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Last updated on April 16, 2014 at 17:34 EDT

DICK’S Sporting Goods Reports Second Quarter Results

August 20, 2013

- Consolidated non-GAAP earnings per diluted share increased to $0.71 in the second quarter of 2013 from $0.65 per diluted share in the second quarter of 2012

PITTSBURGH, Aug. 20, 2013 /PRNewswire/ — DICK’S Sporting Goods, Inc. (NYSE: DKS), the largest U.S.-based full-line sporting goods retailer, today reported sales and earnings results for the second quarter ended August 3, 2013.

Second Quarter Results

The Company reported consolidated non-GAAP net income for the second quarter ended August 3, 2013 of $88.9 million, or $0.71 per diluted share, excluding an asset impairment charge, compared to the Company’s expectations provided on May 21, 2013 of $0.75 to 0.77 per diluted share. For the second quarter ended July 28, 2012, the Company reported consolidated non-GAAP net income of $81.3 million, or $0.65 per diluted share, excluding an impairment charge related to the Company’s investment in JJB Sports.

On a GAAP basis, the Company reported consolidated net income for the second quarter ended August 3, 2013 of $84.2 million, or $0.67 per diluted share. For the second quarter ended July 28, 2012, the Company reported consolidated net income of $53.7 million, or $0.43 per diluted share. The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading “Non-GAAP Net Income and Earnings Per Share Reconciliations.”

Net sales for the second quarter of 2013 increased 6.6% to $1.5 billion. Adjusted for the shifted calendar due to the 53(rd) week in 2012, consolidated same store sales decreased 0.4%, compared to the Company’s guidance of an approximate 2 to 3% increase. Second quarter 2012 consolidated same store sales increased 3.8%. Shifted same store sales in the second quarter of 2013 for DICK’S Sporting Goods increased 0.1% while Golf Galaxy decreased 6.1%.

Unshifted consolidated same store sales increased 1.2%, compared to the Company’s guidance of an approximate 3.5 to 4.5% increase. Unshifted same store sales in the second quarter of 2013 for DICK’S Sporting Goods increased 1.9% while Golf Galaxy decreased 7.2%. eCommerce penetration was 5.6% of total sales.

“Our second quarter results were below our guidance as a sluggish consumer environment along with higher levels of precipitation and cooler temperatures contributed to a decrease in traffic, resulting in lower than expected same store sales,” said Edward W. Stack, Chairman and CEO. “Despite these challenges in the second quarter, we were able to generate record non-GAAP earnings per share.”

Mr. Stack continued, “We are revising our full year guidance to a range of $2.60 to $2.65 per share, primarily due to lower sales expectations for the second half of the year, which are a result of our belief that consumers will remain relatively cautious. In order to drive traffic and respond to the consumer environment we are increasing our advertising levels, enhancing the customer experience, and investing in growth categories.”

Mr. Stack concluded, “The current challenges we are facing are short-term in nature and we are actively pursuing strategies to address them. This does not change our view of the profitable long-term growth opportunities for our business.”

New Stores

In the second quarter, the Company opened seven new DICK’S Sporting Goods stores. These stores are listed in a table later in the release under the heading “Store Count and Square Footage.”

As of August 3, 2013, the Company operated 527 DICK’S Sporting Goods stores in 44 states, with approximately 28.7 million square feet and 81 Golf Galaxy stores in 30 states, with approximately 1.4 million square feet.

Balance Sheet

The Company ended the second quarter of 2013 with approximately $135 million in cash and cash equivalents as compared to $350 million at the end of the second quarter of 2012. As of the end of the second quarter of 2013, the Company did not have any outstanding borrowings under its $500 million revolving credit facility. Over the course of the past twelve months, the Company utilized capital to invest in omni-channel growth, remodel stores, build a distribution center, fund shares purchased pursuant to share repurchase programs, pay a special dividend and quarterly dividends, and acquire intellectual property rights to the Field & Stream brand.

Inventory per square foot was 5.0% higher at the end of the second quarter of 2013 as compared to the end of the second quarter of 2012, while clearance inventory per square foot decreased 4.1% during the same period.

Year-to-Date Results

The Company reported consolidated non-GAAP net income for the 26 weeks ended August 3, 2013 of $149.4 million, or $1.19 per diluted share. For the 26 weeks ended July 28, 2012, the Company reported consolidated non-GAAP net income of $138.5 million, or $1.10 per diluted share.

On a GAAP basis, the Company reported consolidated net income for the 26 weeks ended August 3, 2013 of $149.0 million, or $1.18 per diluted share. For the 26 weeks ended July 28, 2012, the Company reported consolidated net income of $110.8 million, or $0.88 per diluted share.

