GlobeNewswire Inc | Nov 2, 2021 04:01PM EDT

November 02, 2021

-- EPS of $1.07 for FY 2021 Third Quarter -- Declares Special Cash Dividend of $1.00 per Share -- Declares Regular Cash Dividend of $0.25 per Share

EL SEGUNDO, Calif., Nov. 02, 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 third quarter ended October 3, 2021.

Net sales for the fiscal 2021 third quarter were $289.6 million compared to net sales of $305.0 million for the third quarter of fiscal 2020. The decrease in net sales primarily reflects the unfavorable impact from a calendar shift related to the Companys 53-week fiscal year in 2020 that resulted in pre-Fourth of July holiday sales moving from the third quarter in fiscal 2020 to the second quarter in fiscal 2021. This calendar shift does not impact the Companys same store sales calculation, which is measured on a comparable-week basis. Same store sales for the third quarter of fiscal 2021 decreased 0.7% compared to the prior year period and increased 13.2% compared to the third quarter of 2019.

Gross profit for the fiscal 2021 third quarter was $108.0 million, which compares to $110.0 million in the third quarter of the prior year. The Companys gross profit margin was 37.3% in the fiscal 2021 third quarter versus 36.1% in the third quarter of the prior year. The increase in gross profit margin largely reflects a 152-basis point increase in merchandise margins, partially offset by higher store occupancy expense as a percentage of net sales compared with the prior year.

Selling and administrative expense as a percentage of net sales was 25.9% in the fiscal 2021 third quarter versus 23.4% in the fiscal 2020 third quarter. Overall selling and administrative expense for the quarter increased by $3.8 million from the prior year primarily due to increased store-related costs, such as labor, benefits, and facility costs, versus the prior year period, which included reduced operating hours due to COVID-19. The Companys advertising expense also increased in the 2021 third quarter compared to the prior year period, but remained substantially below pre-pandemic levels.

Net income for the third quarter of fiscal 2021 was $24.1 million, or $1.07 per diluted share. This compares to net income of $28.4 million, or $1.31 per diluted share, in the third quarter of fiscal 2020, which at the time was the highest earnings of any quarter in the Companys history. Earnings per diluted share for the third quarter of fiscal 2021, compared to the prior year, reflects an approximate $0.20 unfavorable impact from the Companys fiscal calendar shift as discussed above. For comparison purposes, for the third quarter of fiscal 2019, net income was $6.4 million, or $0.30 per diluted share.

For the 39-week period ended October 3, 2021, net sales were $888.5 million compared to net sales of $750.6 million in the first 39 weeks of last year. Same store sales increased 18.9% in the first 39 weeks of 2021 versus the comparable period last year. Net income for the first 39 weeks of fiscal 2021 was $82.5 million, or $3.66 per diluted share, including a previously reported net benefit of $0.06 per diluted share. This compares to net income for the first 39 weeks of fiscal 2020 of $34.9 million, or $1.63 per diluted share, including a previously reported net benefit of $0.13 per diluted share.

Adjusted EBITDA was $37.3 million for the third quarter of fiscal 2021 and $120.5 million for the 39-week period ended October 3, 2021. EBITDA and Adjusted EBITDA are non-GAAP financial measures. See Non-GAAP Financial Measures below for more details and a reconciliation of non-GAAP EBITDA and Adjusted EBITDA to the most comparable GAAP measure, net income.

Steven G. Miller, the Companys Chairman, President and Chief Executive Officer, said, We are pleased to report another strong quarter of sales and earnings. Despite a significant impact from the California wildfires, same store sales largely kept pace with last years peak pandemic-related sales surge, while comping very positively against 2019. While earnings were slightly down on a year-over-year basis primarily due to fiscal calendar shifts, sales were strong across our product mix, especially compared to pre-pandemic levels. We were particularly excited to see a resurgence in our team sports business as leagues and schools throughout our markets returned to more normal activities.

Mr. Miller continued, As we continue to manage through the widespread supply chain disruptions and labor challenges impacting the retail industry, we feel well positioned to produce fourth quarter results that significantly exceed pre-pandemic levels. In the fourth quarter to date, we are continuing to see strength across a broad array of categories. That said, October is historically a low volume month and the key to the quarter is the holiday period, which is always heavily influenced by winter weather and the overall retail consumer environment and this year will also be influenced by supply chain challenges.

Balance SheetThe Company ended the fiscal 2021 third quarter with zero borrowings under its credit facility and with cash and cash equivalents of $114.0 million. In the 2021 year-to-date fiscal period through the end of the third quarter, the Company improved its cash position by $49.4 million, while returning to shareholders $36.8 million in value through a combination of regular and special cash dividends, as well as open-market stock repurchases. In the fiscal 2021 third quarter, the Company repurchased 100,498 shares of its common stock.

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 special cash dividend of $1.00 per share of outstanding common stock, which will be paid on December1,2021, to stockholders of record as of November 17,2021.

The Board of Directors also declared a quarterly cash dividend of $0.25 per share, which will be paid on December15,2021, to stockholders of record as of December1,2021.

