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80 Dick’s Sporting Goods, Inc. | 2010 Annual Report
Non-GAAP Net Income and Earnings Per Share Reconciliation
Merger and Non-cash
Integration Impairment Non-GAAP
Year Ended January 31, 2009 As Reported Costs1 Charges3 Total
(In thousands, except per share data)
Net sales $ 4,130,128 $ – $ – $ 4,130,128
Cost of goods sold, including occupancy and distribution costs 2,946,079 – – 2,946,079
Gross Profit 1,184,049 – – 1,184,049
Selling, general and administrative expenses 928,170 – – 928,170
Impairment of goodwill and other intangible assets 164,255 – (164,255) –
Impairment of store assets 29,095 – (29,095) –
Merger and integration costs 15,877 (15,877) – –
Pre-opening expenses 16,272 – – 16,272
Income From Operations 30,380 15,877 193,350 239,607
Gain on sale of asset (2,356) – – (2,356)
Interest expense 17,430 – – 17,430
Other expense 1,485 – – 1,485
Income Before Income Taxes 13,821 15,877 193,350 223,048
Provision for income taxes, excluding tax impact of non-deductible
executive separation costs 51,181 6,041 31,688 88,910
Tax impact of non-deductible executive separation costs 2,505 (2,505) – –
Provision for income taxes 53,686 3,536 31,688 88,910
Net (Loss) Income $ (39,865) $ 12,341 $ 161,662 $ $134,138
Earnings (Loss) Per Common Share:
Basic $ (0.36) $ 1.20
Diluted2 $ (0.36) $ 1.15
Weighted Average Common Shares Outstanding:
Basic 111,662 111,662
Diluted 111,662 116,650
1 Costs related to the Golf Galaxy and Chick’s Sporting Goods integration total $18.4 million, which includes $15.9 million of pre-tax “merger and integration costs” and
$2.5 million included in the Company’s provision for income taxes reflecting the “tax impact of non-deductible executive separation costs.” The net income impact of
merger and integration costs equals $12.3 million, which includes $9.8 million for the after tax amount of “merger and integration costs” and the $2.5 million included
in the Company’s provision for income taxes reflecting the “tax impact of non-deductible executive separation costs.”
2 Due to the net loss, as reported diluted earnings per share is calculated using basic weighted average common shares outstanding.
3 The goodwill impairment charge of $111,312 is not deductible for tax purposes.
The provision for income taxes for the aforementioned adjustments were calculated at 40%, which approximates the Company’s blended tax rate, excluding the impact
of the goodwill impairment charge of $111,312. Additionally, the provision for income taxes relating to merger and integration costs includes $2.5 million reflecting
the “tax impact of non-deductible executive separation costs” discussed above.