-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IC33F06lo0FF+bAus/6JoTCTByTCRTHB0NGjKlgXSjMWznmWaQet3uIfAli7Bcxa BQ/hrlx5GYT56ZTO+yHbsw== 0000931763-98-002407.txt : 19980914 0000931763-98-002407.hdr.sgml : 19980914 ACCESSION NUMBER: 0000931763-98-002407 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980801 FILED AS OF DATE: 19980911 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIBBETT SPORTING GOODS INC CENTRAL INDEX KEY: 0001017480 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 631074067 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-20969 FILM NUMBER: 98708046 BUSINESS ADDRESS: STREET 1: 451 INDUSTRIAL LANE CITY: BIRMINGHAM STATE: AL ZIP: 35211 BUSINESS PHONE: 2059424292 MAIL ADDRESS: STREET 1: 451 INDUSTRIAL LANE CITY: BIRNINGHAM STATE: AL ZIP: 35211 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES - --------- EXCHANGE ACT OF 1934. For the quarterly period ended: August 1, 1998 -------------- - OR - TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES - -------- EXCHANGE ACT OF 1934. For the transaction period from _________ to ________ COMMISSION FILE NUMBER 000-20969 HIBBETT SPORTING GOODS, INC. (Exact name of registrant as specified in its charter) DELAWARE 63-1074067 --------- ---------- (State or other jurisdiction of (IRS Employee Identification No.) incorporation or organization) 451 INDUSTRIAL LANE, BIRMINGHAM, ALABAMA 35211 ---------------------------------------- ----- (Address of principal executive offices) (Zip code) (205)-942-4292 -------------- (Registrant's telephone number including area code) NONE ---- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --------- --------- Indicate the number of shares outstanding of each of the issuer's common stock, as of the latest practicable date: Shares of common stock, par value $.01 per share, outstanding as of August 1, 1998 were 6,405,816 shares. HIBBETT SPORTING GOODS, INC.
INDEX PAGE NO. -------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets at August 1, 1998 and January 31, 1998 2 Condensed Consolidated Statements of Operations for the Thirteen Week and Twenty-Six Week Periods Ended August 1, 1998 and August 2, 1997 3 Condensed Consolidated Statements of Cash Flows for the Twenty-Six Week Periods Ended August 1, 1998 and August 2, 1997 4 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6-10 PART II. OTHER INFORMATION Item 1. Legal Proceedings 10 Item 2. Changes in Securities 10 Item 3. Defaults Upon Senior Securities 10 Item 4. Submission of Matters to Vote of Security-Holders 10 Item 5. Other Information 11 Item 6. Exhibits and Reports on Form 8-K 11
1 HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars In Thousands)
AUGUST 1, 1998 JANUARY 31, 1998 -------------- ---------------- (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 343 $ 4,498 Accounts receivable, net 1,890 1,839 Inventories 46,231 33,267 Prepaid expenses and other 1,669 650 Deferred income taxes 702 606 -------- -------- Total current assets 50,835 40,860 -------- -------- Property and equipment, net 14,627 12,115 -------- -------- Noncurrent Assets: Deferred income taxes 386 364 Other, net 157 27 -------- -------- Total noncurrent assets 543 391 -------- -------- Total Assets $ 66,005 $ 53,366 ======== ======== LIABILITIES AND STOCKHOLDERS' INVESTMENT Current Liabilities: Accounts payable $ 18,834 $ 10,951 Accrued income taxes 961 860 Accrued expenses: Payroll-related 1,937 1,813 Other 1,800 1,587 -------- -------- Total current liabilities 23,532 15,211 -------- -------- Long-Term Debt 1,046 - -------- -------- Stockholders' Investment: Preferred stock, $.01 par value 1,000,000 shares authorized, no shares outstanding - - Common stock, $.01 par value, 12,000,000 shares authorized, 6,405,816 shares issued and outstanding at August 1, 1998 and 6,393,977 shares issued and outstanding at January 31, 1998 64 64 Paid-in capital 53,743 53,681 Retained earnings (deficit) (12,380) (15,590) -------- -------- Total stockholders' investment 41,427 38,155 -------- -------- Total Liabilities and Stockholders' Investment $ 66,005 $ 53,366 ======== ========
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 2 HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars In Thousands, Except Per Share Amounts)
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED ------------------------------- ------------------------------- AUGUST 1, 1998 AUGUST 2, 1997 AUGUST 1, 1998 AUGUST 2, 1997 -------------- -------------- -------------- -------------- (Unaudited) (Unaudited) Net sales $32,524 $26,393 $65,845 $52,558 Cost of goods sold, (Including warehouse, distribution and store occupancy costs) 22,907 18,555 46,065 36,681 --------- --------- --------- --------- Gross profit 9,617 7,838 19,780 15,877 Store operating, selling, and administrative expenses 6,701 5,671 13,220 10,912 Depreciation and amortization 731 556 1,411 1,073 --------- --------- --------- --------- Operating income 2,185 1,611 5,149 3,892 Interest expense (income), net (5) 14 (50) (11) --------- --------- --------- --------- Income before provision for income taxes 2,190 1,597 5,199 3,903 Provision for income taxes 838 611 1,989 1,493 --------- --------- --------- --------- Net income $ 1,352 $ 986 $ 3,210 $ 2,410 ========= ========= ========= ========= Earnings per common share: Basic: Net income $ 0.21 $ 0.16 $ 0.50 $ 0.39 ========= ========= ========= ========= Diluted: Net income $ 0.21 $ 0.16 $ 0.49 $ 0.38 ========= ========= ========= ========= Weighted average shares outstanding: Basic 6,402,950 6,167,273 6,398,732 6,150,767 ========= ========= ========= ========= Diluted 6,587,518 6,279,770 6,569,521 6,264,084 ========= ========= ========= =========
