Print page
Email page
Download PDF
« Previous Release | Next Release »
AUSTIN, Texas--(BUSINESS WIRE)--May 7, 2008--Golfsmith International Holdings, Inc., (NASDAQ: GOLF) today announced financial results for the first quarter fiscal 2008 ended March 29, 2008.
First Quarter Highlights:
-- Net revenues increased 2.0 percent to $79.2 million for the
first quarter compared with net revenues of $77.7 million for
the first quarter of fiscal 2007. The increase includes net
revenues from 13 non-comparable retail stores opened in fiscal
2007, partially offset by a 11.4 percent decrease in net
revenues from its direct channel and a 8.4 percent decrease in
comparable store sales.
-- Operating loss totaled $5.2 million in the first quarter
compared with a $3.9 million loss for the first quarter of
fiscal 2007.
-- Net loss totaled $5.4 million or a loss per share of $0.34,
based on 15.8 million fully diluted weighted average shares
outstanding. This compares with a net loss of $4.9 million, or
$0.31 per share, based on 15.7 million fully diluted weighted
average shares outstanding in the three months ended March 31,
2007.
-- Operating results included a $1.8 million charge, or $0.11
cents per share related to restructuring costs, severance and
search fees associated with organizational changes made in the
first quarter, including the severance package provided to our
previous CEO.
"Our first quarter results were slightly below our initial expectations due to lack of new product launches, a decline in rounds played and the challenging economic environment. In addition, in comparison to last year, there was the negative impact of the Easter shift, said Martin Hanaka, chairman and interim chief executive officer of Golfsmith. "Looking ahead, we will continue to focus intently on expense controls, gross margin expansion, and improved inventory management. During April we experienced improved sales trends and now are more closely in line with expectations. As we stated in our last conference call, we expect the third and fourth quarters to be similar or slightly below last's year's respective quarter, while the second quarter should show meaningful improvement and our performance is still tracking to this expectation."
As of March 29, 2008, total inventory was $100.5 million as compared to $100.1 million on March 31, 2007 and average comp store inventory declined 7%.
Outlook:
For Fiscal 2008 Golfsmith continues to expect overall sales growth to be slightly positive with slightly negative comparable store sales and a decrease in direct sales. Earnings growth will be driven by reduced operating expenses and marketing costs as well as lower pre-opening costs.
Conference Call Information
The company will host a conference call today at 4:30 p.m. (eastern time) to discuss the first quarter Fiscal 2008 financial results. The call will be simulcast over the Internet at https://investors.golfsmith.com. A replay will be available for 30 days after the call at the aforementioned website. Telephone replays can be accessed for seven days following the call by dialing 888-286-8010 (U.S.) or 617-801-6888 (international) and entering passcode 95411892.
About Golfsmith
Golfsmith International Holdings, Inc., (NASDAQ: GOLF) is a 40-year-old specialty retailer of golf and tennis equipment, apparel and accessories. The company operates as an integrated multi-channel retailer, offering its guests the convenience of shopping in its 72 stores across the United States, through its Internet site at www.golfsmith.com and from its assortment of catalogs. Golfsmith offers an extensive product selection that features premier branded merchandise, as well as its proprietary products, clubmaking components and pre-owned clubs.
Cautionary Language
This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about the company's beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words "may," "could," "would," "should," "believe," "expect," "anticipate," "plan," "estimate," "target," "project," "intend," or similar expressions. Forward-looking statements are not guarantees of performance. These statements are based on management's beliefs and assumptions, which in turn are based in part on currently available information and in part on management's estimates and projections of future events and conditions. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for the products, the introduction of new product offerings, store opening costs, the ability to lease new sites on a timely basis, expected pricing levels, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve risks and uncertainties, which could cause actual results that differ materially from those contained in any forward-looking statement. Many of these factors are beyond the company's ability to control or predict. Such factors include, but are not limited to the Risk Factors set forth in Item 1A. Risk Factors in the company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2008.
The company believes its forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update publicly any of them in light of new information or future events.
Golfsmith International, Inc.
Consolidated Statement of Operations
(Unaudited)
Three Months Ended
-------------------------
March 29, March 31,
2008 2007
------------ ------------
Net revenues $79,235,496 $77,662,496
Cost of products sold 52,075,606 51,579,270
------------ ------------
Gross profit 27,159,890 26,083,226
Selling, general and administrative 32,335,834 29,351,900
Store pre-opening / closing expenses 28,144 630,766
------------ ------------
Total operating expenses 32,363,978 29,982,666
------------ ------------
Operating loss (5,204,088) (3,899,440)
Interest expense (997,650) (983,490)
Interest income 9,951 5,902
Other income 25,544 31,998
Other expense (18,983) (42,979)
------------ ------------
Loss before income taxes (6,185,226) (4,888,009)
Income tax benefit (expense) 742,227 (20,982)
------------ ------------
Net loss $(5,442,999) $(4,908,991)
============ ============
Basic net loss per share of common stock $ (0.34) $ (0.31)
Diluted net loss per share of common stock $ (0.34) $ (0.31)
Basic weighted average common shares
outstanding 15,839,215 15,730,759
Diluted weighted average common shares
outstanding 15,839,215 15,730,759
Golfsmith International, Inc.
Consolidated Balance Sheet
March 29, December 29,
2008 2007
------------- -------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,160,736 $ 4,025,299
Receivables, net 2,221,113 1,600,844
Inventories 100,522,490 98,509,444
Prepaid and other current assets 11,105,191 10,531,017
------------- -------------
Total current assets 116,009,530 114,666,604
Property and equipment:
Land and buildings 21,752,029 21,719,245
Equipment, furniture and fixtures 35,630,217 37,292,454
Leasehold improvements and construction
in progress 36,722,666 35,039,300
------------- -------------
94,104,912 94,050,999
Less: accumulated depreciation and
amortization (35,123,584) (33,309,807)
------------- -------------
Net property and equipment 58,981,328 60,741,192
Tradename 11,158,000 11,158,000
Trademarks 13,972,251 13,972,251
Customer database, net 1,321,913 1,416,336
Debt issuance costs, net 533,516 574,556
Other long-term assets 379,951 391,097
------------- -------------
Total assets $202,356,489 $202,920,036
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 40,872,849 $ 49,008,389
Accrued expenses and other current
liabilities 18,889,166 21,165,752
Line of credit 65,413,000 50,736,236
------------- -------------
Total current liabilities 125,175,015 120,910,377
Deferred rent liabilities 11,934,307 11,771,043
------------- -------------
Total liabilities 137,109,322 132,681,420
Total stockholders' equity 65,247,167 70,238,616
------------- -------------
Total liabilities and stockholders' equity $202,356,489 $202,920,036
============= =============
CONTACT: Investor Relations:
ICR
Joseph Teklits/Jean Fontana
203-682-8200
www.icrinc.com
SOURCE: Golfsmith International Holdings, Inc.