GlobeNewswire Inc | May 4, 2021 04:01PM EDT

May 04, 2021

-- Achieves Record First Quarter Sales and Earnings Results -- Same Store Sales Increased 31.8% in FY 2021 First Quarter versus Guidance of 20% -- EPS of $0.96 for FY 2021 First Quarter versus Guidance Range of $0.47 to $0.53 -- Ends FY 2021 First Quarter with $100.1 Million in Cash and Cash Equivalents, No Debt -- Increases Quarterly Cash Dividend by 20% to $0.18 per Share -- Declares Special Cash Dividend of $1.00 per Share

EL SEGUNDO, Calif., May 04, 2021 (GLOBE NEWSWIRE) -- Big 5 Sporting Goods Corporation (Nasdaq: BGFV) (the Company, we, our, us, Big 5), a leading sporting goods retailer, today reported financial results for the fiscal 2021 first quarter ended April 4, 2021.

Steven G. Miller, the Companys Chairman, President and Chief Executive Officer, said, We are pleased to report record first quarter results driven by a combination of top line sales strength, merchandise margin expansion and an improved cost structure. Our team continues to do a tremendous job satisfying the incredible consumer demand we are seeing across our diverse product mix.

Mr. Miller continued, Same store sales were up 31.8% for the fiscal 2021 first quarter reflecting broad-based strength across apparel, footwear and hardgoods, including very robust demand for winter-related products. These results were especially remarkable given the headwinds impacting sales of team sports products due to the widespread suspension of league play over most of the quarter. Our sales accelerated beyond expectations in March, benefitting from the resumption of team sports activities, along with school re-openings and stimulus checks. Our strong sales momentum has continued into the second quarter with sales performing at historically high levels for the quarter to date. We are excited by the strength in our business, which has translated to our balance sheet, as we continue to operate with zero debt while growing our cash position. In light of this strength and to continue to return value to shareholders, our Board of Directors has declared a 20% increase in our regular cash dividend to an annual rate of $0.72 per share and also has declared a special cash dividend of $1.00 per share.

Net sales for the fiscal 2021 first quarter were $272.8 million compared to net sales of $217.7 million for the first quarter of fiscal 2020, which included significant store closures due to COVID-19 over the last ten days of the period. Same store sales increased 31.8% for the first quarter of fiscal 2021. The increase in net sales was partially offset by an approximately $10.0 million unfavorable impact from the calendar shift related to the Companys 53-week fiscal 2020 that caused fiscal 2021 to begin one week later than fiscal 2020, as well as an unfavorable impact from the calendar shift related to the Easter holiday, during which the Companys stores are closed, from the second quarter in fiscal 2020 to the first quarter in fiscal 2021. Same store sales comparisons are made on a comparable-week basis and the calendar shifts did not have a material impact on same store sales comparisons.

Gross profit for the fiscal 2021 first quarter increased to $97.9 million from $64.6 million in the first quarter of the prior year. The Companys gross profit margin was 35.9% in the fiscal 2021 first quarter versus 29.6% in the first quarter of the prior year. The increase in gross profit margin largely reflects a 350-basis point increase in merchandise margins, lower store occupancy and warehousing costs as a percentage of net sales and, to a lesser degree, the favorable impact from an insurance settlement, partially offset by lower distribution costs capitalized into inventory for the quarter.

Selling and administrative expense as a percentage of net sales was 25.7% in the fiscal 2021 first quarter versus 32.8% in the fiscal 2020 first quarter. Overall selling and administrative expense for the quarter decreased $1.3 million from the prior year primarily due to lower print advertising expense and the elimination of a liability for an employment agreement, partially offset by higher performance-based incentive compensation accruals.

Net income for the first quarter of fiscal 2021 was $21.5 million, or $0.96 per diluted share, which includes a benefit of $0.06 per diluted share related to the elimination of the employment agreement liability and the insurance settlement. Net loss for the first quarter of fiscal 2020 was $4.6 million, or $0.22 per basic share.

Adjusted EBITDA for the first quarter of fiscal 2021 was $30.3 million, compared to a loss of $2.2 million in the prior year period. EBITDA and Adjusted EBITDA are non-GAAP financial measures. See Non-GAAP Financial Measures below for more details and a reconciliation of non-GAAP Adjusted EBITDA and EBITDA to the most comparable GAAP measure, net income.

