MINNEAPOLIS, Aug. 18 /PRNewswire-FirstCall/ -- Gander Mountain Company
(Nasdaq: GMTN) today reported sales and earnings results for the second
quarter ended July 31, 2004.
Total sales for the second quarter of fiscal 2004 increased 35%, or
$33.3 million, to $128.1 million. Comparable store sales increased 1.8% on top
of a 15.5% increase in the second quarter of fiscal 2003. The net loss for
the quarter was $3.7 million compared with a net loss of $4.4 million in the
second quarter of fiscal 2003.
For the 26 weeks ended July 31, 2004, sales increased $62.6 million, or
38%, to $226.8 million. Comparable store sales increased 4.8%. The net loss
for the 26 weeks ended July 31, 2004 was $17.3 million, compared with a net
loss of $15.6 million for the 26 weeks ended August 2, 2003.
On April 26, 2004, Gander Mountain closed its initial public offering of
6,583,750 shares of its common stock and converted existing preferred stock to
common stock. On a GAAP basis, the per share net loss for the second quarter
of 2004 was $0.26 per common share compared with a net loss of $8.75 per
common share for the second quarter of fiscal 2003. For the 26 weeks ended
July 31, 2004 on a GAAP basis, the Company's net loss was $2.71 per common
share compared with a net loss of $24.56 per common share for the 26 weeks
ended August 2, 2003. Giving effect to the conversion of preferred shares and
the application of the net proceeds of the offering as of the beginning of
each period presented, pro forma net loss for the second quarter of fiscal
2004 was unchanged from the GAAP net loss of $3.7 million, or $0.26 per share,
compared to a pro forma net loss of $3.5 million, or $0.25 per share, for the
second quarter of last year. Pro forma net loss for the 26 weeks ended July
31, 2004 was $16.3 million, or $1.15 per share, compared to a pro forma net
loss of $14.2 million, or $1.09 per share, for the 26 weeks ended August 2,
2003.
"Our industry leading 35% sales growth this quarter reflects our focus on
both comparable store performance and new store development," said Mark Baker,
President and CEO. "We are on track to meet our overall financial plan for
2004 as we move into the higher volume third and fourth quarters."
During the second quarter of fiscal 2004, the Company opened stores in
Fredricksburg, VA, Indianapolis, IN and Coldwater, MI, bringing total square
footage to 2.9 million, an increase of 34% over the prior year. The Company
operates 70 stores in ten states.
"During the third quarter, Gander Mountain expects to continue on pace as
the fastest-growing outdoor lifestyle retailer," Baker added. "We plan to open
an additional 14 stores before year end, including two relocations and five
stores in new markets -- Texas, Kentucky and Colorado. Strong brand
recognition and positive response to our outdoor lifestyle store concept are
evident even as we enter new markets. Our more than 4,000 dedicated
associates continue to lead the industry in serving every customer."
Fiscal 2004 Outlook
The Company's current outlook for fiscal 2004 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.
Full Fiscal Year 2004 -
-- The Company expects to open 19 new stores, including two relocations,
during the year, representing incremental square footage of
approximately 1.2 million square feet.
-- Sales are expected to reach $675-$700 million, an increase of 38% to
43% over fiscal 2003.
-- Comparable store sales are expected to increase by approximately 3% to
5%.
-- Income before income taxes is expected to be $16-$21 million, compared
with $1.5 million in fiscal 2003.
Conference Call Information
A conference call to discuss these results will be held today at 8:00 a.m.
Central Time. The conference call will be webcast from
http://www.GanderMountain.com . To register for the event, please go to the
website at least fifteen minutes early to register, download and install any
necessary audio software. The call will also be available to investors and
analysts by phone at (800) 811-7286, passcode 915714.
For those who cannot listen to the live broadcast, an archived webcast
will be available shortly after the conclusion of the call, and remain
available on http://www.GanderMountain.com for approximately 90 days.
About Gander Mountain Company
Gander Mountain Company, headquartered in Minneapolis, Minnesota, is a
leading specialty retailer that serves the needs of outdoor lifestyle
enthusiasts, with a particular focus on hunting, fishing and camping. Focused
on a "We Live Outdoors" culture, Gander Mountain stores offer competitively
priced national, regional and owned brand outdoor equipment, accessories,
related technical apparel and footwear. There are currently 70 Gander
Mountain outdoor lifestyle stores in ten states. For the nearest Gander
Mountain store location, call 800-282-5993 or visit
http://www.GanderMountain.com .
Cautionary Note Regarding Forward-Looking Statements
Any statements in this release that are not historical or current facts
are forward-looking statements. All forward-looking statements in this
release are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from any
future results, performances or achievements expressed or implied by the
forward-looking statements. Certain of these risks and uncertainties are
described in the "Risk Factors" section of the final prospectus relating to
our initial public offering, as filed with the SEC, as well as in our
subsequent reports filed with the SEC, which are available at our website at
http://www.GanderMountain.com and at the SEC's website at http://www.sec.gov .