Fourth Quarter GuidanceFor the 13-week fiscal 2021 fourth quarter, the Company expects same store sales to be in the range of negative low-single digits to positive low-single digits with earnings per diluted share in the range of $0.55 to $0.70. This compares to a same store sales increase of 10.5% and earnings per diluted share of $0.95 in the 14-week fourth quarter of fiscal 2020, which included a previously reported net benefit of $0.12 per diluted share. The mid-point of the Companys guidance range reflects an expected same-store sales increase of approximately 10% versus the fiscal 2019 fourth quarter. The Companys sales and earnings guidance for the fiscal 2021 fourth quarter assumes that any new conditions relating to the COVID-19 pandemic, including any regulations that may be issued in response to the pandemic, will not materially impact the Companys operations during the period.

Store OpeningsDuring the third quarter, the Company opened one new store and closed two stores. The Company currently has 430 stores in operation, which includes one new store opening in the fourth quarter to date. Over the remainder of the fourth quarter, the Company expects to open approximately three additional stores, including the relocation of two stores that the Company expects to close during the quarter. For the fiscal 2021 full year, the Company anticipates opening approximately five stores and closing four stores, including two relocations, which would result in a year-end store count of 431 stores.

Conference Call InformationThe Company will host a conference call and audio webcast today, November 2, 2021, at 2:00 p.m. Pacific (5:00 p.m. Eastern), to discuss financial results for the third 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 November 9, 2021 by calling (844) 512-2921 to access the playback; the passcode is 13724491.

About Big 5 Sporting Goods CorporationBig 5 is a leading sporting goods retailer in the western United States, operating 429 stores under the Big 5 Sporting Goods name as of the fiscal quarter ended October 3, 2021. Big5 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, including any potential variants, 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 or any potential variants), 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 earnings before interest, income tax expense, depreciation and amortization (EBITDA) and any 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 39 weeks ended ended October 3, October 3, 2021 2021 (In thousands) GAAP net income (as reported) $ 24,131 $ 82,480 + Interest (as reported) 175 701 + Income tax expense (as reported) 8,524 25,942 + Depreciation and amortization (as reported) 4,473 13,121 EBITDA $ 37,303 $ 122,244 - Elimination of liability for an employment ? (995 ) agreement- Gain on recovery of insurance settlement ? (709 ) related to civil unrestAdjusted EBITDA $ 37,303 $ 120,540

FINANCIAL TABLES FOLLOW

BIG 5 SPORTING GOODS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share amounts) October 3, January 3, 2021 2021ASSETS Current assets: Cash and cash equivalents $ 114,006 $ 64,654 Accounts receivable, net of allowances of 10,249 19,879 $92 and $58, respectivelyMerchandise inventories, net 255,245 251,180 Prepaid expenses 11,134 11,684 Total 390,634 347,397 current assets Operating lease right-of-use assets, net 277,180 278,607 Property and equipment, net 59,441 57,245 Deferred income taxes 14,212 13,831 Other assets, net of accumulated amortization of 3,886 2,914 $796 and $2,407, respectivelyTotal $ 745,353 $ 699,994 assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 81,965 $ 80,882 Accrued expenses 78,528 82,877 Current portion of operating lease 76,113 73,737 liabilitiesCurrent portion of finance lease 3,379 2,089 liabilitiesTotal 239,985 239,585 current liabilities Operating lease liabilities, less current 212,465 217,788 portionFinance lease liabilities, less current portion 6,391 2,504 Other long-term liabilities 6,749 7,479 Total 465,590 467,356 liabilities Commitments and contingencies Stockholders' equity: Common stock, $0.01 par value, authorized 50,000,000 shares; issued 26,061,483 and25,580,541 shares, respectively; outstanding 260 255 22,310,772 and 21,930,328 shares, respectivelyAdditional paid-in capital 124,000 121,837 Retained earnings 200,296 153,073 Less: Treasury stock, at cost; 3,750,711 (44,793 ) (42,527 ) and 3,650,213 shares, respectivelyTotal 279,763 232,638 stockholders' equityTotal $ 745,353 $ 699,994 liabilities and stockholders' equity

BIG 5 SPORTING GOODS CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands, except per share data) 13 Weeks Ended 39 Weeks Ended October September October September 3, 27, 3, 27, 2021 2020 2021 2020 Net sales $ 289,637 $ 304,959 $ 888,463 $ 750,630 Cost of sales 181,660 194,924 555,670 503,847 Gross profit 107,977 110,035 332,793 246,783 Selling and administrative expense 75,147 71,337 223,670 201,040 Other income ? ? ? (2,500 ) Operating income 32,830 38,698 109,123 48,243 Interest expense 175 199 701 1,683 Income before income taxes 32,655 38,499 108,422 46,560 Income tax expense 8,524 10,106 25,942 11,642 Net income $ 24,131 $ 28,393 $ 82,480 $ 34,918 Earnings per share: Basic $ 1.11 $ 1.33 $ 3.81 $ 1.64 Diluted $ 1.07 $ 1.31 $ 3.66 $ 1.63 Weighted-average shares of common stock outstanding:Basic 21,798 21,310 21,654 21,237 Diluted 22,534 21,725 22,525 21,464

Contact:

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

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