Dick's Sporting Goods 2012 Annual Report Download

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2012 ANNUAL REPORT
1

Table of contents

  • Page 1
    2012 ANNUAL REPORT 1

  • Page 2
    ... 444 Same Store Sales Increase Store Count (Dick's Sporting Goods stores) 1 Adjusted amounts exclude certain non-recurring, infrequent or unusual items. The non-GAAP amounts are provided within Reg. G reconciliations on the Company's website at http://www.DicksSportingGoods.com/investors. All...

  • Page 3
    ... value. CONSISTENT STORE GROWTH DICK'S Sporting Goods Stores 2005 2006 2007 2008 2009 2010 2011 2012 255 294 355 398 419 444 480 518 3 8 4 21 31 51 !3 2 41 @3 7 !1 2 !7 1 #7 9 6 71 !4 1 3 5 !8 6 DICK'S Sporting Goods Stores 518 Golf Galaxy Stores Store Support Center Distribution Centers...

  • Page 4
    ... per diluted share of $2.02 in 2011. Operating margin grew 72 basis points for the 53 weeks in 2012. Our overall same-store sales grew 4.3 percent, reflecting increases across both our DICK'S Sporting Goods and Golf Galaxy chains, as well as in our eCommerce channel. We also continued to maintain...

  • Page 5
    ... and a mobile app for smartphone users + Relocated, expanded and repositioned a Golf Galaxy store, with elevated experiential shopping + Opened two new True Runner specialty concept stores + Opened a new 624,000 square foot distribution center that has increased our store support capability to...

  • Page 6
    ...made our eCommerce business more accessible by launching a comprehensive mobile application that enables consumers to use their smartphones to locate our stores, make purchases, access the benefits of our ScoreCard Rewards Program and earn rewards for engaging with the DICK'S Sporting Goods brand on...

  • Page 7
    ... the premium vendor shop environment in our stores. DICK'S value proposition includes in-store access to specialized equipment services across several different sporting goods categories, from bicycle inspections to golf club repairs to baseball glove steaming. Our service platform gives us a clear...

  • Page 8
    ... pack. In 2012, we accelerated our research effort by opening two True Runner concept stores. In 2013, we plan to open additional True Runner locations and to introduce a Field & Stream store exclusively focused on hunting, fishing and camping. These highly specialized concept stores enable us to...

  • Page 9
    ...with the ability to make purchases, locate our stores and access ScoreCard Rewards benefits right from a smartphone. We continue to focus on growing our eCommerce business in ways that create value for our customers while improving our profitability and inventory management. In 2013, we plan to test...

  • Page 10
    8

  • Page 11
    You step out onto the field. You get that familiar feeling. The anticipation, the excitement. It's time. Time to prove you're ready. Time to live up to your potential. Time to compete. When you walk into DICK'S, it's that same feeling. The feeling that you're about to get better. One step closer to ...

  • Page 12
    ... can be accessed from within our store locations, as well as via mobile technology. The result is an ultimate sporting goods destination store that enables today's athletes and outdoor enthusiasts to get the products, services and knowledge they need when, where and how they want. DICK'S TRULY HAS...

  • Page 13
    ... EXPERIENCE - WHETHER THEY STOP BY ONE OF OUR STORES OR VISIT OUR GROWING eCOMMERCE SITE. UNPARALLELED OUR EXCEPTIONAL SERVICE CULTURE IS ROOTED IN EMPLOYING HIGH-CALIBER SALES ASSOCIATES, INCLUDING ACCOMPLISHED ATHLETES AND SPORTS ENTHUSIASTS WHO TRULY LIVE THE DICK'S SPORTING GOODS BRAND. 11

  • Page 14
    ... equipment for their needs but also guide them in leveraging our on-site amenities, including golf simulators and putting greens where they can test potential purchases and receive custom fittings. We also employ Certified Club Technicians who offer a wide range of specialized services, such as club...

  • Page 15
    ...-performance equipment isn't just a luxury - it's often vital to success. The Lodge at DICK'S stocks authentic merchandise optimized for a range of outdoor pursuits, from hunting, camping and fishing, to skiing, kayaking and paddle boarding. We feature an extensive line of tried-and-true products...

  • Page 16
    ... bicycles, accessories and riding apparel from trusted manufacturers like Diamondback, Yakima, Pearl Izumi, Giro and Bell, as well as our Nishiki brand. We also employ a team of certified bike technicians who provide on-site access to an extensive menu of services, including custom fittings, safety...

  • Page 17
    ... what local teams need to compete. We do our part to support them by donating equipment to area coaches, offering exclusive team discounts, hosting player registrations and instructional clinics, and providing in-store access to a wide selection of value-added services - from steaming new baseball...

  • Page 18
    ... & Stream brand. We staff our Footwear stores with knowledgeable sales associates who are specially trained to identify the best shoes for every need, provide gait analysis for our customers and ensure the precision fit necessary for peak performance. OUR SHARED-SERVICE CONCEPT GIVES CUSTOMERS THE...

