Thank you for visiting Dick's Sporting Goods. If you need assistance with shopping on our site, please call us at 1-877-846-9997 and a customer care representative will be happy to assist you. Please inform the Customer Service representative that you require assistance.

News Releases

Printer Friendly Version View printer-friendly version
Dick's Sporting Goods Reports Second Quarter Results:

- EPS Increases 77% over Last Year to $0.83

- Comparable Store Sales Increase 7.2%

- Increases Full Year Guidance

PITTSBURGH, Aug. 21 /PRNewswire-FirstCall/ -- Dick's Sporting Goods, Inc. (NYSE: DKS) today reported sales and earnings results for the second quarter ended August 4, 2007. The results include the operating results of Golf Galaxy for 2007 from the acquisition date, but not for 2006 as Golf Galaxy was acquired on February 13, 2007.

Second Quarter Results

Net income increased 87% to $47.9 million and earnings per diluted share increased 77% to $0.83, compared to prior year net income of $25.7 million, or $0.47 per diluted share. Earnings guidance provided on May 23, 2007 was for earnings per diluted share of $0.74 - 0.77. The operating results of Golf Galaxy are included in the current period results.

Net sales for the quarter increased 38% to $1,013.4 million due to a comparable store sales increase of 7.2% (or 5.8% adjusting for the shifted retail calendar, compared to a 6.5% increase in Q2 last year), the opening of new stores, and the inclusion of Golf Galaxy in this years' quarterly results (which will be included in Dick's Sporting Goods comparable store sales calculation beginning in Q2 2008). Comparable store sales for Golf Galaxy on a proforma basis increased 4.7%, or 5.5% after adjusting for the shifted retail calendar.

"The Dick's Sporting Goods portfolio of businesses produced an outstanding second quarter. We achieved increased sales not only in golf but across most of our businesses, delivered gross margin improvements, provided operating expense leverage and solid inventory management. In addition, Golf Galaxy delivered strong sales and earnings in their seasonally largest quarter. I would like to commend all of our team members for their efforts in driving the results for our second quarter," said Edward W. Stack, Chairman and CEO.

New Stores

In the second quarter, the Company opened six Dick's Sporting Goods stores and two Golf Galaxy stores. The stores that opened in the second quarter are listed in a table later in the release under the heading "Store Count and Square Footage".

Year-to-Date Results

Net income for the 26 weeks ended August 4, 2007 increased 88% to $69.6 million and earnings per diluted share increased 78% to $1.21, as compared to prior year net income of $37.1 million, or $0.68 per diluted share. The operating results of Golf Galaxy have been included in the results beginning with the February 13, 2007 date of acquisition.

Net sales increased 33% to $1,837.0 million due to a comparable store sales increase of 4.7% (or 3.1% adjusting for the shifted retail calendar, compared to a 6.9% increase year-to-date last year), the opening of new stores, and the inclusion of Golf Galaxy in this year's results. Comparable store sales for Golf Galaxy on a proforma basis increased 4.7%, or 3.0% after adjusting for the shifted retail calendar.

Current 2007 Outlook

The Company's current outlook for 2007 is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act as described later in this release. Although the Company believes that comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.

    -- Full Year 2007 - (52-Week Year) Comparisons to Fiscal 2006 - (53-Week
       Year)

       -- We are currently increasing earnings guidance for the full year.
          Based on an estimated 58 million shares outstanding, the Company is
          increasing its consolidated earnings per diluted share guidance from
          the previous estimate of $2.37 - 2.40 to the new estimate of
          approximately $2.47 - 2.50.  This new range represents an
          approximate 23% increase over earnings per diluted share for the
          full year 2006 of $2.03 and includes the expected results of Golf
          Galaxy, which we continue to expect to be approximately $0.02 per
          diluted share accretive for the year.

       -- Comparable store sales for Dick's Sporting Goods stores are expected
          to increase approximately 2% compared to a 6.0% increase last year.

