Dick's Sporting Goods, Inc. 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 |
For the Quarterly Period Ended May 3, 2008
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File No. 001-31463
DICKS SPORTING GOODS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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16-1241537 |
(State or Other Jurisdiction of
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(I.R.S. Employer |
incorporation or Organization)
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Identification No.) |
300 Industry Drive, RIDC Park West, Pittsburgh, Pennsylvania 15275
(Address of Principal Executive Offices)
(724) 273-3400
(Registrants Telephone Number, including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
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Large accelerated filer þ
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act)
Yes o No þ
The number of shares of common stock, par value $0.01 per share, and Class B common stock, par
value $0.01 per share, outstanding as of May 20, 2008 was 85,188,091 and 26,223,868, respectively.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DICKS SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME UNAUDITED
(Amounts in thousands, except per share data)
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13 Weeks Ended |
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May 3, |
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May 5, |
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2008 |
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2007 |
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Net sales |
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$ |
912,112 |
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$ |
823,553 |
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Cost of goods sold, including occupancy
and distribution costs |
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653,006 |
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579,134 |
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GROSS PROFIT |
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259,106 |
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244,419 |
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Selling, general and administrative expenses |
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219,964 |
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198,007 |
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Pre-opening expenses |
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4,924 |
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7,121 |
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INCOME FROM OPERATIONS |
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34,218 |
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39,291 |
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Gain on sale of asset |
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(2,356 |
) |
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Interest expense, net |
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1,658 |
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3,207 |
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INCOME BEFORE INCOME TAXES |
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34,916 |
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36,084 |
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Provision for income taxes |
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14,141 |
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14,383 |
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NET INCOME |
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$ |
20,775 |
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$ |
21,701 |
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EARNINGS PER COMMON SHARE: |
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Basic |
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$ |
0.19 |
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$ |
0.20 |
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Diluted |
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$ |
0.18 |
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$ |
0.19 |
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WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING: |
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Basic |
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111,216 |
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107,098 |
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Diluted |
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117,295 |
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114,442 |
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See accompanying notes to unaudited condensed consolidated financial statements.
3
DICKS SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED
(Dollars in thousands)
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May 3, |
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February 2, |
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2008 |
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2008 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
46,997 |
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$ |
50,307 |
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Accounts receivable, net |
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75,780 |
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62,035 |
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Inventories, net |
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970,543 |
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887,364 |
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Prepaid expenses and other current assets |
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53,227 |
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50,274 |
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Deferred income taxes |
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20,131 |
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19,714 |
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Total current assets |
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1,166,678 |
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1,069,694 |
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Property and equipment, net |
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547,024 |
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531,779 |
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Construction in progress leased facilities |
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31,149 |
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23,744 |
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Intangible assets, net |
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97,837 |
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80,038 |
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Goodwill |
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304,386 |
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304,366 |
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Other assets |
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43,487 |
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26,014 |
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TOTAL ASSETS |
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$ |
2,190,561 |
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$ |
2,035,635 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
401,962 |
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$ |
365,750 |
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Accrued expenses |
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231,510 |
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228,816 |
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Deferred revenue and other liabilities |
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86,797 |
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104,549 |
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Income taxes payable |
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13,442 |
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62,583 |
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Current portion of other long-term debt and capital leases |
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251 |
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250 |
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Total current liabilities |
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733,962 |
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761,948 |
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LONG-TERM LIABILITIES: |
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Senior convertible notes |
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172,500 |
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172,500 |
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Revolving credit borrowings |
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121,485 |
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Other long-term debt and capital leases |
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8,622 |
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8,685 |
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Non-cash obligations for construction in progress leased facilities |
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31,149 |
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23,744 |
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Deferred revenue and other liabilities |
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204,553 |
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180,238 |
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Total long-term liabilities |
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538,309 |
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385,167 |
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COMMITMENTS AND CONTINGENCIES |
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STOCKHOLDERS EQUITY: |
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Preferred stock |
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Common stock |
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851 |
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848 |
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Class B common stock |
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262 |
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263 |
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Additional paid-in capital |
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425,957 |
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416,423 |
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Retained earnings |
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489,749 |
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468,974 |
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Accumulated other comprehensive income |
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1,471 |
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2,012 |
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Total stockholders equity |
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918,290 |
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888,520 |
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
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$ |
2,190,561 |
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$ |
2,035,635 |
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See accompanying notes to unaudited condensed consolidated financial statements.
4
DICKS SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME UNAUDITED
(Dollars in thousands)
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13 Weeks Ended |
|
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May 3, |
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May 5, |
|
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2008 |
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2007 |
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NET INCOME |
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$ |
20,775 |
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$ |
21,701 |
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OTHER COMPREHENSIVE INCOME: |
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Unrealized (loss) gain on available-for-sale securities,
net of tax |
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|
(448 |
) |
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712 |
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Foreign currency translation adjustment, net of tax |
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|
(93 |
) |
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34 |
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COMPREHENSIVE INCOME |
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$ |
20,234 |
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$ |
22,447 |
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See accompanying notes to unaudited condensed consolidated financial statements.
5
DICKS SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY UNAUDITED
(Dollars in thousands)
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Accumulated |
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Class B |
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Additional |
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Other |
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Common Stock |
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Common Stock |
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Paid-In |
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Retained |
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Comprehensive |
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Shares |
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Dollars |
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Shares |
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Dollars |
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Capital |
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Earnings |
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Income |
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Total |
|
BALANCE, February 3, 2007 |
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|
79,382,554 |
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|
$ |
794 |
|
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|
26,787,680 |
|
|
$ |
268 |
|
|
$ |
302,235 |
|
|
$ |
315,453 |
|
|
$ |
1,800 |
|
|
$ |
620,550 |
|
Cumulative effect of
adoption of FIN 48 |
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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(1,515 |
) |
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|
(1,515 |
) |
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|
ADJUSTED BALANCE,
February 3, 2007 |
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79,382,554 |
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|
$ |
794 |
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|
26,787,680 |
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|
$ |
268 |
|
|
$ |
302,235 |
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$ |
313,938 |
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|
$ |
1,800 |
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$ |
619,035 |
|
Exchange of Class B
common stock for
common stock |
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|
480,200 |
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5 |
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(480,200 |
) |
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(5 |
) |
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Stock options issued for
acquisition |
|
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|
|
|
|
|
|
|
|
|
9,117 |
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|
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|
|
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|
9,117 |
|
Sale of common stock under
stock plan |
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|
204,955 |
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2 |
|
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|
|
|
|
|
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|
4,505 |
|
|
|
|
|
|
|
|
|
|
|
4,507 |
|
Exercise of stock options |
|
|
4,769,933 |
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|
47 |
|
|
|
|
|
|
|
|
|
|
|
30,212 |
|
|
|
|
|
|
|
|
|
|
|
30,259 |
|
Tax benefit on convertible note
bond hedge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,811 |
|
|
|
|
|
|
|
|
|
|
|
2,811 |
|
Net income |
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|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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|
155,036 |
|
|
|
|
|
|
|
155,036 |
|
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,039 |
|
|
|
|
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|
|
|
|
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|
29,039 |
|
Total tax benefit from exercise
of stock options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,504 |
|
|
|
|
|
|
|
|
|
|
|
38,504 |
|
Foreign currency translation adjustment,
net of taxes of $87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134 |
|
|
|
134 |
|
Unrealized gain on securities
available-for-sale, net of taxes
of $46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78 |
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
BALANCE, February 2, 2008 |
|
|
84,837,642 |
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|
$ |
848 |
|
|
|
26,307,480 |
|
|
$ |
263 |
|
|
$ |
416,423 |
|
|
$ |
468,974 |
|
|
$ |
2,012 |
|
|
$ |
888,520 |
|
Exchange of Class B
common stock for
common stock |
|
|
66,362 |
|
|
|
1 |
|
|
|
(66,362 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options |
|
|
229,601 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
2,454 |
|
|
|
|
|
|
|
|
|
|
|
2,456 |
|
Tax benefit on convertible note
bond hedge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
744 |
|
|
|
|
|
|
|
|
|
|
|
744 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,775 |
|
|
|
|
|
|
|
20,775 |
|
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,370 |
|
|
|
|
|
|
|
|
|
|
|
5,370 |
|
Total tax benefit from exercise
of stock options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
966 |
|
|
|
|
|
|
|
|
|
|
|
966 |
|
Foreign currency translation adjustment,
net of taxes of $59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(93 |
) |
|
|
(93 |
) |
Unrealized loss on securities
available-for-sale, net of taxes
of $241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(448 |
) |
|
|
(448 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, May 3, 2008 |
|
|
85,133,605 |
|
|
$ |
851 |
|
|
|
26,241,118 |
|
|
$ |
262 |
|
|
$ |
425,957 |
|
|
$ |
489,749 |
|
|
$ |
1,471 |
|
|
$ |
918,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited condensed consolidated financial statements.
