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AUSTIN, Texas--(BUSINESS WIRE)--Aug. 5, 2008--Golfsmith International Holdings, Inc., (NASDAQ: GOLF) today announced financial results for the second quarter of fiscal 2008 ended June 28, 2008.
Second Quarter Highlights:
Martin Hanaka, chairman and chief executive officer of Golfsmith commented, "We were pleased with our second quarter results, especially considering the state of the consumer and a promotional sporting goods sector. Through selective promotions and prudent inventory investments, we achieved slightly positive same-store sales and net income growth of 26%. Looking ahead, we will continue to focus on controlling our expenses and managing our inventory, as well as executing on carefully managed promotions to drive sales. While we are planning conservatively for the second half, we continue to expect our 2008 earnings to show meaningful improvement compared to 2007."
Year-to-Date Results
As of June 28, 2008, total inventory was $101.1 million as compared to $102.5 million on June 30, 2007 and average comparable store inventory declined 3.2%.
Outlook:
For Fiscal 2008, Golfsmith continues to expect overall sales growth to be slightly positive with slightly negative comparable store 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 second 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 13485454.
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.
On August 5, 2008 Golfsmith International Holdings, Inc. (the "Company") issued a news release announcing its results of operations for the second quarter ended June 28, 2008.
The Company will conduct an earnings conference call at 3:30 p.m. Central Daylight Time on August 5, 2008. The earnings conference will be available live on the Company's Web site at investors.golfsmith.com.
The news release issued on August 5, 2008, is furnished as Exhibit No. 99 to this Current Report on Form 8-K. The Company's Annual Report to Shareholders and its reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about the Company.
The information in this Current Report on Form 8-K, including Exhibit No. 99 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section. The information in this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
Golfsmith International Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
--------------------------- ---------------------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
------------- ------------- ------------- -------------
Net revenues $129,994,600 $124,998,760 $209,230,096 $202,661,256
Cost of
products sold 85,310,115 80,556,095 137,385,721 132,135,365
------------- ------------- ------------- -------------
Gross profit 44,684,485 44,442,665 71,844,375 70,525,891
Selling,
general and
administrative 34,167,492 35,612,535 66,503,326 64,964,435
Store pre-
opening
expenses 81,223 1,147,630 109,367 1,778,396
------------- ------------- ------------- -------------
Total operating
expenses 34,248,715 36,760,165 66,612,693 66,742,831
------------- ------------- ------------- -------------
Operating
income 10,435,770 7,682,500 5,231,682 3,783,060
Interest
expense (738,809) (933,212) (1,736,459) (1,916,702)
Interest income 32,294 39,624 42,245 45,526
Other income 46,080 206,852 71,624 238,850
Other expense (51,169) (26,177) (70,152) (69,156)
------------- ------------- ------------- -------------
Income before
income taxes 9,724,166 6,969,587 3,538,940 2,081,578
Income tax
expense (1,152,744) (154,200) (410,517) (175,182)
------------- ------------- ------------- -------------
Net income $ 8,571,422 $ 6,815,387 $ 3,128,423 $ 1,906,396
============= ============= ============= =============
Net income per
share:
Basic $ 0.54 $ 0.43 $ 0.20 $ 0.12
Diluted $ 0.54 $ 0.43 $ 0.20 $ 0.12
Weighted
average number
of shares
outstanding:
Basic 15,973,033 15,797,633 15,906,124 15,768,818
Diluted 15,973,033 15,830,810 15,951,852 15,872,254
Golfsmith International Holdings, Inc.
Consolidated Balance Sheets
June 28, 2008 December 29,
(Unaudited) 2007
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,664,315 $ 4,025,299
Receivables, net 2,806,980 1,600,844
Inventories 101,052,822 98,509,444
Prepaid expenses and other current assets 11,383,530 10,531,017
------------- -------------
Total current assets 120,907,647 114,666,604
Property and equipment:
Land and buildings 22,066,559 21,719,245
Equipment, furniture, fixture and autos 33,270,579 37,292,454
Leasehold improvements and construction
in progress 37,400,657 35,039,300
------------- -------------
92,737,795 94,050,999
Less: accumulated depreciation (34,388,792) (33,309,807)
------------- -------------
Net property and equipment 58,349,003 60,741,192
Tradename 11,158,000 11,158,000
Trademarks 13,972,251 13,972,251
Customer database, net 1,227,491 1,416,336
Debt issuance costs, net 492,476 574,556
Other long-term assets 368,804 391,097
------------- -------------
Total assets $206,475,672 $202,920,036
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 67,735,614 $ 49,008,389
Accrued expenses and other current
liabilities 18,039,179 21,165,752
Line of credit 34,603,152 50,736,236
------------- -------------
Total current liabilities 120,377,945 120,910,377
Deferred rent 11,879,477 11,771,043
------------- -------------
Total liabilities 132,257,422 132,681,420
Total stockholders' equity 74,218,250 70,238,616
------------- -------------
Total liabilities and stockholders'
equity $206,475,672 $202,920,036
============= =============
CONTACT: Investor Relations:
ICR
Joseph Teklits/Jean Fontana, 203-682-8200
www.icrinc.com
SOURCE: Golfsmith International Holdings, Inc.