GANDER MOUNTAIN COMPANY 
By
Net income for the third quarter was
For the 39 weeks ended
Financial highlights for the third quarter:
* On retail segment sales of
* Retail segment SG&A costs improved
* Current availability under the company's existing credit facility at
"While the current retail environment is as difficult as any in recent
memory, our efforts to conserve costs, improve operating margins, reduce
capital expenditures and improve operating cash flows have borne results,"
said
After this earnings release has been furnished to the SEC, a pre-recorded call offering additional comments on the quarter will be available to all investors on the company's website at http://www.GanderMtn.com, both as a webcast and in the form of a transcript.
About Gander Mountain Company
Gander Mountain Company (Nasdaq: GMTN), headquartered in
Cautionary Note Regarding Forward-Looking Statements
Any statements in this release that are not historical or current facts are forward-looking statements. All forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward- looking statements. Certain of these risks and uncertainties are described in the "Risk Factors" section of the company's Annual Report on Form 10-K for fiscal 2007 and other required reports, as filed with the SEC, which are available at http://www.GanderMtn.com and at the SEC's Website at http://www.sec.gov.
Gander Mountain Company
Consolidated Statements of Operations - Unaudited
(In thousands, except per share data)
13 Weeks Ended 39 Weeks Ended
November November November November
1, 3, 1, 3,
2008 2007 2008 2007
Sales $269,920 $259,539 $730,455 $651,799
Cost of goods sold 200,160 189,445 551,183 496,293
Gross profit 69,760 70,094 179,272 155,506
Operating expenses:
Selling, general and
administrative expenses 64,975 64,946 190,871 171,754
Exit costs, impairment and other
charges (1,112) 1,582 (20) 2,208
Pre-opening expenses - 3,041 2,035 4,753
Income (loss) from operations 5,897 525 (13,614) (23,209)
Interest expense, net 4,950 5,543 14,301 14,049
Income (loss) before income taxes 947 (5,018) (27,915) (37,258)
Income tax provision 182 125 619 375
Net Income (loss) $765 $(5,143) $(28,534) $(37,633)
Basic and diluted loss per common
share $0.03 $(0.25) $(1.18) $(1.86)
Weighted average common shares
outstanding 24,162 20,362 24,086 20,255
Gander Mountain Company
Consolidated Balance Sheets
(In thousands)
November 1, February 2,
2008 2008
Assets (Unaudited)
Current assets:
Cash and cash equivalents $1,651 $2,622
Accounts receivable 21,408 10,992
Income taxes receivable 450 486
Inventories 441,860 403,683
Prepaids and other current assets 16,554 15,987
Total current assets 481,923 433,770
Property and equipment, net 167,639 168,685
Goodwill 54,332 48,803
Acquired intangible assets, net 19,345 25,098
Other assets, net 1,985 3,576
Total assets $725,224 $679,932
Liabilities and shareholders'
equity
Current liabilities:
Borrowings under credit facility $306,264 $246,013
Accounts payable 88,327 72,563
Accrued and other current
liabilities 48,363 60,606
Notes payable - related parties 10,000 -
Current maturities of long term debt 14,077 8,247
Total current liabilities 467,031 387,429
Long term debt 56,801 64,173
Deferred income taxes 7,406 7,113
Other long term liabilities 27,476 27,397
Shareholders' equity:
Preferred stock ($.01 par value,
5,000,000 shares authorized;
no shares issued and outstanding) - -
Common stock ($.01 par value,
100,000,000 shares authorized;
24,118,755 and 24,049,064 shares
issued and outstanding) 241 241
Additional paid-in-capital 278,334 277,110
Accumulated deficit (112,065) (83,531)
Total shareholders' equity 166,510 193,820
Total liabilities and
shareholders' equity $725,224 $679,932
Gander Mountain Company
Consolidated Statements of Cash Flows - Unaudited
(In thousands)
39 Weeks Ended
November 1, November 3,
Operating activities 2008 2007
Net loss $(28,534) $(37,633)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and
amortization 23,434 19,770
Exit costs, impairment and
other charges (1,205) -
Stock-based compensation
expense 989 1,278
(Gain)/ loss on disposal of assets (62) 60
Change in operating assets
and liabilities:
Accounts receivable (10,380) (12,108)
Inventories (38,177) (122,435)
Prepaids and other current
assets (567) (2,651)
Other assets (121) (1,483)
Accounts payable and other
liabilities 4,786 50,407
Deferred income taxes 293 -
Net cash used in operating
activities (49,544) (104,795)
Investing activities
Purchases of property and
equipment (16,195) (40,548)
Acquisition of business and
related expenses (172) (7,080)
Proceeds from sale of assets 77 -
Net cash used in investing
activities (16,290) (47,628)
Financing activities
Borrowings under credit
facility, net of repayments 60,251 139,093
Proceeds from short term notes
payable - related parties 10,000 -
Proceeds from long term debt - 13,082
Reductions in long term debt (5,623) (2,463)
Proceeds from exercise of
stock options and employee
stock purchases 235 3,053
Net cash provided by financing
activities 64,863 152,765
Net (decrease) increase in cash (971) 342
Cash, beginning of period 2,622 1,342
Cash, end of period $1,651 $1,684
Non-cash investing activities: During the 39 weeks ended November
1, 2008 and November 3, 2007, the Company acquired equipment
totaling approximately $4.1 million and $2.6 million,
respectively, that was financed through capital leases.
Additionally, during the 39 weeks ended November 1, 2008 and
November 3, 2007, there were $1.5 million and $1.2 million,
respectively, in non-cash accruals and reclassifications for
property and equipment that did not require the use of cash.
These amounts are excluded from Purchases of property and
equipment in this statement of cash flows.
Gander Mountain Company
Segment Information - Unaudited
(In thousands)
Statement of Operations data:
13 Weeks Ended 13 Weeks Ended
November 1, 2008 November 3, 2007
Retail Direct Total Retail Direct Total
Sales $255,506 $14,414 $269,920 $259,539 $- $259,539
Depreciation
and
amortization 7,447 326 7,773 7,086 - 7,086
Income
(loss) from
operations 8,086 (2,189) 5,897 525 - 525
Net income
(loss) 3,705 (2,940) 765 (5,143) - (5,143)
39 Weeks Ended 39 Weeks Ended
November 1, 2008 November 3, 2007
Retail Direct Total Retail Direct Total
Sales $656,644 $73,811 $730,455 $651,799 $- $651,799
Depreciation
and
amortization 22,319 1,115 23,434 19,770 - 19,770
Income
(loss) from
operations (13,630) 16 (13,614) (23,209) - (23,209)
Net income
(loss) (25,940) (2,594) (28,534) (37,633) - (37,633)
Balance Sheet data:
As of November 1, 2008 As of November 3, 2007
Retail Direct Total Retail Direct Total
Total assets $631,448 $93,776 $725,224 $691,011 $- $691,011
Inventories 420,780 21,080 441,860 474,953 - 474,953
Goodwill and
intangible
assets 7,007 66,670 73,677 7,204 - 7,204
Long term debt 21,801 35,000 56,801 25,901 - 25,901
SOURCE Gander Mountain Company
