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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 17, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE SPORTSMAN'S GUIDE, INC.
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C>
MINNESOTA 41-1293081
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
411 FARWELL AVENUE
SOUTH ST. PAUL, MINNESOTA 55075
(612) 451-3030
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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GARY OLEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
THE SPORTSMAN'S GUIDE, INC.
411 FARWELL AVENUE
SOUTH ST. PAUL, MINNESOTA 55075
(612) 451-3030
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
STEVEN R. WATTS, ESQ.
Chernesky, Heyman & Kress P.L.L.
1100 Courthouse Plaza, S.W.
Dayton, Ohio 45402
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same
offering. / / ____________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / / ____________________
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE (1) OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 Par value................ 693,561 $6.437 $4,464,452 $1,317
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) on the basis of the average of the high and low prices
reported on the Nasdaq National Market on April 16, 1998.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 17, 1998
PROSPECTUS
693,561 SHARES
[LOGO]
COMMON STOCK
This Prospectus relates to the offering of 693,561 shares of Common Stock
(the "Shares") of The Sportsman's Guide, Inc. (the "Company") by certain
shareholders of the Company (the "Selling Shareholders"). The Shares constitute
shares of Common Stock issued upon exercise of warrants to purchase shares of
Common Stock attached to subordinated notes payable issued by the Company in
private transactions. See "Selling Shareholders."
The Shares may be offered from time to time by the Selling Shareholders
through ordinary brokerage transactions on the Nasdaq National Market, in the
over-the-counter market, in privately negotiated transactions or otherwise, at
market prices prevailing at the time of sale or at negotiated prices. The
Company will not receive any of the proceeds from the sale of the Shares by the
Selling Shareholders and will pay the expenses of the offering of the Shares.
See "Selling Shareholders" and "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the symbol
"SGDE." On April 16, 1998, the last reported sale price of the Common Stock was
$6.75 per share.
Each Selling Shareholder and any broker-dealer participating in the sale of
the Shares on behalf of the Selling Shareholders may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 (the "Securities
Act"). Any commissions received by any such broker-dealer and any profit on the
resale of the Shares may be deemed to be underwriting commissions or discounts
under the Securities Act.
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THE COMMON STOCK OFFERED BY THIS PROSPECTUS IS SPECULATIVE AND INVOLVES A
HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 6.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1998
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NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THE INFORMATION CONTAINED
HEREIN IS CURRENT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy and information statements and other
information filed by the Company with the Commission can be inspected and copied
at the office of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, or at certain of its Regional Offices located at 7 World
Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and copies of such material can be obtained
from the Public Reference Section of the Commission, at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of the web site is http://www.sec.gov. The Company's Common Stock is traded on
the Nasdaq National Market and reports, proxy and information statements and
other information concerning the Company may also be inspected at the offices of
The Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form S-3
filed by the Company with the Commission under the Securities Act (the
"Registration Statement"). This Prospectus omits certain of the information
contained in the Registration Statement, and reference is hereby made to the
Registration Statement and the related exhibits for further information with
respect to the Company and the securities offered hereby. Any statements
contained herein concerning the provisions of any document are not necessarily
complete, and in such instance reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997.
2. The description of the shares of Common Stock of the Company contained
in the Company's Registration Statement on Form 8-A filed under the
Exchange Act and any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
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statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated
herein by reference (other than exhibits to such documents which are not
specifically incorporated by reference in such documents). Written or telephone
requests for such copies should be directed to Charles B. Lingen, The
Sportsman's Guide, Inc., 411 Farwell Avenue, South St. Paul, Minnesota 55075,
(612) 451-3030.
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THE COMPANY
The Sportsman's Guide, Inc. (the "Company") is a mail order catalog retailer
of value priced outdoor, hunting and general merchandise. The Company primarily
targets men who are hunters, outdoorsmen and collectors, offering a wide
selection of high value products at low prices as well as unique products. The
Company sells its products through distinctive catalogs that are marketed as The
"Fun-to-Read" Catalog-Registered Trademark- featuring creative and expansive use
of art and copy to describe products in a humorous and entertaining fashion.
Products are offered for sale at what the Company advertises as "ridiculously
low prices," made possible by the Company's purchasing strategy, which is
increasingly focused on manufacturers' close-outs and military surplus items.
The Company employs an information intensive management approach to
merchandising, marketing and customer list management, continually testing,
assessing and adjusting day-to-day activities as well as long-term strategies.
The Company's short catalog lead time (approximately 60 days) gives it a high
degree of flexibility to make changes in upcoming catalogs based on up-to-date
information. The Company believes that its niche marketing focus on the
value-oriented outdoorsman, together with its product offerings, catalog formats
and management strategy, position it uniquely within the direct marketing
industry.
The Company sells its products through monthly main catalogs and specialty
catalogs. Products offered include footwear, clothing and accessories, hunting
and shooting accessories, camping and outdoor recreation equipment, optics,
collectibles, gift items and a diverse range of additional offerings in other
product categories. The Company's catalogs consist of a changing mix of products
from catalog to catalog. The Company believes this dynamic product mix and the
humorous, entertaining format are key competitive advantages that keep customers
reading each catalog. In addition, the Company offers a high level of customer
service including a buyer's club, an interest free payment plan and an
unconditional return policy in an attempt to foster increased customer loyalty.
The monthly general catalog contains a wide variety of product offerings and is
sent to a relatively broad range of customers in the Company's targeted market.
