SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report OCTOBER 6, 1998
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THE SPORTS AUTHORITY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-13426 36-3511120
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3383 N. State Road 7, Ft. Lauderdale, Florida 33319
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(Address of principal executive offices) (Zip Code)
(954) 735-1701
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Reference news releases attached as exhibit 99 and 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) The following exhibits are filed with this report:
99 News Release, dated October 6, 1998.
99.1 News Release, dated October 6, 1998.
2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE SPORTS AUTHORITY, INC.
Date: October 6, 1998 By: /S/ ANTHONY F. CRUDELE
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Anthony F. Crudele
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
3
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EXHIBIT INDEX
EXHIBIT
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99 News Release dated October 6, 1998.
99.1 News Release dated October 6, 1998.
EXHIBIT 99
THE
SPORTS
AUTHORITY
October 6, 1998
FOR IMMEDIATE RELEASE
CONTACT: THE SPORTS AUTHORITY, INC. Alexander L. Stanton
Anthony F. Crudele Vice President of Strategic Planning
Chief Financial Officer & Treasurer
(954) 730-4260 (954) 677-6003
THE SPORTS AUTHORITY ANNOUNCES RESIGNATIONS OF TWO SENIOR OFFICERS
================================================================================
Fort Lauderdale, Florida, October 6, 1998-- The Sports Authority, Inc.
(NYSE:TSA), the world's largest full-line sporting goods retailer, today
announced that the Company's Chief Merchandising Officer, Robert J. Timinski,
and the Senior Vice President of Stores, Arnold Sedel, have tendered their
resignations in order to pursue other business opportunities.
Robert J. Timinski has been with the Company since 1993, overseeing all
merchandinsing operations, and was promoted to Chief Merchandising Officer in
January of this year. Arnold Sedel has been overseeing store operations for the
Company for 10 years, and was promoted to Senior Vice President, Stores in 1991.
Chief Executive Officer, Marty Hanaka, commented, "Arnie and Bob have served the
Company loyally over the past years, and we wish them all the best in their
future endeavors. As The Sports Authority moves ahead, we are building a
management team with a strong record of growth in retailing in order to position
the Company as one of the leading growth retailers and strengthen our leadership
within the sporting goods industry. I look forward to building the team to do
this, and providing growth in long-term value to our shareholder."
The Sports Authority operates 214 full line sporting goods superstores; 198
stores in 32 states across the United States, six in Canada, and ten in Japan
under is joint venture agreement with JUSCO Co., Ltd.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements which reflect
management's current views of future events and financial performance. These
forward-looking statements are based on many assumptions and factors which
involve risks and uncertainties that could cause actual results to differ
materially. These risks and uncertainties are disclosed in the Company's Form
10-K for 1997 and the 1998 2nd Quarter 10-Q.
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3383 North State Road 7 - Fort Lauderdale, Florida 33319 - 954-735-1701
EXHIBIT 99.1
THE
SPORTS
AUTHORITY
October 6, 1998
FOR IMMEDIATE RELEASE
CONTACT: THE SPORTS AUTHORITY, INC. Alexander L. Stanton
Anthony F. Crudele Vice President of Strategic Planning
Chief Financial Officer & Treasurer
(954) 730-4260 (954) 677-6003
THE SPORTS AUTHORITY ANNOUNCES 3RD QUARTER RESTRUCTURING CHARGE
================================================================================
Fort Lauderdale, Florida, October 6, 1998-- The Sports Authority, Inc.
(NYSE:TSA), the world's largest full-line sporting goods retailer, today
announced that the Company will be taking an after-tax charge of $55 million, or
$1.72 per share in the third quarter, related to the restructuring of its
business. The charge will include amounts related to 18 store closings (2 of
which will be relocated), asset impairments under FAS 121 for six stores which
will remain open, inventory writedowns, severance payments, tax restructuring
costs, and other miscellaneous corporate charges. The charge reflects the
deterioration in sales productivity and earnings growth resulting from poor
performing stores and inappropriate capital allocations.
Detail of Restructuring & Other Charges (IN MILLIONS):
<TABLE>
<CAPTION>
PRE-TAX AFTER-TAX
ITEM AMOUNT AMOUNT
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<S> <C> <C>
RESTRUCTURING CHARGES:
Store Exit Costs $ 39.9 $ 24.3
Asset Impairments 13.3 8.1
Corporate Severance Payments 4.2 2.6
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57.4 35.0
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OTHER CHARGES:
Inventory Write-downs & Markdowns 21.9 13.4
Tax Restructuring - 4.7
Miscellaneous Corp. Charges 3.2 2.0
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25.1 20.1
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TOTAL CHARGES $ 82.5 $ $ 55.0
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</TABLE>
Marty Hanaka, Chief Executive Officer stated, "As is critical for any retail
business, we have completed a comprehensive analysis of the value of all our
locations and initiatives, and made changes as appropriate to reflect this
value. Given that the closing locations were negatively impacting annual
earnings by $0.18 to $0.20, this action should have an equivalent positive
effect on earnings in future years. Although closing stores and taking these
charges are difficult and painful, we wanted to effect the necessary changes now
in order to position our business for greater profitability in the future."
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3383 North State Road 7 - Fort Lauderdale, Florida 33319 - 954-735-1701
<PAGE>
The Company also announced that it expects the third-quarter loss, excluding the
charge, to be between $0.27 and $0.32 per share; including the charge, the loss
for the quarter is anticipated to be between $1.99 and $2.04 per share. This is
compared with earnings of $0.06 per share during the same period of the prior
year. Sales for the period are expected to be approximately $365 million, with a
comparable store sales decline of between 5.0% and 5.5%. Sales during the period
continued to be negatively impacted by the difficult footwear environment, as
well as continued softness in the men's apparel and golf categories.
Commenting on the business, Mr. Hanaka noted, "The continued negative trends in
comparable store sales have certainly been disappointing, and the difficulties
in some key industry categories have resulted in substantial promotional
pressure and increased markdowns. However, I continue to be optimistic about the
long-term sporting goods industry outlook given the anticipated growth in some
of the hardlines areas and the increased participation in many sports. I am
completely confident that, with the changes just announced and strong, new
leadership, the Company will be able to capitalize on future opportunities.
Moving ahead, we are focusing on enhancing our sales productivity at all
locations, reducing our cost structure, improving the benefits resulting from
our logistics strategy, and building an organization which is focused on the
customer and structured for alignment across all areas of the Company."
The store closings will take place in the latter part of the fourth quarter,
following the holiday season, and the Company's multi-store market strategy will
result in opportunities for many of the personnel at these closing locations to
take positions in other Company operations.
The Sports Authority operates 214 full line sporting goods superstores; 198
stores in 32 states across the United States, six in Canada, and ten in Japan
under its joint venture agreement with JUSCO Co., Ltd.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements which reflect
management's current views of future events and financial performance. These
forward-looking statements are based on many assumptions and factors which
involve risks and uncertainties that could cause actual results to differ
materially. These risks and uncertainties are disclosed in the Company's Form
10-K for 1997.
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3383 North State Road 7 - Fort Lauderdale, Florida 33319 - 954-735-1701
