GMTN Gander Mountain Company (MM)

Record Annual Revenues Exceed $1 Billion for the first time Record Fourth Quarter Revenues of $334 Million Record Fourth Quarter Cash Flows from Operations of $109 Million ST. PAUL, Minn., April 22 /PRNewswire-FirstCall/ -- Gander Mountain Company (http://www.gandermtn.com/) (NASDAQ:GMTN), the nation's largest retail network of stores for hunting, fishing, camping, and marine products and services and outdoor lifestyle apparel and footwear, today announced results for the fourth quarter and fiscal year ended January 31, 2009. In addition, a pre-recorded call offering additional comments on the quarter will be available to all investors on the company's Website at http://www.gandermtn.com/, both as a webcast and in the form of a transcript. An archived webcast and transcript will remain available on the company's Website for approximately 90 days. Fourth Quarter 2008: Gander Mountain's fiscal fourth quarter 2008 results included record consolidated sales of $334.1 million compared to consolidated sales of $317.6 million for the fourth quarter of fiscal 2007, a 5.2 percent increase. Retail segment sales for the fourth quarter were $322.0 million, an increase of $10.0 million or 3.2 percent, as compared to the fiscal 2007 fourth quarter. Direct segment sales were $12.1 million for the quarter, compared to $5.5 million for the same quarter last year. The increase in Direct segment sales resulted primarily from the startup of the new Gander Direct internet and catalog operations in the third quarter of fiscal 2008 and the inclusion of Overton's, acquired in December 2007, for the full quarter in fiscal 2008. Retail segment net income in the fourth quarter was $16.6 million, which includes a $6.5 million non-cash charge for impairment of goodwill in light of current market conditions. Excluding the non-cash impairment charge, retail segment net income in the fourth quarter was $23.1 million. For the fourth quarter of fiscal 2007, retail net income was $7.0 million. The improvement resulted primarily from increased product margins and decreased SG&A costs. Direct segment net loss for the fourth quarter was $3.5 million, compared with a net loss of $1.2 million in the fourth quarter of 2007. Consolidated net income improved to $13.0 million for the fiscal 2008 fourth quarter, including the $6.5 million non-cash charge for impairment of goodwill, compared to net income of $5.8 million for the same quarter last year. Excluding the non-cash impairment charge, consolidated net income for the fiscal 2008 fourth quarter was $19.6 million. As reported, comparable store sales during the fourth quarter of fiscal 2008 were (0.2) percent, an improvement over (6.5) percent in the third quarter of fiscal 2008. The firearms, ammunition, seasonal hunting and footwear categories all experienced strong sales performance during the quarter. Comparable store sales were a positive 2.7 percent during the quarter, excluding the (2.9) percent impact of boats, ATV sales and power sport services, which are categories the company is in the process of exiting. Consolidated SG&A costs, as a percentage of sales, improved 168 basis points to 20.0 percent of sales in the fourth quarter of fiscal 2008 as compared to the fourth quarter of fiscal 2007. 2008 Fiscal Year: For the fiscal year, the company reported record sales of $1.1 billion, an increase of 9.8 percent over the prior year. The company reported a net loss for the year of $15.5 million, or ($0.64) per share, compared with a net loss of $31.8 million, or ($1.52) per share for the 2007 fiscal year. Retail segment results for the year were a net loss of $9.4 million compared with a net loss of $30.6 million in fiscal 2007. Comparable store sales declined 5.6 percent. Direct segment results were a net loss of $6.1 million compared with a net loss of $1.2 million in fiscal 2007 reflecting additional investment in the launch of Gander Direct in fiscal 2008. Improvement in inventory management resulted in a decrease in Retail segment inventory of 18 percent per square foot, year-over-year, and a 23 percent decrease in Retail segment clearance inventory. Record cash flows from operating activities for the year were $59.2 million, an improvement of approximately $90 million over fiscal year 2007. During the year, the