The specialty catalogs offer a more narrow selection of product categories, but
a deep and broad selection of products in each featured category. Specialty
catalogs are sent to core groups of the Company's mailing list that have
demonstrated a propensity to buy products from the featured product category.
Product categories featured in specialty catalogs include footwear and apparel,
deer hunting equipment, camping equipment, military surplus and ammunition and
shooting supplies. The Company circulated 11 monthly and 18 specialty catalogs
which made up a total circulation of approximately 61 million catalogs in 1997.
Catalogs are mailed to persons selected from the Company's 3.6 million name
database and rented or exchanged mailing lists. Over one million customers have
purchased from the Company in the last 12 months.
The Company's predecessor was founded by Gary Olen in 1970 as a direct
marketer focused on the deer hunter. The Company's product offerings and
marketing efforts have evolved to broaden the Company's focus to include the
value-oriented male in general, and the outdoorsman in particular. In 1992, the
Company instituted a value pricing approach by which high quality products are
sold at below normal retail prices. The Company believes this value pricing
approach has been the key factor in its significant sales growth since that
time, driving sales from $38 million in 1992 to $128 million in 1997. In 1994,
the Company began to strengthen its management team in an effort to capitalize
on the opportunity represented by the recent sales growth. The Company has added
experienced direct marketing professionals in each of its key functional areas
over the past few years. The new management team has focused on improving
profitability by investing in advanced information systems to allow better and
more timely decision making, increasing the emphasis on higher margin
manufacturers' close-outs and military surplus items and implementing extensive
cost control programs.
The Company's strategy is based on five key elements: (i) expand and
capitalize on the value-oriented male niche; (ii) offer quality, name brand and
unique products at value pricing; (iii) provide a fun and convenient shopping
experience; (iv) manage by proactively using information systems; and (v)
capitalize on the Company's flexible structure and short catalog lead time.
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The Company was incorporated under the laws of the State of Minnesota on
March 23, 1977 as The Olen Company, Inc. At that time the Company acquired the
business and assets of The Olen Company, a sole proprietorship owned by Gary
Olen, the President and Chief Executive Officer of the Company. In March 1986,
the Company changed its name to The Sportsman's Guide, Inc. The Company's
principal executive offices are located at 411 Farwell Avenue, South St. Paul,
Minnesota 55075, and its telephone number is (612) 451-3030. The Company's web
site address is www.sportsmansguide.com.
RECENT DEVELOPMENTS
During February 1998, the Company sold 1,600,000 shares of Common Stock at
$6.50 per share in a registered public offering (the "Public Offering") and
received net proceeds of approximately $8.7 million. Cruttenden Roth
Incorporated and John G. Kinnard and Company, Incorporated acted as
representatives of the underwriters (the "Representatives"). Certain of the
Selling Shareholders sold shares of Common Stock in the Public Offering.
During February 1998, the Company paid $3.4 million of subordinated notes
payable and repurchased all of the Company's Series A Preferred Stock for $1.0
million using a portion of the net proceeds. The Company plans to utilize the
remaining $4.3 million as additional working capital and for general corporate
purposes.
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RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE PURCHASING SHARES
OF COMMON STOCK OFFERED HEREBY.
RISKS ASSOCIATED WITH CATALOG RETAILING
The Company's success depends on the success of its catalog business, which
the Company believes is achieved through the efficient targeting of its
mailings, appropriate shifts in the Company's merchandising mix, the Company's
ability to achieve adequate response rates to its mailings and the Company's
ability to accurately forecast economic conditions and consumer demand. Catalog
mailings involve substantial postage, paper, printing and merchandise
acquisition costs which are incurred prior to the mailing of each catalog. If
for any reason the Company were to experience a significant shortfall in
anticipated sales from a particular catalog mailing and thereby not recover
costs associated with that catalog edition, the Company's business, financial
condition and results of operations could be adversely affected. In addition,
response rates and sales generated by each catalog mailing can be affected by
factors such as consumer preferences, economic conditions, timing of the
Company's and competitors' catalog mailings and merchandise mix. Any inability
of the Company to accurately target the appropriate customers or to achieve
adequate response rates could result in lower sales and lower margins which
could have a material adverse effect on the Company's business, financial
condition and results of operations.
DEPENDENCE ON SERVICE PROVIDERS
The Company's ability to distribute its catalogs and to fill customer orders
depends on services provided by third parties. The Company is dependent on (i)
outside printers to print and mail its catalogs, (ii) shipping companies and the
U.S. Postal Service for timely delivery of its catalogs and shipment of its
merchandise to customers and (iii) an outside call center to handle inbound
customer telephone orders when calls become backlogged or in the event of
telephone system failure. Any disruption in these services could have a material
adverse effect on the Company's business, financial condition and results of
operations.
The United Parcel Service ("UPS") strike in August 1997 and related events
negatively impacted the Company's sales in the third quarter of 1997. Although
the Company is not dependent upon UPS to ship most of its products (other than
ammunition, which is shipped solely through UPS and accounted for approximately
5.7% of the Company's sales in 1997), management believes the UPS strike and
resulting publicity created a perception among buyers that orders could not be
delivered or that delivery would be significantly delayed. This perception
resulted in a decrease in orders for the Company's product offerings and
therefore suppressed sales. The Company was further impacted when the overloaded
U.S. Postal Service failed to deliver the Company's catalogs on a timely basis,
or at all, during and after the UPS strike.
