SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal year ended DECEMBER 31, 1995
Commission File No. 1-13426
A. The Sports Authority 401(k) Savings and Profit Sharing Plan
B. The Sports Authority, Inc.
3383 N. State Road 7
Ft. Lauderdale, Florida 33319
(954) 735-1701
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, The Sports
Authority, Inc., as plan administrator, has duly caused this Annual Report to be
signed by the undersigned thereunto duly authorized.
THE SPORTS AUTHORITY , INC.
Date: June 28, 1996 By: /S/ ANTHONY F. CRUDELE
----------------------
Anthony F. Crudele
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
2
<PAGE>
THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN
INDEX TO FORM 11-K
PAGE NUMBER
-----------
Report of Independent Certified Public Accountants 4
Statement of Net Assets Available for Benefits with Fund information
at December 31, 1995 5
Statement of Net Assets Available for Benefits with Fund information
at December 31, 1994 6
Statement of Changes in Net Assets Available for Benefits with Fund
information for the year ended December 31, 1995 7
Statement of Changes in Net Assets Available for Benefits with Fund
information for the year ended December 31, 1994 8
Notes to Financial Statements 9-12
Schedule I - Schedule of Assets Held For Investment Purposes -
December 31, 1995 13
Schedule II - Schedule of Reportable Transactions for the year
ended December 31, 1995 14-15
Index to Exhibits 16
3
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Participants and Administrator
of The Sports Authority 401(k) Savings
and Profit Sharing Plan
In our opinion, the accompanying statements of net assets available for benefits
with Fund information and the related statements of changes in net assets
available for benefits with Fund information present fairly, in all material
respects, the net assets available for benefits of The Sports Authority 401(k)
Savings and Profit Sharing Plan at December 31, 1995 and 1994, and the changes
in net assets available for benefits for the years then ended, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provides a reasonable basis for the opinion expressed above.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
schedules I and II is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by ERISA. The Fund information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. Schedule I, II and the Fund Information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
PRICE WATERHOUSE LLP
Fort Lauderdale, Florida
June 28, 1996
4
<PAGE>
THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
<TABLE>
<CAPTION>
AT DECEMBER 31, 1995
-------------------------------------------------------------------------------------------------
THE SPORTS KMART
MANAGED GROWTH BALANCED AUTHORITY CORPORATION
INCOME EQUITY EQUITY COMMON STOCK COMMON STOCK
FUND FUND FUND FUND FUND OTHER TOTAL
----------- ----------- ----------- ----------- ----------- ----------- -----------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Cash $ 67 $ 81 $ 73 $ 122 $ 38 $ 1 $ 382
Investments, at Fair Value
The Sports Authority
Common Stock -- -- -- 934,051 -- -- 934,051
Kmart Corporation Common Stock -- -- -- -- 458,387 -- 458,387
Short-term Investments 287 -- 1,000 17 10,902 -- 12,206
Managed Income Fund 1,754,355 -- -- -- -- -- 1,754,355
Growth Equity Fund -- 1,451,214 -- -- -- -- 1,451,214
Balanced Equity Fund -- -- 1,095,601 -- -- -- 1,095,601
Participant Loans -- -- -- -- -- 111,645 111,645
----------- ----------- ----------- ----------- ----------- ----------- -----------
1,754,642 1,451,214 1,096,601 934,068 469,289 111,645 5,817,459
----------- ----------- ----------- ----------- ----------- ----------- -----------
Receivables:
Contributions from Plan
Participants 51,250 62,851 37,534 55,954 -- -- 207,589
Contributions from Employer 23,798 26,478 16,055 519,328 -- -- 585,659
Other Receivable 91 444 833 1,617 16,141 (8,634) 9,492
----------- ----------- ----------- ----------- ----------- ----------- -----------
75,139 89,773 54,422 575,899 16,141 (8,634) 802,740
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Assets Available