Company reduced its total debt by approximately $38 million. "Gander Mountain improved its performance through the year in total revenues, operating performance and cash generation as we applied a more disciplined approach to our operations, capital, and expense decisions," said David C. Pratt, chairman and interim chief executive officer. "Thus far into 2009, in a difficult retail environment, we continue to see progress in operating performance. Our ongoing efforts to build the leadership team, improve operating margins, and reduce debt should continue the momentum we generated in the 'New Gander Mountain' this last fiscal year." About Gander Mountain Company: Gander Mountain Company (NASDAQ:GMTN), headquartered in Saint Paul, Minnesota, is the nation's largest retail network of stores for hunting, fishing, camping, marine, and outdoor lifestyle apparel and footwear, products and services. Established in 1960, the Gander Mountain brand has offered an expanding assortment of outdoor equipment, technical apparel and footwear, as well as gunsmith and archery services. The stores feature national, regional and local brands as well as the company's owned brands. Focused on a "We Live Outdoors" culture, Gander Mountain dedicates itself to creating outdoor memories. There are 116 conveniently located Gander Mountain outdoor lifestyle stores in 23 states and three outlet stores. Customers may also shop at http://www.gandermtn.com/. For the nearest store location call 800-282-5993 or visit http://www.gandermtn.com/. Gander Mountain is also the parent company of Overton's (http://www.overtons.com/), a leading catalog and Internet based retailer of products for boating and other water sports enthusiasts. 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 company's Annual Report on Form 10-K for fiscal 2007 and other required reports, as filed with the SEC, which are available at http://www.gandermtn.com/ and at the SEC's Website at http://www.sec.gov/. Gander Mountain Company Consolidated Statements of Operations (In thousands, except per share data) 13 Weeks Ended 52 Weeks Ended ---------------- ---------------- January 31, February 2, January 31, February 2, 2009 2008 2009 2008 ---- ---- ---- ---- Sales $334,114 $317,604 $1,064,569 $969,403 Cost of goods sold 242,897 232,357 794,080 728,649 ------- ------- ------- ------- Gross profit 91,217 85,247 270,489 240,754 Operating expenses: Selling, general and administrative expenses 66,951 68,988 257,822 240,744 Exit costs, impairment and other charges 927 4,285 907 6,493 Goodwill impairment charge 6,514 - 6,514 - Pre-opening expenses 13 84 2,048 4,836 -- -- ----- ----- Income (loss) from operations 16,812 11,890 3,198 (11,319) Interest expense, net 3,707 5,696 18,008 19,745 ----- ----- ------ ------ Income (loss) before income taxes 13,105 6,194 (14,810) (31,064) Income tax provision 68 375 687 750 -- --- --- --- Net Income (loss) $13,037 $5,819 $(15,497) $(31,814) ======= ====== ======== ======== Income (loss) per common share Basic $0.54 $0.25 $(0.64) $(1.52) Diluted $0.54 $0.25 $(0.64) $(1.52) Weighted average common shares outstanding Basic 24,149 22,889 24,102 20,913 Diluted 24,149 22,901 24,102 20,913 Gander Mountain Company Consolidated Balance Sheets (In thousands) January 31, February 2, 2009 2008 ---- ---- Assets Current assets: Cash and cash equivalents $1,655 $2,622 Accounts receivable 10,784 10,992 Income tax receivable 62 486 Inventories 358,127 403,683 Prepaids and other current assets 12,132 15,987 ------ ------ Total current assets 382,760 433,770 Property and equipment, net 162,180 168,685 Goodwill 47,114 48,803 Acquired intangible assets, net 19,130 25,098 Other assets, net 1,936 3,576 ----- ----- Total assets $613,120 $679,932 ======== ======== Liabilities and shareholders' equity Current liabilities: Borrowings under credit facility $204,514 $246,013 Accounts payable 63,863 72,563 Accrued and other current liabilities 55,456 60,606 Notes payable - related parties 10,000 - Current maturities of long term debt 15,628 8,247 ------ ----- Total current liabilities 349,461 387,429 Long term debt 50,402 64,173 Deferred income taxes 5,954 7,113 Other long term liabilities 27,398 27,397 Shareholders' equity: Preferred stock ($.01 par value, 5,000,000 shares authorized; no shares issued and outstanding) - - Common