There can be no assurance that strikes, delays or disruptions in service
will not occur in the future. Such occurrences could have a material adverse
effect on the Company's business, financial condition and results of operations.
INCREASES IN POSTAGE AND PAPER COSTS; PAPER AVAILABILITY
Increases in postal rates and paper costs have a significant impact on the
cost of production and mailing of the Company's catalogs and the shipment of
customer orders. Postage prices increase periodically, and the Company has no
control over increases that may occur in the future. The U.S. Postal Service has
recently proposed an increase in postal rates which, if approved, could go into
effect in 1998. Paper prices historically have been cyclical and significant
increases have been experienced by the Company in the past. Significant
increases in postal rates or paper costs could have a material adverse effect on
the Company's business, financial condition and results of operations,
particularly to the extent the Company is unable to pass on such increases
directly to its customers or offset such increases by reducing other costs.
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In addition, the Company is dependent upon the availability of paper to
print its catalogs. Paper shortages have occurred in the past and may occur in
the future. Any such paper shortage may increase the Company's paper costs and
cause the Company to reduce its catalog circulation, change to a different
weight or grade of paper or reduce the number of pages per catalog. Such
increased costs or responsive actions could have a material adverse effect on
the Company's business, financial condition and results of operations.
LIST DEVELOPMENT AND MAINTENANCE
The Company mails catalogs to names in its proprietary customer database and
to potential customers whose names are obtained from rented or exchanged mailing
lists. Names derived from rented or exchanged lists generate lower response
rates while requiring the same or greater advertising expenses than names in the
Company's database. Consequently, overall response rates could decline while
expenses increase if the Company were to increase its use of rented or exchanged
lists relative to the use of names in its customer database. In addition, the
Company must constantly update its mailing list by identifying new prospective
customers and tracking purchases by existing customers. The Company uses
internally developed customer segmentation models to identify prospective and
existing customers to whom a catalog will be mailed. Inaccurate models or the
Company's failure to update its mailing list could have a material adverse
effect on the Company's business, financial condition and results of operations.
There has been increasing public concern regarding right to privacy issues
involved with the rental and use of customer mailing lists among direct
marketing retailers. Any legislation enacted at the federal or state level
limiting or prohibiting this practice could have a material adverse effect on
the Company's new customer acquisition strategies.
DEPENDENCE ON SENIOR MANAGEMENT
The Company's success is dependent to a significant extent on the efforts of
members of senior management, including Gary Olen, the Company's President,
Chief Executive Officer and co-founder. The Company's ability to attract and
retain well-qualified senior management and other key personnel is crucial to
the Company's successful continued operations. The loss of any member of senior
management could have a material adverse effect upon the Company. The Company
maintains key-man life insurance on Mr. Olen and has entered into employment
agreements with certain of its senior managers.
QUARTERLY FLUCTUATIONS AND SEASONALITY
The Company's sales and results of operations have fluctuated and can be
expected to continue to fluctuate on a quarterly basis as a result of a number
of factors, including: the timing of new merchandise and catalog offerings;
recognition of costs or sales contributed by new merchandise and catalog
offerings; fluctuations in response rates; fluctuations in postage, paper and
printing costs and in merchandise returns; adverse weather conditions that
affect response, distribution or shipping; shifts in the timing of holidays; and
changes in the Company's product mix. The Company recognizes the cost of catalog
production and mailing over the estimated useful lives of the catalogs, ranging
from four to six months from the catalog's in-home date. Consequently,
quarter-to-quarter sales and expense comparisons will be impacted by the timing
of the mailing of the Company's catalog editions.
The majority of the Company's sales historically occur during the third and
fourth fiscal quarters. The seasonal nature of the Company's business is due to
the catalog's focus on hunting merchandise and related accessories for the fall,
as well as winter apparel and gifts for the holiday season. The Company expects
this seasonality will continue in the future. In anticipation of increased sales
activity during the third and fourth fiscal quarters, the Company incurs
significant additional expenses for hiring additional employees and building
inventory levels. If for any reason the Company's sales were to fall below its
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expectations during the third and fourth fiscal quarters, the Company's
business, financial condition and results of operations could be adversely
affected.
RISK OF CHANGING ECONOMIC CONDITIONS AND CONSUMER PREFERENCES
The Company's business is sensitive to changes in discretionary consumer
spending, which is controlled to a large extent by prevailing economic
conditions. A recession in the national or regional economies or uncertainties
regarding future economic prospects could affect consumer spending habits and
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company is also subject to risks associated with changing consumer
preferences. Failure to anticipate and respond to changes in consumer
preferences in a timely or commercially appropriate manner could lead to lower
sales or margins which could have a material adverse effect on the Company's
business, financial condition and results of operations.
RISKS OF BUSINESS INTERRUPTION OR DISASTER; DEPENDENCE ON SINGLE FACILITY
The Company's ability to receive, process and fulfill customer orders
depends on the effective operation of its telephone lines, operational and
management information systems, and warehouse and distribution facility. Any
material disruption in the Company's order receipt, processing or fulfillment
systems resulting from internal or external telephone system failure, electrical
problems, failure of the Company's information systems or other technical
problems could cause significant delays in the Company's ability to receive and
fill orders and may cause orders to be lost, shipped or delivered late or
cancelled by the customer. The Company maintains a single warehouse and
distribution facility at its headquarters in South St. Paul, Minnesota. If this
facility were to be destroyed or significantly damaged by fire or other
disaster, the Company would need to obtain alternative facilities and replenish
its inventory, either of which would result in significantly increased operating
costs and delays in fulfilling customer orders. The increased costs and delays
associated with such disruptions could have a material adverse effect on the
Company's business, financial condition and results of operations. While the
Company maintains business interruption insurance, there can be no assurance
that such levels of insurance will be adequate.
