EX-99.1 3 dks-20150801xex99earningsr.htm EXHIBIT 99.1 Exhibit



Exhibit 99.1
FOR IMMEDIATE RELEASE 

DICK'S Sporting Goods Reports Second Quarter Results; Exceeds Earnings Expectations and Raises Full Year Guidance
 
•
Consolidated earnings per diluted share increased 15% to $0.77, up from $0.67, excluding golf restructuring charges in the prior year
 
•
Consolidated same store sales for the second quarter increased 1.2%

•
Company raises its full year 2015 earnings per diluted share guidance to $3.13 to 3.21
 
•
Company declared a $0.1375 per share quarterly dividend

PITTSBURGH, August 18, 2015 - DICK'S Sporting Goods, Inc. (NYSE: DKS), the largest U.S. based full-line omni-channel sporting goods retailer, today reported sales and earnings results for the second quarter ended August 1, 2015.

Second Quarter Results

The Company reported consolidated net income for the second quarter ended August 1, 2015 of $90.8 million, or $0.77 per diluted share, compared to the Company’s expectations provided on May 19, 2015 of $0.73 to 0.76 per diluted share. The Company reported consolidated net income for the second quarter ended August 2, 2014 of $69.5 million, or $0.57 per diluted share. Excluding golf restructuring charges in the prior year, net income was $81.7 million, or $0.67 per diluted share. The GAAP to non-GAAP reconciliation is 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 2015 increased 7.9% to approximately $1.8 billion. Consolidated same store sales increased 1.2%, compared to the Company's guidance of approximately flat to an increase of 2%. Same store sales for DICK'S Sporting Goods increased 1.5%, against a strong base that included the World Cup. Golf Galaxy decreased 2.9%, representing sequential progress. Second quarter 2014 consolidated same store sales increased 3.2%.
 
"We are pleased with our second quarter results. We delivered a double-digit increase in earnings by leveraging our omni-channel presence to generate profitable revenue growth and meaningful margin expansion,” said Edward W. Stack, Chairman and CEO. “We are seeing the benefits of our key growth pillars, as we continue to open very productive stores while winning online."





Omni-channel Development

eCommerce penetration for the second quarter of 2015 was 7.3% of total net sales, compared to 6.3% during the second quarter of 2014.

In the second quarter, the Company opened seven new DICK'S Sporting Goods stores, one new Field & Stream store and closed three Golf Galaxy stores, as these leases expired. As of August 1, 2015, the Company operated 619 DICK'S Sporting Goods stores in 46 states, with approximately 33.1 million square feet, 75 Golf Galaxy stores in 29 states, with approximately 1.4 million square feet and 12 Field & Stream stores in seven states, with approximately 0.6 million square feet.

Store count, square footage and new stores are listed in a table later in the release under the heading "Store Count and Square Footage."

Balance Sheet
 
The Company ended the second quarter of 2015 with approximately $123 million in cash and cash equivalents and no outstanding borrowings under its revolving credit facility. Over the course of the last 12 months, the Company continued to invest in omni-channel growth, while returning over $288 million to shareholders through share repurchases and quarterly dividends. Total inventory increased 13.9% at the end of the second quarter of 2015 as compared to the end of the second quarter of 2014. This planned increase was due primarily to earlier receipts of back-to-school merchandise and support for the outdoor business.

Also, the Company has amended and extended its revolving credit facility prior to its expiration in December 2016, thereby benefiting from the attractive interest rate environment. The Company has increased its limit from $500 million to $1 billion to support the continued growth of its business.

Year-to-Date Results

The Company reported consolidated net income for the 26 weeks ended August 1, 2015 of $154.2 million, or $1.30 per diluted share. For the 26 weeks ended August 2, 2014, the Company reported consolidated net income of $139.5 million, or $1.14 per diluted share. The Company reported consolidated non-GAAP net income for the 26 weeks ended August 2, 2014 of $143.0 million, or $1.17 per diluted share. The GAAP to non-GAAP reconciliation is included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliations."

Net sales for the 26 weeks ended August 1, 2015 increased 8.3% from last year's period to approximately $3.4 billion, reflecting the opening of new stores and a 1.1% increase in consolidated same store sales.