stock ($.01 par value, 100,000,000 shares authorized; 24,195,736 and 24,049,064 shares issued and outstanding) 242 241 Additional paid-in-capital 278,691 277,110 Accumulated deficit (99,028) (83,531) ------- ------- Total shareholders' equity 179,905 193,820 ------- ------- Total liabilities and shareholders' equity $613,120 $679,932 ======== ======== Gander Mountain Company Consolidated Statements of Cash Flows (In thousands) 52 Weeks Ended ---------------- January 31, February 2, Operating activities 2009 2008 ---- ---- Net loss $(15,497) $(31,814) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 31,046 27,589 Exit costs, impairment and other charges (533) 4,561 Goodwill impairment charge 6,514 - Stock-based compensation expense 1,175 1,587 (Gain)/ loss on disposal of assets (62) 289 Change in operating assets and liabilities: Accounts receivable (72) 484 Inventories 45,555 (36,324) Prepaids and other current assets 3,816 (3,947) Other assets (236) (2,046) Accounts payable and other liabilities (12,910) 9,224 Deferred income taxes 384 - --- --- Net cash provided by (used in) operating activities 59,180 (30,397) ------ ------- Investing activities Purchases of property and equipment (18,513) (46,549) Acquisition of business and related expenses (172) (76,493) Proceeds from insurance settlement - 726 Proceeds from sale of assets 101 - --- --- Net cash used in investing activities (18,584) (122,316) ------- -------- Financing activities (Repayments) borrowings under credit facility, net (41,499) 77,528 Proceeds from short term notes payable - related parties 10,000 - Proceeds from long term debt - 53,082 Reductions in long term debt (10,471) (3,874) Proceeds from sales of common stock, net of expenses - 23,967 Proceeds from exercise of stock options and employee stock purchases 407 3,290 --- ----- Net cash (used in) provided by financing activities (41,563) 153,993 ------- ------- Net (decrease) increase in cash (967) 1,280 Cash, beginning of period 2,622 1,342 ----- ----- Cash, end of period $1,655 $2,622 ====== ====== Non-cash investing activities: During the 52 weeks ended January 31, 2009 and February 2, 2008, the Company acquired equipment totaling approximately $4.1 million and $3.6 million, respectively, that was financed through capital leases. These amounts are excluded from Purchases of property and equipment in this statement of cash flows. Gander Mountain Company Segment Information (In thousands) Statement of Operations data: 13 Weeks Ended 13 Weeks Ended January 31, 2009 February 2, 2008 ---------------- ---------------- Retail Direct Total Retail Direct Total ------ ------ ----- ------ ------ ----- Sales $322,031 $12,083 $334,114 $312,064 $5,540 $317,604 Depreciation and amortization 7,801 287 8,088 7,659 185 7,844 Exit costs, impairment & other charges 927 - 927 4,285 - 4,285 Goodwill impairment charge 6,514 - 6,514 - - - Income (loss) from operations 19,719 (2,907) 16,812 12,455 (565) 11,890 Net income (loss) $16,584 $(3,547) $13,037 $7,025 $(1,206) $5,819 52 Weeks Ended 52 Weeks Ended January 31, 2009 February 2, 2008 ---------------- ---------------- Retail Direct Total Retail Direct Total ------ ------ ----- ------ ------ ----- Sales $978,675 $85,894 $1,064,569 $963,863 $5,540 $969,403 Depreciation and amortization 30,120 1,402 31,522 27,470 185 27,655 Exit costs, impairment & other charges 907 - 907 6,493 - 6,493 Goodwill impairment charge 6,514 - 6,514 - - - Income (loss) from operations 6,090 (2,892) 3,198 (10,754) (565) (11,319) Net income (loss) $(9,357) $(6,140) $(15,497) $(30,608) $(1,206) $(31,814) Balance Sheet data: As of January 31, 2009 As of February 2, 2008 ------------------------ ------------------------ Retail Direct Total Retail Direct Total ------ ------ ----- ------ ------ ----- Total assets $517,812 $95,308 $613,120 $587,320 $92,612 $679,932 Inventories 334,868 23,259 358,127 384,510 19,173 403,683 Goodwill & acquired intangible assets 400 65,844 66,244 7,083 66,818 73,901 Long term debt $20,402 $30,000 $50,402 $26,673 $37,500 $64,173 DATASOURCE: Gander Mountain Company CONTACT: Investor Relations, Bob Vold of Gander Mountain Company, +1-651-325-4300; or Media, David Ewald, +1-651-290-6276, Cell, +1-612-490-2650, for Gander Mountain Company Web Site: http://www.gandermountain.com/ http://www.overtons.com/

Copyright