6
DICKS SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
|
May 3, |
|
|
May 5, |
|
|
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
(Note 4) |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
20,775 |
|
|
$ |
21,701 |
|
Adjustments to reconcile net income
to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
20,400 |
|
|
|
16,402 |
|
Deferred income taxes |
|
|
(10,950 |
) |
|
|
(4,696 |
) |
Stock-based compensation |
|
|
5,370 |
|
|
|
6,902 |
|
Excess tax benefit from stock-based compensation |
|
|
(848 |
) |
|
|
(8,957 |
) |
Tax benefit from exercise of stock options |
|
|
159 |
|
|
|
2,484 |
|
Tax benefit from convertible bond hedge |
|
|
744 |
|
|
|
680 |
|
Gain on sale of asset |
|
|
(2,356 |
) |
|
|
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
7,922 |
|
|
|
(2,496 |
) |
Inventories |
|
|
(83,179 |
) |
|
|
(105,995 |
) |
Prepaid expenses and other assets |
|
|
(16,371 |
) |
|
|
(777 |
) |
Accounts payable |
|
|
38,456 |
|
|
|
71,021 |
|
Accrued expenses |
|
|
(20,147 |
) |
|
|
(17,039 |
) |
Income taxes receivable / payable |
|
|
(48,292 |
) |
|
|
12,426 |
|
Deferred construction allowances |
|
|
7,324 |
|
|
|
9,136 |
|
Deferred revenue and other liabilities |
|
|
(5,127 |
) |
|
|
(7,805 |
) |
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(86,120 |
) |
|
|
(7,013 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(49,393 |
) |
|
|
(45,410 |
) |
Purchase of corporate aircraft |
|
|
(25,107 |
) |
|
|
|
|
Proceeds from sale of corporate aircraft |
|
|
27,463 |
|
|
|
|
|
Proceeds from sale-leaseback transactions |
|
|
|
|
|
|
165 |
|
Payment for purchase of Golf Galaxy, net of $4,859 cash acquired |
|
|
|
|
|
|
(221,449 |
) |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(47,037 |
) |
|
|
(266,694 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Revolving credit borrowings, net |
|
|
121,485 |
|
|
|
158,557 |
|
Payments on other long-term debt and capital leases |
|
|
(59 |
) |
|
|
(57 |
) |
Construction allowance receipts |
|
|
7,454 |
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
2,456 |
|
|
|
17,396 |
|
Excess tax benefit from stock-based compensation |
|
|
848 |
|
|
|
8,957 |
|
Decrease in bank overdraft |
|
|
(2,244 |
) |
|
|
(5,701 |
) |
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
129,940 |
|
|
|
179,152 |
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS |
|
|
(93 |
) |
|
|
37 |
|
|
|
|
|
|
|
|
NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
(3,310 |
) |
|
|
(94,518 |
) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
50,307 |
|
|
|
135,942 |
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
46,997 |
|
|
$ |
41,424 |
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Construction in progress leased facilities |
|
$ |
7,405 |
|
|
$ |
1,843 |
|
Accrued property and equipment |
|
$ |
16,835 |
|
|
$ |
(7,647 |
) |
Cash paid for interest |
|
$ |
2,841 |
|
|
$ |
3,340 |
|
Cash paid for income taxes |
|
$ |
72,537 |
|
|
$ |
3,318 |
|
Stock options issued for acquisition (net of tax benefit upon exercise) |
|
$ |
7,266 |
|
|
$ |
7,630 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
7
DICKS SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Company
Dicks Sporting Goods, Inc. (together with its subsidiaries, the Company) is a specialty retailer
selling sporting goods, footwear and apparel through its 446 stores, the majority of which are
located throughout the eastern half of the United States. On February 13, 2007, the Company
acquired Golf Galaxy, Inc. (Golf Galaxy) by means of
merger of our wholly-owned subsidiary with
and into Golf Galaxy. On November 30, 2007, the Company acquired all of the outstanding stock of
Chicks Sporting Goods, Inc. (Chicks). The
unaudited Condensed Consolidated Statements of Income include
the operations of Golf Galaxy and Chicks from their dates of acquisition forward.
Unless otherwise specified, any reference to year is to our fiscal year and when used in this Form
10-Q and unless the context otherwise requires, the terms Dicks, we, us, the Company and
our refer to Dicks Sporting Goods, Inc. and its
wholly-owned subsidiaries.
2. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared by us, in
accordance with the requirements for Form 10-Q and do not include all the disclosures normally
required in annual consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America. The interim financial information
as of May 3, 2008 and for the 13 weeks ended May 3, 2008 and May 5, 2007 is unaudited and has been
prepared on the same basis as the audited financial statements. In the opinion of management, such
unaudited information includes all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the interim financial information. This unaudited interim
financial information should be read in conjunction with the audited consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K for the year ended February
2, 2008 as filed with the Securities and Exchange Commission on March 27, 2008. Operating results
for the 13 weeks ended May 3, 2008 are not necessarily indicative of the results that may be
expected for the year ending January 31, 2009 or any other period.
3. Newly Issued Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines
fair value, establishes a framework for measuring fair value and expands disclosures about fair
value measurements; however, SFAS 157 does not require any new fair value measurements. SFAS
No. 157, as issued, is effective for fiscal years beginning after November 15, 2007. FASB Staff
Position (FSP) FAS No. 157-2 was issued in February 2008 and deferred the effective date of SFAS
No. 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets and nonfinancial
liabilities. Accordingly, as of February 3, 2008, the Company adopted SFAS No. 157 for financial
assets and liabilities only. As of May 3, 2008, the Companys financial assets subject to SFAS
No. 157 consisted of assets held by the Company in trust related to the Companys deferred
compensation plans, for which a corresponding liability exists, and the Companys holdings of
unregistered common stock of GSI Commerce Inc. (GSI), totaling $9.4 million and $2.5 million,
respectively. The assets held in trust are classified as having Level 1 inputs, as the fair value
is based on quoted prices in active markets for identical assets. The unregistered common stock is
classified as having Level 3 inputs, as the pricing inputs are unobservable for the investment and
include situations where there is little, if any, market activity for the investment. The inputs
into the determination of fair value require significant management judgment or estimation. The
adoption of SFAS No. 157 for financial assets and financial liabilities did not have a significant
impact on the Companys results of operations, financial condition or liquidity. The adoption of
SFAS No. 157 in 2009 for nonfinancial assets and nonfinancial liabilities is also not expected to
have a significant impact on the Companys results of operations, financial condition or liquidity.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities (SFAS 159). SFAS 159 permits entities to choose to measure many financial
instruments and certain other items at fair value. SFAS 159 was effective as of the beginning of
our 2008 fiscal year, and did not have a material impact on the Companys financial statements.
8
In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS 141R).
SFAS 141R significantly changes the accounting for business combinations in a number of areas
including the treatment of contingent consideration, preacquisition contingencies, transaction
costs, in-process research and development and restructuring costs. In addition, under SFAS 141R,
changes in an acquired entitys deferred tax assets and uncertain tax positions after the
measurement period will impact income tax expense. SFAS 141R is effective for fiscal years
beginning after December 15, 2008. We will adopt SFAS 141R beginning in the first quarter of
fiscal 2009. This standard will change our accounting treatment for business combinations on a
prospective basis, including the treatment of any income tax adjustments related to past
acquisitions.