Capital Allocation

During fiscal 2015, the Company has repurchased approximately 2.6 million shares of its common stock at an average cost of $57.09 per share, for a total cost of $150 million. Since starting its $1 billion share repurchase authorization at the beginning of fiscal 2013, the Company has repurchased over $605 million of common stock, and has approximately $395 million remaining under the authorization.

On August 12, 2015, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.1375 per share on the Company's Common Stock and Class B Common Stock. The dividend is payable in cash on September 30, 2015 to stockholders of record at the close of business on September 11, 2015.






Current 2015 Outlook
 
The Company's current outlook for 2015 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. 

v
Full Year 2015 

•
Based on an estimated 118 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share in the range of $3.13 to 3.21. The Company's earnings per diluted share guidance contemplates the $150 million of share repurchases executed in the first quarter of 2015. For the 52 weeks ended January 31, 2015, the Company reported consolidated earnings per diluted share of $2.84. Consolidated earnings per diluted share for the 52 weeks ended January 31, 2015 were $2.87, excluding a gain on the sale of an asset and golf restructuring charges.

•
Consolidated same store sales are currently expected to increase in the range of 1 to 3%, compared to a 2.4% increase in fiscal 2014.

•
The Company expects to open 44 new DICK'S Sporting Goods stores and relocate seven DICK'S Sporting Goods stores in 2015. The Company also expects to open nine new Field & Stream stores and relocate one Golf Galaxy store in 2015.

v
Third Quarter 2015
    
•
Based on an estimated 118 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share in the range of $0.45 to 0.48 in the third quarter of 2015, compared to consolidated earnings per diluted share of $0.41 in the third quarter of 2014.

•
Consolidated same store sales are currently expected to increase in the range of 1 to 3% in the third quarter of 2015, as compared to a 1.1% increase in the third quarter of 2014.
 
•
The Company expects to open 27 new DICK'S Sporting Goods stores and relocate five DICK'S Sporting Goods stores in the third quarter of 2015. The Company also expects to open seven new Field & Stream stores in the third quarter of 2015.
 
v
Capital Expenditures
 
•
In 2015, the Company anticipates capital expenditures to be approximately $245 million on a net basis and approximately $365 million on a gross basis. In 2014, capital expenditures were $247 million on a net basis and $349 million on a gross 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 investors.DICKS.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary audio software.
 
In addition to the webcast, the call can be accessed by dialing (877) 443-5743 (domestic callers) or (412) 902-6617 (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 approximately 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 10069408. The dial-in replay will be available for approximately 30 days following the live call.





Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

This release contains forward-looking statements within the meaning of the securities laws. These forward-looking statements are subject to risks and uncertainties and change based on various important factors, many of which may be beyond our control. Our future performance and actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements should not be relied upon by investors as a prediction of actual results. Forward-looking statements include statements regarding, among other things, the Company's future performance, number of shares outstanding, inventory position, growth in the omni-channel network, number of new store openings and capital expenditures.

Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include, but are not limited to: changes in consumer discretionary spending; competition in the sporting goods industry; changes in consumer demand or shopping patterns and our ability to identify new trends; limitations on the availability of attractive retail store sites; omni-channel growth and our development of an eCommerce platform; unauthorized disclosure of sensitive or confidential customer information; risks relating to our private brand offerings and new retail concepts; disruptions with our eCommerce service provider or our information systems; factors affecting our vendors, including supply chain and currency risks; talent needs and the loss of Edward W. Stack, our Chairman and Chief Executive Officer; disruptions of our information systems; developments with sports leagues, professional athletes or sports superstars; weather, weather-related disruptions and seasonality of our business; and risks associated with being a controlled company.

For additional information on these and other factors that could affect our actual results, see our risk factors, which may be amended from time to time, set forth in our filings with the SEC, including our most recent Annual Report filed with the Securities and Exchange Commission on March 27, 2015. The Company disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation. Forward-looking statements included in this release are made as of the date of this release.
 
About DICK'S Sporting Goods, Inc.
 
Founded in 1948, DICK'S Sporting Goods, Inc. is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories. As of August 1, 2015, the Company operated more than 615 DICK'S Sporting Goods locations across the United States, serving and inspiring athletes and outdoor enthusiasts to achieve their personal best through a blend of dedicated associates, in-store services and unique specialty shop-in-shops dedicated to Team Sports, Athletic Apparel, Golf, Lodge/Outdoor, Fitness and Footwear.