Net sales for the first half of 2013 increased 5.4% from the first half of 2012 to $2.9 billion primarily due to the opening of new stores, partially offset by a consolidated same store sales decrease of 0.2% on an unshifted basis.

Dividend

On August 14, 2013, the Company’s Board of Directors authorized and declared a quarterly dividend in the amount of $0.125 per share on the Company’s Common Stock and Class B Common Stock. The dividend is payable in cash on September 27, 2013 to stockholders of record at the close of business on September 6, 2013.

Current 2013 Outlook

The Company’s current outlook for 2013 is based on current expectations and includes “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, as described later in this release. Although the Company believes that the expectations and other comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations or comments will prove to be correct.

* Full Year 2013 – (52 Week Year) Comparisons to Fiscal 2012 – (53 Week Year)

    --  Based on an estimated 126 million diluted shares outstanding, the
        Company currently anticipates reporting consolidated non-GAAP earnings
        per diluted share of approximately $2.60 to 2.65, excluding an asset
        impairment charge and the partial recovery of a previously impaired
        asset.  For the 53 weeks ended February 2, 2013, the Company reported
        consolidated non-GAAP earnings per diluted share of $2.53, excluding an
        impairment charge.  The 53(rd) week in fiscal 2012 contributed
        approximately $0.03 to earnings per diluted share.
    --  Consolidated same store sales are currently expected to be approximately
        flat to an increase of 1% on a 52-week to 52-week comparative basis,
        compared to a 4.3% increase in fiscal 2012.
    --  The Company expects to open approximately 40 new DICK'S Sporting Goods
        stores, relocate one DICK'S Sporting Goods store and complete four full
        and 75 partial remodels of DICK'S Sporting Goods stores in 2013. The
        Company also expects to open one new Golf Galaxy store and relocate one
        Golf Galaxy store in 2013, both of which will be in the new, larger
        format.
    --  The Company expects to open approximately one new True Runner store and
        approximately two new Field & Stream stores in 2013.

* Third Quarter 2013

    --  Based on an estimated 126 million diluted shares outstanding, the
        Company currently anticipates reporting consolidated earnings per
        diluted share of approximately $0.37 to 0.39 in the third quarter of
        2013, compared to third quarter 2012 consolidated earnings per diluted
        share of $0.40.
    --  Consolidated same store sales adjusted for the shifted calendar, due to
        the 53(rd) week in 2012, are currently expected to be approximately flat
        to an increase of 1% in the third quarter of 2013, or decrease
        approximately 2 to 3% on an unshifted basis, as compared to a 5.1%
        increase in the third quarter of 2012.
    --  The Company expects to open approximately 20 new DICK'S Sporting Goods
        stores, relocate one DICK'S Sporting Goods store and remodel three
        DICK'S Sporting Goods stores in the third quarter of 2013.
    --  The Company expects to open one new True Runner store and one new Field
        & Stream store in the third quarter of 2013.

* Fourth Quarter 2013

    --  Based on an estimated 126 million diluted shares outstanding, the
        Company currently anticipates reporting consolidated earnings per
        diluted share of approximately $1.04 to 1.07 in the fourth quarter of
        2013, compared to fourth quarter 2012 consolidated earnings per diluted
        share of $1.03.  The 14th week in fiscal 2012 contributed approximately
        $0.03 to earnings per diluted share.
    --  Consolidated same store sales adjusted for the shifted calendar, due to
        the 53(rd) week in 2012, are currently expected to increase
        approximately 3 to 4% in the fourth quarter of 2013, or  approximately
        negative 2 to negative 1% on an unshifted basis, as compared to a 1.2%
        increase in the fourth quarter of 2012.
    --  The Company expects to open approximately eleven new DICK'S Sporting
        Goods stores and remodel one DICK'S Sporting Goods store in the fourth
        quarter of 2013.
    --  The Company expects to open approximately one new Field & Stream store
        in the fourth quarter of 2013.

* Capital Expenditures

    --  In 2013, the Company anticipates capital expenditures to be
        approximately $299 million on a gross basis and approximately $258
        million on a net basis.

Conference Call Info

The Company will host a conference call today at 10:00 a.m. 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 website located at http://www.dickssportinggoods.com/investors. To listen to the live call, please go to the website at least fifteen minutes early to register and download and install any necessary audio software.

In addition to the webcast, the call can be accessed by dialing (866) 652-5200 (domestic callers) or (412) 317-6060 (international callers) and requesting the “DICK’S Sporting Goods Earnings Call.”

