AUSTIN, Texas, March 1, 2012 (GLOBE NEWSWIRE) -- Golfsmith International Holdings, Inc., (Nasdaq:GOLF) today announced preliminary financial results for the fourth quarter and fiscal year 2011.
Fourth Quarter Highlights:
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Net revenues increased 2.3% to $74.5 million as compared to net revenues of $72.9 million for the fourth quarter of fiscal 2010. Net revenues were positively impacted by our new store growth of four stores since the end of the fourth quarter last year. This increase was partially offset by a decrease in comparable store sales of 4.7% and a 3.5% decrease in net revenues from the direct-to-consumer channel, primarily due to a decline in traffic in October and a sales disruption related to the company-wide deployment of a new ERP system, particularly on our e-commerce site.
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Operating loss for the fourth quarter was $5.3 million as compared to an operating loss of $5.2 million for the same period last year. The fourth quarter of fiscal 2011 included $0.6 million in charges for legal and other professional services incurred outside the ordinary course of business, which we expect to continue to incur in the near future. Operating results for the fourth quarter of 2010 included $1.1 million in charges related to store closings, asset impairment and lease termination costs.
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Net loss for the fourth quarter of fiscal 2011 totaled $5.6 million, or $0.34 per diluted share, as compared to a net loss of $5.7 million, or $0.35 per share for the same period last year. Excluding the store closing costs and other unusual charges in the fourth quarter of both periods, the Company's net loss for the fourth quarter of fiscal 2011 was $5.0 million, or $0.31 per share, as compared to $4.6 million, or $0.28 per share, for the fourth quarter of fiscal 2010.
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The Company ended the fourth quarter with $41.9 million of outstanding borrowings under its credit facility and borrowing availability of $28.7 million, after giving effect to all reserves. This compares to $40.4 million of outstanding borrowings under its credit facility and borrowing availability of $18.5 million at January 2, 2011.
- As of December 31, 2011, total inventory was $90.7 million compared to $79.4 million as of the fourth quarter of fiscal 2010. Comparable average store inventory increased approximately 5.4%. The increase in inventory was primarily related to delivery of new merchandise associated with product launches planned for the first quarter and staging of inventory for new store openings in 2012.
Martin Hanaka, Chairman and Chief Executive Officer of Golfsmith, commented, "While we had a challenging start to our fourth quarter we were pleased to see sales trends improve in November and December. We also achieved a 450 basis-point increase in gross margin to 36.8% in the fourth quarter which was primarily driven by a favorable sales mix shift to higher margin categories."
Mr. Hanaka continued, "We have successfully executed on a number of key strategic initiatives over that last three years that we expect will enable us to achieve strong long term sales and earnings growth. I want to thank our team for their hard work and dedication which has helped to solidify Golfsmith as an industry leader in the golf specialty retail space."
For the Fiscal Year 2011:
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Net revenues were $387.3 million for the year ending 2011 as compared to net revenues of $351.9 million for the same period last year. Net revenues reflect a 4.7% increase in comparable store sales and a 9.2% increase in net revenues from its direct-to-consumer channel.
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Operating income was $2.8 million for fiscal year 2011 as compared to an operating loss of $4.3 million for the same period last year. Results for 2011 included $1.3 million in charges for legal and other professional services incurred outside the ordinary course of business and $0.2 million in lease termination charges. Operating income for fiscal year 2010 included the $2.7 million in store closing costs.
- Net income for fiscal year 2011 totaled $0.9 million, or $0.05 per diluted share, compared to net loss of $5.5 million, or $0.34 per diluted share, for fiscal year 2010. Excluding the above-mentioned charges for both periods, net income would have been $2.1 million, or $0.13 per diluted share, for fiscal 2011 as compared to a net loss of $2.8 million, or $0.17 per diluted share, for the same period last year.
Information Regarding Legal and Professional Fees Outside of Ordinary Course of Business
The Company incurred $1.3 million in costs in 2011 associated with exploring a strategic transaction that may include a potential sale of the Company. The Company is providing this disclosure in light of the magnitude of these expenses incurred outside of the ordinary course of business. The Company to date has not reached an agreement with respect to such a transaction and the Company cannot predict whether an agreement will be reached.
Conference Call Information:
The Company will host a conference call today, March 1st at 4:30 p.m. (eastern time) to discuss the fourth quarter and fiscal year 2011 financial results. The call will be simulcast over the Internet at https://investors.golfsmith.com. A replay will be available for 30 days following the call at the aforementioned website. Telephone replays can be accessed for one month following the call by dialing 877-870-5176 (U.S.) or 858-384-5517 (international) and entering pass code 7494998.