See notes to condensed consolidated financial statements. 3 HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars In Thousands)
TWENTY-SIX WEEKS ENDED ------------------------------ AUGUST 1, 1998 AUGUST 2, 1997 -------------- -------------- (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,210 $ 2,410 ------- ------- Adjustments to reconcile net income to net cash (used in) operating activities: Depreciation and amortization 1,411 1,073 Deferred income taxes (118) (115) Loss on disposal of assets 18 7 Change in assets and liabilities (5,858) (4,005) ------- ------- Total adjustments (4,547) (3,040) ------- ------- Net cash (used in) operating activities (1,337) (630) ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (3,929) (1,680) Proceeds from sale of property 3 5 ------- ------- Net cash (used in) investing activities (3,926) (1,675) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt - - Proceeds from options exercised and purchase of shares under employee stock purchase plan 62 405 Revolving loan borrowings and repayments, net 1,046 704 ------- ------- Net cash provided by financing activities 1,108 1,109 ------- ------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS (4,155) (1,196) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,498 2,269 ------- ------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 343 $ 1,073 ======= =======
See notes to condensed consolidated financial statements. 4 HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Hibbett Sporting Goods, Inc. and its wholly-owned subsidiaries (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended January 31, 1998. In the opinion of management, the condensed consolidated financial statements included herein contain all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the Company's financial position as of August 1, 1998 and August 2, 1997, and the results of its operations and cash flows for the periods presented. The Company has experienced and expects to continue to experience seasonal fluctuations in its net sales and operating income. Therefore, the results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. 2. EARNINGS PER SHARE The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings per Share, effective January 31, 1998, and restated earnings per share ("EPS") for all periods presented in the consolidated statements of operations. A reconciliation of the weighted average shares for basic and diluted EPS is as follows:
THIRTEEN WEEK PERIOD ENDED TWENTY-SIX WEEK PERIOD ENDED ------------------------------------ ------------------------------------- AUGUST 1, 1998 AUGUST 2, 1997 AUGUST 1, 1998 AUGUST 2, 1997 --------------- ----------------- ---------------- ---------------- Weighted average shares outstanding: Weighted average shares, excluding the effect of stock options 6,402,950 6,167,273 6,398,732 6,150,767 Effect of stock options 184,568 112,497 170,789 113,317 --------------- ----------------- ---------------- ---------------- Weighted average shares, including the effect of stock options 6,587,518 6,279,770 6,569,521 6,264,084 =============== ================= ================ ================
3. CONTINGENCIES The Company is a party to various legal proceedings incidental to its business. In the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect the financial position or results of operations of the Company. 5 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Hibbett Sporting Goods, Inc. ("Hibbett" or the "Company") is a rapidly- growing operator of full-line sporting goods stores in small to mid-sized markets in the southeastern United States. Hibbett's stores offer a broad assortment of high quality athletic equipment, footwear, and apparel at competitive prices with superior customer service. The Company's merchandise assortment features a core selection of brand name merchandise emphasizing team and individual sports complemented by a selection of localized apparel and accessories designed to appeal to a wide range of customers within each market. The Company believes that its stores are among the primary retail distribution alternatives for brand name vendors that seek to reach Hibbett's target markets. The Company operates 140 Hibbett Sports stores as well as eleven smaller- format Sports Addition athletic shoe stores and four larger-format Sports & Co. superstores. Hibbett's primary retail format and growth vehicle is Hibbett Sports, a 5,000 square foot store located primarily in enclosed malls as well as dominant strip centers. Although competitors in some markets may carry product lines and national brands similar to Hibbett, the Company believes that its Hibbett Sports stores are typically the primary, full-line sporting goods retailers in their markets due to, among other factors, the extensive selection of traditional team and individual sports merchandise offered and a high level of customer service. The Company operates on a 52 or 53 week fiscal year ending on the Saturday nearest to January 31 of each year. Hibbett is incorporated under the laws of the state of Delaware. RESULTS OF OPERATIONS The following table sets forth statement of operations items expressed as a percentage of net sales for the periods indicated.
THIRTEEN WEEK TWENTY-SIX WEEK PERIOD ENDED PERIOD ENDED ------------------------------------- --------------------------------------- August 1, 1998 August 2, 1997 August 1, 1998 August 2, 1997 ---------------- ------------------ ------------------ ------------------- Net sales 100.0% 100.0% 100.0% 100.0% Cost of goods sold, including warehouse, distribution and store occupancy costs 70.4 70.3 70.0 69.8 ---------------- ------------------ ----------------- ------------------- Gross profit 29.6 29.7 30.0 30.2 Store operating, selling, and administrative expenses 20.6 21.5 20.1 20.8 Depreciation and amortization 2.3 2.1 2.1 2.0 ---------------- ------------------ ----------------- ------------------- Operating income 6.7 6.1 7.8 7.4 Interest expense (income), net 0.0 0.1 (0.1) 0.0 ---------------- ------------------ ----------------- ------------------- Income before provision for income taxes 6.7 6.0 7.9 7.4 Provision for income taxes 2.6 2.3 3.0 2.8 ---------------- ------------------ ----------------- ------------------- Net income 4.1% 3.7% 4.9% 4.6% ================ ================== ================= ===================
6 THIRTEEN WEEKS ENDED AUGUST 1, 1998 COMPARED TO THIRTEEN WEEKS ENDED AUGUST 2, 1997 Net sales. Net sales increased $6.1 million, or 23.2%, to $32.5 million for the thirteen weeks ended August 1, 1998, from $26.4 million for the comparable period in the prior year. This increase is attributed to opening a net of forty- seven Hibbett Sports stores and two Sports Additions store in the last 52 week period ended August 1, 1998, and a 2.7% increase in comparable store net sales. The increase in comparable net sales was due primarily to increased equipment and footwear sales. New stores and stores not in the comparable store net sales calculation accounted for $5.5 million of the increase in net sales and increases in comparable store net sales contributed $563,000. Comparable store net sales data for a period reflect stores open throughout that period and the corresponding period of the prior fiscal year. Comparable store net sales do not include sales by the Company's four larger format Sports & Co. superstores or the Company's wholly-owned subsidiary, Hibbett Team Sales, Inc. During the thirteen weeks ended August 1, 1998, the Company opened eighteen Hibbett Sports stores and two Sports Additions stores. The Company acquired two of the stores from W.C. Bradley Company and five of the stores from Olympia Sports. Five of the seven stores acquired have been converted to Hibbett Sports stores and two have been converted to Sports Additions stores. Gross profit. Cost of goods sold includes the cost of inventory, occupancy costs for stores and occupancy and operating costs for the distribution center. Gross profit was $9.6 million, or 29.6% of net sales, in the thirteen weeks ended August 1, 1998, as compared to $7.8 million, or 29.7% of net sales, in the same period of the prior fiscal year. The decrease in gross profit as a percentage of net sales in the thirteen weeks ended August 1, 1998 was due primarily to higher store occupancy costs as a percentage of net sales as a result of the increased number of new stores in the store base. Store operating, selling and administrative expenses. Store operating, selling and administrative expenses were $6.7 million, or 20.6% of net sales, for the thirteen weeks ended August 1, 1998, as compared to $5.7 million, or 21.5% of net sales, for the comparable period a year ago. The decrease in store operating, selling and administrative expenses as a percentage of net sales in the thirteen weeks ended August 1, 1998 is primarily attributable to improved leveraging of administrative costs over higher sales. Depreciation and amortization. Depreciation and amortization as a percentage of net sales increased slightly to 2.3% in the thirteen weeks ended August 1, 1998 from 2.1% in the thirteen weeks ended August 2, 1997 due to the increased number of new stores in the store base. Interest expense (income), net. Net interest income for the thirteen weeks ended August 1, 1998 was $5,000 compared to net interest expense of $14,000 in the prior year period. The increase is attributable to income earned on higher levels of temporary cash investments. TWENTY-SIX WEEKS ENDED AUGUST 1, 1998 COMPARED TO TWENTY-SIX WEEKS ENDED AUGUST 2, 1997 Net sales. Net sales increased $13.3 million, or 25.3%, to $65.9 million for the twenty-six weeks ended August 1, 1998, from $52.6 million for the comparable period in the prior year. This increase is attributed to opening a net of forty-seven Hibbett Sports stores and two Sports Additions store in the last 52 week period ended August 1, 1998, and a 4.5% increase in comparable store net sales. The increase in comparable net sales was due primarily to increased equipment and footwear sales. During the twenty-six weeks ended August 1, 1998, the Company opened thirty-three Hibbett Sports stores and two Sports Additions stores. New stores and stores not in the comparable store net sales calculation accounted for $11.5 million of the increase in net sales and increases in comparable store net sales contributed $1.8 million. Comparable store net sales data for a period reflect stores open throughout that period and the corresponding period of the prior fiscal year. Comparable store net sales do not include sales by the Company's four larger format Sports & Co. superstores or the Company's wholly-owned subsidiary, Hibbett Team Sales, Inc. Gross profit. Cost of goods sold includes the cost of inventory, occupancy costs for stores and occupancy and operating costs for the distribution center. Gross profit was $19.8 million, or 30.0% of net sales, in the twenty-six weeks ended August 1, 1998, as compared to $15.9 million, or 30.2% of net sales, in the same period of the prior fiscal year. The 7 decrease in gross profit as a percentage of net sales in the twenty-six weeks ended August 1, 1998 was due primarily to higher store occupancy costs as a percentage of net sales as a result of the increased number of new stores in the store base. Store operating, selling and administrative expenses. Store operating, selling and administrative expenses were $13.2 million, or 20.1% of net sales, for the twenty-six weeks ended August 1, 1998, as compared to $10.9 million, or 20.8% of net sales, for the comparable period a year ago. The decrease in store operating, selling and administrative expenses as a percentage of net sales in the twenty-six weeks ended August 1, 1998 is primarily attributable to improved leveraging of administrative costs over higher sales. Depreciation and amortization. Depreciation and amortization as a percentage of net sales increased slightly to 2.1% in the twenty-six weeks ended August 1, 1998 from 2.0% in the twenty-six weeks ended August 2, 1997. Interest expense (income), net. Net interest income for the twenty-six weeks ended August 1, 1998 was $50,000 compared to net interest income of $11,000 in the prior year period. The increase is attributable to income earned on higher levels of temporary cash investments. LIQUIDITY AND CAPITAL RESOURCES The Company's capital requirements relate primarily to new store openings and working capital requirements. The Company's working capital needs are somewhat seasonal in nature and typically reach their peak near the end of the third and the beginning of the fourth quarter of its fiscal year. Historically, the Company has funded its cash requirements primarily through cash flows from operations and borrowings under its revolving loan facilities. Net cash provided by (used in) operating activities has historically been driven by net income levels combined with fluctuations in inventory and accounts payable balances. The Company has continued to increase inventory levels in the twenty-six weeks ended August 1, 1998 as the number of new stores has increased. The Company has financed this increase through increased net income and accounts payable balances as well as borrowings under a Revolving Credit Facility. Net cash used in operating activities was $1.3 million for the twenty-six week period ending August 1, 1998 as compared to net cash used in operating activities of $630,000 for the twenty-six week period ending August 2, 1997. With respect to cash flows from investing activities, capital expenditures were $3.9 million in the twenty-six week period ended August 1, 1998 compared to $1.7 million for the prior year period. Capital expenditures in the twenty-six weeks ended August 1, 1998 primarily related to the opening of thirty-five new stores, construction costs incurred on stores not yet open, and distribution center-related expenditures. The increase in capital expenditures in the current year period resulted from additional new store activity and new distribution center equipment. Net cash provided by financing activities was $1.1 million in both twenty-six week periods ending August 1, 1998 and August 2, 1997. These financing activities were the result of borrowings against the revolving credit facility, purchases of shares under the employee stock purchase plan and the exercise of stock options. The Company estimates capital expenditures in fiscal 1999 to be approximately $6.5 million which includes resources budgeted to (i) fund the opening of approximately 48 Hibbett Sports stores, (ii) remodel selected existing stores and (iii) fund headquarters and distribution center-related capital expenditures. The Company maintains an unsecured $20 million Revolving Credit Facility (the "Facility"). Borrowings under the Facility bear interest at the Company's option either at a base rate, a quoted cost of funds rate, or a LIBOR based rate. As of August 1, 1998, there was $1,046,000 outstanding under the Facility which expires October 31,1999. Based on its current operating and store opening plans, the Company believes that it can fund its cash needs for the foreseeable future through borrowings under the Facility and cash generated from operations. 