DEPENDENCE ON SOURCING MERCHANDISE
The Company offers a changing mix of products. This changing mix of products
presents certain unique challenges in finding merchandise for the Company's
catalogs. The Company's buyers must develop and maintain relationships with
vendors to locate sources for high quality, low price, name brand merchandise
they believe will interest the Company's customers. The Company competes with
non-catalog retailers for much of the merchandise offered in its catalogs. There
can be no assurance that the Company will be able to locate sources for or
maintain ongoing access to manufacturers' close-outs, military surplus and other
items featured by the Company or that such merchandise will be available to the
Company at the times or prices or in the quantities desired.
COMPETITION
The direct marketing industry is highly competitive and fragmented. Although
the Company believes that no competitor offers as comprehensive a selection of
products at discount prices, the Company has significant competitors within each
merchandise category and may face competition from new entrants or existing
competitors who shift focus to markets currently served by the Company. These
competitors include other outdoor/hunting or discount mail order catalogs or
retailers. Some of these competitors are larger and have substantially greater
financial, marketing and other resources than the Company. An increase in the
amount of competition faced by the Company or its failure to compete effectively
against its
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competitors could have a material adverse effect on the Company's business,
financial condition and results of operations.
INVENTORY COST AND MARK-DOWNS
The Company frequently purchases large quantities of manufacturers'
close-outs and other individual product items on an opportunistic or
when-available basis. The seasonal nature of the merchandise or the timing of
its acquisition may require that it be held for several months before being
offered in a catalog. This can result in increased inventory levels and lower
inventory turnover, thereby increasing the Company's working capital
requirements and related carrying costs. Increased inventory levels, lower
turnover rates and the inability to return manufacturers' close-outs, military
surplus and direct imported merchandise to vendors increase the risk of future
inventory mark-downs.
AVAILABILITY OF LABOR
The Company's executive offices, warehouse and distribution facilities are
located in South St. Paul, Minnesota. Due to the current low unemployment rate
in the Minneapolis/St. Paul metropolitan area, the Company faces a shrinking
pool of available labor and could experience labor shortages and higher labor
costs in the future, particularly when numerous additional employees are needed
for the Company's peak selling season. The Company uses dedicated agents at an
outside call center to meet its needs for additional qualified telemarketing
agents when the Company is unable to hire locally, which results in an increase
in the Company's operating costs. Such labor shortages and higher costs could
have a material adverse effect on the Company's business, financial condition
and results of operations.
MERCHANDISE RETURNS
The Company maintains a policy of making refunds or exchanges for all
merchandise returned by customers for any reason, and places no time limit on
this return policy. As the Company's merchandise mix of footwear and apparel has
increased so have merchandise returns. While the Company makes allowances in its
financial statements for anticipated merchandise returns based on historical
return rates, its history of forecasting footwear and apparel returns is
limited. Consequently, there can be no assurance that actual merchandise returns
will not exceed the Company's allowances. Any significant increase in
merchandise returns or merchandise returns that exceed the Company's reserves
could have a material adverse effect on the Company's business, financial
condition and results of operations.
CONTROL BY PRINCIPAL SHAREHOLDERS AND MANAGEMENT
As of April 16, 1998, the executive officers and directors of the Company
(including Vincent W. Shiel, the Chairman of the Board of the Company and
members of his family as well as trusts for the benefit of children and
grandchildren) beneficially owned approximately 35.6% of the outstanding shares
of Common Stock. Such persons also beneficially own exercisable options to
purchase 191,756 shares of Common Stock, which if fully exercised would result
in such persons beneficially owning 38.1% of the outstanding shares of Common
Stock.
As a result of such ownership, such persons will be able to greatly
influence the outcome of shareholder votes including votes concerning the
election of directors and changes in control. Such a level of ownership can have
the effect of delaying or preventing a change in control of the Company and can
adversely affect the voting and other rights of the other holders of Common
Stock. In addition, the Company's Restated Articles of Incorporation provide
that shareholders may cumulate their votes for the election of directors, which
may allow shareholders owning less than a majority of the outstanding shares of
Common Stock to elect one or more directors.
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GOVERNMENT REGULATION
The Company is subject to federal, state and local laws and regulations
which affect its business. Federal Trade Commission regulations govern the
manner in which orders may be solicited and prescribe other obligations in
fulfilling orders and consummating sales. Other laws and regulations prohibit or
limit the sale, in certain states and localities, of certain items offered in
the Company's catalogs such as black powder firearms, ammunition, bows, knives
and similar products. The failure to comply with such laws and regulations could
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company sells black powder firearms, air guns, ammunition and shooting
accessories. Sales of these products accounted for approximately 15.6% of the
Company's sales in 1997. Government regulation of firearms can affect sales of
these ancillary firearm products, and any increase in such regulation could have
a material adverse effect on the Company's business, financial condition and
results of operations.
State and local government regulation of hunting can result in changes to
hunting seasons, bans or limitations on hunting or other similar restrictions.
