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TSA Earned $14.6 Million In Q4

MARCH 18, 2004 -- The Sports Authority's Q4 net income of $14.6 million, or $0.55 per diluted share, includes the effect of after-tax, merger integration costs of $13.7 million, or $0.52 per diluted share. Excluding merger integration costs, Q4 net income was $28.3 million, or $1.08 per diluted share, compared with $1.03 per diluted share in the prior year's quarter, as reported by the former Gart Sports Co. on a stand-alone basis, and pro-forma combined net income for the prior year's quarter of $0.77 per diluted share.

Total sales for the 13 weeks ended January 31, 2004 increased 125% to $712.0 million compared to $316.8 million in the prior year's Q4, as reported by the former Gart Sports on a stand-alone basis. Q4 comp-store sales for the combined company increased 0.2%.

TSA opened six stores during Q4, for a total of 14 new store openings in 2003. It also closed five former TSA and two former Gart Sports stores during the quarter to arrive at a total number of stores in operation as of January 31, 2004 of 384 stores in 45 states.

Doug Morton, CEO, stated, "We are pleased with our fourth quarter results given the on-going efforts to integrate the two companies. Our results were primarily driven by strong sales in hunting, ski apparel, snowboards and footwear. We are also very encouraged with the initial results realized from the introduction of an enhanced offering of winter product in the northeast."

Net income for the 52 weeks ended January 31, 2004, including the effect of after-tax, merger integration costs of $26.7 million, or $1.37 per diluted share, and income related to non-recurring events and a related tax benefit of $1.9 million, or $0.10 per diluted share, totaled $16.4 million, or $0.84 per diluted share. Excluding these items, net income was $41.2 million, or $2.11 per diluted share, for the 52 weeks ended January 31, 2004 compared with $1.86 per diluted share in the prior year's comparable period as reported by the former Gart Sports on a stand-alone basis.

Total sales for the 52 weeks ended January 31, 2004 increased 67% to $1,760.4 million compared with $1,051.2 million in the prior year's 52 weeks as reported by the former Gart Sports on a stand-alone basis. Year-to-date comp-store sales decreased 0.7%, which represents a year-over-year comparison of the combined company results for Q3 and Q4, and the former Gart Sports on a stand-alone basis for the first six months.

It is forecasting sales in Q1 to be in the range of $585 to $590 million and comp-store sales to increase approximately 2%. TSA expects to report net income of $8.7 to $9.0 million, and diluted EPS of $0.33 to $0.34, based on 26.4 million diluted shares outstanding in the quarter. All earnings estimates are exclusive of merger integration costs. TSA expects to open seven new stores during the quarter, which will be offset by a like number of closures related to the ongoing merger integration process.

For fiscal year 2004, the company expects sales to be approximately $2.6 billion and comp-store sales to increase approximately 2%. TSA expects to report net income in the range of $68.4 to $69.7 million, and diluted EPS between $2.57 to $2.62, based on an estimated 26.6 million diluted shares outstanding. All earnings estimates are exclusive of merger integration costs. TSA expects to open 23 new stores during the year and expects to close 15 stores. The number of stores in operation at the end of fiscal 2004 is expected to be 392.

Morton concluded, "The merger integration process is progressing well and we continue to be optimistic with the level of synergies that will be realized from combining the two companies. We remain enthusiastic about the prospects for our new company as we move ahead with a stronger operating platform for growth."


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Copyright 2004 Sporting Goods Business



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