In May 2008, the FASB issued FASB Staff Position (FSP) No. APB 14-1 Accounting for Convertible
Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlements)
(previously FSP APB 14-a), which will change the accounting treatment for convertible securities
which the issuer may settle fully or partially in cash. Under the final FSP, cash settled
convertible securities will be separated into their debt and equity components. The value assigned
to the debt component will be the estimated fair value, as of the issuance date, of a similar debt
instrument without the conversion feature, and the difference between the proceeds for the
convertible debt and the amount reflected as a debt liability will be recorded as additional
paid-in capital. As a result, the debt will be recorded at a discount reflecting its below market
coupon interest rate. The debt will subsequently be accreted to its par value over its expected
life, with the rate of interest that reflects the market rate at issuance being reflected on the
income statement. This change in methodology will affect the calculations of net income and
earnings per share for many issuers of cash settled convertible securities. The FSP is effective
for financial statements issued for fiscal years beginning after December 15, 2008, and interim
periods within those fiscal years. The Company is currently evaluating the impact of the adoption
of FSP No. APB 14-1 on the Companys financial statements.
4. Correction to Previously Reported Amounts
Certain corrections have been made for the reporting of the Companys cash flows related to the
receipt of construction allowances. Our condensed consolidated statements of cash flows for the 13
weeks ended May 5, 2007 have been revised to correct an immaterial error in our accounting for the
receipt of construction allowances, which should have been presented as operating activities rather
than as investing activities, as previously reported. The effect of this correction was to decrease
cash used in operating activities by $2.7 million and increase cash used in investing activities by
$2.7 million for the 13 weeks ended May 5, 2007. The correction did not affect the previously
reported results of operations of the Company nor did it change the amount of total cash flows for
the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended May 5, 2007 |
|
|
As |
|
|
|
|
|
|
previously |
|
|
|
|
|
|
reported |
|
Correction |
|
As corrected |
|
|
(In thousands) |
Net cash used in operating activities |
|
$ |
(9,712 |
) |
|
$ |
2,699 |
|
|
$ |
(7,013 |
) |
Net cash used in investing activities |
|
|
(263,995 |
) |
|
|
(2,699 |
) |
|
|
(266,694 |
) |
Construction Allowances The Company conducts a substantial portion of its business in leased
properties. The Company may receive reimbursement from a landlord for some of the cost of the
structure, subject to satisfactory fulfillment of applicable lease provisions. These reimbursements
may be referred to as tenant allowances, construction allowances, or landlord reimbursements
(construction allowances).
The Companys accounting for construction allowances differs if a store lease is accounted for
under the provisions of EITF 97-10, The Effect of Lessee Involvement in Asset Construction. Some
of the Companys leases have a cap on the construction allowance, which places the Company at risk
for cost overruns and causes the Company to be deemed the owner during the construction period. In
cases where the Company is deemed to be the owner during the construction period, a sale and
leaseback of the asset occurs when construction of the asset is complete and the lease term begins,
if relevant sale-leaseback accounting criteria are met. Any gain or loss from the transaction is
deferred and amortized as rent expense on a straight-line basis over the base term of the lease.
The Company reports the amount of cash received for the construction allowance as Construction
Allowance Receipts within the financing activities section of its unaudited Condensed Consolidated
Statements of Cash Flows when such allowances are received prior to completion of the
sale-leaseback transaction. The Company reports the amount of cash received from construction
allowances as Proceeds from sale
9
leaseback transactions within the investing activities section of its unaudited Condensed
Consolidated Statements of Cash Flows when such amounts are received after the sale-leaseback
accounting criteria have been achieved.
In instances where the Company is not deemed to be the owner during the construction period,
reimbursement from a landlord for tenant improvements is classified as an incentive and included in
deferred revenue and other liabilities on the consolidated balance sheets. The deferred rent credit
is amortized as rent expense on a straight-line basis over the base term of the lease. Landlord
reimbursements from these transactions are included in cash flows from operating activities as a
change in Deferred construction allowances.
5. Acquisitions, Goodwill and Other Intangible Assets
On
February 13, 2007, Dicks Sporting Goods, Inc. acquired Golf Galaxy, which became a wholly-owned
subsidiary of Dicks by means of a merger of Dicks wholly-owned subsidiary with and into Golf
Galaxy. The Company paid approximately $227.0 million in connection with the acquisition, which
was financed using approximately $79 million of cash and cash equivalents and the balance from
borrowings under our revolving line of credit.
The acquisition is being accounted for using the purchase method in accordance with SFAS No. 141,
Business Combinations, with Dicks as the accounting acquirer. Accordingly, the purchase price
has been allocated to tangible and identifiable intangible assets acquired and liabilities assumed
based on their estimated fair values at the date of the acquisition. The excess of the purchase
price over the fair value of net assets acquired was recorded as goodwill. Goodwill and
identifiable intangible assets recorded in the acquisition will be tested periodically for
impairment as required by SFAS Statement No. 142, Goodwill and Other Intangible Assets. Based
upon the purchase price allocation, the Company has recorded $112.3 million of goodwill as a result
of the acquisition. None of the goodwill is deductible for tax purposes. The Company received an
independent appraisal for certain assets to determine their fair value. The purchase price
allocation is final, except for any potential income tax changes that may arise. The following
table summarizes the fair values of the assets acquired and liabilities assumed (in thousands):
|
|
|
|
|
Inventory |
|
$ |
70,711 |
|
Other current assets (including cash) |
|
|
19,685 |
|
Property and equipment, net |
|
|
47,875 |
|
Other long term assets, excluding goodwill and other intangible assets |
|
|
246 |
|
Trade name |
|
|
65,749 |
|
Customer lists and other intangibles |
|
|
5,659 |
|
Goodwill |
|
|
112,295 |
|
Accounts payable |
|
|
(34,000 |
) |
Accrued expenses |
|
|
(14,063 |
) |
Other current liabilities |
|
|
(9,759 |
) |
Other long-term liabilities |
|
|
(30,062 |
) |
|
|
|
|
|
|
|
|
|
Fair value of net assets acquired, including intangibles |
|
$ |
234,336 |
|
|
|
|
|
The customer list will be amortized over 12 years. In addition, the trade name is an
indefinite-lived intangible asset, which will not be amortized. The amortization of intangible
assets is included in selling, general and administrative expenses.
On November 30, 2007, the Company acquired all of the outstanding stock of Chicks for
approximately $69.2 million. In addition, Chicks shareholders have the opportunity to receive up
to $5 million in additional consideration upon satisfaction by Chicks of certain specified
performance criteria through June 2008.
The acquisition of Chicks is being accounted for using the purchase method in accordance with SFAS
No. 141, Business Combinations. Accordingly, we recorded the net assets at their estimated fair
values, and included operating results in our unaudited Condensed Consolidated Statements of Income from the
date of acquisition. We allocated the purchase price on a preliminary basis using information
currently available. The Company is in the process of obtaining an independent appraisal for
certain assets, including intangibles not yet identified, and refining its internal fair value
estimates; therefore, the allocation of the purchase price is preliminary and the final allocation
will likely differ. Based on the preliminary purchase price allocation, the Company has recorded
$34.7 million of goodwill as a result of the acquisition. None of the goodwill is deductible for
tax purposes.
10
The Company acquired trademarks for $18 million during the quarter ended May 3, 2008 covering
certain golf equipment, golf balls, golf accessories and other sporting goods and equipment. The
trademarks are indefinite-lived intangible assets, which will not be amortized.
6. Store Closing and Relocation Reserves
On a stores closing or relocation date, estimated lease termination and other costs to close or
relocate a store are recorded in cost of goods sold, including occupancy and distribution costs on
the condensed consolidated statements of income. The calculation of accrued lease termination and
other costs primarily include future minimum lease payments, maintenance costs and taxes from the
date of closure or relocation to the end of the remaining lease term, net of contractual or
estimated sublease income. The liability is discounted using a credit-adjusted risk-free rate of
interest. The assumptions used in the calculation of the accrued lease termination and other costs
are evaluated each quarter. Any changes in these assumptions are recorded in cost of goods sold,
including occupancy and distribution costs on the condensed consolidated statements of income.