       -- The Company expects to open 45 new Dick's Sporting Goods stores, 16
          new Golf Galaxy stores and relocate one Dick's Sporting Goods store
          in 2007.

    -- Third Quarter 2007

       -- Based on an estimated 59 million diluted shares outstanding, the
          Company anticipates consolidated earnings per diluted share of
          approximately $0.09 - 0.12, as compared to $0.14 in 2006.  The year-
          over-year comparison is impacted by several factors, including the
          shift in the 2007 retail calendar, which positively impacted Q1 and
          Q2 this year and is offset in Q3 and Q4.  Further, the inclusion of
          Golf Galaxy is approximately $0.02 per share dilutive in the third
          quarter.

       -- Comparable store sales for Dick's Sporting Goods stores are expected
          to decrease approximately 1 - 3%, or be approximately flat to down
          2%, adjusting for the shifted retail calendar which compares to a
          8.9% increase in Q3 last year. Golf Galaxy will be included in the
          quarterly comparable store base beginning in Q2 2008, which will be
          the first full quarter following the anniversary of the date of
          acquisition.

       -- The Company expects to open 24 new Dick's Sporting Goods stores and
          one new Golf Galaxy store.

Conference Call Info

The Company will be hosting a conference call today at 10:00 am eastern time to discuss the second quarter results. Investors will have the opportunity to listen to the earnings conference call over the internet through the Company's web site located at http://www.dickssportinggoods.com/investors. To listen to the live call, please go to the web site at least fifteen minutes early to register, download and install any necessary audio software.

For those who cannot listen to the live broadcast, the webcast will be archived on the Company's web site for approximately 30 days. In addition, a dial-in replay will be available shortly after the call. To listen, investors should dial (888) 286-8010 (domestic callers) or (617) 801-6888 (international callers) and enter confirmation code 68541751. The dial-in replay will be available for 30 days following the live call.

Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "guidance," "estimate," "intend," "predict," and "continue" or similar words. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks and uncertainties are more fully described in the Company's Annual Report on Amendment No. 1 to Form 10-K/A for the year ended February 3, 2007 as filed with the Securities and Exchange Commission on June 5, 2007. The Company disclaims any obligation and does not intend to update any forward-looking statements except as may be required by the securities laws.

Company Convertible Notes

The Company's stock price has triggered an optional conversion right with respect to the Company's Senior Convertible Notes due 2024, which if exercised will not currently have any dilutive effect on the Company's outstanding shares, but may cause a dilutive effect if exercised in the future. We do not anticipate that the outstanding notes will be exercised under this optional right. This disclosure constitutes any notice required to be given by the Company under its Indenture dated as of February 18, 2004 with respect to the Company's Senior Convertible Notes due 2024.

About Dick's Sporting Goods, Inc.

Dick's Sporting Goods, Inc. 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. As of August 4, 2007, the Company operated 315 stores in 34 states primarily throughout the eastern half of the U.S. The Company also owns Golf Galaxy, a multi-channel golf specialty retailer, with 77 stores in 29 states, ecommerce websites and catalog operations.

Dick's Sporting Goods, Inc. news releases are available at http://www.dickssportinggoods.com/ (click on the Investor Relations link at the top of the home page).

Contact:

Timothy E. Kullman, SVP - Chief Financial Officer or
Dennis Magulick, Director, Investor Relations
724-273-3400
investors@dcsg.com


                 DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
                    (In thousands, except per share data)

                                                13 Weeks Ended
                                     -----------------------------------------
                                       August 4,   % of     July 29,    % of
                                         2007      Sales      2006      Sales
                                     -----------  -------  ---------   -------
    Net sales                        $1,013,421   100.00%   $734,047   100.00%
    Cost of goods sold, including
     occupancy and distribution costs   714,761    70.53     526,650    71.75
                                     -----------  -------  ---------   -------
      GROSS PROFIT                      298,660    29.47     207,397    28.25

    Selling, general and
     administrative expenses            212,747    20.99     159,239    21.69
    Pre-opening expenses                  2,719     0.27       2,451     0.33
                                     -----------  -------  ---------   -------
      INCOME FROM OPERATIONS             83,194     8.21      45,707     6.23