for Benefits $ 1,829,848 $ 1,541,068 $ 1,151,096 $ 1,510,089 $ 485,468 $ 103,012 $ 6,620,581
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
5
<PAGE>
THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
<TABLE>
<CAPTION>
AT DECEMBER 31, 1994
-------------------------------------------------------------------------------------------------
THE SPORTS KMART
MANAGED GROWTH BALANCED AUTHORITY CORPORATION
INCOME EQUITY EQUITY COMMON STOCK COMMON STOCK
FUND FUND FUND FUND FUND OTHER TOTAL
----------- ----------- ----------- ----------- ----------- ----------- -----------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Cash - - - - - $ 100 $ 100
Receivables:
Contributions from Plan
Participants - - - - - 127,516 127,516
Contributions from Employer - - - - - 58,831 58,831
-------- --------
Total Receivables - - - - - 186,347 186,347
-------- --------
Net Assets Available for Benefits - - - - - $186,447 $186,447
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
-------------------------------------------------------------------------------------------------
THE SPORTS KMART
MANAGED GROWTH BALANCED AUTHORITY CORPORATION
INCOME EQUITY EQUITY COMMON STOCK COMMON STOCK
FUND FUND FUND FUND FUND OTHER TOTAL
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to Net Assets
Attributed to:
Investment Income:
Cash Dividends $ -- $ -- $ -- $ -- $ 30,816 $ -- $ 30,816
Interest Income -- -- -- -- -- 2,141 2,141
Realized/Unrealized
Gain/(Loss) or
Appreciation/
(Depreciation) 79,440 119,707 174,910 (54,741) (319,711) 4 (391)
Contributions:
Contributions from
Plan Participants 591,844 579,445 472,167 708,511 -- 2,558 2,354,525
Contributions from Employer 247,409 220,461 190,575 783,056 -- 162 1,441,663
Transfers from Other Plans 1,112,092 606,997 465,182 -- 1,215,854 1,430 3,401,555
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total Additions 2,030,785 1,526,610 1,302,834 1,436,826 926,959 6,295 7,230,309
Deductions from Net Assets
Attributed to:
Participant Withdrawals 188,738 155,109 100,303 101,680 240,767 5,930 792,527
Trustee Administrative Fees 3,648 -- -- -- -- -- 3,648
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total Deductions 192,386 155,109 100,303 101,680 240,767 5,930 796,175
Net Increase prior to
Interfund Transfers 1,838,399 1,371,501 1,202,531 1,335,146 686,192 365 6,434,134
Interfund Transfers (8,551) 169,567 (51,435) 174,943 (200,724) (83,800) --
Net Assets Available
for Benefits
at Beginning of Year -- -- -- -- -- 186,447 186,447
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Assets Available for
Benefits at End of Year $ 1,829,848 $ 1,541,068 $ 1,151,096 $ 1,510,089 $ 485,468 $ 103,012 $ 6,620,581
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
7
<PAGE>
THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1994
-------------------------------------------------------------------------------------------------
THE SPORTS KMART
MANAGED GROWTH BALANCED AUTHORITY CORPORATION
INCOME EQUITY EQUITY COMMON STOCK COMMON STOCK
FUND FUND FUND FUND FUND OTHER TOTAL
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to Net
Assets Attributed to:
Contributions from
Plan Participants - - - - - $ 127,516 $ 127,516
Contributions from
Employer - - - - - 58,931 58,931
----------- ----------- ----------- ----------- ----------- ------------- --------------
Total Additions - - - - - 186,447 186,447
----------- ----------- ----------- ----------- ----------- ------------- --------------
Net Assets Available
for Benefits at
Beginning of Year - - - - - - -
----------- ----------- ----------- ----------- ----------- ------------- --------------
Net Assets Available
for Benefits at
End of Year - - - - - $ 186,447 $ 186,447
=========== =========== =========== =========== =========== ============= ==============
</TABLE>
8
The accompanying notes are an integral part of these financial statements
<PAGE>
THE SPORTS AUTHORITY 401(K) SAVINGS
AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ACCOUNTING POLICIES
The accompanying financial statements of The Sports Authority 401(k) Savings and
Profit Sharing Plan (the "Plan") are prepared on the accrual basis of
accounting.
The Sports Authority, Inc. (the "Company") prepares its Plan financial
statements in conformity with generally accepted accounting principles. These
principles require management to make estimates and assumptions that affect the
reported amounts of net assets available for benefit, and report amounts of
changes in net assets available for benefit during the reporting period. Actual
results could differ from those estimates.
Plan investments, other than the Managed Income Fund, are stated at fair value.
The Sports Authority, Inc. Common Stock Fund and Kmart Corporation Common Stock
Fund are valued at their quoted market prices. Mutual fund investments are
valued at net asset value representing the value at which shares of the fund may
be purchased or redeemed. The Managed Income Fund is valued at contract value
which approximates fair value. Participant notes receivable are valued at cost
which approximates market value. Realized and unrealized gains and losses are
determined utilizing the average cost method. Unrealized gains or losses
resulting from changes in market prices are included in the Statements of
Changes in Net Assets Available for Benefits with fund information.
Expenses of administering the Plan may be paid by the Employer or may be paid
from the funds; provided, however, that brokerage fees, transfer taxes and other
expenses incident to the operation of a fund are charged against that fund. For
the year ended December 31, 1995, the Employer paid the fee associated with the
recordkeeper and trustee, except for the Managed Income Fund, in which
administrative expenses are paid from fund assets. Taxes, if any, on any assets
held or income received by any fund are charged against that fund.
NOTE 2 - PLAN DESCRIPTION
GENERAL
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more compete description
of the Plan's provisions.
The Plan is a voluntary, defined contribution plan which commenced December 1,
1994. Employees are eligible to participate in the plan on the first day of the
month following attainment of age 21 and performance of 1,000 hours of service
within a twelve month period. Employees that were participants in the Kmart
Corporation Employee Savings Plan (the "Kmart Plan") on November 30, 1994 are
eligible as of the effective date. Employees as of December 1,
9
<PAGE>
1994, that were not yet eligible under the Kmart Plan, shall receive credit
under the Plan for service hours earned under the Kmart Plan.
ADMINISTRATION
The Trustees of the Plan are Wachovia Bank of Georgia and the Company. The
record keeper for the Plan is Mercer. The Plan's Compensation Committee is
appointed by the Company's Board of Directors, and is responsible for the
administration and investment decisions of the Funds.
CONTRIBUTIONS AND VESTING
Except as may be limited by applicable Internal Revenue Code regulations, a
participant may elect before-tax or after-tax contributions to the Plan through
payroll deductions ranging from 1% to 16% of compensation. For any amount the
participant contributes up to 6% of compensation, the Company will contribute an
amount equal to 50% thereof. All participants are automatically vested in the
Company's contributions to the Plan.
Participants may elect to have their contributions invested in four funds: A
Managed Income Fund, a Growth Equity Fund, a Balanced Equity Fund and The Sports
Authority Common Stock Fund. The primary objective of the Managed Income Fund is
to preserve principal and income while maximizing current income through a
portfolio balanced between fixed income securities, investment contracts, and
money market investments. The Growth Equity Fund invests in larger established
companies. The Balanced Equity Fund has three objectives; current income,
capital growth and conservation of principal. The Sports Authority Common Stock
Fund invests in the Company's Common Stock. Excess cash is temporarily invested
in short term investments. The percentage allocation to each fund must be either
10% or an exact multiple of 10%. Contributions previously invested in the Kmart
Plan were transferred to the Plan in March 1995. The Plan's investment funds
were set up to offer the same fund types as the Kmart Plan, including a Kmart
Corporation Common Stock Fund. Balances in the Kmart Plan were transferred to
the corresponding funds in the Plan. No additional contributions can be made in
the Kmart Corporation Common Stock fund under the Plan.
Effective as of the first day of each month, a participant may elect to change
the amount or form of contributions made to the Plan. The participant will be
able to change the percentage allocated to each fund on the existing value as
well as for future contributions. The participant will also be able to change
the amount of future contributions made to the Plan.
A participant may elect to discontinue before-tax or after-tax contributions
immediately with proper notification. A participant, after previously suspending
contributions, may resume contributions without penalty. A participant will be
permitted to withdraw all or a part of their before-tax contributions only after
the withdrawal of any after-tax contributions and either the participant (i) has
attained the age of 59 1/2 or (ii) has met the hardship rules as defined in the
Plan.
10
<PAGE>
In the event of such a withdrawal, all before-tax contributions and employer
matching contributions will be suspended for six months. A participant may elect
to withdraw all or a part of their after-tax contributions without penalty.
A participant may elect to request a loan of their employee contributions. The
loan is subject to certain conditions including a minimum loan of $1,000 and a
maximum loan not to exceed the lesser of $50,000 or 50% of their vested balance
and no more than one loan outstanding to any participant at any time. The term
of any loan shall range from one year to a maximum of five years. Participant
loans bear interest at the prime rate.
The Plan also includes a Profit Sharing portion, whereby the participant will
receive employer contributions equal to at least one percent of their
compensation for each year. The contribution to the Profit Sharing Plan for the
Plan year ending December 31, 1995 in the amount of $495,000 was made on April
3, 1996.
Under the Profit Sharing portion of the Plan, the contributions will be invested
in The Sports Authority Common Stock Fund until a participant is 100% vested. A
participant's vesting requires five years of Plan participation and includes
participation in the Kmart Plan. Fully vested participants may direct or
transfer their contributions to the various investment funds. Forfeitures of the
Profit Sharing Plan are used to reduce company contributions.
TERMINATION
Participation in the Plan automatically terminates when a participant is no
longer an employee and his or her account balance is distributed, except that if
the value of a participant's account exceeds $3,500, participation may continue
until age 70 1/2 unless the participant sooner requests distribution or dies.
During continuation of participation after employment terminates, no additional
employee or employer contributions, loans or partial withdrawals will be
permitted. Upon termination of participation, a full distribution is made of the
participant's account. Withdrawals and distributions are paid in cash, except a
participant may elect to take the distribution in stock if the participant's
account consists of any shares of Kmart Corporation Common Stock and/or any
shares of the Company Common Stock.
NOTE 3 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets per the financial statements to
the Form 5500:
AS OF DECEMBER 31,
1995 1994
---------- --------
Net assets per the financial statements $6,620,581 $186,447
Benefits approved but unpaid (49,181) -
---------- --------
Net assets per the Form 5500 $6,571,400 $186,447
========== ========
11
<PAGE>
The following is a reconciliation of the benefits paid per the financial
statements to the Form 5500:
YEAR ENDED
DECEMBER 31,
1995
---------------
Benefits paid per the financial statements $ 792,527
Benefits approved but unpaid at year end 49,181
---------------
Benefits paid per the Form 5500 $ 841,708
===============
NOTE 4 - TAX STATUS
The Internal Revenue Service has determined and informed the Company by letter
dated February 6, 1996, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The Plan
administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable provisions of the
IRC.
NOTE 5 - TRANSACTIONS WITH PARTIES-IN-INTEREST
The Plan purchased 49,979 shares and sold 3,119 shares of the Company common
stock for $1,091,603 and $77,350, respectively. Distributions to Plan
participants consisted of 1,017 shares of the Company common stock, market value
of such shares at date of distribution was $36,132. The Plan did not pay any
fees to the trustee, Wachovia Bank of Georgia, as all trustee fees were paid
directly by the Company. During the Plan year ended December 31, 1995, the
Company paid $16,038 in trustee fees.