The following table summarizes the activity in fiscal 2008 and 2007 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
|
May 3, |
|
|
May 5, |
|
|
|
2008 |
|
|
2007 |
|
Accrued store closing and relocation reserves, beginning of period |
|
$ |
21,882 |
|
|
$ |
19,903 |
|
Expense charged to earnings |
|
|
|
|
|
|
50 |
|
Cash payments |
|
|
(1,467 |
) |
|
|
(1,141 |
) |
Interest accretion and other changes in assumptions |
|
|
2,228 |
|
|
|
163 |
|
|
|
|
|
|
|
|
Accrued store closing and relocation reserves, end of period |
|
|
22,643 |
|
|
|
18,975 |
|
Less: current portion of accrued store closing and relocation reserves |
|
|
(6,340 |
) |
|
|
(6,294 |
) |
|
|
|
|
|
|
|
Long-term portion of accrued store closing and relocation reserves |
|
$ |
16,303 |
|
|
$ |
12,681 |
|
|
|
|
|
|
|
|
The current portion of accrued store closing and relocation reserves is recorded in accrued
expenses and the long-term portion is recorded in long-term deferred revenue and other liabilities
in the condensed consolidated balance sheets.
7. Stock-Based Compensation and Employee Stock Plans
Total stock-based compensation expense recognized for the 13 week periods ended May 3, 2008 and May
5, 2007 was $5.4 million and $6.9 million, respectively, before income taxes and includes Employee
Stock Purchase Plan expense of $0.5 million and $0.4 million, respectively. The expense was
recorded in selling, general and administrative expenses in the
unaudited condensed consolidated statements
of income. The related total tax benefit was $1.9 million and $2.6 million for the 13 weeks ended
May 3, 2008 and May 5, 2007, respectively.
The fair value of stock-based awards to employees is estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee Stock Options |
|
Employee Stock Purchase Plan |
|
|
13 Weeks Ended |
|
13 Weeks Ended |
|
|
May 3, |
|
May 5, |
|
May 3, |
|
May 5, |
Black - Scholes Valuation Assumptions (1) |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
Expected life (years) (2) |
|
|
5.03 - 7.00 |
|
|
|
5.29 |
|
|
|
|
|
|
|
|
|
Expected volatility (3) |
|
|
35.89 - 36.68 |
% |
|
|
36.76 - 40.14 |
% |
|
|
|
|
|
|
|
|
Weighted average volatility |
|
|
36.18 |
% |
|
|
37.31 |
% |
|
|
|
|
|
|
|
|
Risk-free interest rate (4) |
|
|
2.61 - 3.02 |
% |
|
|
4.43 - 4.81 |
% |
|
|
|
|
|
|
|
|
Expected dividend yield |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average fair values |
|
$ |
10.59 |
|
|
$ |
12.44 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
(1) |
|
This table excludes valuation assumptions related to the assumption of outstanding Golf
Galaxy options by Dicks during the period in conjunction with the acquisition of Golf
Galaxy on February 13, 2007. |
|
(2) |
|
The expected life of the options represent the estimated period of time until exercise
and is based on historical |
11
|
|
|
|
|
experience of similar awards. |
|
(3) |
|
Beginning on the date of adoption of SFAS 123R, expected volatility is based on the
historical volatility of the Companys common stock since the inception of the Companys
shares being publicly traded in October 2002; prior to the date of adoption of SFAS 123R,
expected volatility was estimated using the Companys historical volatility and volatility
of other publicly-traded retailers. |
|
(4) |
|
The risk-free interest rate is based on the implied yield available on U.S. Treasury
constant maturity interest rates whose term is consistent with the expected life of the
stock options. |
The assumptions used to calculate the fair value of options granted are evaluated and revised, as
necessary, to reflect market conditions and experience.
Stock Options
The following summarizes all stock option transactions from February 2, 2008 through May 3, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
Average |
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Remaining |
|
|
|
|
|
|
Shares |
|
|
Exercise |
|
|
Contractual |
|
|
Aggregate |
|
|
|
Subject to |
|
|
Price per |
|
|
Life |
|
|
Intrinsic Value (in |
|
|
|
Options |
|
|
Share |
|
|
(Years) |
|
|
thousands) |
|
Outstanding, February 2, 2008 |
|
|
19,276,445 |
|
|
$ |
14.66 |
|
|
|
6.35 |
|
|
$ |
352,494 |
|
Granted |
|
|
726,875 |
|
|
|
27.87 |
|
|
|
|
|
|
|
|
|
Exercised |
|
|
(229,601 |
) |
|
|
12.85 |
|
|
|
|
|
|
|
|
|
Forfeited / Expired |
|
|
(39,214 |
) |
|
|
20.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, May 3, 2008 |
|
|
19,734,505 |
|
|
$ |
15.15 |
|
|
|
6.43 |
|
|
$ |
284,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, May 3, 2008 |
|
|
13,666,702 |
|
|
$ |
10.70 |
|
|
|
5.59 |
|
|
$ |
258,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate intrinsic value in the table above is based on the Companys closing stock prices for
the last business day of the period indicated. As of May 3, 2008, total unrecognized stock-based
compensation expense related to nonvested stock options was approximately $58.4 million, before
income taxes, and is expected to be recognized over a weighted average period of approximately 2.2
years.
Restricted Stock
The following table summarizes all restricted stock transactions from February 2, 2008 through May
3, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
Remaining |
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Contractual |
|
|
Aggregate |
|
|
|
Number of |
|
|
Grant Date |
|
|
Life |
|
|
Intrinsic Value (in |
|
|
|
Shares |
|
|
Fair Value |
|
|
(Years) |
|
|
thousands) |
|
Nonvested, February 2, 2008 |
|
|
300,000 |
|
|
$ |
26.01 |
|
|
|
2.03 |
|
|
$ |
9,879 |
|
Granted |
|
|
392,774 |
|
|
|
27.87 |
|
|
|
|
|
|
|
|
|
Vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited / Expired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested, May 3, 2008 |
|
|
692,774 |
|
|
$ |
27.06 |
|
|
|
2.42 |
|
|
$ |
20,492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the 13 weeks ended May 3, 2008, the Company issued 392,774 shares of restricted stock to
eligible employees, which shares of common stock are subject to forfeiture until the end of an
applicable vesting period, which is determined based on the employees continuing employment. The
awards vest on the third anniversary of the date of grant. As of May 3, 2008 all of the shares of
restricted stock were outstanding and total unrecognized stock-based compensation expense related
to
12
nonvested shares of restricted stock was approximately $16.8 million, before income taxes, which is
expected to be recognized over a weighted average period of approximately 2.42 years.
8. Earnings per Share
The computation of basic earnings per share is based on the number of weighted average common
shares outstanding during the period. The computation of diluted earnings per share is based upon
the weighted average number of shares outstanding plus the incremental shares that would be
outstanding assuming exercise of dilutive stock options, restricted
stock and warrants. The number of incremental
shares from the assumed exercise of stock options and warrants is calculated by applying the
treasury stock method. The aggregate number of shares, totaling 8,776,048, that the Company could
be obligated to issue upon conversion of our $172.5 million issue price of senior convertible notes
was excluded from calculations for the 13 weeks ended May 3, 2008. The computations for basic and
diluted earnings per share are as follows (in thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
|
May 3, |
|
|
May 5, |
|
|
|
2008 |
|
|
2007 |
|
Net income |
|
$ |
20,775 |
|
|
$ |
21,701 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (for basic calculation) |
|
|
111,216 |
|
|
|
107,098 |
|
Dilutive effect of outstanding common stock options, restricted stock and warrants |
|
|
6,079 |
|
|
|
7,344 |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (for diluted calculation) |
|
|
117,295 |
|
|
|
114,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share basic |
|
$ |
0.19 |
|
|
$ |
0.20 |
|
Net earnings per common share diluted |
|
$ |
0.18 |
|
|
$ |
0.19 |
|
Potential dilutive shares are excluded from the computation of earnings per share if their effect
is anti-dilutive. Anti-dilutive options excluded from the calculation of earnings per share for the
13 weeks ended May 3, 2008 and May 5, 2007 were 5.2 million and 4.4 million, respectively.
9. Interest Expense, net
Interest expense, net is comprised of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
|
May 3, |
|
|
May 5, |
|
|
|
2008 |
|
|
2007 |
|
Interest expense |
|
$ |
2,053 |
|
|
$ |
4,140 |
|
Interest income |
|
|
395 |
|
|
|
933 |
|
|
|
|
|
|
|
|
Interest expense, net |
|
$ |
1,658 |
|
|
$ |
3,207 |
|
|
|
|
|
|
|
|
10. Income Taxes
The Company adopted the provisions of Financial Standards Accounting Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (FIN 48), an interpretation of FASB Statement No.