8 NEW ACCOUNTING PRONOUNCEMENTS In June 1997, the Financial Accounting Standards Board ("FASB"), issued SFAS No. 130, Reporting Comprehensive Income, which establishes standards for reporting and display of "comprehensive income" which is the total of net income and all other non-owner changes in stockholders' equity and its components. This standard was adopted on February 1, 1998 and did not have a significant impact on the Company's financial reporting. In June 1997, the FASB issued SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. SFAS No. 131, which supersedes SFAS Nos. 14, 18, 24 and 30, establishes new standards for segment reporting, using the "management approach," in which reportable segments are based on the same criteria on which management disaggregates a business for making operating decisions and assessing performance. The Company will adopt the standard in fiscal 1999. The new rules are not expected to have a significant impact on the Company's financial reporting. In February 1998, the FASB issued SFAS No. 132, Employers' Disclosures about Pensions and Other Post-retirement Benefits. SFAS No. 132, which supersedes SFAS Nos. 87, 88, and 106, standardizes the disclosure requirements for pensions and other post-retirement benefits to the extent practicable, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis, and eliminates certain disclosures that are no longer as useful as they were when SFAS Nos. 87, 88, and 106, were issued. The Company does not offer pensions or other post-retirement benefits. Therefore, the standard will not have an impact on the Company's financial reporting. The American Institute of Certified Public Accountants ("AICPA"), has issued Statement of Position ("SOP"), 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. This statement requires capitalization of external direct costs of materials and services, payroll and payroll related costs for employees directly associated, and interest cost during development of computer software for internal use. Planning and preliminary costs should be amortized on a straight-line basis unless another systematic and rational basis is more representative of the software's use. This statement is not expected to have a material effect on the Company's financial reporting. The AICPA has issued SOP 98-5, Reporting on the Costs of Start-up Activities. This statement provides guidance on the financial reporting of start-up costs and organization costs, and requires these costs to be expensed as incurred. The new rules which are effective the fiscal year beginning after December 15, 1998, are not expected to have a significant impact on the Company's financial reporting. YEAR 2000 COMPLIANCE The Company's efficient operations are dependent in large part on its management information systems. Accordingly, if the Year 2000 issue is not properly addressed both internally and externally, it could result in a material disruption to the Company's operations. The Company is in the process of evaluating its management information systems to identify and address Year 2000 issues. The Company's financial, distribution, and merchandising systems are third party vendor software programs which have been routinely updated through the years. The Company is currently in the process of such upgrades for each of these software programs. These upgrades will provide numerous system enhancements and will be Year 2000 compliant as represented in writing by the software vendors. The upgrades are expected to be completed by the Company's fiscal 1999 year-end, January 30, 1999. Based on present information, the Company believes that these upgrades to the Company's primary information systems, along with plans to upgrade or modify other less significant systems will substantially mitigate the risk of a material disruption in the Company's operations due to internal Year 2000 factors. In order to address external Year 2000 factors, the Company is in the process of communicating with its suppliers and other outside parties to evaluate their Year 2000 issues and to coordinate Year 2000 compliance. Based on present information and currently available resources, the Company plans to have a substantial portion of its Year 2000 issues addressed by the Company's fiscal 1999 year-end, January 30, 1999, and the Company does not currently anticipate any significant impact on its financial position or results of operations related thereto. 