For those who cannot listen to the live webcast, it will be archived on the Company’s website for 30 days. In addition, a dial-in replay of the call will be available. To listen to the replay, investors should dial (877) 344-7529 (domestic callers) or (412) 317-0088 (international callers) and enter confirmation code 10031652. 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 or otherwise made by our management in connection with the subject matter of this release are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond our control. Our future performance and financial results may differ materially from those included in any such forward-looking statements and such forward-looking statements should not be relied upon by investors 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”, “goal”, “will”, “will be”, “will continue”, “will result”, “could”, “may”, “might” or other words with similar meanings. Forward-looking statements include statements regarding, among other things, our expectations for future performance, our efforts to drive traffic, our belief that current challenges are short-term and will not impact profitable long-term growth, investing in new, relocated or remodeled stores and expectations on capital expenditures.

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 2013 and beyond to differ materially from those expressed or implied in any forward-looking statements included in this release or otherwise made by our management: ongoing economic and financial uncertainties may cause a decline in consumer spending; changes in the general economic and business conditions and in the specialty retail or sporting goods industry in particular; competition in the sporting goods industry; changes in consumer demand; limitations on the availability of attractive store locations; unauthorized disclosure of sensitive or confidential customer information; risks relating to our private brand offerings; access to adequate capital; changing laws and regulations affecting our business including the regulation of firearms and ammunition; factors affecting our vendors; litigation risks; foreign trade issues and currency exchange rate fluctuations; the loss of our key executives, especially Edward W. Stack, our Chairman and Chief Executive Officer; protection of our intellectual property; disruptions with our eCommerce services provider or of our information systems; disruption at our distribution facilities; developments with sports leagues, professional athletes or sports superstars; weather and seasonality of our business; regional risks; risks associated with strategic investments or acquisitions; labor needs; risks associated with being a controlled company; our anti-takeover provisions; our current intention to issue quarterly cash dividends; and our share repurchase activity, if any.

Known and unknown risks and uncertainties are more fully described in the Company’s Annual Report on Form 10-K for the year ended February 2, 2013 as filed with the Securities and Exchange Commission (“SEC”) on March 22, 2013 and in other reports filed with the SEC. 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 or assess the impact of all such risk factors. Forward-looking statements included in this release are made as of the date of this release. We do not assume any obligation and do not intend to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by the securities laws.

About DICK’S Sporting Goods, Inc.

DICK’S Sporting Goods, Inc. is an authentic full-line sports and fitness specialty omni-channel retailer offering a broad assortment of high quality, competitively-priced brand name sporting goods equipment, apparel and footwear in a specialty store environment. The Company also owns and operates Golf Galaxy, LLC, a golf specialty retailer.

As of August 3, 2013, the Company operated 527 DICK’S Sporting Goods stores in 44 states, 81 Golf Galaxy stores in 30 states and eCommerce websites and catalog operations for DICK’S Sporting Goods and Golf Galaxy. DICK’S Sporting Goods, Inc. news releases are available at http://www.dickssportinggoods.com/investors. The Company’s website is not part of this release.

Contact:

Andre J. Hawaux, EVP – Finance, Administration and Chief Financial Officer or

Anne-Marie Megela, VP – Treasury Services and Investor Relations

DICK’S Sporting Goods, Inc.

investors@dcsg.com

(724) 273-3400



                                                            DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

                                                           CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

                                                               (In thousands, except per share data)

                                                                                  13 Weeks Ended
                                                                                  --------------

                                                 August 3,                   % of                    July 28,                   % of
                                                       2013                                                     2012
                                                                          Sales (1)                                          Sales (1)
                                                                          --------                                            --------

    Net sales                                                 $1,531,431                          100.00%                                $1,437,041            100.00%

    Cost of goods sold, including occupancy and
     distribution costs                           1,052,101                              68.70                       989,261                        68.84
                                                  ---------                              -----                       -------                        -----

    GROSS PROFIT                                    479,330                              31.30                       447,780                        31.16

    Selling, general and administrative expenses    336,950                              22.00                       310,864                        21.63

    Pre-opening expenses                              5,285                               0.35                         2,276                         0.16
                                                      -----                               ----                         -----                         ----

    INCOME FROM OPERATIONS                          137,095                               8.95                       134,640                         9.37

    Impairment of available-for-sale investments          -                                           -                          32,370                   2.25

    Interest expense                                    716                               0.05                         1,000                         0.07

    Other (income) expense                           (1,735)                             (0.11)                           54                                 -
                                                     ------                              -----                           ---                               ---

    INCOME BEFORE INCOME TAXES                      138,114                               9.02                       101,216                         7.04

    Provision for income taxes                       53,951                               3.52                        47,553                         3.31
                                                     ------                               ----                        ------                         ----

    NET INCOME                                                   $84,163                            5.50%                                   $53,663              3.73%
                                                                 =======                            ====                                    =======              ====

    EARNINGS PER COMMON SHARE:

    Basic                                                          $0.68                                                           $0.45

    Diluted                                                        $0.67                                                           $0.43

    WEIGHTED AVERAGE COMMON SHARES

    OUTSTANDING:

    Basic                                           122,901                                                  119,928

    Diluted                                         125,593                                                  124,533

    Cash dividend declared per share                              $0.125                                                          $0.125

    (1) Column does not add due to rounding


                                                            DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

                                                           CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

                                                               (In thousands, except per share data)

                                                                                  26 Weeks Ended
                                                                                  --------------

                                                 August 3,                   % of                    July 28,                   % of
                                                       2013                                                     2012
                                                                          Sales (1)                                             Sales
                                                                          --------                                              -----

    Net sales                                                 $2,865,132                          100.00%                                $2,718,745             100.00%

    Cost of goods sold, including occupancy and
     distribution costs                           1,974,149                              68.90                       1,876,358                      69.02
                                                  ---------                              -----                       ---------                      -----

    GROSS PROFIT                                    890,983                              31.10                         842,387                      30.98

    Selling, general and administrative expenses    649,658                              22.67                         606,995                      22.33

    Pre-opening expenses                              6,614                               0.23                           5,017                       0.18
                                                      -----                               ----                           -----                       ----

    INCOME FROM OPERATIONS                          234,711                               8.19                         230,375                       8.47

    Impairment of available-for-sale investments          -                                           -                          32,370                    1.19

    Interest expense                                  1,385                               0.05                           4,449                       0.16

    Other income                                     (7,940)                             (0.28)                         (1,811)                     (0.07)
                                                     ------                              -----                          ------                      -----

    INCOME BEFORE INCOME TAXES                      241,266                               8.42                         195,367                       7.19

    Provision for income taxes                       92,282                               3.22                          84,547                       3.11
                                                     ------                               ----                          ------                       ----

    NET INCOME                                                  $148,984                            5.20%                                  $110,820               4.08%
                                                                ========                            ====                                   ========               ====

    EARNINGS PER COMMON SHARE:

    Basic                                                          $1.21                                                           $0.92

    Diluted                                                        $1.18                                                           $0.88

    WEIGHTED AVERAGE COMMON SHARES

    OUTSTANDING:

    Basic                                           122,802                                                  120,721

    Diluted                                         125,728                                                  125,768

    Cash dividends declared per share                             $0.250                                                          $0.250

    (1) Column does not add due to rounding



                                                                          DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

                                                                             CONSOLIDATED BALANCE SHEETS - UNAUDITED

                                                                                     (Dollars in thousands)

                                                                                                              August 3,              July 28,       February 2,
                                                                                                                    2013                      2012       2013
                                                                                                                    ----                      ----       ----

    ASSETS

    CURRENT ASSETS:

    Cash and cash equivalents                                                                                               $134,765                 $350,404              $345,214

    Accounts receivable, net                                                                                      84,956                    53,704                34,625

    Income taxes receivable                                                                                        2,455                     7,845                15,737

    Inventories, net                                                                                           1,275,215                 1,134,594             1,096,186

    Prepaid expenses and other current assets                                                                    109,146                    67,071                73,838

    Deferred income taxes                                                                                         46,138                    27,689                30,289
                                                                                                                  ------                    ------                ------

       Total current assets                                                                                    1,652,675                 1,641,307             1,595,889
                                                                                                               ---------                 ---------             ---------

    Property and equipment, net                                                                                  937,310                   817,427               840,135

    Construction in progress - leased facilities                                                                       -                    10,207                     -

    Intangible assets, net                                                                                        97,858                    75,061                98,903

    Goodwill                                                                                                     200,594                   200,594               200,594

    Other assets:

       Deferred income taxes                                                                                       4,114                     8,196                 4,382

       Other                                                                                                     126,920                   110,148               147,904
                                                                                                                 -------                   -------               -------

       Total other assets                                                                                        131,034                   118,344               152,286
                                                                                                                 -------                   -------               -------

    TOTAL ASSETS                                                                                                          $3,019,471               $2,862,940            $2,887,807
                                                                                                                          ==========               ==========            ==========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    CURRENT LIABILITIES:

    Accounts payable                                                                                                        $598,263                 $561,161              $507,247

    Accrued expenses                                                                                             295,010                   275,158               269,900

    Deferred revenue and other liabilities                                                                       111,101                   101,437               146,362

    Income taxes payable                                                                                          12,777                         -                68,746

    Current portion of other long-term debt and leasing obligations                                                8,300                     8,579                 8,513

       Total current liabilities                                                                               1,025,451                   946,335             1,000,768
                                                                                                               ---------                   -------             ---------

    LONG-TERM LIABILITIES:

    Other long-term debt and leasing obligations                                                                   6,360                    14,407                 7,762

    Non-cash obligations for construction in progress - leased facilities                                              -                    10,207                     -

    Deferred income taxes                                                                                          8,449                         -                 7,413

    Deferred revenue and other liabilities                                                                       314,756                   279,927               284,540
                                                                                                                 -------                   -------               -------

       Total long-term liabilities                                                                               329,565                   304,541               299,715
                                                                                                                 -------                   -------               -------

    COMMITMENTS AND CONTINGENCIES

    STOCKHOLDERS' EQUITY:

    Common stock                                                                                                     981                       959                   981

    Class B common stock                                                                                             249                       250                   249

    Additional paid-in capital                                                                                   913,580                   797,620               874,236

    Retained earnings                                                                                          1,030,108                 1,013,087               911,704

    Accumulated other comprehensive income                                                                            81                       106                   112

    Treasury stock                                                                                              (280,544)                (199,958)             (199,958)
                                                                                                                --------                  --------              --------

       Total stockholders' equity                                                                              1,664,455                 1,612,064             1,587,324
                                                                                                               ---------                 ---------             ---------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                            $3,019,471               $2,862,940            $2,887,807
                                                                                                                          ==========               ==========            ==========



                                                    DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

                                                  CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

                                                               (Dollars in thousands)

                                                                                            26 Weeks Ended
                                                                                            --------------

                                                                            August 3,              July 28,
                                                                                  2013                  2012
                                                                                  ----                  ----

    CASH FLOWS FROM OPERATING ACTIVITIES:

    Net income                                                                           $148,984                       $110,820

    Adjustments to reconcile net income to net cash
     provided by operating activities:

    Depreciation and amortization                                               76,314                          58,100

    Impairment of available-for-sale investments                                     -                          32,370

    Deferred income taxes                                                      (14,545)                        (10,989)

    Stock-based compensation                                                    13,925                          15,207

    Excess tax benefit from exercise of stock options                          (15,475)                        (39,863)

    Tax benefit from exercise of stock options                                     102                           3,141

    Other non-cash items                                                           290                             (84)

    Changes in assets and liabilities:

        Accounts receivable                                                    (21,690)                        (13,228)

        Inventories                                                           (179,029)                      (119,597)

        Prepaid expenses and other assets                                      (12,738)                           (688)

        Accounts payable                                                        83,458                          41,925

        Accrued expenses                                                       (15,561)                          1,369

        Income taxes payable / receivable                                      (27,212)                          6,623

        Deferred construction allowances                                        12,756                          12,191

        Deferred revenue and other liabilities                                 (44,173)                        (30,317)
                                                                               -------                         -------

    Net cash provided by operating activities                                    5,406                          66,980
                                                                                 -----                          ------

    CASH FLOWS FROM INVESTING ACTIVITIES:

    Capital expenditures                                                       (95,479)                        (95,158)

    Purchase of JJB Sports convertible notes and equity
     securities                                                                      -                         (31,986)

    Proceeds from sale of other assets                                          11,000                               -

    Deposits and purchases of other assets                                     (48,469)                        (44,408)
                                                                               -------                         -------

    Net cash used in investing activities                                     (132,948)                      (171,552)
                                                                              --------                        --------

    CASH FLOWS FROM FINANCING ACTIVITIES:

    Payments on other long-term debt and leasing
     obligations                                                                (1,615)                      (138,611)

    Construction allowance receipts                                                  -                               -

    Proceeds from exercise of stock options                                     22,736                          44,939

    Excess tax benefit from exercise of stock options                           15,475                          39,863

    Minimum tax withholding requirements                                       (12,877)                         (5,237)

    Cash paid for treasury stock                                               (80,603)                      (198,774)

    Cash dividend paid to stockholders                                         (33,550)                        (30,417)

    Increase in bank overdraft                                                   7,558                           8,823
                                                                                 -----                           -----

    Net cash used in financing activities                                      (82,876)                      (279,414)
                                                                               -------                        --------

    EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
     EQUIVALENTS                                                                   (31)                            (12)
                                                                                   ---                             ---

    NET DECREASE IN CASH AND CASH EQUIVALENTS                                 (210,449)                      (383,998)

    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                             345,214                         734,402
                                                                               -------                         -------

    CASH AND CASH EQUIVALENTS, END OF PERIOD                                             $134,765                       $350,404
                                                                                         ========                       ========

    Supplemental disclosure of cash flow information:

    Construction in progress - leased facilities                                     $          -                        $10,207

    Accrued property and equipment                                                        $77,409                        $35,213

    Cash paid for interest                                                                 $1,091                           $851

    Cash paid for income taxes                                                           $140,712                        $92,375

Store Count and Square Footage

The stores that opened during the second quarter of 2013 are as follows:


                                    DICK'S
                                    ------

    Store                                  Market
                                           ------

    Alliance, TX                           Dallas

    Dublin, CA                             San Francisco

    Petaluma, CA                           Santa Rosa

    Pensacola, FL                          Pensacola

    Chico, CA                              Chico

    Colonial Heights, VA                   Richmond

    Portage, MI                            Kalamazoo

The following represents a reconciliation of beginning and ending stores and square footage for the periods indicated ((1)):


                        Fiscal 2013                        Fiscal 2012
                        -----------                        -----------

                DICK'S             Golf     Total  DICK'S            Golf     Total
               Sporting          Galaxy           Sporting         Galaxy
                Goods                               Goods
                -----                               -----

     Beginning
     stores         518                  81            599                480        81 561

    Q1
     New
     stores           2                   -              2                  6         -   6

    Q2
     New
     stores           7                   -              7                  4         -   4

     Ending
     stores         527                  81            608                490        81 571
                    ===                 ===            ===                ===       === ===

     Remodeled
     stores           -                   -              -                  -         -   -
                    ===                 ===            ===                ===       === ===

     Relocated
     stores           -                   -              -                  1         -   1
                    ===                 ===            ===                ===       === ===



    Square
     Footage:

    (in
     millions)

                                          DICK'S
                                         Sporting              Golf           Total
                                          Goods              Galaxy
                                          -----              ------

    Q1
     2012                                    26.5                       1.3                      27.8

    Q2
     2012                                    26.7                       1.3                      28.0

    Q3
     2012                                    27.9                       1.3                      29.2

    Q4
     2012                                    28.2                       1.4                      29.6
    -----                                    ----                       ---                      ----

    Q1
     2013                                    28.3                       1.4                      29.7

    Q2
     2013                                    28.7                       1.4                      30.1

     (1) Store count and square footage amounts do not include the Company's True Runner stores.

Non-GAAP Financial Measures

In addition to reporting the Company’s financial results in accordance with generally accepted accounting principles (“GAAP”), the Company provides information regarding net income and earnings per diluted share adjusted for certain non-recurring, infrequent or unusual items; earnings before interest, taxes and depreciation, adjusted to exclude certain significant gains and losses (“adjusted EBITDA”) and a reconciliation from the Company’s gross capital expenditures, net of tenant allowances. These measures are considered non-GAAP and are not preferable to GAAP financial information; however, the Company believes this information provides additional measures of performance that the Company’s management, analysts 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/investors.


    Non-GAAP Net Income and Earnings Per Share Reconciliations:

    (in thousands, except per share data):

                                                                                        Fiscal 2013

                                                                               13 Weeks Ended August 3, 2013
                                                                               -----------------------------

                                                                As Reported               Asset Impairment       Non-GAAP
                                                                                               Charge             Total
                                                                                               ------             -----

    Net sales                                                                $1,531,431                        $                -                  $1,531,431

    Cost of goods sold, including
     occupancy and distribution
     costs                                                        1,052,101                                 -                     1,052,101
                                                                  ---------                               ---                     ---------

    GROSS PROFIT                                                    479,330                                 -                       479,330

    Selling, general and
     administrative expenses                                        336,950                            (7,881)                      329,069

    Pre-opening expenses                                              5,285                                 -                         5,285
                                                                      -----                               ---                         -----

    INCOME FROM OPERATIONS                                          137,095                             7,881                       144,976

    Interest expense                                                    716                                 -                           716

    Other income                                                     (1,735)                                -                        (1,735)
                                                                     ------                               ---                        ------

    INCOME BEFORE INCOME TAXES                                      138,114                             7,881                       145,995

    Provision for income taxes                                       53,951                             3,152                        57,103
                                                                     ------                             -----                        ------

    NET INCOME                                                                  $84,163                                    $4,729                     $88,892
                                                                                =======                                    ======                     =======

    EARNINGS PER COMMON SHARE:

    Basic                                                                         $0.68                                                      $0.72

    Diluted                                                                       $0.67                                                      $0.71

    WEIGHTED AVERAGE COMMON SHARES

    OUTSTANDING:

    Basic                                                           122,901                                               122,901

    Diluted                                                         125,593                                               125,593

During the second quarter of 2013, the Company recorded a pre-tax $7.9 million non-cash impairment charge to reduce the carrying value of a corporate aircraft held for sale to fair market value. The provision for income taxes was calculated at 40%, which approximates the Company’s blended tax rate.


                                                                   Fiscal 2013

                                                          26 Weeks Ended August 3, 2013
                                                          -----------------------------

                                     As                   Recovery of                 Asset                Non-GAAP
                                  Reported                Previously               Impairment                Total
                                                        Impaired Asset               Charge
                                                        --------------               ------

    Net sales                                $2,865,132                                     $       -                    $         -  $2,865,132

    Cost of goods sold, including
     occupancy and distribution
     costs                        1,974,149                                     -                           -              1,974,149
                                  ---------                                   ---                         ---              ---------

    GROSS PROFIT                    890,983                                     -                           -                890,983

    Selling, general and
     administrative expenses        649,658                                     -                      (7,881)               641,777

    Pre-opening expenses              6,614                                     -                           -                  6,614
                                      -----                                   ---                         ---                  -----

    INCOME FROM OPERATIONS          234,711                                     -                       7,881                242,592

    Interest expense                  1,385                                     -                           -                  1,385

    Other income                     (7,940)                                4,342                           -                 (3,598)
                                     ------                                 -----                         ---                 ------

    INCOME BEFORE INCOME TAXES      241,266                                (4,342)                      7,881                244,805

    Provision for income taxes       92,282                                     -                       3,152                 95,434
                                     ------                                   ---                       -----                 ------

    NET INCOME                                 $148,984                                       $(4,342)                        $4,729    $149,371
                                               ========                                       =======                         ======    ========

    EARNINGS PER COMMON SHARE:

    Basic                                         $1.21                                                                        $1.22

    Diluted                                       $1.18                                                                        $1.19

    WEIGHTED AVERAGE COMMON

    SHARES OUTSTANDING:

    Basic                           122,802                                                                      122,802

    Diluted                         125,728                                                                      125,728

During the first quarter of 2013, the Company determined that it would recover $4.3 million of its investment in JJB Sports, which it had previously fully impaired. There is no related tax expense as the Company reversed a portion of the deferred tax valuation allowance it had previously recorded for net capital loss carryforwards it did not expect to realize at the time its investment in JJB Sports was fully impaired. During the second quarter of 2013, the Company recorded a pre-tax $7.9 million non-cash impairment charge to reduce the carrying value of a corporate aircraft held for sale to fair market value. The provision for income taxes was calculated at 40%, which approximates the Company’s blended tax rate.


                                                         Fiscal 2012

                                                 13 Weeks Ended July 28, 2012
                                                 ----------------------------

                                   As Reported             Impairment of             Non-GAAP
                                                            Investments                Total
                                                            -----------                -----

    Net sales                                  $1,437,041                                    $       -               $1,437,041

    Cost of goods sold, including
     occupancy and distribution
     costs                             989,261                                    -                    989,261
                                       -------                                  ---                    -------

    GROSS PROFIT                       447,780                                    -                    447,780

    Selling, general and
     administrative expenses           310,864                                    -                    310,864

    Pre-opening expenses                 2,276                                    -                      2,276
                                         -----                                  ---                      -----

    INCOME FROM OPERATIONS             134,640                                    -                    134,640

    Impairment of available-for-
     sale investments                   32,370                              (32,370)                         -

    Interest expense                     1,000                                    -                      1,000

    Other expense                           54                                    -                         54
                                           ---                                  ---                        ---

    INCOME BEFORE INCOME TAXES         101,216                               32,370                    133,586

    Provision for income taxes          47,553                                4,734                     52,287
                                        ------                                -----                     ------

    NET INCOME                                    $53,663                                      $27,636                  $81,299
                                                  =======                                      =======                  =======

    EARNINGS PER COMMON SHARE:

    Basic                                           $0.45                                                      $0.68

    Diluted                                         $0.43                                                      $0.65

    WEIGHTED AVERAGE COMMON SHARES

    OUTSTANDING:

    Basic                              119,928                                                 119,928

    Diluted                            124,533                                                 124,533

During the second quarter of 2012, the Company fully impaired its investment in JJB Sports and recorded a pre-tax charge of $32.4 million. The Company recorded a deferred tax asset valuation allowance of approximately $7.9 million for a portion of the $32.4 million net capital loss carryforward that it expects not to realize as a result of the impairment of its investment in JJB Sports.


                                                          Fiscal 2012

                                                  26 Weeks Ended July 28, 2012
                                                  ----------------------------

                                   As Reported              Impairment of             Non-GAAP
                                                             Investments                Total
                                                             -----------                -----

    Net sales                                   $2,718,745                                    $       -                  $2,718,745

    Cost of goods sold, including
     occupancy and distribution
     costs                           1,876,358                                     -                    1,876,358
                                     ---------                                   ---                    ---------

    GROSS PROFIT                       842,387                                     -                      842,387

    Selling, general and
     administrative expenses           606,995                                     -                      606,995

    Pre-opening expenses                 5,017                                     -                        5,017
                                         -----                                   ---                        -----

    INCOME FROM OPERATIONS             230,375                                     -                      230,375

    Impairment of available-for-
     sale investments                   32,370                               (32,370)                           -

    Interest expense                     4,449                                     -                        4,449

    Other income                        (1,811)                                    -                       (1,811)
                                        ------                                   ---                       ------

    INCOME BEFORE INCOME TAXES         195,367                                32,370                      227,737

    Provision for income taxes          84,547                                 4,734                       89,281
                                        ------                                 -----                       ------

    NET INCOME                                    $110,820                                      $27,636                    $138,456
                                                  ========                                      =======                    ========

    EARNINGS PER COMMON SHARE:

    Basic                                            $0.92                                                         $1.15

    Diluted                                          $0.88                                                         $1.10

    WEIGHTED AVERAGE COMMON SHARES

    OUTSTANDING:

    Basic                              120,721                                                  120,721

    Diluted                            125,768                                                  125,768

During the second quarter of 2012, the Company fully impaired its investment in JJB Sports and recorded a pre-tax charge of $32.4 million. The Company recorded a deferred tax asset valuation allowance of approximately $7.9 million for a portion of the $32.4 million net capital loss carryforward that it expects not to realize as a result of the impairment of its investment in JJB Sports.


Adjusted EBITDA

Adjusted EBITDA should not be considered as an alternative to net income or any other generally accepted accounting principles measure of performance or liquidity. Adjusted EBITDA, as the Company has calculated it, may not be comparable to similarly titled measures reported by other companies. Adjusted 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 3,              July 28,
                                2013                   2012
                                ----                   ----

                                 (dollars in thousands)

    Net income                          $84,163                     $53,663

    Provision for income
     taxes                    53,951                        47,553

    Interest expense             716                         1,000

    Depreciation and
     amortization             43,506                        30,444
                                                            ------

    EBITDA                             $182,336                    $132,660
                                       ========                    ========

    Add: Impairment of
     available-for-sale
     investments                   -                        32,370

    Adjusted EBITDA, as
     defined                           $182,336                    $165,030
                                       ========                    ========

    % increase in adjusted
     EBITDA                       10%


                                    26 Weeks Ended

                         August 3,               July 28,
                               2013                   2012
                               ----                   ----

                                (dollars in thousands)

    Net income                        $148,984                    $110,820

    Provision for income
     taxes                   92,282                        84,547

    Interest expense          1,385                         4,449

    Depreciation and
     amortization            76,314                        58,100

    EBITDA                            $318,965                    $257,916
                                      ========                    ========

    Add: Impairment of
     available-for-sale
     investments                  -                        32,370

    Less: Recovery of
     previously impaired
     asset                   (4,342)                            -

    Adjusted EBITDA, as
     defined                          $314,623                    $290,286
                                      ========                    ========

    % increase in
     adjusted EBITDA              8%


Reconciliation of Gross Capital Expenditures to Net 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 3,             July 28,
                                  2013                 2012
                                  ----                 ----

                                       (dollars in thousands)

    Gross capital
     expenditures                       $(95,479)                    $(95,158)

    Proceeds from sale-
     leaseback transactions          -                             -

    Deferred construction
     allowances                 12,756                        12,191

    Construction allowance
     receipts                        -                             -
                                   ---                           ---

    Net capital
     expenditures                       $(82,723)                    $(82,967)
                                        ========                     ========

SOURCE DICK’s Sporting Goods, Inc.


Source: PR Newswire