109 (SFAS 109), on February 4, 2007. As a result of the implementation of FIN 48, the Company
recognized no material adjustment in the liability for unrecognized income tax benefits. At the
adoption date of February 4, 2007, the Company had $12.0 million of unrecognized tax benefits, of
which approximately $9.1 million would affect our effective tax rate if recognized. At May 3, 2008,
the Company had $10.2 million of unrecognized tax benefits. Over the next twelve months, management
anticipates that it is reasonably possible that the amount of unrecognized tax benefits could be
reduced by approximately $4.1 million, none of which would affect the effective tax rate.
The Company recognizes interest and penalties related to uncertain tax positions in income tax
expense. As of February 3, 2008, the Company had approximately $1.7 million of accrued interest
related to uncertain tax positions.
The tax years 2004 2006 remain open to examination by the major taxing jurisdictions to which we
are subject.
13
11. Commitments and Contingencies
The
Company enters into licensing agreements for exclusive or
preferential rights to use certain trademarks
extending through 2020. Under specific agreements, the Company is obligated to pay annual
guaranteed minimum royalties. The aggregate amount of required
minimum royalty payments at May 3, 2008 is as follows
(in thousands):
|
|
|
|
|
Fiscal Year |
|
|
|
|
Remainder of 2008 |
|
$ |
6,451 |
|
2009 |
|
|
9,456 |
|
2010 |
|
|
10,790 |
|
2011 |
|
|
12,115 |
|
2012 |
|
|
14,935 |
|
Thereafter |
|
|
40,644 |
|
|
|
|
|
|
|
$ |
94,391 |
|
|
|
|
|
In addition, certain agreements require the Company to pay additional royalties if the qualified
purchases are in excess of the guaranteed minimum. Payments made under agreements requiring
minimum guaranteed contractual amounts were $1.6 million and $0.4 million for the 13 weeks ended
May 3, 2008 and May 5, 2007, respectively.
The Company also has certain naming rights and other marketing commitments extending through 2026
of $81.8 million. Payments made under these commitments were $2.7 million for the 13 weeks ended
May 3, 2008. Payments under these commitments are scheduled to be made as follows: remainder of
2008, $11.4 million; 2009, $14.7 million; 2010, $5.0 million; 2011, $5.0 million; 2012, $5.3
million; thereafter, $37.7 million.
The Company is involved in legal proceedings incidental to the normal conduct of its business.
Although the outcome of any pending legal proceedings cannot be predicted with certainty,
management believes that adequate insurance coverage is maintained and that the ultimate resolution
of these matters will not have a material adverse effect on the Companys liquidity, financial
position or results of operations.
12. Stock Split
On September 12, 2007, the Companys Board of Directors declared a two-for-one stock split, in the
form of a stock dividend, of the Companys common shares for stockholders of record on September
28, 2007. The split became effective on October 19, 2007 by issuing our stockholders of record one
additional share of common stock for every share of common stock held, and one additional share of
Class B common stock for every share of Class B common stock held. The applicable share and
per-share data for all periods included herein have been restated to give effect to this stock
split.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
We caution that any forward-looking statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q or made by our
management involve risks and uncertainties and are subject to change based on various important
factors, many of which may be beyond our control. Accordingly, our future performance and
financial results may differ materially from those expressed or implied in any such forward-looking
statements. Investors should not place undue reliance on forward-looking statements as a
prediction of actual results. You can identify these statements as those that may predict,
forecast, indicate or imply future results, performance or advancements and by forward-looking
words such as believe, anticipate, expect, estimate, predict, intend, plan,
project, will, will be, will continue, will result, could, may, might or any
variations of such words or other words with similar meanings. Forward-looking statements address,
among other things, our expectations, our growth strategies, including our plans to open new
stores, our efforts to increase profit margins and return on invested capital, plans to grow our
private label business, projections of our future profitability, results of operations, capital
expenditures or our financial condition or other forward-looking information and includes
statements about revenues, earnings, spending, margins, liquidity, store openings and operations,
inventory, private label products, our actions, plans or strategies.
The following factors, among others, in some cases have affected and in the future could affect our
financial performance and actual results and could cause actual results for fiscal 2008 and beyond
to differ materially from those expressed or implied in
14
any forward-looking statements included in this report or otherwise made by our management: the
intense competition in the sporting goods industry and actions by our competitors; the availability
of retail store sites on terms acceptable to us; the cost of real estate and other items related to
our stores; our inability to manage our growth, open new stores on a timely basis and expand
successfully in new and existing markets; changes in consumer demand; changes in general economic
and business conditions and in the specialty retail or sporting goods industry in particular
including the potential impact of natural disasters or national and international security concerns
on us or the retail environment; unauthorized disclosure of sensitive or confidential information;
risks relating to product liability claims and the availability of sufficient insurance coverage
relating to those claims and risks relating to the regulation of the products we sell, such as
hunting rifles and ammunition; our relationships with our suppliers, distributors and manufacturers
and their ability to provide us with sufficient quantities of products and risks associated with
relying on foreign sources of production; currency exchange rate fluctuations; risks relating to
problems with or disruption of our current management information systems; any serious disruption
at our distribution or return facilities; the seasonality of our business; regional risks because
our stores are generally concentrated in the eastern half of the United States; the outcome of
litigation or legal actions against us; risks relating to operational and financial restrictions
imposed by our Credit Agreement; factors associated with our pursuit of strategic acquisitions and
risks and uncertainties associated with assimilating acquired companies; our ability to access
adequate capital; the loss of our key executives, especially Edward W. Stack, our Chairman, Chief
Executive Officer and President; our ability to meet our labor needs; risks related to the economic
impact or the effect on the U.S. retail environment relating to instability and conflict in the
Middle East or elsewhere; that we are controlled by our Chief Executive Officer and his relatives,
whose interests may differ from our stockholders; our quarterly operating results and comparable
store sales may fluctuate substantially; our current anti-takeover provisions could prevent or
delay a change-in-control of the Company; our ability to repay or make the cash payments under our
senior convertible notes; various risks associated with our exclusive brand offerings; changes in
our business strategies and other factors discussed in other reports or filings filed by us with
the Securities and Exchange Commission.
In addition, we operate in a highly competitive and rapidly changing environment; therefore, new
risk factors can arise, and it is not possible for management to predict all such risk factors, nor
to assess the impact of all such risk factors on our 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. We do not assume any obligation and do not intend to update any
forward-looking statements except as may be required by the securities laws.
On February 13, 2007, Dicks Sporting Goods, Inc. acquired Golf Galaxy, Inc. (Golf Galaxy) which
became a wholly owned subsidiary of Dicks by means of a merger of Dicks subsidiary with and into
Golf Galaxy. On November 30, 2007, Dicks acquired all of the outstanding stock of Chicks Sporting
Goods, Inc. (Chicks), which also became a wholly-owned subsidiary of Dicks. Due to these
acquisitions, additional risks and uncertainties arise that could affect our financial performance
and actual results and could cause actual results for fiscal 2008 and beyond to differ materially
from those expressed or implied in any forward-looking statements included in this report or
otherwise made by our management. Such risks, which are difficult to predict with a level of
certainty and may be greater than expected, include, among others, risk associated with combining
businesses and/or with assimilating acquired companies.
OVERVIEW
Dicks is an authentic full-line sporting goods retailer offering a broad assortment of brand name
sporting goods equipment, apparel and footwear in a specialty store environment. Unless otherwise
specified, any reference to year is to our fiscal year and when used in this Form 10-Q and unless
the context otherwise requires, the terms Dicks, we, us, the Company and our refer to
Dicks Sporting Goods, Inc. and its wholly-owned subsidiaries.
On
February 13, 2007, the Company acquired Golf Galaxy by means of merger of our wholly-owned
subsidiary with and into Golf Galaxy. On November 30, 2007, the Company completed its acquisition
of Chicks Sporting Goods, Inc. The unaudited Condensed Consolidated Statements of Income include
the results of Golf Galaxy and Chicks for fiscal 2007 from their respective dates of acquisition
forward.