12
<PAGE>
SCHEDULE I
THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN ITEM 27(A) -
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
<TABLE>
<CAPTION>
DECEMBER 31, 1995
- ------------------------------------------------- ------------------------------------------------------------------
IDENTITY OF ISSUE, BORROWER, PAR VALUE DESCRIPTION OF INVESTMENT INCLUDING
LESSOR OR SIMILAR PARTY OR NO. OF MATURITY DATE, RATE OF INTEREST, CURRENT
SHARES COLLATERAL, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Investments:
Kmart Corporation Common 64,335 Kmart Corporation, Common Stock $975,474 $458,387
Stock Fund Par Value $1
The Sports Authority Common 45,843 The Sports Authority, Inc. Common 1,004,205 934,051
Stock Fund* Stock Par Value $.01
Participant Loans 35 Participant Loans - 111,645
(High and Low interest rates are 9.00%
and 8.25%, respectively)
Registered Investment Companies:
Managed Income Fund 44,012 Guaranteed Investment Contracts 1,697,658 1,754,355
Balanced Equity Fund 45,031 American Mutual Fund 997,079 1,095,601
Short Term Investments 12,206 Money Market Fund 12,206 12,206
Growth Equity Fund 74,843 Growth Investors Mutual Fund 1,498,923 1,451,214
---------
Total Assets Held For Investments
Purposes
$5,817,459
==========
</TABLE>
*The Sports Authority, Inc., is a party-in-interest to the Plan.
13
<PAGE>
SCHEDULE II
THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN
ITEM 27(D) - SCHEDULE OF REPORTABLE TRANSACTIONS
AND PARTY-IN-INTEREST TRANSACTIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ASSETS AND CURRENT VALUE
TRANSACTIONS (INCLUDING OF ASSETS ON
IDENTITY OF PARTY INTEREST RATE AND MATURITY PURCHASE SELLING COST OF TRANSACTION NET GAIN
INVOLVED IN CASE OF A LOAN) PRICE PRICE EXPENSES ASSETS DATE (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kmart Corporation Kmart Corporation-
Common Stock Fund Common Stock
3 purchases $11,429 $102 $11,531 $11,429
21 sales $422,104 $1,758 $512,297 $422,104 ($91,951)
The Sports Authority The Sports Authority-
Common Stock Fund* Common Stock
21 purchases $1,678,564 $3,998 $1,682,562 $1,678,564
12 sales $113,734 $252 $87,398 $113,734 $26,084
Managed Income Fund Guaranteed Investment
Contracts
10 purchases $793,508 $793,508 $793,508
10 sales $155,192 $152,007 $155,192 $3,185
Balanced Equity Fund American Mutual Fund
30 purchases $697,218 $697,218 $697,218
10 sales $186,214 $169,170 $186,214 $17,044
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ASSETS AND CURRENT VALUE
TRANSACTIONS (INCLUDING OF ASSETS ON
IDENTITY OF PARTY INTEREST RATE AND MATURITY PURCHASE SELLING COST OF TRANSACTION NET GAIN
INVOLVED IN CASE OF A LOAN) PRICE PRICE EXPENSES ASSETS DATE (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Growth Equity Fund Growth Investors
Mutual Fund
31 purchases $980,594 $980,594 $980,594
8 sales $166,230 $138,149 $166,230 $28,081
</TABLE>
* The Sports Authority, Inc. is a party-in-interest to the Plan.
15
<PAGE>
INDEX TO EXHIBITS
SEQUENTIAL
EXHIBITS PAGE NUMBER
- -------- -----------
23.1 Consent of Price Waterhouse LLP 17
16
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-94224) of The Sports Authority 401(k) Savings and
Profit Sharing Plan of our report dated June 28, 1996, appearing in this Form
11-K.
Price Waterhouse LLP
Fort Lauderdale, Florida
July 15, 1996