Balance SheetThe Company ended the fiscal 2021 first quarter with no borrowings under its credit facility and with cash and cash equivalents of $100.1 million. This compares to zero borrowings and $64.7 million of cash and cash equivalents as of the end of the 2020 fiscal year and to $124.3 million of borrowings and $44.2 million of cash as of the end of the fiscal 2020 first quarter, reflecting a $180.2 million improvement in net cash (cash less revolver borrowings) on a year-over-year basis and a $35.4 million improvement in net cash compared to the end of fiscal 2020. Total merchandise inventories decreased by approximately 20.8% as of the end of the fiscal 2021 first quarter versus the first quarter of the prior year.

Quarterly Cash Dividend and Special Cash DividendIn light of the continued strength of the Companys business, cash flow generation and improved balance sheet, the Companys Board of Directors has declared a 20% increase in its quarterly cash dividend from $0.15 per share of outstanding common stock to $0.18 per share of outstanding common stock, which will be paid on June 15, 2021 to stockholders of record as of June 1, 2021. Additionally, to further return value to shareholders, the Companys Board of Directors has declared a special cash dividend of $1.00 per share of outstanding common stock, which will be paid on June 1, 2021 to stockholders of record as of May 17, 2021.

Second Quarter GuidanceFor the fiscal 2021 second quarter, the Company expects same store sales to increase in the range of 22% to 27% and expects to realize earnings per diluted share in the range of $1.05 to $1.25. Fiscal 2021 second quarter guidance reflects the combined positive impact of calendar shifts of the Easter holiday, during which the Companys stores are closed, from the second quarter of fiscal 2020 into the first quarter of fiscal 2021, and the Fourth of July holiday from the third quarter of fiscal 2020 into the second quarter of fiscal 2021. The Companys second quarter guidance compares to a same store sales decrease of 4.2% and earnings per diluted share of $0.52 in the second quarter of fiscal 2020, which included a net benefit of approximately $0.13 per diluted share related to rent abatement savings and a recovery in eminent domain litigation, partially offset by expense associated with special employee recognition bonus awards.

Store OpeningsThe Company currently has 430 stores in operation. During fiscal 2021, the Company expects to open approximately five stores and close approximately two stores.

Conference Call InformationThe Company will host a conference call and audio webcast today, May 4, 2021, at 2:00 p.m. Pacific (5:00 p.m. Eastern), to discuss financial results for the first quarter of fiscal 2021. To access the conference call, participants in North America may dial (877) 407-9039 and international participants may dial (201) 689-8470. Participants are encouraged to dial in to the conference call ten minutes prior to the scheduled start time. The call will also be broadcast live over the Internet and accessible through the Investor Relations section of the Companys website at www.big5sportinggoods.com. Visitors to the website should select the Investor Relations link to access the webcast. The webcast will be archived and accessible on the same website for 30 days following the call. A telephonic replay will be available through May 11, 2021 by calling (844) 512-2921 to access the playback; the passcode is 13719234.

About Big 5 Sporting Goods CorporationBig 5 is a leading sporting goods retailer in the western United States, operating 430 stores under the Big 5 Sporting Goods name as of the fiscal quarter ended April 4, 2021. Big 5 provides a full-line product offering in a traditional sporting goods store format that averages 11,000 square feet. Big 5s product mix includes athletic shoes, apparel and accessories, as well as a broad selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, home recreation, tennis, golf, and winter and summer recreation.

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause Big 5s actual results in current or future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, the economic impacts of COVID-19 on Big 5s business operations, including as a result of regulations that may be issued in response to COVID-19, changes in the consumer spending environment, fluctuations in consumer holiday spending patterns, increased competition from e-commerce retailers, breach of data security or other unauthorized disclosure of sensitive personal or confidential information, the competitive environment in the sporting goods industry in general and in Big 5s specific market areas, inflation, product availability and growth opportunities, changes in the current market for (or regulation of) firearm-related products, a reduction or loss of product from a key supplier, disruption in product flow, seasonal fluctuations, weather conditions, changes in cost of goods, operating expense fluctuations, increases in labor and benefit-related expense, changes in laws or regulations, including those related to tariffs and duties, public health issues (including those caused by COVID-19), impacts from civil unrest or widespread vandalism, lower than expected profitability of Big 5s e-commerce platform or cannibalization of sales from Big 5s existing store base which could occur as a result of operating the e-commerce platform, litigation risks, stockholder campaigns and proxy contests, risks related to Big 5s historically leveraged financial condition, changes in interest rates, credit availability, higher expense associated with sources of credit resulting from uncertainty in financial markets and economic conditions in general. Those and other risks and uncertainties are more fully described in Big 5s filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Big 5 conducts its business in a highly competitive and rapidly changing environment. Accordingly, new risk factors may arise. It is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on Big 5s business or the extent to which any individual risk factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Big 5 undertakes no obligation to revise or update any forward-looking statement that may be made from time to time by it or on its behalf.