As of May 3, 2008 we operated 348 Dicks Sporting Goods stores, 83 Golf Galaxy stores and 15
Chicks stores, with approximately 21.6 million square feet, in 41 states, the majority of which
are located throughout the eastern half of the United States.
On September 12, 2007, the Companys board of directors approved a two-for-one stock split of the
Companys common stock and Class B common stock in the form of a stock dividend. The split was
effected by issuing our stockholders of record as of September 28, 2007 one additional share of
common stock for every share of common stock held, and one additional share of Class B common stock
for every share of Class B common stock held. The applicable share and per-share data for fiscal
2007 included herein have been restated to give effect to this stock split.
15
Due to the seasonal nature of our business, interim results are not necessarily indicative of
results for the entire fiscal year. Our revenue and earnings are typically greater during our
fiscal fourth quarter, which includes the majority of the holiday selling season.
CRITICAL ACCOUNTING POLICIES
As discussed in Item 7, Managements Discussion and Analysis of Financial Condition and Results of
Operations section of the Companys Annual Report on Form 10-K for the fiscal year ended February
2, 2008, the Company considers its policies on inventory valuation, vendor allowances, goodwill,
intangible assets and impairment of long-lived assets, business combinations, self-insurance
reserves, stock-based compensation and uncertain tax positions to be the most critical in
understanding the judgments that are involved in preparing its consolidated financial statements.
There have been no changes in the Companys critical accounting policies during the period ended
May 3, 2008.
RESULTS OF OPERATIONS AND OTHER SELECTED DATA
Executive Summary
Net income for the current quarter ended May 3, 2008 totaled $20.8 million and earnings per diluted
share was $0.18, as compared to net income of $21.7 million, or $0.19 per diluted share for the 13
weeks ended May 5, 2007.
Net sales for the current quarter increased 11% to $912.1 million, due primarily to new store
sales, partially offset by a comparable store sales decrease of 3.8%. Golf Galaxy will be included
in the Companys comparable store sales calculation beginning in the second quarter of 2008.
As a percentage of net sales, gross profit decreased 127 basis points to 28.41% for the quarter,
due primarily to higher occupancy expenses caused by the deleverage related to the comparable store
sales decline in the current quarter, partially offset by merchandise margins improvements and
increased efficiencies in the merchandise supply chain.
We ended the first quarter with $121.5 million of outstanding borrowings on our Second Amended and
Restated Credit Agreement (the Credit Agreement). There were no outstanding borrowings as of
February 2, 2008.
The following represents a reconciliation of beginning and ending stores for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
13 Weeks Ended |
|
|
|
May 3, 2008 |
|
|
May 5, 2007 |
|
|
|
Dicks |
|
|
Golf Galaxy |
|
|
Chicks |
|
|
Total |
|
|
Dicks |
|
|
Golf Galaxy |
|
|
Total |
|
Beginning stores |
|
|
340 |
|
|
|
79 |
|
|
|
15 |
|
|
|
434 |
|
|
|
294 |
|
|
|
65 |
|
|
|
359 |
|
New |
|
|
8 |
|
|
|
4 |
|
|
|
|
|
|
|
12 |
|
|
|
15 |
|
|
|
10 |
|
|
|
25 |
|
Closed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending stores |
|
|
348 |
|
|
|
83 |
|
|
|
15 |
|
|
|
446 |
|
|
|
309 |
|
|
|
75 |
|
|
|
384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relocated stores |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
following table presents for the periods indicated items in the
unaudited Condensed Consolidated
Statements of Income as a percentage of the Companys net sales, as well as the basis point change
in the percentage of net sales from the prior years period. In addition, other selected data is
provided to facilitate a further understanding of our business. These tables should be read in
conjunction with the following managements discussion and analysis and the unaudited condensed
consolidated financial statements and related notes thereto.
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis Point |
|
|
|
|
|
|
|
|
|
|
Increase / |
|
|
|
|
|
|
|
|
|
|
(Decrease) in |
|
|
|
|
|
|
|
|
|
|
Percentage of |
|
|
13 Weeks Ended |
|
Net Sales |
|
|
May 3, |
|
May 5, |
|
from Prior Year |
|
|
2008 |
|
2007 (1) |
|
2007-2008 (1) |
Net sales (2) |
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
N/A |
|
Cost of goods sold, including occupancy and distribution costs (3) |
|
|
71.59 |
|
|
|
70.32 |
|
|
|
127 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
28.41 |
|
|
|
29.68 |
|
|
|
(127 |
) |
Selling, general and administrative expenses (4) |
|
|
24.12 |
|
|
|
24.04 |
|
|
|
8 |
|
Pre-opening expenses (5) |
|
|
0.54 |
|
|
|
0.86 |
|
|
|
(32 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
3.75 |
|
|
|
4.77 |
|
|
|
(102 |
) |
Gain on sale of asset (6) |
|
|
(0.26 |
) |
|
|
0.00 |
|
|
|
(26 |
) |
Interest expense, net (7) |
|
|
0.18 |
|
|
|
0.39 |
|
|
|
(21 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
3.83 |
|
|
|
4.38 |
|
|
|
(55 |
) |
Provision for income taxes |
|
|
1.55 |
|
|
|
1.75 |
|
|
|
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
2.28 |
% |
|
|
2.64 |
% |
|
|
(36 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
store net sales decrease / increase (8) |
|
|
-3.8 |
% |
|
|
2.0 |
% |
|
|
|
|
Number of stores at end of period (9) |
|
|
446 |
|
|
|
384 |
|
|
|
|
|
Total square feet at end of period (9) |
|
|
21,594,415 |
|
|
|
18,546,143 |
|
|
|
|
|
|
|
|
(1) |
|
Column does not add due to rounding. |
|
(2) |
|
Revenue from retail sales is recognized at the point of sale, net of sales tax. A
provision for anticipated merchandise returns is provided through a reduction of sales and cost of
sales in the period that the related sales are recorded. Revenue from gift cards and returned
merchandise credits (collectively the cards), are deferred and recognized upon the redemption of
the cards. These cards have no expiration date. Income from unredeemed cards is recognized in the
unaudited Condensed Consolidated Statements of Income in selling, general and administrative expenses at the
point at which redemption becomes remote. The Company performs an evaluation of the aging of the
unredeemed cards, based on the elapsed time from the date of original issuance, to determine when
redemption is remote. |
|
(3) |
|
Cost of goods sold includes the cost of merchandise, inventory shrinkage and
obsolescence, freight, distribution and store occupancy costs. Store occupancy costs include rent,
common area maintenance charges, real estate and other asset based taxes, store maintenance,
utilities, depreciation, fixture lease expenses and certain insurance expenses. |
|
(4) |
|
Selling, general and administrative expenses include store and field support payroll and
fringe benefits, advertising, bank card charges, information systems, marketing, legal, accounting,
other store expenses, stock-based compensation expense and all expenses associated with operating
the Companys corporate headquarters. |
|
(5) |
|
Pre-opening expenses consist primarily of rent, marketing, payroll and recruiting costs
incurred prior to a new or relocated store opening. |
|
(6) |
|
Gain on sale of asset resulted from the Company exercising a buy out option on an
aircraft lease and subsequently selling the aircraft. |
|
(7) |
|
Interest expense, net, results primarily from interest on our senior convertible notes
and Credit Agreement. |
|
(8) |
|
Comparable store sales begin in a stores 14th full month of operations after
its grand opening. Comparable store sales are for stores that opened at least 13 months prior to
the beginning of the period noted. Stores that were relocated during the applicable period have
been excluded from comparable store sales. Each relocated store is returned to the comparable
store base after its 14th full month of operations at that new location. |
|
(9) |
|
The store count and footage amounts include Golf Galaxy for fiscal 2008 and 2007 and
Chicks for fiscal 2008. |
17
13 Weeks Ended May 3, 2008 Compared to the 13 Weeks Ended May 5, 2007
Net Income
Net income for the current quarter totaled $20.8 million and earnings per diluted share was $0.18,
as compared to net income of $21.7 million, or $0.19 per diluted share for the 13 weeks ended May
5, 2007. The decrease was primarily due to an increase in selling, general and administrative
expenses, partially offset by an increase in net sales and gross profit.
Net Sales
Net sales for the current quarter increased 11% to $912.1 million, due primarily to new store sales
partially offset by a comparable store sales decrease of 3.8%. Golf Galaxy will be included in the
Companys comparable store sales calculation beginning in the second quarter of 2008.
