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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934. For the quarterly period ended March 31, 2003 or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934. For the transition period from to .
------- -------
Commission File No. 0-15767
THE SPORTSMAN'S GUIDE, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1293081
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
411 FARWELL AVE., SO. ST. PAUL, MINNESOTA 55075
(Address of principal executive offices)
(651) 451-3030
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
--- ---
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
Yes No x
--- ---
As of May 9, 2003, there were 4,761,143 shares of the registrant's Common Stock
outstanding.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE SPORTSMAN'S GUIDE, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share data)
March 31, December 31,
2003 2002
--------- ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $10,880 $17,152
Accounts receivable -- net 1,950 3,014
Inventory 22,528 20,593
Promotional material 3,693 2,540
Prepaid expenses and other 1,806 1,133
Deferred income taxes 1,650 2,409
------- -------
Total current assets 42,507 46,841
PROPERTY AND EQUIPMENT -- NET 2,531 2,672
------- -------
Total assets $45,038 $49,513
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $13,731 $16,230
Accrued expenses 2,462 3,896
Income taxes payable 31 1,882
Deferred revenue 3,879 3,706
Returns reserve 1,519 1,738
Customer deposits and other liabilities 1,738 1,321
------- -------
Total current liabilities 23,360 28,773
DEFERRED INCOME TAXES 85 119
------- -------
Total liabilities 23,445 28,892
COMMITMENTS AND CONTINGENCIES -- --
SHAREHOLDERS' EQUITY
Common Stock-$.01 par value; 36,800,000 shares authorized;
4,759,010 shares issued and outstanding at March 31, 2003 and
4,753,810 shares issued and outstanding at December 31, 2002 48 47
Additional paid-in capital 11,602 11,588
Retained earnings 9,943 8,986
------- -------
Total shareholders' equity 21,593 20,621
------- -------
Total liabilities and shareholders' equity $45,038 $49,513
======= =======
See accompanying condensed notes to consolidated financial statements.
2
THE SPORTSMAN'S GUIDE, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
For the Three Months Ended
March 31, 2003 and 2002
(In thousands, except per share data)
2003 2002
---- ----
Sales $43,749 $41,465
Cost of sales 29,552 28,162
------- -------
Gross profit 14,197 13,303
Selling, general and administrative expenses 12,730 12,087
------- -------
Earnings from operations 1,467 1,216
Miscellaneous income, net 29 29
------- -------
Earnings before income taxes 1,496 1,245
Income tax expense 539 461
------- -------
Net earnings $ 957 $ 784
======= =======
Net earnings per share:
Basic $ .20 $ .17
======= =======
Diluted $ .19 $ .16
======= =======
Weighted average common and common equivalent shares outstanding:
Basic 4,757 4,749
======= =======
Diluted 5,119 4,885
======= =======
See accompanying condensed notes to consolidated financial statements.
3
THE SPORTSMAN'S GUIDE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
March 31, 2003 and 2002
(In thousands)
2003 2002
---- ----
Cash flows from operating activities:
Net earnings $ 957 $ 784
Adjustments to reconcile net earnings to cash used in
operating activities:
Depreciation and amortization 332 387
Deferred income taxes 725 103
Other (2) --
Changes in assets and liabilities:
Accounts receivable 1,064 1,030
Inventory (1,935) (824)
Promotional material (1,153) 25
Prepaid expenses and other (673) (45)
Income taxes (1,851) (1,803)
Accounts payable (2,499) (3,408)
Accrued expenses (1,434) (1,038)
Customer deposits and other liabilities 371 522
-------- --------
Cash flows used in operating activities (6,098) (4,267)
Cash flows from investing activities:
Purchases of property and equipment (195) (180)
Other 6 --
--------- ---------
Cash flows used in investing activities (189) (180)
Cash flows from financing activities:
Proceeds from exercise of stock options 15 6
-------- --------
Cash flows provided by financing activities 15 6
Decrease in cash and cash equivalents (6,272) (4,441)
Cash and cash equivalents at beginning of the quarter 17,152 8,592
-------- --------
Cash and cash equivalents at end of the quarter $ 10,880 $ 4,151
======== ========
Supplemental disclosure of cash flow information
Cash paid during the quarter for:
Income taxes 1,780 2,161
See accompanying condensed notes to consolidated financial statements.
4
THE SPORTSMAN'S GUIDE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: Basis of Presentation
The accompanying consolidated financial statements are unaudited and
reflect all adjustments which are normal and recurring in nature, and
which, in the opinion of management, are necessary for a fair
presentation thereof. Reclassifications have been made to prior year
financial information wherever necessary to conform to the current year
presentation. Results of operations for the interim periods are not
necessarily indicative of full-year results.
In preparing the Company's consolidated financial statements,
management is required to make estimates and assumptions that affect
reported amounts of assets and liabilities and related revenues and
expenses. Actual results could differ from the estimates used by
management.
The accompanying consolidated financial statements include the accounts
of the company and its wholly-owned subsidiary. All significant
intercompany balances and transactions have been eliminated in
consolidation.
The Company's fiscal quarter ends on the Sunday nearest March 31 for
2003 and 2002, but for clarity of presentation, all periods are
described as if the quarter end is March 31. Fiscal first quarter 2003
and 2002 each consisted of 13 weeks.
Amounts billed to customers for shipping and handling are recorded in
revenues at the time of shipment. Sales include shipping and handling
revenues of $5.8 million and $5.6 million for the quarters ended March
31, 2003 and 2002.
Note 2: Stock Options
Stock options issued to employees are accounted for under the intrinsic
value method. No stock-based compensation cost is reflected in the net
earnings, as all options granted had an exercise price equal to the
market value of the underlying common stock on the date of grant. The
following table illustrates the effect on net earnings and earnings per
share as if the Company had applied the fair value method of accounting
for stock options (in thousands, except per share data):
Quarters Ended March 31,
------------------------
2003 2002
---- ----
Net earnings as reported ......................... $ 957 $ 784
Deduct: Total stock-based employee compensation
expense under the fair value method for all awards,
net of related tax effects ..................... (117) (59)
----- -----
Pro-forma net earnings ........................... $ 840 $ 725
Earnings Per Share:
Basic -- as reported ........................ $ .20 $ .17
Basic -- pro-forma .......................... .19 .16
Diluted -- as reported ...................... $ .19 $ .16
Diluted -- pro-forma ........................ .17 .15
Note 3: Net Earnings Per Share
The Company's basic net earnings per share amounts have been computed
by dividing net earnings by the weighted average number of outstanding
common shares. Diluted net earnings per share amounts have been
computed by dividing net earnings by the weighted average number of
outstanding common shares and common share equivalents relating to
stock options and warrants, when dilutive.
5
For the quarters ended March 31, 2003 and 2002, 361,683 and 136,167
common share equivalents were included in the computation of diluted
net earnings per share.
Options and warrants to purchase 14,950 and 450,776 shares of common
stock with a weighted average exercise price of $8.70 and $6.90 were
outstanding during the quarters ended March 31, 2003 and 2002, but were
not included in the computation of diluted net earnings per share
because the exercise price exceeded the average market price of the
common shares during the period.
Warrants issued in connection with a public offering of common stock in
1998 to purchase 100,000 shares of common stock at $8.45 expired in
February 2003.
Note 4: Legal Proceedings
In March 2003, the Company was notified by the Bureau of Industry,
United States Department of Commerce (BIS) that BIS has reason to
believe the Company violated Export Administration Regulations by
exporting optical sighting devices for firearms and associated parts to
Canada and other destinations without obtaining required authorization
from BIS. BIS asserts the Company committed 61 separate violations for
shipments from October 1999 to March 2002. The potential maximum civil
penalty is up to $11,000 for each violation. The Company is currently
in discussions with BIS to settle the matter prior to the issuance of a
charging letter. While the Company cannot predict the outcome of this
matter at this time, management does not believe the matter will have a
material adverse impact on the Company.
Note 5: Subsequent Events
On May 5, 2003, the Company announced that its board of directors
authorized a plan to repurchase up to ten percent of its outstanding
common stock in the open market or in privately negotiated transactions
over the next twelve months.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
We are a leading marketer of value priced outdoor gear and general merchandise,
with a special emphasis on outdoor clothing, equipment and footwear. We market
and sell our merchandise through main, specialty and Buyer's Club catalogs and
two e-commerce Web sites. Our catalogs as well as our Web sites offer high
quality products at low prices. Our catalogs are advertised as The "Fun-to-Read"
Catalog(R) and our primary Web site is advertised as the "Fun-to-Browse"
Website(R). Our Web sites include www.sportsmansguide.com, our online retail
store modeled on our print catalogs and www.bargainoutfitters.com, our online
liquidation outlet.
Our business was started in 1970 by Gary Olen, our Chairman. Over time, our
product offerings and marketing efforts have broadened from the deer hunter to
include those interested in pursuing and living the outdoor lifestyle in general
and the value-oriented outdoorsman in particular. In 1992, we began our value
pricing strategy of offering outdoor equipment and supplies at discount prices,
later adding government surplus, manufacturers' close-outs and other merchandise
lines. In 1994, we began to publish specialty catalogs which allowed us to
utilize a customized marketing plan to individual customer groups.
Sales generated through the Internet have grown rapidly over the last several
years. We launched our online retail store in April 1998 and began posting our
catalogs and full product offerings on the site in February 1999. Our e-commerce
offerings generated over $53.0 million in sales in 2002 compared to $1.3 million
in 1998. Product sales on the sites accounted for approximately 34% of our sales
in the first quarter of 2003 compared to less than 1% for all of 1998.
In the fall of 2000, we began to aggressively promote and sell the Buyer's Club
membership program. In addition, unique catalogs (Buyer's Club Advantage(TM))
were developed and promoted to members only allowing us to maximize sales and
profitability from our best customers.
We believe that our value pricing, specialty catalog titles, the Internet, and
Buyer's Club memberships have been important to our growth in sales and
profitability. Our sales have increased from $43 million in 1992 to
approximately $180 million in 2002.
FISCAL YEAR
Our fiscal quarter ends on the Sunday nearest March 31 for 2003 and 2002, but
for the clarity of presentation, all periods are described as if the quarter end
is March 31. Fiscal first quarter 2003 and 2002 each consisted of 13 weeks.
CRITICAL ACCOUNTING POLICIES
Sales are recorded at the time of shipment along with a provision for
anticipated merchandise returns, net of exchanges, which is recorded based upon
historical experience and current expectations. Amounts billed to customers for
shipping and handling are recorded in sales at the time of shipment.
Customers can purchase one year memberships in our Buyer's Club for a $29.99
annual fee. We also offer two year memberships for $49.99. Club members receive
merchandise discounts of 10% on regularly priced items and 5% on ammunition.
Membership fees are deferred and recognized in income as the individual members
place orders and receive discounts. Any remaining deferred membership fees are
recognized in income after the expiration of the membership.
The cost of producing and mailing catalogs is deferred and expensed over the
estimated useful lives of the catalogs. Catalog production and mailing costs are
amortized over periods ranging from four to six months from the in-home date of
the catalog with the majority of the costs amortized within the first month. We
estimate the in-home date to be one week from the known mailing date of the
catalog. The ongoing cost of developing and maintaining the customer list is
charged to operations as incurred. All other advertising costs are expensed as
incurred.
Stock options issued to employees are accounted for under the intrinsic value
method. Pro-forma disclosures as if the fair value method were used are included
in Note 2 to the Consolidated Financial Statements.
7
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, information from our
Consolidated Statements of Earnings expressed as a percentage of sales:
Quarters Ended March 31,
2003 2002
---- ----
Sales .............................................................. 100.0% 100.0%
Cost of sales ...................................................... 67.5 67.9
----- -----
Gross profit ................................................... 32.5 32.1
Selling, general and administrative expenses ....................... 29.1 29.1
----- -----
Earnings from operations ....................................... 3.4 3.0
Miscellaneous income, net .......................................... -- --
----- -----
Earnings before income taxes ................................... 3.4 3.0
Income tax expense ................................................. 1.2 1.1
----- -----
Net earnings ................................................... 2.2% 1.9%
===== =====
Quarter ended March 31, 2003 compared to quarter ended March 31, 2002
SALES. Sales for the quarter ended March 31, 2003 of $43.7 million were $2.2
million or approximately 5% higher than sales of $41.5 million during the same
period last year. The increase in sales, quarter over quarter, was primarily due
to higher sales generated from unique product offerings on the Internet.
Internet related sales continue to grow, period over period, as we continue to
make enhancements to our Web sites and implement and improve upon various
marketing and merchandising programs. For the first quarter of 2003, sales
generated through the catalogs increased slightly over the prior year's sales
level in spite of an approximate 5% planned reduction in our catalog
circulation. As of the end of the first quarter 2003, the Buyer's Club
membership had increased to approximately 329,000, up 6% over the 310,000
reported at December 31, 2002 and up approximately 22% over the membership count
one year ago.
Sales generated through the Internet for the quarter ended March 31, 2003 were
approximately 34% of total sales compared to approximately 27% of total sales
during the same period last year. Sales generated through the Internet are
defined as sales that are derived from our Web sites, catalog orders processed
online and online offers placed by telephone.
Gross returns and allowances for the quarter ended March 31, 2003 were $3.3
million or 7.0% of gross sales compared to $3.4 million or 7.5% of gross sales
during the same period last year. The decrease in gross returns and allowances,
as a percentage of sales, was primarily due to favorable trends in actual
customer return activity.
GROSS PROFIT. Gross profit for the quarter ended March 31, 2003 was $14.2
million or 32.5% of sales compared to $13.3 million or 32.1% of sales during the
same period last year. The increase in gross profit, as a percentage of sales,
was primarily from an increase in product margins from numerous product
categories offset by higher shipping costs. In the first quarter of 2003,
product margins increased, year over year, particularly in the optics, hunting
accessories, automotive, hardware and camping product categories. In comparing
the first quarter of 2003 with the same period in 2002, the increase in shipping
costs was largely due to the increase in the average weight of our outgoing
shipments to the customer and postage rate increases since last year.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the quarter ended March 31, 2003 were $12.7 million
or 29.1% of sales compared to $12.1 million or 29.1% of sales for the same
period last year. Selling, general and administrative expenses, as a percentage
of sales, were unchanged from the same quarter a year ago with the favorable
impact of higher Internet related sales and improved catalog productivity offset
by higher general and administrative expenses. The dollar increase in selling,
general and administrative expenses was primarily due to higher medical/workers
compensation expenses, increased facility costs as a result of leasing
additional, temporary warehouse space and higher business insurance costs.
Total catalog circulation during the first quarter of 2003 was 11.3 million
catalogs compared to 11.8 million catalogs during the first quarter of 2002. We
mailed nine catalog editions consisting of three main catalogs, three Buyer's
Club Advantage(TM) catalogs and three specialty catalogs during the quarter
ended March 31, 2002 compared to 11 catalog editions consisting of three main
catalogs, three Buyer's Club Advantage(TM) catalogs and five specialty catalogs
during the quarter ended March 31, 2002. Advertising expense for the quarter
ended March 31, 2003 was $6.9 million or 15.8% of sales compared to $7.0 million
or 16.9% of sales for the same period last year. The decrease in advertising
expense, as a percentage of sales,
8
compared to the same period last year was primarily due to the increase in sales
generated through the Internet and improved catalog productivity. Advertising
expense, in dollars, for the first quarter of 2003 was lower compared to the
same period last year primarily as a result of the planned reduction in catalog
circulation partially offset by an increase in commissions to Internet affiliate
partners.
EARNINGS FROM OPERATIONS. Earnings from operations for the quarter ended March
31, 2003 were $1.5 million compared to $1.2 million for the quarter ended March
31, 2002.
INTEREST EXPENSE. During the quarters ended March 31, 2003 and 2002, we did not
borrow under the revolving line of credit.
INCOME TAX. Income tax expense for the quarter ended March 31, 2003 was $539,000
compared to $461,000 for the quarter ended March 31, 2002.
NET EARNINGS. Net earnings for the quarter ended March 31, 2003 were $957,000
compared to $784,000 for the same period last year.
SEASONALITY AND QUARTERLY RESULTS
The majority of our sales historically occur during the second half of the year.
The seasonal nature of our business is due to our focus on outdoor merchandise
and related accessories for the fall, as well as winter apparel and gifts for
the holiday season. We expect this seasonality will continue in the future. In
anticipation of increased sales activity during the third and fourth quarters,
we incur significant additional expenses for hiring employees and building
inventory levels.
The following table sets forth certain unaudited financial information for each
of the quarters shown:
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
- ----------------------------------------------------------------------------------------------------------------
2003
Sales $ 43,749
Gross profit 14,197
Earnings from operations 1,467
Net earnings 957
Net diluted earnings per share .19
2002
Sales $ 41,465 $ 34,791 $ 36,746 $ 66,312
Gross profit 13,303 10,551 11,189 23,564
Earnings from operations 1,216 494 366 4,549
Net earnings 784 317 269 2,647
Net diluted earnings per share .16 .06 .05 .53
LIQUIDITY AND CAPITAL RESOURCES
We meet our operating cash requirements through funds generated from operations
and borrowings under our revolving line of credit.
WORKING CAPITAL. We had working capital of $19.1 million as of March 31, 2003
compared to $18.1 million as of December 31, 2002, with current ratios of 1.8 to
1 and 1.6 to 1, respectively. We purchase large quantities of manufacturers'
close-outs and direct imports, particularly in footwear and apparel merchandise
categories. The seasonal nature of the merchandise 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 our
working capital requirements and related carrying costs.
We offer our Buyer's Club members an installment credit plan with no finance
fees, known as the "Buyer's Club 4-Pay Plan". Each of the four consecutive
monthly installments is billed directly to customers' credit cards. We had
installment receivables of $1.4 million at March 31, 2003 compared to $2.3
million at December 31, 2002. The installment plan will continue to require the
allocation of working capital which we expect to fund from operations and
availability under our revolving credit facility.
9
We have an Amended and Restated Credit and Security Agreement with Wells Fargo
Bank Minnesota, National Association, providing a revolving line of credit up to
$15.0 million, subject to an adequate borrowing base, expiring in May 2005. The
revolving line of credit is for working capital and letters of credit. Letters
of credit may not exceed $10.0 million at any one time. Funding under the credit
facility consists of a collateral base of 45% of eligible inventory plus 80% of
eligible trade accounts receivable. Borrowings bear interest at the bank's prime
rate. The revolving credit line is collateralized by substantially all of our
assets. All borrowings are subject to various covenants. The most restrictive
covenants include a limit on quarterly measurements of year-to-date earnings
(loss), minimum gross margin percentage, maximum days inventory levels (as
defined) and maximum annual spending levels for capital assets. The agreement
also prohibits the payment of dividends to shareholders. As of March 31, 2003,
we were in compliance with all applicable covenants under the revolving line of
credit agreement. We had no borrowings against the revolving credit line as of
March 31, 2003 and December 31, 2002. Outstanding letters of credit were $1.5
million at March 31, 2003 compared to $2.6 million at December 31, 2002.
OPERATING ACTIVITIES. Cash flows used in operating activities for the quarter
ended March 31, 2003 were $6.1 million compared to $4.3 million for the same
period last year. The increase in cash flows used in operating activities was
primarily the result of higher inventory levels due to several seasonal,
opportunistic product purchases and a higher level of deferred promotional
material as a result of the timing of catalog mailings.
