Dick's Sporting Goods 2006 Annual Report Download - page 64

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This Annual Report to Stockholders contains certain non-GAAP financial information. The adjusted financial information is
considered non-GAAP and is not preferable to GAAP financial information; however, the Company believes this information provides
additional measures of performance that the Company’s management and investors can use to compare core, operating results
between reporting periods. The Company has provided reconciliations below for EBITDA, ROIC, net income and earnings per share
adjusted for merger integration and store closing costs, the acquisition of Galyan’s on July 29, 2004, the gain on sale of investment
and stock compensation expense (for fiscal 2005).
EBITDA
EBITDA should not be considered as an alternative to net income or any other generally accepted accounting principles measure of
performance or liquidity. EBITDA, as the Company has calculated it, may not be comparable to similarly titled measures reported by
other companies. EBITDA is a key metric used by the Company that provides a measurement of profitability that eliminates the
effect of changes resulting from financial decisions, tax regulations, and capital investments.
EBITDA 2006 2005 2004 2005 Adjusted 2004 Adjusted
(dollars in thousands)
Net income $ 112,611 $72,980 $ 68,905 $ 94,548 $ 74,518
Provision for income taxes 75,074 48,654 45,936 63,032 49,678
Interest expense, net 10,025 12,959 8,009 12,959 8,009
Depreciation and amortization 54,929 49,861 37,621 48,992 33,594
Stock option expense (fiscal 2005) –– – (22,473) –
EBITDA $ 252,639 $184,454 $ 160,471 $ 197,058 $ 165,799
GAAP EBITDA % increase over GAAP Prior Year 37% 15%
GAAP EBITDA % increase over Adjusted Prior Year 28% 19%
Results adjusted for
merger integration,
Add: gain on sale
Merger integration Less: Less: of investment
Year Ended and store Gain on sale Stock option and stock
EBITDA Fiscal 2005 (Adjusted)1January 28, 2006closing costs of investment expense option expense
Net income $72,980 $22,674 $ 1,106 $–$94,548
Provision for income taxes 48,654 15,116 738 – 63,032
Interest expense, net 12,959–––12,959
Depreciation and amortization 49,861(869) – – 48,992
Stock option expense –– – 22,473 (22,473)
EBITDA $184,454$ 36,921 $ 1,844 $22,473 $ 197,058
1Presents EBITDA adjusted for merger integration and store closing costs, gain on sale of investment and the effect of expensing stock option expense as if we had
applied SFAS 123, “Accounting for Stock-Based Compensation” in fiscal 2005.
Results adjusted
Add: for merger
Merger integration Less: integration and
Year Ended and store Gain on sale gain on sale
EBITDA Fiscal 2004 (Adjusted)2January 29, 2005 closing costs of investment of investment
Net income $ 68,905 $ 12,202 $ 6,589 $ 74,518
Provision for income taxes 45,936 8,134 4,392 49,678
Interest expense, net 8,009 – – 8,009
Depreciation and amortization 37,621 (4,027) – 33,594
EBITDA $ 160,471 $ 16,309 $ 10,981 $ 165,799
2Presents EBITDA adjusted for merger integration and store closing costs and gain on sale of investment.
DICK’S SPORTING GOODS, INC. 2006 ANNUAL REPORT
62
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES