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 Plan Year Ended December 31, 1999
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
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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, 2000 By: /S/ GEORGE R. MIHALKO
--------------------------------
George R. Mihalko
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
2
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THE SPORTS AUTHORITY 401(k) SAVINGS
AND PROFIT SHARING PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
As of December 31, 1999 and 1998 and for the year ended December 31, 1999
<TABLE>
<CAPTION>
Contents
<S> <C>
Report of Independent Certified Public Accountants...............................................4
Financial Statements
Statements of Net Assets Available for Benefits..................................................5
Statement of Changes in Net Assets Available for Benefits........................................6
Notes to Financial Statements....................................................................7
Supplemental Schedules
Schedule H, Line 4i - Schedule of Assets Held For Investment Purposes at End of Year............12
Schedule H, Line 4j - Schedule of Reportable Transactions.......................................13
Index to Exhibits...............................................................................14
</TABLE>
3
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Participants and Administrator
of The Sports Authority 401(k) Savings
and Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of The Sports Authority 401(k) Savings and Profit Sharing Plan as of December
31, 1999 and 1998, and the related statement of changes in net assets available
for benefits for the year ended December 31, 1999. 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 in accordance with auditing standards generally accepted
in the United States. Those standards 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. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes at end of year as of December 31, 1999, and
reportable transactions for the year then ended are presented for purposes of
additional analysis and are not a required part of the financial statements but
are supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the 1999 financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
1999 financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Miami, Florida
June 26, 2000
4
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THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31,
1999 1998
------------------------- --------------------
<S> <C> <C>
Assets
Investments, at fair value $ 19,992,759 $ 18,045,181
Receivables:
Contributions from plan participants 305,380 377,296
Contributions from employer 879,855 937,095
Other receivables (payables) 29,811 (7,533)
------------------------- --------------------
Total receivables 1,215,046 1,306,858
------------------------- --------------------
Total assets 21,207,805 19,352,039
Liabilities
Refund of excess contributions 34,077 37,264
------------------------- --------------------
Net assets available for benefits $ 21,173,728 $ 19,314,775
========================= ====================
</TABLE>
See accompanying notes.
5
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THE SPORTS AUTHORITY 401(K) SAVINGS AND PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C>
Additions
Investment income:
Dividend and interest income $ 350,608
Net appreciation in fair value of investments 129,654
Contributions:
From plan participants 3,807,374
From employer 2,200,768
Other 166,369
-------------------
Total additions 6,654,773
Deductions
Participant withdrawals 4,784,780
Administrative fees 11,040
-------------------
Total deductions 4,795,820
-------------------
Net increase 1,858,953
Net assets available for benefits at beginning of year 19,314,775
-------------------
Net assets available for benefits at end of year $ 21,173,728
===================
</TABLE>
See accompanying notes.
6
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THE SPORTS AUTHORITY 401(k) SAVINGS
AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1 - SUMMARY OF 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.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Investment Valuation and Income Recognition
Plan investments are stated at fair value. The Sports Authority Common Stock is
valued at quoted market price. The shares of registered investment companies are
valued at quoted market prices, which represent the net asset values of shares
held by the Plan at year-end. Participant loans are valued at their outstanding
balances which approximate fair value.
Information about the net assets and the significant components of changes in
net assets related to the nonparticipant-directed investment is as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1999 1998
----------------- --------------------
<S> <C> <C>
Investments, at fair value:
The Sports Authority, Inc. Common Stock $ 1,027,378 $ 1,917,090
<CAPTION>
Year Ended
December 31,
1999
--------------------
<S> <C>
Change in net assets:
Dividend and interest income $ 966
Net depreciation in fair value of investments (1,901,493)
Contributions from plan participants 499,318
Contributions from employer 1,004,103
Participant withdrawals (492,605)
Administrative fees (1)
</TABLE>
7
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The fair value of individual investments that represent 5% or more of the Plan's
net assets at December 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
1999 1998
----------------- --------------------
<S> <C> <C>
Wachovia Bank of Georgia, N.A.:
AIM Balanced Fund $ 5,471,371 $ 4,616,454
Davis New York Venture Fund 8,015,964 6,693,960
American Express Trust Company - Income
Fund I 3,386,502 3,303,448
The Sports Authority, Inc.:
Common Stock ** * 1,917,090
Participant loans * 983,887
* Investment not greater than 5%.
** Nonparticipant-directed.
</TABLE>
The Plan's investments (including investments bought, sold and held during the
year) appreciated (depreciated) in fair value for the year ended December 31,
1999 as follows:
Registered investment companies $ 2,031,147
Common stock (1,901,493)
------------------
$ 129,654
==================
Plan Expenses
Expenses of administering the Plan may be paid by either the The Sports
Authority, Inc. (the "Company") or from the funds, except for brokerage fees,
transfer taxes and other expenses incident to the operation of a fund which are
charged against that fund. For the year ended December 31, 1999, the Company
paid all recordkeeper and trustee fees, except for the fees associated with the
Managed Income Fund, which were paid from fund assets.
Reclassifications
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation.
NOTE 2 - PLAN DESCRIPTION
General
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
8
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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. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
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 matching contributions to the Plan.
Effective as of the first day of the following month, a participant may elect to
change the amount or form of contributions made to the Plan. The participant may
change the percentage allocated to each fund on the existing value as well as
future contributions. The participant is also 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 is
permitted to withdraw all or a part of his 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. In the event of such a withdrawal, all employee contributions and employer
matching contributions will be suspended for six months. A participant may elect
to withdraw all or a part of his after-tax contributions at any time. A
proportionate amount of earnings will be distributed which are taxable and may
be subject to a 10% early withdrawal penalty.
A participant may elect to request a loan of his 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 the participant's
vested balance. No more than one loan may be outstanding to any participant at
any time. The term of any loan shall range from one year to five years for loans
not for the purpose of purchasing a primary residence. Participant loans bear
interest at the prime rate.
The Plan also includes a Profit Sharing portion, whereby each participant will
receive employer contributions equal to at least one percent of his eligible
compensation for each year. The Profit Sharing contribution to the Plan for the
year ended December 31, 1999 was $756,427.
9
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Profit Sharing contributions are invested in The Sports Authority Common Stock
Fund until a participant is 100% vested. A participant's vesting in the Profit
Sharing contributions requires completion of five years of vesting service. One
year of vesting service is earned for each calendar year in which an employee
has 1,000 or more hours of service. Fully vested participants may direct or
transfer their contributions to the various investment funds. Forfeitures of
assets in the Profit Sharing portion of the Plan are used to reduce future
profit sharing contributions. Forfeitures for the Plan year ended December 31,
1999 were $40,321.
Payment of Benefits Upon Termination
Participation in the Plan automatically terminates when a participant is no
longer an employee. Upon termination, the participant's account balance is
distributed if the vested value of the participant's account is $5,000 or less.
If the vested amount exceeds $5,000, the participant may leave the balance in
the plan or request payment. After employment terminates, no additional employee
or employer contributions, loans or partial withdrawals are permitted. Upon
termination of participation, a full distribution is made of the participant's
account. Withdrawals and distributions are paid in cash, except where the
participant elects to take the distribution in stock to the extent that the
participant's account consists of shares of Company Common Stock.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions and to terminate the Plan
subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
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:
<TABLE>
<CAPTION>
As of December 31,
1999 1998
---------------------------------
<S> <C> <C>
Net assets available for benefits per the financial statements $ 21,173,728 $ 19,314,775
Benefits approved but unpaid (412,274) (184,358)
---------------------------------
Net assets available for benefits per the
Form 5500 $ 20,761,454 $ 19,130,417
=================================
</TABLE>
10
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The following is a reconciliation of the benefits paid per the financial
statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended
December 31,
1999
--------------------
<S> <C>
Benefits paid per the financial statements $ 4,784,780
Amounts allocated on Form 5500 to withdrawn participants at
December 31, 1998 (184,358)
Amounts allocated on Form 5500 to withdrawn participants at
December 31, 1999 412,274
--------------------
Benefits paid per the Form 5500 $ 5,012,696
====================
</TABLE>
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
year-end but not yet paid.
NOTE 4 - TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated February 6, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
NOTE 5 - SUBSEQUENT EVENT
On January 27, 2000 State Street Bank and Trust Company replaced Wachovia Bank
of Georgia, N.A., as trustee of the Plan.
11
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<TABLE>
<CAPTION>
THE SPORTS AUTHORITY 401(k) SAVINGS AND PROFIT SHARING PLAN
EIN 36-3511120 PLAN NUMBER 001
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
December 31, 1999
----------------------------------------------------------------------------------------------------------------------------
(c)
(b) Description of Investment Including (e)
(a) Identity of Issue, Borrower, Maturity Date, Rate of Interest, (d) Current
Lessor or Similar Party Collateral, Par or Maturity Value Cost Value
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* Wachovia Bank of Georgia, N.A.: Interest bearing cash # $ 323
Wachovia Prime Cash Management Fund # 125
AIM Balanced Fund # 5,471,371
Davis New York Venture Fund # 8,015,964
American Express Trust Company -
Income Fund I # 3,386,502
United International Growth Fund # 342,062
Sound Shore Fund, Inc. # 776,790
* The Sports Authority, Inc. Common Stock $ 5,187,890 1,027,378
Participant loans Interest rates ranging from
7.75% to 9.00%, maturity dates
ranging from one to five years 972,244
------------------
Total Assets Held For Investment Purposes $ 19,992,759
==================
*Denotes a party-in-interest to the Plan.
# Cost information is not presented as investment is participant-directed.
</TABLE>
12
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<TABLE>
<CAPTION>
THE SPORTS AUTHORITY 401(k) SAVINGS AND PROFIT SHARING PLAN
EIN 36-3511120 PLAN NUMBER 001
SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
For The Year Ended December 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
(b) (f) (h)
Description of Asset Expense Current Value
(a) (including maturity date and (c) (d) Incurred (g) of Asset on (i)
Identity of Party interest rate in case Purchase Selling with Cost of Transaction Net Gain
Involved of a loan) Price Price Transaction Asset Date or (Loss)
------------------------------------------------------------------------------------------------------------------------------------
iii) A series of transactions in excess of 5% of Plan assets:
<S> <C> <C> <C> <C> <C> <C> <C>
The Sports Authority, Inc. Common Stock $ 1,637,339 $ - $ - $ 1,637,339 $ 1,637,339 $ -
625,558 14 1,618,613 625,558 (993,069)
Column (e) has been excluded as the information is not applicable. There were no
category (i), (ii) or (iv) reportable transactions in 1999.
</TABLE>
13
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INDEX TO EXHIBITS
Sequential
Exhibits Page Number
-------- -----------
23.1 Consent of Ernst & Young LLP 15
14