Because a significant amount of the Company's sales are attributable to hunting,
such changes or restrictions could decrease the demand for certain of the
Company's products, which could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company presently does not collect sales or similar taxes on sales of
merchandise shipped to residents of states other than Minnesota. Various states
have sought to impose on direct marketers the burden of collecting state sales
and use taxes on the sale of merchandise shipped to residents of that state. The
U.S. Supreme Court has held that the various states, absent Congressional
legislation, may not impose tax collection obligations on an out-of-state mail
order company whose only contacts with the taxing state are the distribution of
catalogs and other advertisement materials through the mail, and whose
subsequent delivery of purchased goods is by mail or interstate common carriers.
If such legislation is ultimately enacted by Congress or if the Company
otherwise becomes subject to collection of additional sales or use tax, the
imposition of additional tax collection obligations could adversely affect
customer response rates and have a material adverse effect on the Company's
business, financial condition and results of operations.
SHARES ELIGIBLE FOR FUTURE SALE
As of April 16, 1998, the Company had outstanding 4,721,252 shares of Common
Stock, which does not include shares of Common Stock issuable upon the exercise
of outstanding options and Representatives warrants. Sales of substantial
amounts of the Company's Common Stock could adversely affect prevailing market
prices of the Company's Common Stock and could impair the Company's ability to
raise additional capital. Of the shares of Common Stock outstanding as of April
16, 1998, approximately 2,462,086 shares are not subject to the lockup
agreements described below and are freely tradeable pursuant to Rule 144(k) or
other exemptions from registration under the Securities Act. Approximately
2,259,166 shares of Common Stock outstanding as of April 16, 1998 are subject to
lockup agreements and will be eligible for sale beginning August 5, 1998
(approximately 1,122,388 of which will be subject to the requirements of Rule
144). Additionally, holders of 213,739 exercisable options have agreed not to
offer, sell or otherwise dispose of the shares issuable upon the exercise of
such options until August 5, 1998 without the prior written consent of
Cruttenden Roth Incorporated. Also, in connection with the Public Offering, the
Company issued to the Representatives five-year warrants to purchase up to
100,000 shares of Common Stock which include customary demand and participatory
registration rights.
PRODUCT LIABILITY EXPOSURE
The Company's products include black powder firearms, ammunition, machetes,
air guns, paintball guns, blank firing firearms, bows, slingshots, knives, stun
guns, blowguns, crossbows, certain non-lethal and
10
<PAGE>
chemical spray devices and other potentially dangerous products. Although the
Company is not a manufacturer of any of these products, the sale of these
products involves a risk of being named as a party defendant in product
liability litigation. No assurance can be given that the Company's insurance
will cover all potential claims arising from the sale of such products or that
the amount of the coverage will be adequate, nor can assurance be given that
adequate insurance coverage can be obtained in the future at an acceptable cost
or at all. Any uninsured or inadequately insured claim or liability could have a
material adverse effect on the Company's business, financial condition and
results of operations.
POSSIBLE VOLATILITY OF STOCK PRICE
The Company's Common Stock is traded on the Nasdaq National Market. The
market price for the Common Stock may be significantly affected by such factors
as the Company's operating results, the actions of competitors, news
announcements or changes in general economic and market conditions. The Nasdaq
National Market has experienced a high level of price and volume volatility and
market prices for the stock of many companies have experienced wide price
fluctuations not necessarily related to the operating performance of the
companies.
USE OF PROCEEDS
This Prospectus relates solely to Shares being offered for the account of
the Selling Shareholders. The Company will not receive any of the proceeds from
the sale of the Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
BACKGROUND
The Selling Shareholders are former holders of subordinated notes payable
previously issued by the Company in private placements. In connection with
subordinated notes payable issued in 1993 and 1994, the Company issued to the
note holders warrants to purchase 50,000 shares of Common Stock at an exercise
price of $2.50 per share expiring in June 1998 and warrants to purchase 324,680
shares at $1.88 per share expiring in April 1999. In May 1996, the Company
issued subordinated notes payable to replace and renew the 1993 and 1994
subordinated notes and certain other notes payable and, in connection with the
refinancing, issued warrants to purchase 341,347 shares of Common Stock at $1.81
per share expiring in May 2001.
The warrants, by their terms, were to expire 30 days following completion of
a public offering of the Company's Common Stock unless exercised prior to such
time. The Selling Shareholders acquired the Shares offered hereby upon exercise
of the warrants following completion of the Public Offering. The Company has
filed the Registration Statement, of which this Prospectus forms a part, to
enable the holders of the shares issued upon exercise of the warrants, which are
restricted securities, to sell such Shares in an offering registered under the
Securities Act.
BENEFICIAL OWNERSHIP
The following table sets forth certain information as to the beneficial
ownership of the Company's Common Stock as of April 16, 1998 by each Selling
Shareholder and the number of shares of Common Stock that each Selling
Shareholder may sell pursuant to this Prospectus. None of the Selling
Shareholders, other than Vincent W. Shiel, Leonard M. Paletz, Mark F. Kroger and
William T. Sena, who are directors of the Company, has held any position or
office or had any material relationship with the Company or any of
11
<PAGE>
its predecessors or affiliates, other than as a shareholder or holder of
subordinated notes payable, during the past three years, except as described in
the footnotes to the table.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
PRIOR TO OFFERING
------------------------ NUMBER OF SHARES
NAME NUMBER PERCENT(1) THAT MAY BE SOLD
- ------------------------------------------------------------------------- --------- ------------- ----------------
<S> <C> <C> <C>
Vincent W. Shiel, Ph.D.(2)............................................... 572,000 12.1% 192,349
Leonard M. Paletz(3)..................................................... 210,016 4.4 46,020
Mark F. Kroger(4)........................................................ 85,370 1.8 14,501
William T. Sena, as trustee of various trusts for the benefit of Dr. and
Mrs. Shiel and their children(5)....................................... 106,819 2.3 40,000
Ralph E. Heyman, individually and as trustee of various trusts for the
benefit of Dr. and Mrs. Shiel and their children and
grandchildren(6)....................................................... 401,725 8.5 97,652
Stuart A. Shiel(7)....................................................... 144,018 3.1 20,000
Frederick J. Kroger(8)................................................... 166,170 3.5 72,835
Patrick Kroger(9)........................................................ 7,500 * 7,500
Barbara Kroger(9)........................................................ 7,500 * 7,500
Anne Shock(9)............................................................ 6,200 * 6,200
Joseph Shock(9).......................................................... 6,200 * 6,200
Mary Helldoerfer(9)...................................................... 6,200 * 6,200
Charles Helldoerfer(9)................................................... 6,200 * 6,200
Timothy Kroger(9)........................................................ 6,200 * 6,200
Sherry Kroger(9)......................................................... 6,200 * 6,200
Lowell E. Mills.......................................................... 2,500 * 2,500
Christopher S. Mills..................................................... 240 * 240
Susan M. Mills........................................................... 117,819 2.5 11,760
Frederic H. Mayerson..................................................... 52,600 1.1 17,168
Richard H. Steiner....................................................... 29,636 * 11,918
Philip H. Steiner........................................................ 29,636 * 11,918
Ruth J. Conway........................................................... 62,500 1.3 62,500
John B. Flege, Jr........................................................ 20,000 * 20,000
Victor P. Serodino....................................................... 20,000 * 20,000
</TABLE>
- ------------------------
* Less than 1% of outstanding shares.
(1) Percentages are calculated on the basis of the number of shares outstanding
on April 16, 1998.
(2) Includes 470,051 shares held in the name of Dr. Shiel as Trustee of the
Vincent W. Shiel Revocable Trust and 101,949 shares held in the name of
Helen M. Shiel, wife of Dr. Shiel, as Trustee of the Helen M. Shiel
Revocable Trust. Does not include 663,848 shares held by Dr. and Mrs.
Shiel's children or in trusts for the benefit of Dr. and Mrs. Shiel and
their children and grandchildren, of which Dr. Shiel expressly disclaims
beneficial ownership. Dr. Shiel is Chairman of the Board of Directors of the
Company.
12
<PAGE>
(3) Mr. Paletz is a director of the Company.
(4) Mr. Mark Kroger is a director of the Company.
(5) Includes 106,819 shares held as trustee of various trusts for the benefit of
Dr. and Mrs. Shiel and their children, of which Mr. Sena has no pecuniary
interest. Mr. Sena is a director of the Company.
(6) Includes 399,725 shares held as trustee of various trusts for the benefit of
Dr. and Mrs. Shiel and their children and grandchildren, of which Mr. Heyman
has no pecuniary interest.
(7) Does not include (i) 42,520 shares held by Mr. Heyman as trustee of a trust
for the benefit of Mr. Shiel, of which Mr. Shiel expressly disclaims
beneficial ownership and (ii) an aggregate of 143,300 shares held by Mr.
Heyman as trustee of various trusts for the benefit of children of Mr.
Shiel, of which Mr. Shiel expressly disclaims beneficial ownership. Mr.
Shiel is the son of Dr. Shiel.
(8) Includes 71,334 shares held as co-trustee of various trusts for the benefit
of his grandchildren. Mr. Kroger is the father of Mark F. Kroger.
(9) Adult child or spouse of an adult child of Frederick J. Kroger.
13
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders and any persons receiving Shares from the Selling
Shareholders by gift, pledge, transfer or succession may offer and sell the
Shares from time to time on the Nasdaq National Market, in the over-the-counter
market, in privately negotiated transactions or otherwise, at prices and terms
then prevailing, at prices related to the then-current market price, or in
negotiated transactions, or at negotiated prices. The Shares offered hereby may
be sold by one or more of the following methods, without limitation: (i)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (ii) a block trade in which a broker or dealer so engaged will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (iii) purchases by a broker or
dealer or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; and (iv) face-to-face transactions between
sellers and purchasers without a broker-dealer. In effecting sales, brokers or
dealers engaged by the Selling Shareholders may arrange for other brokers or
dealers to participate.
In connection with the Public Offering, each of the Selling Shareholders has
agreed, for a period of 180 days from the effective date of the Public Offering
(the "Lockup Period"), not to offer, sell or otherwise dispose of any shares of
Common Stock held by them (including the Shares) without the prior written
consent of Cruttenden Roth Incorporated. In addition, each Selling Shareholder
has agreed that any shares sold by such shareholder in the 90-day period
following the Lockup Period will be sold through the Representatives. The Lockup
Period expires August 5, 1998.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Shareholders or other
sellers in amounts to be negotiated in connection with sales of the Shares
covered by this Prospectus. Such broker-dealers and any other participating
broker-dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. Any commissions paid or discounts
or concessions allowed to such broker-dealers, and any profits realized by
broker-dealers which purchase Shares on the resale of such Shares, may be deemed
to be underwriting discounts and commissions under the Securities Act.