The decrease in comparable store sales is mostly attributable to sales decreases in golf, kids
athletic footwear which was impacted by the Companys decision to exit the Heelys wheeled shoe
business in 2007, licensed merchandise and lodge outdoors. These sales decreases were partially
offset by increases in athletic footwear, excluding the Heelys business, baseball, cleats and
hunting.
Income from Operations
Income from operations decreased to $34.2 million for the current quarter from $39.3 million for
the 13 weeks ended May 5, 2007. The decrease was primarily due to a $22.0 million increase in
selling, general and administrative expenses partially offset by a $14.7 million increase in gross
profit and a $2.2 million decrease in pre-opening expenses.
Gross profit increased 6% to $259.1 million for the current quarter from $244.4 million for the 13
weeks ended May 5, 2007. The 127 basis point decrease is due primarily to a 170 basis point
increase in occupancy expenses caused by the deleverage related to the comparable store sales
decline in the current quarter. Merchandise margins improved by 24 basis points due primarily to
improved merchandise margins in several of the Companys product categories. The Company also
realized efficiencies in the merchandise supply chain that contributed 24 basis points to gross
profit in the current quarter.
Selling, general and administrative expenses increased 11% to $220.0 million for the current
quarter from $198.0 million for the 13 weeks ended May 5, 2007. The 8 basis point increase was
primarily due to an increase store payroll costs that deleveraged as a result of the comparable
store sales decrease (77 basis points) partially offset by reductions in net advertising expense,
primarily print media.
Pre-opening expenses decreased to $4.9 million for the quarter from $7.1 million for the 13 weeks
ended May 5, 2007. Pre-opening expenses were for the opening of eight new Dicks stores and four
new Golf Galaxy stores during the quarter. Pre-opening expense in any period fluctuate depending
on the timing and number of new stores which open in preceding and subsequent quarters.
Gain on Sale of Asset
The Company exercised its early buy out rights on an aircraft lease during the quarter. The
Company recognized a $2.4 million pre-tax gain on the subsequent sale of the aircraft.
Interest Expense, Net
Interest expense, net, was $1.7 million for the quarter as compared to $3.2 million for the 13
weeks ended May 5, 2007. The Companys average borrowings outstanding on our Credit Agreement
decreased to $56.8 million for the quarter from $140.4 million for the 13 weeks ended May 5, 2007,
primarily due to borrowings made in fiscal 2007 to fund the acquisition of Golf Galaxy. The
average interest rate on the revolving line of credit decreased by 295 basis points over last year.
LIQUIDITY AND CAPITAL RESOURCES AND CHANGES IN FINANCIAL CONDITION
The following discussion has been updated to reflect the effects of the correction of previously
reported amounts discussed in Note 4 to the unaudited Condensed Consolidated Financial Statements
Our primary capital requirements are for inventory, capital improvements, and pre-opening expenses
to support expansion plans, as well as for various investments in store remodeling, store fixtures
and ongoing infrastructure improvements.
18
The change in cash and cash equivalents is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
|
|
May 3, |
|
|
May 5, |
|
|
|
2008 |
|
|
2007 |
|
Net cash used in operating activities |
|
$ |
(86,120 |
) |
|
$ |
(7,013 |
) |
Net cash used in investing activities |
|
|
(47,037 |
) |
|
|
(266,694 |
) |
Net cash provided by financing activities |
|
|
129,940 |
|
|
|
179,152 |
|
Effect of exchange rate changes on cash |
|
|
(93 |
) |
|
|
37 |
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
$ |
(3,310 |
) |
|
$ |
(94,518 |
) |
|
|
|
|
|
|
|
Operating Activities
Cash flow from operations is seasonal in our business. Typically, we use cash flow from operations
to increase inventory in advance of peak selling seasons, with the pre-Christmas inventory increase
being the largest. In the fourth quarter, inventory levels are reduced in connection with
Christmas sales and this inventory reduction, combined with proportionately higher net income,
typically produces significant positive cash flow.
Cash used in operating activities for the 13 weeks ended May 3, 2008 totaled $86.1 million. The
seasonal increase in inventory during the quarter used $83.2 million and a decrease in income taxes
payable due to the timing of payments and higher federal extension payment used $48.3 million.
These uses of cash were partially offset by the seasonal increase in accounts payable which
provided $38.5 million. Net income for the 13 weeks ended May 3, 2008 provided $20.8 million, and
the non-cash charge for depreciation and amortization totaled $20.4 million.
The annual cash flow from operating the Companys stores is a significant source of liquidity, and
will continue to be used in 2008 primarily to purchase inventory, make capital improvements and
open new stores. All of the Companys revenues are realized at the point-of-sale in the stores.
Investing Activities
Cash used in investing activities for the 13 weeks ended May 3, 2008 decreased by $219.7 million,
to $47.0 million as the 13 weeks ended May 5, 2007 reflected payments of $221.4 million, net of
$4.9 million cash acquired, relating to the purchase of Golf Galaxy. The Companys gross capital
expenditures used $49.4 million during the quarter, which we use to build new stores and remodel or
relocate existing stores. Furthermore, net cash used in investing activities includes purchases of
information technology assets and expenditures for distribution facilities and corporate
headquarters.
We opened 12 stores during the 13 weeks ended May 3, 2008 as compared to opening twenty-five stores
during the 13 weeks ended May 5, 2007.
Cash requirements in 2008, other than normal operating expenses, are expected to consist primarily
of capital expenditures related to the addition of new stores, enhanced information technology and
improved distribution infrastructure. The Company plans to open 44 new Dicks stores, ten new Golf
Galaxy stores and relocate one Dicks store in 2008. The Company also anticipates incurring
additional expenditures for remodeling existing stores. While there can be no assurance that
current expectations will be realized, the Company expects capital expenditures, net of deferred
construction allowances and proceeds from sale leaseback transactions, to be approximately $125
million in 2008, including Golf Galaxy and Chicks capital expenditure requirements.
Financing Activities
Cash provided by financing activities for the 13 weeks ended May 3, 2008 totaled $129.9 million
primarily reflecting borrowings under the Credit Agreement of $121.5 million as a result of the
seasonal increase in inventory. Financing activities also consisted of proceeds from transactions
in the Companys common stock and the excess tax benefit from stock-based compensation. As stock
option grants are exercised, the Company will continue to receive proceeds and a tax deduction;
however, the amounts and the timing cannot be predicted.
The Companys liquidity and capital needs have generally been met by cash from operating
activities, the proceeds from the convertible notes and borrowings under the Credit Agreement,
including up to $75 million in the form of letters of credit. Borrowing availability under the
Credit Agreement is generally limited to the lesser of 70% of the Companys eligible
19
inventory or 85% of the Companys inventorys liquidation value, in each case net of specified
reserves and less any letters of credit outstanding. Interest on outstanding indebtedness under
the Credit Agreement currently accrues, at the Companys option, at a rate based on either (i) the
prime corporate lending rate or (ii) the LIBOR rate plus 0.75% to 1.50% based on the level of total
borrowings during the prior three months. The Credit Agreements term expires July 27, 2012.
Borrowings under the Credit Agreement were $121.5 million as of May 3, 2008. There were no
outstanding borrowings under the Credit Agreement as of February 2, 2008. Total remaining
borrowing capacity, after subtracting letters of credit as of May 3, 2008 and February 2, 2008 was
$207.9 million and $333.2 million, respectively.
The Credit Agreement contains restrictions regarding the Companys and related subsidiarys
ability, among other things, to merge, consolidate or acquire non-subsidiary entities, to incur
certain specified types of indebtedness or liens in excess of certain specified amounts, to pay
cash dividends or make distributions on the Companys stock, to make certain investments or loans
to other parties, or to engage in lending, borrowing or other commercial transactions with
subsidiaries, affiliates or employees. Under the Credit Agreement, the Company may be obligated to
maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 in certain circumstances. The
obligations of the Company under the Credit Agreement are secured by interests in substantially all
of the Companys personal property excluding store and distribution center equipment and fixtures.
As of May 3, 2008, the Company was in compliance with the terms of the Credit Agreement.