  • Page 19
    ...Chip and The North Face. Our Athletic Apparel sales associates are trained to understand the requirements of a broad range of sports, as well as the key features and benefits of today's high-performance fabrics so they can guide customers to make the right purchase every time. BATTLING THE ELEMENTS...

  • Page 20
    ...with a full range of value-added services. Every store is staffed by highly knowledgeable sales associates, including LPGA and PGA pros who have first-hand knowledge of the newest equipment, as well as experience playing local courses. We opened our first True Runner store in 2012 to meet the needs...

  • Page 21
    ...DICK'S SPORTING GOODS COMMUNITY MARKETING PROGRAM Dick Stack, founder of DICK'S Sporting Goods, believed that sports play a vital role in teaching our children fundamental values like a strong work ethic, teamwork and good sportsmanship. He also understood that supporting the organizations that make...

  • Page 22
    ... 2012 Opened 38 new DICK'S Sporting Goods stores, maintaining an eight percent growth rate Enhanced eCommerce platform by launching a ship-from-store capability and a mobile application for smartphone users Introduced new inventory management technologies to improve merchandise assortment planning...

  • Page 23
    ..., Coraopolis, Pennsylvania 15108 (724) 273-3400 (Address of principal executive offices, zip code, telephone number) Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, $0.01 par value Name of Each Exchange on which Registered The New York Stock Exchange...

  • Page 24
    ... and Procedures ...Item 9B. Other Information ...Part III ...Item 10. Directors, Executive Officers and Corporate Governance ...Item 11. Executive Compensation ...Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters ...Item 13. Certain Relationships...

  • Page 25
    ...-looking statements address, among other things, our expectations, our growth strategies, including our plans to open new stores, our efforts to increase profit margins and return on invested capital, plans to grow our private brand business, projections of our future profitability, results of...

  • Page 26
    ...with our information systems; Any serious disruption at our distribution facilities; Performance of professional sports teams, professional team lockouts or strikes, or retirement or scandal involving sports superstars; The seasonality of our business; Regional risks because our stores are generally...

  • Page 27
    ...our name to Dick's Sporting Goods, Inc. Our executive office is located at 345 Court Street, Coraopolis, Pennsylvania 15108 and our phone number is (724) 273-3400. Our website is located at www.DicksSportingGoods.com. The information on our website does not constitute a part of this Annual Report on...

  • Page 28
    ... 2013, giving us a new growth path for our Golf Galaxy brand. Strategic Marketing. Our historical marketing strategy was designed to promote our selection of brand name products at competitive prices and consisted largely of newspaper advertising supplemented by direct mail and seasonal use of local...

  • Page 29
    ... 2012 2010 53% 28% 18% 1% 100% Includes items such as sporting goods equipment, fitness equipment, golf equipment and hunting and fishing gear. Includes the Company's non-merchandise sales categories, including in-store services and shipping revenues. (2) Selling Channels We sell our products...

  • Page 30
    ... sell and service bicycles and certified fitness trainers to provide advice on the best fitness equipment for our customers. As of February 2, 2013, we employed 568 PGA and LPGA professionals in our Dick's golf departments and our Golf Galaxy stores. As of February 2, 2013, we also employed 607 bike...

  • Page 31
    ...and improves inventory productivity. In fiscal 2012, our eCommerce business accounted for approximately 5% of our total sales. Marketing and Advertising Our marketing program is designed to build loyalty for the Dick's brand while promoting our broad assortment of brand name sporting goods equipment...

  • Page 32
    ...information related to the various components of sales, inventory and margin from department to SKU level. Our end-to-end supply chain management suite of software applications is from Manhattan Associates and operates our four distribution centers from the central computing complex in our corporate...

  • Page 33
    ... at the large format sporting goods stores and traditional sporting goods stores. Mass Merchants These stores generally range from 50,000 to over 200,000 square feet and are primarily located in shopping centers, freestanding sites or regional malls. Sporting goods merchandise and apparel represent...

  • Page 34
    ... to 1990, he held various positions in store operations for Ames Department Stores, Inc. Timothy E. Kullman - 57, joined Dick's Sporting Goods as Senior Vice President and Chief Financial Officer in April 2007 and was promoted to Executive Vice President - Finance, Administration and Chief Financial...

  • Page 35
    ... joined Dick's Sporting Goods in 2004 as Vice President, Planning and Allocation. Ms. Willoughby was promoted to Senior Vice President, Supply Chain in 2009 and Senior Vice President - eCommerce in 2010. Prior to joining Dick's Sporting Goods, Ms. Willoughby was employed by Kohl's Department Store...

  • Page 36
    ..., traditional and specialty formats, mass merchants, and catalog, Internet-based and direct-sell retailers. We compete principally based on customer service, store location and appearance, and assortment, quality and availability of merchandise. Pressure from our competitors could require us to...

