Dick's Sporting Goods 2003 Annual Report Download - page 5

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We closed the year with a strong balance sheet.
At year-end, we had no outstanding borrowings on
our $180 million revolving line of credit, a $94 million
cash balance, and inventories were down 6% year-
over-year on a per-store and per-square-foot basis.
As a result, we generated a return on invested capital
of 11.8% and inventory turnover of 3.69x, both key
metrics by which we measure our performance.
Business Development
We measure ourselves not only against sporting
goods retailers, but also against best-in-class
specialty retailers in other sectors, and we will
always look for room to improve. Our performance
in 2003 simply raises the bar for future results, and
we look forward to that challenge. In 2004 and
beyond, you can expect more of what has made us
successful to date. Our objective is to capture an
even larger portion of what is still a very fragmented
$46 billion sporting goods marketplace.
We’re uniquely positioned to capitalize on the
opportunities for growth within our industry. In
addition to improving all that we do within our
existing operations, we will continue to open new
stores in geographically contiguous markets as the
foundation of our growth strategy. We also expect
to expand and deepen our private label offerings,
which offer value and differentiation to our customers
and generate higher margins for our business.
Teamwork
We are constantly working to position ourselves
for continued growth. In 2003 we added a number
of key members to what was already a strong and
experienced management team. Bill Newlin
(Executive Vice President & Chief Administrative
Officer), Bill Dandy (Senior Vice President & Chief
Marketing Officer) and Jerel Hollens (Senior Vice
President— Supply Chain) are all welcomed
additions. These experienced managers will
challenge many components of our business, from
our merchandising assortment to our marketing
strategy to our administrative processes.
As we begin 2004, we have already put in place
a number of initiatives to position ourselves for
what we expect will be another challenging, but
rewarding, year. We improved an already strong
balance sheet by completing an opportunistic
financing in the form of convertible notes in
February 2004. Net proceeds totaled $146 million
after the net cost of a hedge and warrant which
had the effect of increasing the conversion
premium to 100% or $56.16 post-split. Proceeds
will be used for general corporate purposes, which
may include investing in new stores, accelerating
store growth and acquisitions of complementary
companies or businesses.
We are committed to delivering value to our
customers, and returns to our shareholders.
Most importantly, our continued success is an
expression of the joint efforts and ideas of many
stakeholders — our associates, our customers,
and our vendors. On behalf of our management
team, we thank each of you for your support,
and we once again look forward to achieving
new milestones in the year ahead.
Edward W. Stack
Chairman and Chief Executive Officer
Management Team (from left to right)
Joseph J. Queri, Jr. Senior Vice President — Real Estate
Jeffrey R. Hennion Senior Vice President — Strategic Planning
Lee Belitsky Vice President — Controller & Treasurer
Gary M. Sterling Senior Vice President — Merchandising
Bill Dandy Senior Vice President & Chief Marketing Officer
Jerel Hollens Senior Vice President — Supply Chain
William J. Colombo President & Chief Operating Officer
Joseph H. Schmidt Vice President — Store Operations
Edward W. Stack Chairman & Chief Executive Officer
Michael F. Hines Executive Vice President & Chief Financial Officer
Eileen Gabriel Senior Vice President & Chief Information Officer
William R. Newlin Executive Vice President & Chief Administrative Officer
DKS Stock Price Performance 2003
(Adjusted for two-for-one stock split, effective April 2004)