Headquartered in Pittsburgh, PA, DICK'S also owns and operates Golf Galaxy, Field & Stream, True Runner and Chelsea Collective specialty stores. DICK'S offers its products through a content-rich eCommerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront. For more information, visit the Press Room or Investor Relations pages at DICKS.com.

Contacts:
Investor Relations:
Anne-Marie Megela, Vice President – Treasury Services and Investor Relations, or
Nathaniel A. Gilch, Director of Investor Relations
DICK'S Sporting Goods, Inc.
investors@dcsg.com
(724) 273-3400

Media Relations:
(724) 273-5552 or press@dcsg.com


###





DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
 
 
 
13 Weeks Ended
 
 
August 1,
2015
 
% of
Sales (1)
 
August 2,
2014
 
% of
Sales
 
 
 
 
 
 
 
 
 
Net sales
 
$
1,822,979

 
100.00
%
 
$
1,688,890

 
100.00
%
Cost of goods sold, including occupancy and distribution costs
 
1,269,421

 
69.63

 
1,186,334

 
70.24

 
 
 
 
 
 
 
 
 
GROSS PROFIT
 
553,558

 
30.37

 
502,556

 
29.76

 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
395,935

 
21.72

 
383,054

 
22.68

Pre-opening expenses
 
9,216

 
0.51

 
7,940

 
0.47

 
 
 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
148,407

 
8.14

 
111,562

 
6.61

 
 
 
 
 
 
 
 
 
Interest expense
 
840

 
0.05

 
763

 
0.05

Other expense (income)
 
153

 
0.01

 
(2,013
)
 
(0.12
)
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
 
147,414

 
8.09

 
112,812

 
6.68

 
 
 
 
 
 
 
 
 
Provision for income taxes
 
56,575

 
3.10

 
43,345

 
2.57

 
 
 
 
 
 
 
 
 
NET INCOME
 
$
90,839

 
4.98
%
 
$
69,467

 
4.11
%
 
 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE:
 
 

 
 

 
 

 
 

Basic
 
$
0.78

 
 
 
$
0.58

 
 

Diluted
 
$
0.77

 
 
 
$
0.57

 
 

 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 

 
 
 
 

 
 

Basic
 
116,281

 
 
 
119,950

 
 

Diluted
 
117,805

 
 
 
121,840

 
 

 
 
 
 
 
 
 
 
 
Cash dividend declared per share
 
$
0.1375

 
 
 
$
0.1250

 
 

 
 
 
 
 
 
 
 
 
(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 1,
2015
 
% of
Sales (1)
 
August 2,
2014
 
% of
Sales
 
 
 
 
 
 
 
 
 
Net sales
 
$
3,388,287

 
100.00
%
 
$
3,127,798

 
100.00
%
Cost of goods sold, including occupancy and distribution costs
 
2,365,741

 
69.82

 
2,184,359

 
69.84

 
 
 
 
 
 
 
 
 
GROSS PROFIT
 
1,022,546

 
30.18

 
943,439

 
30.16

 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
756,671

 
22.33

 
705,643

 
22.56

Pre-opening expenses
 
15,557

 
0.46

 
14,146

 
0.45

 
 
 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
250,318

 
7.39

 
223,650

 
7.15

 
 
 
 
 
 
 
 
 
Interest expense
 
1,474

 
0.04

 
1,372

 
0.04

Other income
 
(1,997
)
 
(0.06
)
 
(4,377
)
 
(0.14
)
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
 
250,841

 
7.40

 
226,655

 
7.25

 
 
 
 
 
 
 
 
 
Provision for income taxes
 
96,657

 
2.85

 
87,205

 
2.79

 
 
 
 
 
 
 
 
 
NET INCOME
 
$
154,184

 
4.55
%
 
$
139,450

 
4.46
%
 
 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE:
 
 

 
 

 
 

 
 

Basic
 
$
1.32

 
 
 
$
1.16

 
 

Diluted
 
$
1.30

 
 
 
$
1.14

 
 

 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 

 
 
 
 

 
 

Basic
 
116,662

 
 
 
120,544

 
 

Diluted
 
118,356

 
 
 
122,600

 
 

 
 
 
 
 
 
 
 
 
Cash dividends declared per share
 
$
0.2750

 
 
 
$
0.2500

 
 

 
 
 
 
 
 
 
 
 
(1) Column does not add due to rounding





DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(Dollars in thousands)
 
 
August 1,
2015
 
August 2,
2014
 
January 31,
2015
ASSETS
 
 

 
 

 
 

CURRENT ASSETS:
 
 

 
 

 
 

Cash and cash equivalents
 
$
123,220

 
$
100,132

 
$
221,679

Accounts receivable, net
 
106,753

 
102,248

 
80,292

Income taxes receivable
 
4,652

 
6,328

 
14,293

Inventories, net
 
1,615,722

 
1,418,660

 
1,390,767

Prepaid expenses and other current assets
 
99,882

 
90,369

 
91,767

Deferred income taxes
 
46,130

 
39,423

 
51,586

Total current assets
 
1,996,359

 
1,757,160

 
1,850,384

 
 
 
 
 
 
 
Property and equipment, net
 
1,297,302

 
1,138,182

 
1,203,382

Intangible assets, net
 
108,240

 
84,901

 
110,162

Goodwill
 
200,594

 
200,594

 
200,594

Other assets:
 
 

 
 
 
 

Deferred income taxes
 
910

 
3,169

 
1,862

Other
 
72,453

 
71,477

 
69,814

Total other assets
 
73,363

 
74,646

 
71,676

TOTAL ASSETS
 
$
3,675,858

 
$
3,255,483

 
$
3,436,198

 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 

 
 

 
 

CURRENT LIABILITIES:
 
 

 
 

 
 

Accounts payable
 
$
783,722

 
$
688,442

 
$
614,511

Accrued expenses
 
336,597

 
305,937

 
283,828

Deferred revenue and other liabilities
 
142,083

 
125,258

 
172,259

Income taxes payable
 
19,131

 
12,784

 
47,698

Current portion of other long-term debt and leasing obligations
 
560

 
461

 
537

Total current liabilities
 
1,282,093

 
1,132,882

 
1,118,833

LONG-TERM LIABILITIES:
 
 

 
 

 
 

Other long-term debt and leasing obligations
 
5,627

 
6,232

 
5,913

Deferred income taxes
 
36,767

 
18,473

 
44,494

Deferred revenue and other liabilities
 
517,873

 
401,021

 
434,733

Total long-term liabilities
 
560,267

 
425,726

 
485,140

COMMITMENTS AND CONTINGENCIES
 
 

 
 

 
 

STOCKHOLDERS' EQUITY:
 
 

 
 

 
 

Common stock
 
914

 
941

 
932

Class B common stock
 
249

 
249

 
249

Additional paid-in capital
 
1,045,084

 
979,696

 
1,015,404

Retained earnings
 
1,592,803

 
1,296,434

 
1,471,182

Accumulated other comprehensive (loss) income
 
(109
)
 
40

 
(73
)
Treasury stock, at cost
 
(805,443
)
 
(580,485
)
 
(655,469
)
Total stockholders' equity
 
1,833,498

 
1,696,875

 
1,832,225

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
3,675,858

 
$
3,255,483

 
$
3,436,198

 
 
 
 
 
 
 





DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(Dollars in thousands)
 
 
26 Weeks Ended
 
 
August 1,
2015
 
August 2,
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 

 
 

Net income
 
$
154,184

 
$
139,450

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

 
 

Depreciation and amortization
 
90,596

 
89,771

Deferred income taxes
 
(1,319
)
 
(21,424
)
Stock-based compensation
 
14,200

 
12,915

Excess tax benefit from exercise of stock options
 
(5,842
)
 
(6,566
)
Gain on sale of asset
 
—

 
(14,428
)
Other non-cash items
 
265

 
290

Changes in assets and liabilities:
 
 

 
 

Accounts receivable
 
(12,659
)
 
(11,023
)
Inventories
 
(224,955
)
 
(186,595
)
Prepaid expenses and other assets
 
(7,977
)
 
(10,980
)
Accounts payable
 
147,888

 
133,245

Accrued expenses
 
9,638

 
7,697

Income taxes payable / receivable
 
(13,690
)
 
494

Deferred construction allowances
 
75,082

 
44,934

Deferred revenue and other liabilities
 
(22,372
)
 
(25,561
)
Net cash provided by operating activities
 
203,039

 
152,219

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 

 
 

Capital expenditures
 
(154,785
)
 
(150,382
)
Proceeds from sale of other assets
 
—

 
73,392

Deposits and purchases of other assets
 
(406
)
 
(79
)
Net cash used in investing activities
 
(155,191
)
 
(77,069
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 

 
 
Revolving credit borrowings
 
465,600

 
456,400

Revolving credit repayments
 
(465,600
)
 
(456,400
)
Payments on other long-term debt and leasing obligations
 
(263
)
 
(682
)
Construction allowance receipts
 
—

 
—

Proceeds from exercise of stock options
 
17,870

 
8,879

Excess tax benefit from exercise of stock options
 
5,843

 
6,588

Minimum tax withholding requirements
 
(7,619
)
 
(7,645
)
Cash paid for treasury stock
 
(150,000
)
 
(124,999
)
Cash dividends paid to stockholders
 
(33,425
)
 
(31,664
)
Increase (decrease) in bank overdraft
 
21,323

 
(7,242
)
Net cash used in financing activities
 
(146,271
)
 
(156,765
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 
(36
)
 
16

NET DECREASE IN CASH AND CASH EQUIVALENTS
 
(98,459
)
 
(81,599
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
 
221,679

 
181,731

CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
123,220

 
$
100,132






Store Count and Square Footage
 
The stores that opened during the second quarter of 2015 are as follows:
Store
 
Market
 
Concept
Arcola, VA
 
Washington, DC
 
DICK'S Sporting Goods
Bristol, TN
 
TriCities
 
DICK'S Sporting Goods
Mt. Pleasant, SC
 
Charleston
 
DICK'S Sporting Goods
Orlando, FL
 
Orlando
 
DICK'S Sporting Goods
Winchester, VA
 
Winchester
 
DICK'S Sporting Goods
Scottsdale, AZ
 
Phoenix
 
DICK'S Sporting Goods
Mobile, AL
 
Mobile
 
DICK'S Sporting Goods
Mobile, AL
 
Mobile
 
Field & Stream

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

Store Count:
 
 
Fiscal 2015
 
Fiscal 2014
 
 
DICK'S Sporting Goods (2)
 
Specialty Store Concepts (1) (2)
 
Total
 
DICK'S Sporting Goods
 
Specialty Store Concepts (1)
 
Total
Beginning stores
 
603

 
91

 
694

 
558

 
84

 
642

Q1 New stores
 
9

 
1

 
10

 
8

 
—

 
8

Q2 New stores
 
7

 
1

 
8

 
8

 
1

 
9

Ending stores
 
619

 
93

 
712

 
574

 
85

 
659

 
 
 
 
 
 
 
 
 
 
 
 
 
Closed stores
 
—

 
3

 
3

 
—

 
—

 
—

Ending stores
 
619

 
90

 
709

 
574

 
85

 
659

 
 
 
 
 
 
 
 
 
 
 
 
 
Relocated stores
 
1

 
1

 
2

 
4

 
1

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 

Square Footage:
(in millions)
 
 
DICK'S Sporting Goods (2)
 
Specialty Store Concepts (1) (2)
 
Total
Q1 2014
 
30.6

 
1.5

 
32.1

Q2 2014
 
30.9

 
1.6

 
32.5

Q3 2014
 
32.0

 
2.0

 
34.0

Q4 2014
 
32.3

 
1.9

 
34.2

Q1 2015
 
32.7

 
2.0

 
34.7

Q2 2015
 
33.1

 
2.0

 
35.1


(1) 
Includes the Company's Golf Galaxy, Field & Stream and True Runner stores.
(2) 
All-American Sports Centers are reflected as a DICK'S Sporting Goods store and a Field & Stream store.






Non-GAAP Financial Measures
 
In addition to reporting the Company's financial results in accordance with generally accepted accounting principles ("GAAP"), the Company believes that certain non-GAAP financial information provides users of the Company's financial information with additional useful information in evaluating operating performance between reporting periods. These measures should be viewed as supplementing, and not as an alternative or substitute for, the Company's financial results prepared in accordance with GAAP. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies. A reconciliation of the Company's non-GAAP measures to the most directly comparable GAAP financial measures are provided below and on the Company's website at investors.DICKS.com.
 