INVESTING ACTIVITIES. Cash flows used in investing activities during the quarter
ended March 31, 2003 were $189,000 compared to $180,000 during the same period
last year.
FINANCING ACTIVITIES. Cash flows provided by financing activities during the
quarter ended March 31, 2003 were $15,000 compared to $6,000 during the same
period last year.
We believe that cash flows from operations and borrowing capacity under our
revolving credit facility will be sufficient to fund our operations for the next
12 months.
FORWARD-LOOKING STATEMENTS
This report may contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. We use words such as "may," "believe," "estimate," "plan," "expect,"
"intend," "anticipate" and similar expressions to identify forward-looking
statements. These forward-looking statements involve risk and uncertainties.
Actual results could differ materially from those projected in the
forward-looking statements due to a number of factors, including general
economic conditions, a changing market environment for our products and the
market acceptance of our product offerings as well as the factors set forth in
Exhibit 99 "Risk Factors" to our Annual Report on Form 10-K for the year ended
December 31, 2002 filed with the Securities and Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
The Company does not have any material, near-term, market rate risk.
ITEM 4. CONTROLS AND PROCEDURES
Within 90 days prior to the filing date of this report, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Securities and Exchange Act of 1934 is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of their evaluation.
10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 2003, the Company was notified by the Bureau of Industry, United States
Department of Commerce (BIS) that BIS has reason to believe the Company violated
Export Administration Regulations by exporting optical sighting devices for
firearms and associated parts to Canada and other destinations without obtaining
required authorization from BIS. BIS asserts the Company committed 61 separate
violations for shipments from October 1999 to March 2002. The potential maximum
civil penalty is up to $11,000 for each violation. The Company is currently in
discussions with BIS to settle the matter prior to the issuance of a charging
letter. While the Company cannot predict the outcome of this matter at this
time, management does not believe the matter will have a material adverse impact
on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Our annual meeting of shareholders was held May 2, 2003, at which the following
matters were submitted to a vote of shareholders:
1. Election of six directors.
NOMINEE FOR AGAINST ABSTAIN
------- --- ------- -------
Gary Olen 3,802,256 243,515 9,605
Gregory R. Binkley 3,805,316 240,455 9,605
Charles B. Lingen 3,802,316 243,455 9,605
Leonard M. Paletz 3,801,356 244,415 9,605
William T. Sena 4,042,708 3,063 9,605
Jay A. Leitch 4,043,708 2,063 9,605
Darold D. Rath was appointed a director to fill the vacancy on the Board of
Directors created by the retirement of Vincent W. Shiel following the 2003
annual meeting.
2. Ratification of the engagement of Grant Thornton LLP as
independent certified public accountants for the Company for 2003.
FOR AGAINST ABSTAIN BROKER NON-VOTES
--- ------- ------- ----------------
4,051,196 2,430 1,750 0
ITEM 5. OTHER INFORMATION
On May 5, 2003, the Company announced that its board of directors authorized a
plan to repurchase up to ten percent of its outstanding common stock in the
open market or in privately negotiated transactions over the next twelve months.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
99 Section 906 Certifications
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
March 31, 2003.
11
SIGNATURES
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 SPORTSMAN'S GUIDE, INC.
Date: May 9, 2003 /s/ Charles B. Lingen
---------------------
Charles B. Lingen
Executive Vice President Finance and Administration/CFO
CERTIFICATIONS
I, Gregory R. Binkley, certify that:
1. I have reviewed this quarterly report on Form 10-Q of The
Sportsman's Guide, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 9, 2003
By: /s/ Gregory R. Binkley
----------------------
Gregory R. Binkley
President and CEO
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I, Charles B. Lingen, certify that:
1. I have reviewed this quarterly report on Form 10-Q of The
Sportsman's Guide, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 9, 2003
By: /s/ Charles B. Lingen
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Charles B. Lingen
Executive Vice President of
Finance & Administration/CFO
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