Gander Mountain Company
Condensed Statements of Operations - Unaudited
(In thousands, except per share data)
13 Weeks Ended 26 Weeks Ended
July 31, August 2, July 31, August 2,
2004 2003 2004 2003
Sales $128,096 $94,821 $226,815 $164,247
Cost of goods sold 96,558 72,571 176,010 129,875
Gross profit 31,538 22,250 50,805 34,372
Operating expenses:
Store operating expenses 26,968 18,135 50,600 34,296
General and administrative
expenses 6,115 5,601 12,613 10,674
Pre-opening expenses 1,246 1,661 2,477 2,980
Loss from operations (2,791) (3,147) (14,885) (13,578)
Interest expense, net 895 1,241 2,397 2,057
Loss before income taxes (3,686) (4,388) (17,282) (15,635)
Income tax provision (benefit) - - - -
Net loss (3,686) (4,388) (17,282) (15,635)
Less preferred stock dividends - 4,131 4,305 8,262
Loss applicable to common
shareholders $(3,686) $(8,519) $(21,587) $(23,897)
Basic and diluted loss applicable
to common shareholders per share $(0.26) $(8.75) $(2.71) $(24.56)
Weighted average common shares
outstanding 14,222 973 7,962 973
Pro Forma Data (1) (Basic and
Diluted)
Pro forma loss applicable to common
shareholders $(3,686) $(3,468) $(16,340) $(14,163)
Pro forma loss applicable to common
shareholders per share $(0.26) $(0.25) $(1.15) $(1.09)
Pro forma weighted average common
shares outstanding 14,222 14,089 14,222 13,022
Reconciliation of Pro Forma Data to
GAAP
Loss applicable to common
shareholders $(3,686) $(8,519) $(21,587) $(23,897)
Preferred stock dividends - 4,131 4,305 8,262
Interest expense reduction - 920 942 1,472
Pro forma net loss applicable to
common shareholders $(3,686) $(3,468) $(16,340) $(14,163)
Weighted average common shares
outstanding 14,222 973 7,962 973
Conversion of preferred stock - 6,665 3,149 6,665
Additional shares issued in IPO - 6,451 3,111 5,384
Pro forma weighted average common
shares outstanding 14,222 14,089 14,222 13,022
(1) The Company believes the use of pro forma results provides more
meaningful information due to the significant increase in share count as a
result of the closing of the Company's initial public offering on April
26, 2004 and the conversion of convertible preferred stock into shares of
common stock on that date. The pro forma data is presented as if these
events had occurred prior to each period.
Gander Mountain Company
Condensed Balance Sheets
(In thousands)
July 31, August 2, January 31,
2004 2003 2004
Assets (unaudited) (unaudited)
Current assets:
Cash and cash equivalents $1,172 $808 $970
Accounts receivable 14,528 8,625 6,610
Inventories 253,710 174,148 180,361
Prepaids and other current assets 6,305 4,174 3,599
Total current assets 275,715 187,755 191,540
Property and equipment, net 65,684 48,799 54,421
Other assets 4,065 3,784 4,307
Total assets $345,464 $240,338 $250,268
Liabilities and shareholders' equity
Current liabilities:
Borrowings under credit facility $83,469 $99,048 $102,058
Accounts payable 83,577 56,963 35,957
Accrued and other current
liabilities 24,871 19,629 29,892
Total current liabilities 191,917 175,640 167,907
Long term liabilities 4,815 12,058 12,570
Shareholders' equity 148,732 52,640 69,791
Total liabilities and shareholders'
equity $345,464 $240,338 $250,268
Gander Mountain Company
Condensed Statements of Cash Flows - Unaudited
(In thousands)
26 Weeks Ended
July 31, August 2,
2004 2003
Operating activities
Net loss $(17,282) $(15,635)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 5,264 3,785
Change in operating assets and
liabilities:
Accounts receivable (7,918) (5,182)
Inventories (73,349) (64,186)
Prepaid expenses and other assets (2,742) (2,118)
Accounts payable and other
liabilities 43,266 30,797
Net cash used in operating activities (52,761) (52,539)
Investing activities
Purchase of property and equipment (14,825) (11,075)
Net cash used in investing activities (14,825) (11,075)
Financing activities
Proceeds from sale of common stock,
net of expenses 96,216 -
(Repayments of) proceeds from notes
with affiliates (9,839) 9,930
(Repayments of) borrowings under
credit facility, net (18,589) 53,901
Net cash provided by financing
activities 67,788 63,831
Net increase in cash 202 217
Cash, beginning of period 970 591
Cash, end of period $1,172 $808
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SOURCE Gander Mountain Company
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Related links:
http://www.gandermountain.com
CONTACT:
Sharon K. Link, Senior Vice President,
Finance and Administration, of Gander Mountain Company,
+1-952-830-8000; or Bob Burton of IR Squared, +1-678-576-2991
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