9 SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS The statements contained in this report that are not purely historical or which might be considered an opinion or projection concerning the Company or its business, whether express or implied, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include statements regarding the Company's expectations, intentions, plans or strategies regarding the future, including statements related to the Year 2000 issue. All forward-looking statements included in this document are based upon information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. It is important to note that the Company's actual results could differ materially from those described or implied in such forward-looking statements because of, among other factors, the ability of the Company to execute its expansion plans, a shift in demand for the merchandise offered by the Company, the Company's ability to obtain brand name merchandise at competitive prices, the effect of regional or national economic conditions and the effect of competitive pressures from other retailers. In addition, the reader should consider the risk factors described from time to time in the Company's other documents and reports, including the factors described under "Risk Factors" in the Company's Registration Statement on Form S-1, filed with the Securities and Exchange Commission on October 1, 1997, and any amendments thereto. QUARTERLY FLUCTUATIONS The Company has historically experienced and expects to continue to experience seasonal fluctuations in its net sales and operating income. The Company's net sales and operating income are typically higher in the fourth quarter due to sales increases during the holiday selling season. However, the seasonal fluctuations are mitigated by the strong product demand in the spring, summer and back-to-school sales periods. The Company's quarterly results of operations may also fluctuate significantly as a result of a variety of factors, including the timing of new store openings, the amount and timing of net sales contributed by new stores, the level of pre-opening expenses associated with new stores, the relative proportion of new stores to mature stores, merchandise mix, the relative proportion of stores represented by each of the Company's three store concepts and demand for apparel and accessories driven by local interest in sporting events. PART II OTHER INFORMATION ITEM 1: Legal Proceedings The Company is a party to various legal proceedings incidental to its business. In the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect the financial position or results of operations of the Company. ITEM 2: Changes in Securities None ITEM 3: Defaults Upon Senior Securities None ITEM 4: Submission of Matters to Vote of Security-Holders The Company's Annual Meeting of Shareholders was held June 9, 1998. The following individuals were re-elected to the Board of Directors: Votes For Votes Withheld ----------- --------------- Carl Kirkland 6,040,898 7,103 Michael J. Newsome 6,039,994 8,007 Thomas A. Saunders, III 6,039,998 8,003 10 As Class II directors, Messrs. Kirkland, Newsome and Saunders will serve until the Annual Meeting of Shareholders to be held in 2001 or until their successors are elected and qualified. The 1996 Stock Option Plan was amended to provide for an additional 300,000 shares of common stock to be reserved for future grants of stock options by the following vote: For Against Abstain --------- ------- ------- 5,733,168 314,065 768 The Stock Plan for Outside Directors was amended by the following vote: For Against Abstain --------- ------- ------- 5,816,738 227,032 4,231 Arthur Andersen LLP was approved as the independent public accountants of the Company for the fiscal year ending January 30, 1999 by the following vote: For Against Abstain --------- ------- ------- 6,038,863 8,000 1,138 ITEM 5: Other Information None ITEM 6: Exhibits and Reports on Form 8-K (A) Exhibits Exhibit # Description ---------- ------------ 27 Financial Data Schedule (for SEC use only) (B) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants has duly caused this report to be signed on its behalf by the undersigned duly authorized. HIBBETT SPORTING GOODS, INC. Date: September 9, 1998 By: /s/ Susan H. Fitzgibbon ------------------------- --------------------------- Susan H. Fitzgibbon Vice President and Chief Financial Officer 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary information extracted from the financial statements of Hibbett Sporting Goods, Inc. for the interim period ended August 1, 1998 and is qualified in its entirety by reference to such financial statements. 1,000 OTHER JAN-30-1999 FEB-01-1998 AUG-01-1998 343 0 2,089 199 46,231 50,835 26,462 11,835 66,005 23,532 0 0 0 64 41,363 66,005 65,845 65,845 46,065 46,065 14,631 19 (50) 5,199 1,989 3,210 0 0 0 3,210 0.50 0.49 The earnings per share calculations have been prepared in accordance with SFAS No. 128, and basic and diluted earnings per share have been entered in place of primary and fully diluted, respectively.
-----END PRIVACY-ENHANCED MESSAGE-----