    Interest expense, net                 3,629     0.36       2,906     0.40
                                     -----------  -------  ---------   -------
      INCOME BEFORE INCOME TAXES         79,565     7.85      42,801     5.83

    Provision for income taxes           31,635     3.12      17,120     2.33
                                     -----------  -------  ---------   -------
      NET INCOME                        $47,930     4.73%    $25,681     3.50%
                                     ===========  =======  =========   =======
    EARNINGS PER COMMON SHARE:
      Basic                               $0.88                $0.51
      Diluted                             $0.83                $0.47

    WEIGHTED AVERAGE COMMON SHARES
      OUTSTANDING:
      Basic                              54,290               50,746
      Diluted                            57,764               54,887



                                                  26 Weeks Ended
                                    ------------------------------------------
                                     August 4,    % of      July 29,   % of
                                       2007      Sales(1)     2006    Sales(1)
                                    ----------   -------  ----------  -------

    Net sales                       $1,836,975   100.00%  $1,379,545  100.00%
    Cost of goods sold, including
     occupancy and distribution
     costs                           1,293,896    70.44      994,482   72.09
                                    ----------   -------  ----------  -------

      GROSS PROFIT                     543,079    29.56      385,063   27.91

    Selling, general and
     administrative expenses           410,755    22.36      311,474   22.58

    Pre-opening expenses                 9,840     0.54        6,604    0.48
                                    ----------   -------  ----------  -------

      INCOME FROM OPERATIONS           122,484     6.67       66,985    4.86
    Interest expense, net                6,835     0.37        5,155    0.37
                                    ----------   -------  ----------  -------
      INCOME BEFORE INCOME TAXES       115,649     6.30       61,830    4.48

    Provision for income taxes          46,017     2.51       24,732    1.79
                                    ----------   -------  ----------  -------

      NET INCOME                       $69,632     3.79%     $37,098    2.69%
                                    ==========   =======  ==========  =======

    EARNINGS PER COMMON SHARE:

      Basic                              $1.29                 $0.73
      Diluted                            $1.21                 $0.68

    WEIGHTED AVERAGE COMMON SHARES


    OUTSTANDING:

      Basic                             53,920                50,583
      Diluted                           57,493                54,742

    (1) Column does not add due to rounding



                 DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Dollars in thousands)

                                   August 4,       July 29,    February 3,
                                     2007            2006         2007
                                 -----------     -----------   -----------
                                 (unaudited)     (unaudited)
    ASSETS
    CURRENT ASSETS:
      Cash and cash equivalents     $50,489         $32,926      $135,942
      Accounts receivable, net       62,514          53,091        39,687
      Income taxes receivable             -               -        15,671
      Inventories, net              791,654         636,839       641,464
      Prepaid expenses and other
       current assets                41,811          18,133        37,015
      Deferred income taxes           1,079           3,954             -
                                 -----------     -----------   -----------
        Total current assets        947,547         744,943       869,779