Non-GAAP Net Income and Earnings Per Share Reconciliations:
(in thousands, except per share data):
 
 
Fiscal 2014
 
 
13 Weeks Ended August 2, 2014
 
 
 
 
 
 
 
 
 
As Reported
 
Golf Restructuring Charges
 
Non-GAAP Total
Net sales
 
$
1,688,890

 
$
—

 
$
1,688,890

Cost of goods sold, including occupancy and distribution costs
 
1,186,334

 
(2,405
)
 
1,183,929

 
 
 
 
 
 
 
GROSS PROFIT
 
502,556

 
2,405

 
504,961

 
 
 
 
 
 
 
Selling, general and administrative expenses
 
383,054

 
(17,960
)
 
365,094

Pre-opening expenses
 
7,940

 
—

 
7,940

 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
111,562

 
20,365

 
131,927

 
 
 
 
 
 
 
Interest expense
 
763

 
—

 
763

Other income
 
(2,013
)
 
—

 
(2,013
)
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
 
112,812

 
20,365

 
133,177

 
 
 
 
 
 
 
Provision for income taxes
 
43,345

 
8,146

 
51,491

 
 
 
 
 
 
 
NET INCOME
 
$
69,467

 
$
12,219

 
$
81,686

 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
Basic
 
$
0.58

 
 
 
$
0.68

Diluted
 
$
0.57

 
 
 
$
0.67

 
 
 
 
 
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
Basic
 
119,950

 
 
 
119,950

Diluted
 
121,840

 
 
 
121,840


During the second quarter of 2014, the Company recorded pre-tax restructuring charges of $20.4 million including a $14.3 million non-cash impairment of trademarks and store assets, severance charges of $3.7 million resulting from the elimination of specific staff in the golf area of its DICK'S stores and consolidation of DICK'S golf and Golf Galaxy corporate and administrative functions, and a $2.4 million write-down of excess golf inventories. The provision for income taxes was calculated at 40%, which approximates the Company's blended tax rate.






 
 
Fiscal 2014
 
 
26 Weeks Ended August 2, 2014
 
 
 
 
 
 
 
 
 
 
 
As Reported
 
Gain on Sale of Asset
 
Golf Restructuring Charges
 
Non-GAAP Total
Net sales
 
$
3,127,798

 
$
—

 
$
—

 
$
3,127,798

Cost of goods sold, including occupancy and distribution costs
 
2,184,359

 
—

 
(2,405
)
 
2,181,954

 
 
 
 
 
 
 
 
 
GROSS PROFIT
 
943,439

 
—

 
2,405

 
945,844

 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
705,643

 
14,428

 
(17,960
)
 
702,111

Pre-opening expenses
 
14,146

 
—

 
—

 
14,146

 
 
 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
223,650

 
(14,428
)
 
20,365

 
229,587

 
 
 
 
 
 
 
 
 
Interest expense
 
1,372

 
—

 
—

 
1,372

Other income
 
(4,377
)
 
—

 
—

 
(4,377
)
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
 
226,655

 
(14,428
)
 
20,365

 
232,592

 
 
 
 
 
 
 
 
 
Provision for income taxes
 
87,205

 
(5,771
)
 
8,146

 
89,580

 
 
 
 
 
 
 
 
 
NET INCOME
 
$
139,450

 
$
(8,657
)
 
$
12,219

 
$
143,012

 
 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
 
 
Basic
 
$
1.16

 
 
 
 
 
$
1.19

Diluted
 
$
1.14

 
 
 
 
 
$
1.17

 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
 
Basic
 
120,544

 
 
 
 
 
120,544

Diluted
 
122,600

 
 
 
 
 
122,600


During the first quarter of 2014, the Company recorded a pre-tax $14.4 million gain on sale of a Gulfstream G650 corporate aircraft. During the second quarter of 2014, the Company recorded pre-tax restructuring charges of $20.4 million including a $14.3 million non-cash impairment of trademarks and store assets, severance charges of $3.7 million resulting from the elimination of specific staff in the golf area of its DICK'S stores and consolidation of DICK'S golf and Golf Galaxy corporate and administrative functions, and a $2.4 million write-down of excess golf inventories. The provision for income taxes for the aforementioned adjustments were calculated at 40%, which approximates the Company's blended tax rate.