The Company has advised the Selling Shareholders of the requirement that
they and any broker-dealers participating in the sale of their Shares deliver
copies of this Prospectus to purchasers of the Shares and that the
anti-manipulative rules of Regulation M under the Exchange Act may apply to
their sales.
The Company has filed the Registration Statement, of which this Prospectus
forms a part, with respect to the potential sale of the Shares covered hereby.
The Company will use its reasonable best efforts to keep the Registration
Statement current and effective through the earlier of the sale of all of the
Shares or such date as any of the Shares may be freely sold under Rule 144(k)
under the Securities Act. The Company will bear the costs of registering the
Shares under the Securities Act. The Selling Shareholders will bear all selling
commissions and brokerage fees.
The Selling Shareholders may agree to indemnify any broker-dealer or agent
that participates in transactions involving the Shares against certain
liabilities, including liabilities arising under the Securities Act.
In order to comply with the securities laws of certain states, sales of
Shares to the public in such states may be made only through broker-dealers who
are registered or licensed in such states. Sales of the Shares must also be made
by the Selling Shareholders in compliance with other applicable state securities
laws and regulations.
Any Shares which qualify for sale pursuant to Rule 144 under the Securities
Act may be sold under that Rule rather than pursuant to this Prospectus.
There can be no assurance that any of the Selling Shareholders will sell any
or all of the Shares covered by this Prospectus.
14
<PAGE>
LEGAL MATTERS
Legal matters in connection with the Common Stock offered hereby are being
passed upon for the Company and the Selling Shareholders by Chernesky, Heyman &
Kress P.L.L., Dayton, Ohio. Ralph E. Heyman, a partner of Chernesky, Heyman &
Kress P.L.L., owns 2,000 shares of Common Stock for his own account and holds an
aggregate of 399,725 shares of Common Stock as trustee of various trusts for the
benefit of Vincent W. Shiel and Helen M. Shiel and their children and
grandchildren, of which 97,652 shares are being offered hereby.
EXPERTS
The financial statements of the Company included in the Annual Report on
Form 10-K for the fiscal year ended December 28, 1997 incorporated by reference
in this Prospectus and elsewhere in the Registration Statement to the extent and
for the periods indicated in their report have been audited by Grant Thornton
LLP, independent certified public accountants, and are incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting and
auditing in giving said report.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered are as follows:
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee............................................ $ 1,317
Legal fees and expenses......................................... $ 10,000
Accounting fees and expenses.................................... $ 4,000
Printing fees................................................... $ 5,000
Miscellaneous expenses.......................................... $ 1,683
---------
Total........................................................... $ 22,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 302A.521 of the Minnesota Business Corporation Act ("MBCA"),
unless the articles of incorporation or bylaws otherwise provide, a corporation
is required to indemnify its directors, officers and employees against
judgments, penalties, fines, settlements and reasonable expenses (including
attorneys' fees) incurred in connection with legal proceedings if (i) they have
not been indemnified by another organization, (ii) they acted in good faith,
(iii) they received no improper personal benefit, (iv) in the case of any
criminal proceeding, they had no reasonable cause to believe their conduct was
unlawful and (v) generally speaking, they reasonably believed their conduct to
be in the corporation's best interests. A corporation shall advance expenses if
the director, officer or other individual furnishes a written affirmation of his
or her good faith belief that he or she has met the applicable statutory
standards for indemnification, he or she furnishes a written undertaking to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by the corporation and a determination is made that
the facts then known would not preclude indemnification. The registrant's Bylaws
provide indemnification to directors, officers, employees and agents to the full
extent permitted by the MBCA.
Under Section 302A.521, a corporation may purchase and maintain insurance on
behalf of a person in that person's official capacity against any liability
asserted against and incurred by the person in or arising from that capacity,
whether or not the corporation would have been required to indemnify the person
against the liability under the provisions of that section. The registrant
maintains directors and officers liability insurance coverage.
Section 302A.251 of the MBCA permits a corporation to eliminate or limit the
personal liability of a director to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director through a provision
in the corporation's articles of incorporation, except liability for (i) breach
of a director's duty of loyalty, (ii) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) the
payment of unlawful distributions or violations of the Minnesota securities
laws, (iv) any transaction from which the director derived an improper personal
benefit or (v) any act or omission occurring prior to adoption of the provision
in the articles providing for such limitation of liability. The registrant's
Articles of Incorporation provide that, to the fullest extent permitted by the
MBCA, a director shall not be liable to the registrant or its shareholders for
monetary damages for breach of fiduciary duty as a director.
ITEM 16. EXHIBITS.
See Exhibit Index on Page II-4.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of South St. Paul, State of Minnesota, on April 17,
1998.
<TABLE>
<S> <C> <C>
THE SPORTSMAN'S GUIDE, INC.