The Company believes that cash flows generated from operations and funds available under our Credit
Agreement will be sufficient to satisfy its capital requirements through fiscal 2008. Other new
business opportunities or store expansion rates substantially in excess of those presently planned
may require additional funding.
Off-Balance Sheet Arrangements, Contractual Obligations and Other Commercial Commitments
The Companys off-balance sheet contractual obligations and commercial commitments as of May 3,
2008 primarily relate to operating lease obligations, future minimum guaranteed contractual
payments, naming rights and other marketing commitments and letters of credit. The Company has
excluded these items from the condensed consolidated balance sheets in accordance with generally
accepted accounting principles.
OUTLOOK
Full Year 2008 Comparisons to Fiscal 2007
|
|
|
Based on an estimated 118.3 million diluted shares outstanding, the Company
currently anticipates reporting consolidated earnings per diluted share of
approximately $1.22 1.36 as compared to earnings per diluted share for the full year
2007 of $1.33. |
|
|
|
|
Comparable store sales, which include Dicks Sporting Goods stores only, are
expected to decrease approximately 3 5%. The comparable store sales calculation
excludes the Golf Galaxy and Chicks Sporting Goods stores. |
|
|
|
|
The Company expects to open approximately 44 new Dicks Sporting Goods stores, ten
new Golf Galaxy stores and relocate one Dicks store in 2008. |
Second Quarter 2008
|
|
|
Based on an estimated 117.5 million diluted shares outstanding, the Company
anticipates reporting consolidated earnings per diluted share of approximately $0.34
0.38, as compared to earnings per diluted share for the second quarter 2007 of $0.41. |
|
|
|
|
Comparable store sales, which include Dicks and Golf Galaxy stores, are expected to
decrease approximately 4 7%. The comparable store sales calculation excludes the
Chicks Sporting Goods stores. |
|
|
|
|
The Company expects to open approximately ten new Dicks stores and one new Golf
Galaxy store in the second quarter. |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the Companys market risk exposures from those reported in
our Annual Report on Form 10-K for the year ended February 2, 2008.
20
ITEM 4. CONTROLS AND PROCEDURES
During the first quarter of fiscal 2008, there were no changes in the Companys internal control
over financial reporting that materially affected, or are reasonably likely to materially affect,
the Companys internal control over financial reporting.
During the quarter, the Company carried out an evaluation, under the supervision and with the
participation of the Companys management, including the Chief Executive Officer and the Chief
Financial Officer, of the effectiveness of the design and operation of the disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934,
as amended (the Exchange Act). Based upon that evaluation, management, the Companys Chief
Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and
procedures were effective as of the end of the period covered by this Report (May 3, 2008).
On November 30, 2007, the Company acquired all of the outstanding stock of Chicks. The Company is
currently integrating the processes, systems and controls relating to Chicks into the Companys
existing system of internal controls and procedures. As a result, the Companys internal controls
over financial reporting and the scope of management and the Companys assessment of the
effectiveness of the Companys disclosure controls and procedures for the end of the period covered
by this report included all of the Companys business except for Chicks, which represented
approximately 3% of total assets and 4% of total revenues as of and for the period ended May 3,
2008.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a defendant in two cases which make claims concerning alleged failures to pay wages
and overtime wages as required by the Fair Labor Standards Act (FLSA) and applicable state labor
law. The cases were filed in May and November of 2005 in the U.S. District Court for the Western
District of New York (Tamara Barrus v. Dicks Sporting Goods, Inc. and Galyans Trading Company,
Inc. (Barrus) and Daniel Parks v. Dicks Sporting Goods, Inc. (Parks)). In September and
October 2006, respectively, a magistrate judge for the U.S. District Court for the Western District
of New York conditionally certified classes for notice purposes under the FLSA in the Barrus and
Parks cases, which the U.S. District Judge upheld. In the Barrus case, the parties and the Court
agreed to stay the litigation pending an attempt to resolve all claims through mediation. Mediation
sessions were held in April and August 2007. The parties to the Barrus case have continued to work
through the mediators office and independently in an effort to determine whether the matter can be
resolved through settlement. In the Parks case, the parties and the Court have also agreed to stay
the litigation pending an attempt to resolve all claims through mediation. A mediation session was
held in March 2008 and the parties have agreed to continue discussions to determine whether this
matter can be resolved through settlement.
We currently believe that none of these cases properly represent class actions, and we plan to
vigorously defend these cases. Our management believes that the final resolution of these matters
would not have a material effect on our consolidated financial position or liquidity or results of
operations.
In addition to the above matters, various claims and lawsuits arising in the normal course of
business are pending against us. The subject matter of these proceedings primarily includes
commercial, intellectual property, lease disputes and employment issues. The results of those other
proceedings are not expected to have a material adverse effect on our consolidated financial
position, liquidity or results of operations.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the
factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year
ended February 2, 2008 as filed with the Securities and Exchange Commission on March 27, 2008,
which could materially affect our business, financial condition, financial results or future
performance. Reference is made to Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations Forward-Looking Statements of this report which is
incorporated herein by reference.
ITEM 6. EXHIBITS
(a) Exhibits. The Exhibits listed in the Index to Exhibits, which appears on page 23 and is
incorporated herein by reference, are filed as part of this Form 10-Q.
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on May 22, 2008 on its behalf by the
undersigned, thereunto duly authorized.
|
|
|
|
|
DICKS SPORTING GOODS, INC. |
|
|
|
|
|
|
|
By:
|
|
/s/ EDWARD W. STACK
Edward W. Stack
|
|
|
|
|
Chairman of the Board, Chief Executive Officer, President and Director |
|
|
|
|
|
|
|
By:
|
|
/s/ TIMOTHY E. KULLMAN
Timothy E. Kullman
|
|
|
|
|
Executive Vice President, Finance, Administration and Chief Financial Officer (principal financial |
|
|
|
|
and accounting officer) |
|
|
22
INDEX TO EXHIBITS
|
|
|
|
|
|
|
Exhibit Number |
|
Description of Exhibit |
|
Method of Filing |
|
|
|
|
|
|
|
|
4.1 |
|
|
Dicks Sporting Goods, Inc. Amended
and Restated 2002 Stock and Incentive
Plan
|
|
Filed herewith |
|
|
|
|
|
|
|
|
4.2 |
|
|
Golf Galaxy, Inc. Amended and
Restated 2004 Stock Incentive Plan
|
|
Filed herewith |
|
|
|
|
|
|
|
|
4.3 |
|
|
Amendment to the Dicks Clothing and
Sporting Goods, Inc. Stock Option
Plan, dated March 27, 2008
|
|
Filed herewith |
|
|
|
|
|
|
|
|
4.4 |
|
|
Amendment to the Golf Galaxy, Inc.
1996 Stock Option and Incentive Plan,
dated March 27, 2008
|
|
Filed herewith |
|
|
|
|
|
|
|
|
10.1 |
|
|
Second Amendment to the Dicks
Sporting Goods Supplemental Smart
Savings Plan, dated March 27, 2008
|
|
Filed herewith |
|
|
|
|
|
|
|
|
10.2 |
|
|
Third Amendment to the Dicks
Sporting Goods Supplemental Smart
Savings Plans, dated May 16, 2008
|
|
Filed herewith |
|
|
|
|
|
|
|
|
31.1 |
|
|
Certification of Edward W. Stack,
Chairman, Chief Executive Officer and
President, dated as of May 22, 2008
and made pursuant to Rule 13a-14 of
the Securities Exchange Act of 1934,
as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
|
|
Filed herewith |
|
|
|
|
|
|
|
|
31.2 |
|
|
Certification of Timothy E. Kullman,
Executive Vice President, Finance,
Administration and Chief Financial
Officer, dated as of May 22, 2008 and
made pursuant to Rule 13a-14 of the
Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
|
|
Filed herewith |
|
|
|
|
|
|
|
|
32.1 |
|
|
Certification of Edward W. Stack,
Chairman, Chief Executive Officer and
President, dated as of May 22, 2008
and made pursuant to Section 1350,
Chapter 63 of Title 18, United States
Code, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith |
|
|
|
|
|
|
|
|
32.2 |
|
|
Certification of Timothy E. Kullman,
Executive Vice President, Finance,
Administration and Chief Financial
Officer, dated as of May 22, 2008 and
made pursuant to Section 1350,
Chapter 63 of Title 18, United States
Code, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith |
23