 
 
Fiscal 2014
 
 
52 Weeks Ended January 31, 2015
 
 
 
 
 
 
 
 
 
 
 
As Reported
 
Gain on Sale of Asset
 
Golf Restructuring Charges
 
Non-GAAP Total
Net sales
 
$
6,814,479

 
$
—

 
$
—

 
$
6,814,479

Cost of goods sold, including occupancy and distribution costs
 
4,727,813

 
—

 
(2,405
)
 
4,725,408

 
 
 
 
 
 
 
 
 
GROSS PROFIT
 
2,086,666

 
—

 
2,405

 
2,089,071

 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses
 
1,502,089

 
14,428

 
(17,960
)
 
1,498,557

Pre-opening expenses
 
30,518

 
—

 
—

 
30,518

 
 
 
 
 
 
 
 
 
INCOME FROM OPERATIONS
 
554,059

 
(14,428
)
 
20,365

 
559,996

 
 
 
 
 
 
 
 
 
Interest expense
 
3,215

 
—

 
—

 
3,215

Other income
 
(5,170
)
 
—

 
—

 
(5,170
)
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAXES
 
556,014

 
(14,428
)
 
20,365

 
561,951

 
 
 
 
 
 
 
 
 
Provision for income taxes
 
211,816

 
(5,771
)
 
8,146

 
214,191

 
 
 
 
 
 
 
 
 
NET INCOME
 
$
344,198

 
$
(8,657
)
 
$
12,219

 
$
347,760

 
 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
 
 
Basic
 
$
2.89

 
 
 
 
 
$
2.92

Diluted
 
$
2.84

 
 
 
 
 
$
2.87

 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
 
Basic
 
119,244

 
 
 
 
 
119,244

Diluted
 
121,238

 
 
 
 
 
121,238


During the first quarter of 2014, the Company recorded a pre-tax $14.4 million gain on sale of a Gulfstream G650 corporate aircraft. During the second quarter of 2014, the Company recorded pre-tax restructuring charges of $20.4 million including a $14.3 million non-cash impairment of trademarks and store assets, severance charges of $3.7 million resulting from the elimination of specific staff in the golf area of its DICK'S stores and consolidation of DICK'S golf and Golf Galaxy corporate and administrative functions, and a $2.4 million write-down of excess golf inventories. The provision for income taxes for the aforementioned adjustments were calculated at 40%, which approximates the Company's blended tax rate.





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, capital investments and certain non-recurring, infrequent or unusual items.

 
 
13 Weeks Ended
 
 
August 1,
2015
 
August 2,
2014
 
 
(dollars in thousands)
Net income
 
$
90,839

 
$
69,467

Provision for income taxes
 
56,575

 
43,345

Interest expense
 
840

 
763

Depreciation and amortization
 
48,020

 
52,912

EBITDA
 
$
196,274

 
$
166,487

Add: Golf restructuring charges
 
—

 
6,043

Adjusted EBITDA, as defined
 
$
196,274

 
$
172,530

 
 
 
 
 
% increase in adjusted EBITDA
 
14
%
 
 
 

 
 
26 Weeks Ended
 
 
August 1,
2015
 
August 2,
2014
 
 
(dollars in thousands)
Net income
 
$
154,184

 
$
139,450

Provision for income taxes
 
96,657

 
87,205

Interest expense
 
1,474

 
1,372

Depreciation and amortization
 
90,596

 
89,771

EBITDA
 
$
342,911

 
$
317,798

Less: Gain on sale of asset
 
—

 
(14,428
)
Add: Golf restructuring charges
 
—

 
6,043

Adjusted EBITDA, as defined
 
$
342,911

 
$
309,413

 
 
 
 
 
% increase in adjusted EBITDA
 
11
%
 
 






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 1,
2015
 
August 2,
2014
 
 
(dollars in thousands)
Gross capital expenditures
 
$
(154,785
)
 
$
(150,382
)
Proceeds from sale-leaseback transactions
 
—

 
—

Deferred construction allowances
 
75,082

 
44,934

Construction allowance receipts
 
—

 
—

Net capital expenditures
 
$
(79,703
)
 
$
(105,448
)