By /s/ GARY OLEN
------------------------------------------
Gary Olen
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
VINCENT W. SHIEL *
- ------------------------------ Chairman of the Board
Vincent W. Shiel
President, Chief Executive
/s/ GARY OLEN Officer and Director
- ------------------------------ (principal executive
Gary Olen officer)
Senior Vice President of
Finance, Chief Financial
/s/ CHARLES B. LINGEN Officer, Secretary,
- ------------------------------ Treasurer and Director
Charles B. Lingen (principal financial and
accounting officer)
/s/ GREGORY R. BINKLEY Executive Vice President,
- ------------------------------ Chief Operating Officer April 17, 1998
Gregory R. Binkley and Director
MARK F. KROGER *
- ------------------------------ Director
Mark F. Kroger
LEONARD M. PALETZ *
- ------------------------------ Director
Leonard M. Paletz
WILLIAM T. SENA *
- ------------------------------ Director
William T. Sena
*By /s/GARY OLEN
Gary Olen, ATTORNEY-IN-FACT
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ----------- -------------------------------------------------------------------------------------------------- -----
<C> <S> <C>
3.1 Restated Articles of Incorporation as restated through March 5, 1997 (incorporated by reference
from Exhibit 3.1 to Form 10-K for the year ended December 27, 1996, File No. 0-15767)
3.2 Bylaws (incorporated by reference from Exhibit 3.2 to Form S-18 Registration Statement No.
33-4496C filed April 1, 1986)
4.1 Specimen of the Company's Common Stock certificate (incorporated by reference from Exhibit 4.1 to
Amendment No. 1 to Form S-18 Registration Statement No. 33-4496C filed May 8, 1986)
5.1 Opinion of Chernesky, Heyman & Kress P.L.L.*......................................................
23.1 Consent of Grant Thornton LLP*.................................................................. .
23.2 Consent of Chernesky, Heyman & Kress P.L.L. (included in Exhibit 5.1)
24.1 Powers of Attorney of each person whose name is signed to this registration statement pursuant to
a power of attorney*............................................................................
</TABLE>
- ------------------------
* Filed herewith
<PAGE>
Exhibit 5.1
CHERNESKY, HEYMAN & KRESS P.L.L.
Attorneys at Law
10 Courthouse Plaza SW, Suite 1100
P.O. Box 3808
Dayton, Ohio 45401-3808
(937) 449-2800
April 17, 1998
The Sportsman's Guide, Inc.
411 Farwell Avenue
South St. Paul, MN 55075
Gentlemen:
We have acted as counsel for The Sportsman's Guide, Inc., a Minnesota
corporation (the "Company") in connection with the Company's Registration
Statement on Form S-3 filed with the Securities and Exchange Commission under
the Securities Act of 1933 to register 693,561 shares of the Company's Common
Stock, $.01 par value (the "Shares") which may be sold from time to time by
certain shareholders of the Company (the "Selling Shareholders").
For purposes of rendering this opinion, we have examined and reviewed such
corporate records and proceedings of the Company, documents and instruments and
made investigation of such matters as in our judgment permit us to render an
informed opinion on the matters set forth herein.
Based on the foregoing, it is our opinion that the Shares are duly
authorized and, when sold by the Selling Shareholders in the manner set forth in
the Prospectus forming part of the Registration Statement, will be validly
issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and we consent to the reference to our firm under the caption "Legal
Matters" in the Prospectus.
Very truly yours,
Chernesky, Heyman & Kress P.L.L.
SRW/cah
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 23, 1998, accompanying the
financial statements and schedule of The Sportsman's Guide, Inc. included in
the Annual Report on Form 10-K for the fiscal year ended December 28, 1997,
which is incorporated by reference in this Registration Statement and
Prospectus. We consent to the incorporation by reference in the Registration
Statement and Prospectus of the aforementioned report and to the use of our
name as it appears under the caption "Experts".
Grant Thornton LLP
Minneapolis, Minnesota
April 15, 1998
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director or officer
of The Sportsman's Guide, Inc., a Minnesota corporation (the "Company"), hereby
constitutes and appoints Gary Olen and Charles B. Lingen, or any one of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Company's Registration Statement on Form S-3
covering shares of the Company's Common Stock, $.01 par value per share, which
may be resold by certain shareholders of the Company, and to sign any and all
amendments (including post-effective amendments) thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents, and any one of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents or any one of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
March 27, 1998.
Vincent W. Shiel
<PAGE>
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director or officer
of The Sportsman's Guide, Inc., a Minnesota corporation (the "Company"), hereby
constitutes and appoints Gary Olen and Charles B. Lingen, or any one of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Company's Registration Statement on Form S-3
covering shares of the Company's Common Stock, $.01 par value per share, which
may be resold by certain shareholders of the Company, and to sign any and all
amendments (including post-effective amendments) thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents, and any one of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents or any one of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
March 23, 1998.
Mark F. Kroger
<PAGE>
Exhibit 24.3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director or officer
of The Sportsman's Guide, Inc., a Minnesota corporation (the "Company"), hereby
constitutes and appoints Gary Olen and Charles B. Lingen, or any one of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Company's Registration Statement on Form S-3
covering shares of the Company's Common Stock, $.01 par value per share, which
may be resold by certain shareholders of the Company, and to sign any and all
amendments (including post-effective amendments) thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents, and any one of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents or any one of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
March 23, 1998.
Leonard M. Paletz
<PAGE>
Exhibit 24.4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director or officer
of The Sportsman's Guide, Inc., a Minnesota corporation (the "Company"), hereby
constitutes and appoints Gary Olen and Charles B. Lingen, or any one of them,
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Company's Registration Statement on Form S-3
covering shares of the Company's Common Stock, $.01 par value per share, which
may be resold by certain shareholders of the Company, and to sign any and all
amendments (including post-effective amendments) thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents, and any one of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that such attorneys-in-fact and agents or any one of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
March 23, 1998.
William T. Sena