Non-GAAP Financial MeasuresIn addition to reporting our financial results in accordance with generally accepted accounting principles ("GAAP"), we are providing non-GAAP adjusted earnings before interest, income tax expense, depreciation and amortization (EBITDA) and other adjustments (Adjusted EBITDA). EBITDA and Adjusted EBITDA are not prepared in accordance with GAAP and exclude certain items presented below. We use EBITDA and Adjusted EBITDA internally for forecasting purposes and as factors to evaluate our operating performance. We believe that Adjusted EBITDA provides useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of core operating results and business outlook. While we believe that EBITDA and Adjusted EBITDA can be useful to investors in evaluating our period-to-period operating results, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP. In addition, our definition or calculation of these non-GAAP measures may differ from similarly titled measures used by other companies, limiting the usefulness of this financial measure for comparison to other companies.We believe the GAAP measure that is most comparable to non-GAAP EBITDA and Adjusted EBITDA is net income, and a reconciliation of our non-GAAP EBITDA and Adjusted EBITDA to GAAP net income is provided below.

13 Weeks Ended April 4, March 29, 2021 2020 (In thousands)GAAP net income (loss) (as reported) $ 21,546 $ (4,611 )+ Interest (as reported) 342 735 + Income tax expense (benefit) (as reported) 5,861 (2,939 )+ Depreciation and amortization (as reported) 4,259 4,606 EBITDA $ 32,008 $ (2,209 )- Elimination of liability for an employment (995 ) ? agreement- Gain on recovery of insurance settlement related (709 ) ? to civil unrestAdjusted EBITDA $ 30,304 $ (2,209 )

FINANCIAL TABLES FOLLOW

BIG 5 SPORTING GOODS CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except share amounts) April 4, January 3, 2021 2021

ASSETS Current assets: Cash and cash equivalents $ 100,097 $ 64,654 Accounts receivable, net of allowances of $80 and 11,399 19,879 $58, respectivelyMerchandise inventories, net 247,287 251,180 Prepaid expenses 10,513 11,684 Total current assets 369,296 347,397 Operating lease right-of-use assets, net 271,964 278,607 Property and equipment, net 58,710 57,245 Deferred income taxes 12,532 13,831 Other assets, net of accumulated amortization of 3,610 2,914 $594 and $2,407, respectivelyTotal assets $ 716,112 $ 699,994 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 88,613 $ 80,882 Accrued expenses 78,351 82,877 Current portion of operating lease liabilities 73,196 73,737 Current portion of finance lease liabilities 2,664 2,089 Total current liabilities 242,824 239,585 Operating lease liabilities, less current portion 210,891 217,788 Finance lease liabilities, less current portion 4,332 2,504 Other long-term liabilities 6,865 7,479 Total liabilities 464,912 467,356 Commitments and contingencies Stockholders' equity: Common stock, $0.01 par value, authorized 50,000,000 shares; issued 25,938,473 and25,580,541 shares, respectively; outstanding 259 255 22,288,260 and 21,930,328 shares, respectivelyAdditional paid-in capital 122,188 121,837 Retained earnings 171,280 153,073 Less: Treasury stock, at cost; 3,650,213 shares (42,527 ) (42,527 )Total stockholders' equity 251,200 232,638 Total liabilities and stockholders' equity $ 716,112 $ 699,994

BIG 5 SPORTING GOODS CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands, except per share data) 13 Weeks Ended April 4, March 29, 2021 2020 Net sales $ 272,806 $ 217,736 Cost of sales 174,913 153,181 Gross profit 97,893 64,555 Selling and administrative expense 70,144 71,370 Operating income (loss) 27,749 (6,815 ) Interest expense 342 735 Income (loss) before taxes 27,407 (7,550 ) Income tax expense (benefit) 5,861 (2,939 ) Net income (loss) $ 21,546 $ (4,611 ) Earnings (loss) per share: Basic $ 1.01 $ (0.22 )Diluted $ 0.96 $ (0.22 ) Weighted-average shares of common stock outstanding: Basic 21,417 21,149 Diluted 22,371 21,149

Contact:

Big 5 Sporting Goods CorporationBarry EmersonExecutive Vice President and Chief Financial Officer(310) 536-0611

ICR, Inc.John MillsManaging Partner(646) 277-1254