      Property and equipment, net   499,109         392,412       433,071
      Construction in progress -
       leased facilities              7,681          11,254        13,087
      Goodwill                      320,156         156,628       156,628
      Other assets                   71,658          47,900        51,700
                                 -----------     -----------   -----------
    TOTAL ASSETS                 $1,846,151      $1,353,137    $1,524,265
                                 ===========     ===========   ===========
    LIABILITIES AND STOCKHOLDERS'
     EQUITY
    CURRENT LIABILITIES:
      Accounts payable             $357,184        $296,221      $286,668
      Accrued expenses              208,061         166,756       190,365
      Deferred revenue and other
       liabilities                   74,631          51,325        87,798
      Income taxes payable            2,717           4,940             -
      Current portion of other
       long-term debt and capital
       leases                           152             141           152
                                 -----------     -----------   -----------
        Total current liabilities   642,745         519,383       564,983
                                 -----------     -----------   -----------
    LONG-TERM LIABILITIES:
      Senior convertible notes      172,500         172,500       172,500
      Revolving credit borrowings    52,307          41,430             -
      Other long-term debt and
       capital leases                 8,320           8,444         8,365
      Non-cash obligations for
       construction in progress -
       leased facilities              7,681          11,254        13,087
      Deferred revenue and other
       liabilities                  187,994         121,695       144,780
                                 -----------     -----------   -----------
        Total long-term liabilities 428,802         355,323       338,732
                                 -----------     -----------   -----------
    COMMITMENTS AND CONTINGENCIES
    STOCKHOLDERS' EQUITY:
      Common stock                      419             373           397
      Class B common stock              133             136           134
      Additional paid-in capital    387,977         236,620       302,766
      Retained earnings             383,570         239,940       315,453
      Accumulated other
       comprehensive income           2,505           1,362         1,800
                                 -----------     -----------   -----------
        Total stockholders' equity  774,604         478,431       620,550
                                 -----------     -----------   -----------
    TOTAL LIABILITIES AND
     STOCKHOLDERS' EQUITY        $1,846,151      $1,353,137    $1,524,265
                                 ===========     ===========   ===========



                 DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
                            (Dollars in thousands)
                                                         26 Weeks Ended
                                                   -------------------------
                                                    August 4,       July 29,
                                                      2007            2006
                                                   ----------     ----------
    CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                     $69,632       $ 37,098
      Adjustments to reconcile net income
      to net cash provided by operating activities:
        Depreciation and amortization                 38,036         26,246
        Deferred income taxes                        (10,391)       (10,419)
        Stock-based compensation                      14,781         12,525
        Excess tax benefit from stock-based
         compensation                                (30,592)        (4,419)
        Tax benefit from exercise of stock options     3,745            609
        Other non-cash items                           1,370          1,288
        Changes in assets and liabilities:
          Accounts receivable                        (12,056)        (5,179)
          Inventories                                (79,217)      (101,141)
          Prepaid expenses and other assets           (2,550)        (9,024)
          Accounts payable                            57,967         49,135
          Accrued expenses                             1,527         15,015
          Income taxes payable / receivable           46,551         (8,196)
          Deferred construction allowances            22,593          4,967
          Deferred revenue and other liabilities      (8,460)        (6,485)
                                                   ----------     ----------
      Net cash provided by operating activities      112,936          2,020
                                                   ----------     ----------
    CASH FLOWS FROM INVESTING ACTIVITIES:
          Capital expenditures                       (76,884)       (63,712)
          Proceeds from sale-leaseback transactions    9,226          4,583
          Payment for purchase of Golf Galaxy, net
           of $4,859 cash acquired                  (221,461)             -
                                                   ----------     ----------
      Net cash used in investing activities         (289,119)       (59,129)
                                                   ----------     ----------
    CASH FLOWS FROM FINANCING ACTIVITIES:
          Revolving credit borrowings, net            52,307         41,430
          Payments on other long-term debt and
           capital leases                                (97)          (116)
          Construction allowance receipts              2,699          5,799
          Proceeds from sale of common stock under
           employee stock purchase plan                2,466          2,098
          Proceeds from exercise of stock options     24,712          6,150
          Excess tax benefit from stock-based
           compensation                               30,592          4,419
          Decrease in bank overdraft                 (22,013)        (6,309)
                                                   ----------     ----------
      Net cash provided by financing activities       90,666         53,471
                                                   ----------     ----------
    EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
     CASH EQUIVALENTS                                     64              -
                                                   ----------     ----------
    NET DECREASE IN CASH AND CASH EQUIVALENTS        (85,453)        (3,638)
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   135,942         36,564
                                                   ----------     ----------
    CASH AND CASH EQUIVALENTS, END OF PERIOD         $50,489       $ 32,926
                                                   ==========     ==========
    Supplemental non-cash investing and
     financing activities:
      Construction in progress - leased facilities   $(5,406)        $3,916
      Accrued property and equipment                  $1,027       $ 15,223
      Cash paid for interest                          $7,509         $4,551
      Cash paid for income taxes                      $5,426       $ 42,083



    Store Count and Square Footage
    The stores that opened during the second quarter of 2007 are as follows:

    ----------------------------------   ----------------------------------
    DICK'S SPORTING GOODS                GOLF GALAXY
    ----------------------------------   ----------------------------------
    Store                 Market         Store                 Market
    -------------------   -----------    -------------------   ------------
    Lake Grove, NY        Long Island    Sacramento, CA        Sacramento
    Concord, NC           Charlotte      San Diego, CA         San Diego
    Millville, NJ         Jersey South
    Flower Mound, TX      Dallas
    Oswego, IL            Chicago
    Murfreesboro, TN      Nashville


The following represents a reconciliation of beginning and ending stores and square footage for the periods indicated:


                                     Q2 YTD
                         --------------------------------------------------
                                                       Fiscal      Fiscal
                                                        2007        2006
                            --------    -----------    ------    ----------
                             Dick's                                Dick's
                            Sporting                              Sporting
                              Goods     Golf Galaxy     Total       Goods
                            --------    -----------    ------    ----------
    Beginning stores           294           65          359         255
     Q1 New                     15           10           25           8
     Q2 New                      6            2            8           5
                            --------    -----------    ------    ----------
    Ending stores              315           77          392         268
                            ========    ===========    ======    ==========
    Relocated stores             1            -            1           -
                            ========    ===========    ======    ==========


    Square Footage:
    (in millions)
                                 Dick's Sporting
                                       Goods        Golf Galaxy      Total
                                 ---------------    -----------     -------
    Q1 2006                            15.2             0.9          16.1
    Q2 2006                            15.5             0.9          16.4
    Q3 2006                            16.7             0.9          17.6
    Q4 2006                            16.7             0.9          17.6
    ----------                   ---------------    -----------     -------
    Q1 2007                            17.4             1.1          18.5
    Q2 2007                            17.8             1.1          18.9



    Summary Proforma Financial Information

The following unaudited proforma summary presents information as if Golf Galaxy had been acquired at the beginning of the periods presented.


    Proforma Results for 13 and 26 Weeks Ended July 29, 2006 - Unaudited (1)
    (In thousands, except per share amounts)

        13 Weeks Ended          Dick's Sporting
                                     Goods       Golf Galaxy  Consolidated
    -------------------------------------------  -----------  ------------
    Net Sales                      $734,047        $100,171      $834,218

    Net Income                       25,681           4,872        30,553

    Basic earnings per share          $0.51                         $0.60

    Diluted earnings per share        $0.47                         $0.56

    Weighted Average Common Shares
     Outstanding
      Basic                          50,746               -        50,746
      Diluted                        54,887               -        54,887



        26 Weeks Ended          Dick's Sporting
                                     Goods       Golf Galaxy  Consolidated
    -------------------------------------------  -----------  ------------
    Net Sales                    $1,379,545        $164,299    $1,543,844

    Net Income                       37,098           4,456        41,554

    Basic earnings per share          $0.73                         $0.82

    Diluted earnings per share        $0.68                         $0.76

    Weighted Average Common Shares
     Outstanding
      Basic                          50,583               -        50,583
      Diluted                        54,742               -        54,742

    (1) The unaudited proforma results present information as if Golf Galaxy
        had been acquired at the beginning of the periods. The proforma
        amounts include certain reclassifications to Golf Galaxy amounts to
        conform them to the Company's reporting calendar, an increase in pre-
        tax interest expense for the 13 and 26 weeks ended of $2,853 and
        $5,620 respectively, to reflect the increase in borrowings under the
        amended credit facility to finance the acquisition as if it had
        occurred at the beginning of the periods and use of the statutory
        tax rate of the Company in effect during the periods presented to
        determine net income. The proforma amounts do not reflect any
        benefits from economies which might be achieved from combining the
        operations. The proforma information does not necessarily reflect
        the actual results that would have occurred had the companies been
        combined during the periods presented, nor is it necessarily
        indicative of the future results of operations of the combined
        companies.