About Golfsmith
Golfsmith International Holdings, Inc. (Nasdaq:GOLF), has been in business for over 40 years and is a specialty retailer of golf equipment and related apparel and accessories. The company operates as an integrated multi-channel retailer, offering its customers the convenience of shopping in 79 retail locations across the United States, through its Internet site 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.
The Golfsmith International Holdings, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=9492
Cautionary Notice Regarding Forward-Looking Information
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on our beliefs, assumptions, and expectations of future events, taking into account the information currently available to us. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement the strategy, our objectives, the amount and timing of future store openings, store remodels and capital expenditures, the likelihood of our success in expanding our business, financing plans, working capital needs and sources of liquidity. The words "believe," "may," "should," "anticipate," "estimate," "expect," "intend," "potential," "project," "plan," and similar statements are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance, or financial condition to differ materially from the expectations of future results, performance, or financial condition we express or imply in any forward-looking statements. We note these factors pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are not guarantees of performance. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond our ability to control or predict. Our forward-looking statements speak only as of the date of this press release. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
| Golfsmith International Holdings, Inc. | ||||
| Consolidated Statements of Operations | ||||
| Three Months Ended | Fiscal Year Ended | |||
| December 31, | January 1, | December 31, | January 1, | |
| 2011 | 2011 | 2011 | 2011 | |
| (unaudited) | (unaudited) | |||
| Net revenues | $ 74,535,103 | $ 72,884,488 | $387,266,900 | $ 351,851,394 |
| Cost of products sold | 47,093,528 | 49,520,381 | 251,886,047 | 232,311,169 |
| Gross profit | 27,441,575 | 23,364,107 | 135,380,853 | 119,540,225 |
| Selling, general and administrative | 32,414,090 | 27,214,422 | 131,355,223 | 120,377,666 |
| Store pre-opening expenses | 349,918 | 240,688 | 995,213 | 737,898 |
| Store closing, lease termination and impairment charges | -- | 1,133,212 | 182,914 | 2,705,836 |
| Total operating expenses | 32,764,008 | 28,588,322 | 132,533,350 | 123,821,400 |
| Operating income (loss) | (5,322,433) | (5,224,215) | 2,847,503 | (4,281,175) |
| Interest expense | 435,181 | 455,942 | 1,625,820 | 1,262,053 |
| Other income (expense), net | 33,264 | 2,925 | 76,017 | 67,781 |
| Income (loss) before income taxes | (5,724,350) | (5,677,232) | 1,297,700 | (5,475,447) |
| Income tax benefit (expense) | 120,210 | (38,784) | (388,179) | (17,898) |
| Net income (loss) | $ (5,604,140) | $ (5,716,016) | $ 909,521 | $ (5,493,345) |
| Net income (loss) per common share: | ||||
| Basic | $ (0.34) | $ (0.35) | $ 0.06 | $ (0.34) |
| Diluted | $ (0.34) | $ (0.35) | $ 0.05 | $ (0.34) |
| Golfsmith International Holdings, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| December 31, | January 1, | |
| 2011 | 2011 | |
| ASSETS | (unaudited) | |
| Current assets: | ||
| Cash | $ 526,180 | $ 204,340 |
| Receivables, net of allowances | 8,164,691 | 2,011,241 |
| Inventories | 90,513,460 | 79,417,087 |
| Prepaid expenses and other current assets | 8,717,141 | 6,891,261 |
| Total current assets | 107,921,472 | 88,523,929 |
| Property and equipment, net | 59,314,156 | 58,925,620 |
| Intangible assets, net | 25,276,751 | 25,524,016 |
| Other long-term assets | 2,500,904 | 2,057,363 |
| Total assets | $ 195,013,283 | $ 175,030,928 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 49,023,200 | $ 35,694,830 |
| Accrued expenses and other current liabilities | 22,387,248 | 20,393,614 |
| Total current liabilities | 71,410,448 | 56,088,444 |
| Deferred rent liabilities | 16,320,460 | 15,344,004 |
| Long-term debt | 41,905,144 | 40,390,034 |
| Total liabilities | 129,636,052 | 111,822,482 |
| Total stockholders' equity | 65,377,231 | 63,208,446 |
| Total liabilities and stockholders' equity | $ 195,013,283 | $ 175,030,928 |