Non-GAAP Financial Measures

The Company has provided non-GAAP financial information in this earnings release which includes comparable store sales as if Golf Galaxy had been acquired at the beginning of the periods presented. The proforma financial information is considered non-GAAP and is not preferable to GAAP financial information; however, the Company believes this information provides additional measures of performance that the Company's management and investors can use to compare core, operating results between reporting periods. These non-GAAP measures are provided below and on the Company's website at http://www.dickssportinggoods.com/ (click on the Investor Relations link at the top of the home page). The Company's website is not part of this press release.



    Proforma Comparable Store Sales

                                     Dick's
                                    Sporting          Golf
                                      Goods          Galaxy    Consolidated
                                    --------         ------    ------------
    13 weeks ended July 29, 2006       6.5%            0.4%          6.0%

    13 weeks ended August 4, 2007      7.2%            4.7%          7.0%

    26 weeks ended July 29, 2006       6.9%            0.1%          6.2%

    26 weeks ended August 4, 2007      4.7%            4.7%          4.7%


The proforma comparable store sales present information as if Golf Galaxy had been acquired at the beginning of the periods presented. The sales have been adjusted to conform to the Company's reporting calendar and method of reporting comparable sales. Golf Galaxy will be included in the quarterly comparable store base beginning in Q2 2008, which will be the first full quarter following the anniversary of the date of acquisition.

EBITDA

EBITDA should not be considered as an alternative to net income or any other generally accepted accounting principles measure of performance or liquidity. EBITDA, as the Company has calculated it, may not be comparable to similarly titled measures reported by other companies. EBITDA is a key metric used by the Company that provides a measurement of profitability that eliminates the effect of changes resulting from financing decisions, tax regulations, and capital investments.


                                                        13 Weeks Ended
                                                     August 4,      July 29,
           EBITDA                                       2007          2006
    ---------------------------------               ----------     ---------
                                                      (dollars in thousands)
    Net income                                       $47,930        $25,681
    Provision for income taxes                        31,635         17,120
    Interest expense, net                              3,629          2,906
    Depreciation and amortization                     21,634         13,737
                                                    ----------     ---------
      EBITDA                                        $104,828        $59,444
                                                    ==========     =========
      % increase in EBITDA                               76%


                                                        26 Weeks Ended
                                                     August 4,      July 29,
           EBITDA                                       2007          2006
    ---------------------------------               ----------     ---------
                                                      (dollars in thousands)
    Net income                                       $69,632        $37,098
    Provision for income taxes                        46,017         24,732
    Interest expense, net                              6,835          5,155
    Depreciation and amortization                     38,036         26,246
                                                    ----------     ---------
      EBITDA                                        $160,520        $93,231
                                                    ==========     =========
      % increase in EBITDA                               72%



    Reconciliation of Gross Capital Expenditures to Capital Expenditures

The following table represents a reconciliation of the Company's gross capital expenditures to its capital expenditures, net of tenant allowances.



                                                        26 Weeks Ended
                                                  -------------------------
                                                    August 4,      July 29,
                                                      2007           2006
                                                  -----------    ----------
                                                    (dollars in thousands)
    Gross capital expenditures                     $(76,884)      $(63,712)
    Proceeds from sale-leaseback transactions         9,226          4,583
    Changes in deferred construction allowances      22,593          4,967
    Construction allowance receipts                   2,699          5,799
                                                  -----------    ----------
    Net capital expenditures                       $(42,366)      $(48,363)
                                                  ===========    ==========

SOURCE Dick's Sporting Goods, Inc.

CONTACT: Timothy E. Kullman, SVP - Chief Financial Officer, or, Dennis
Magulick, Director, Investor Relations, +1-724-273-3400, investors@dcsg.com,
both of Dick's Sporting Goods, Inc.
Web site: http://www.dickssportinggoods.com
http://www.dickssportinggoods.com/investors
(DKS)