  • Page 37
    ..., mobile communications and the provision of online payment services. Unfavorable changes to regulations in these areas could harm our business. Lack of available retail store sites on terms acceptable to us, rising real estate prices and other costs and risks relating to new store openings could...

  • Page 38
    ...a single third party to operate and host our DicksSportingGoods.com eCommerce website and provide related fulfillment and customer service. We rely on that party's operational, privacy and security procedures and controls to operate and host our Dick's eCommerce business. Failure by such third party...

  • Page 39
    ... protection, advertising, employment, intellectual property, tort and other matters. We may also be subject to lawsuits relating to the design, manufacture or distribution of our private brand products. In addition, although we do not sell hand guns, assault weapons or automatic firearms, we do sell...

  • Page 40
    ... Chairman and Chief Executive Officer. Mr. Stack also holds a majority of the voting power of our capital stock, and has been operating the Company since 1984. Mr. Stack possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company and its businesses. 18

  • Page 41
    ... our stores. We currently operate a 725,000 square foot distribution center in Plainfield, Indiana, a 657,000 square foot distribution center near Atlanta, Georgia, a 601,000 square foot distribution center in Smithton, Pennsylvania and a 624,000 square foot distribution center in Goodyear, Arizona...

  • Page 42
    ... we use sports superstars to market our products and advertise our stores, the retirement of such individuals or scandals they may be implicated in could negatively impact our financial results. The relative seasonality of our operations, along with the current geographic concentrations of our Dick...

  • Page 43
    ... of approximately 670,000 square feet of office space. We currently lease a 725,000 square foot distribution center in Plainfield, Indiana, a 657,000 square foot distribution center near Atlanta, Georgia and a 601,000 square foot distribution center in Smithton, Pennsylvania. The terms of these...

  • Page 44
    ... Arkansas California Colorado Connecticut Delaware Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina Ohio Oklahoma Oregon Pennsylvania...

  • Page 45
    ... DISCLOSURES Not applicable. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION AND DIVIDEND POLICY The shares of Dick's Sporting Goods, Inc. common stock are listed and traded on the New York Stock Exchange...

  • Page 46
    ... years 2012, 2011, 2010, 2009 and 2008 presented below under the caption ''Store Data'' have been derived from internal records of our operations. Our fiscal year consists of 52 or 53 weeks, ends on the Saturday nearest to the last day in January and is referenced by the calendar year ending closest...

  • Page 47
    ... Diluted Store Data: Same store sales increase (decrease) (8) Number of stores at end of period Total square footage at end of period Net sales per square foot (9) Other Data: Gross profit margin Selling, general and administrative expenses as a percentage of net sales Operating margin Inventory...

  • Page 48
    ...Overview Dick's is an authentic full-line sports and fitness omni-channel retailer offering a broad assortment of high quality, competitively priced brand name sporting goods equipment, apparel and footwear in a specialty store environment. The Company also owns and operates Golf Galaxy, LLC, a golf...

  • Page 49
    ..., sales per square foot, store operating contribution margin and store cash flow. New store productivity compares the sales increase for all stores not included in the same store sales calculation with the increase in square footage. Executive Summary á"¢ á"¢ á"¢ á"¢ Net income for the 53 weeks...

  • Page 50
    ... 27 (17) (8) 10 18 (8) Basis Point Increase / (Decrease) in Percentage of Net Sales from Prior Year 2010-2011 N/A (85) 85 (115) 6 194 (27) (2) 5 218 86 132 2012 Net sales Cost of goods sold, including occupancy and distribution costs (2) Gross profit Selling, general and administrative expenses Pre...

  • Page 51
    ... at Dick's Sporting Goods stores, a 5.5% increase at Golf Galaxy and a 48.5% increase in the Company's eCommerce business. The inclusion of the eCommerce business resulted in an increase of approximately 166 basis points to the Company's consolidated same store sales calculation for fiscal 2012. The...

  • Page 52
    ... of one Golf Galaxy store in fiscal 2012 compared to the opening of 36 new Dick's stores as well as the relocation of one Golf Galaxy store in fiscal 2011. Pre-opening expenses in any year fluctuate depending on the timing and number of store openings and relocations. Gain on Sale of Investment...

  • Page 53
    ... 0.8% increase in Dick's Sporting Goods stores, a 4.3% increase in Golf Galaxy and a 36.4% increase in eCommerce. The inclusion of the eCommerce business resulted in an increase of approximately 100 basis points to the Company's consolidated same store sales calculation for fiscal 2011. The increase...

  • Page 54
    ...one Golf Galaxy store in fiscal 2011 compared to the opening of 26 new Dick's stores and two new Golf Galaxy stores and the relocation of two Dick's stores in fiscal 2010. Pre-opening expenses in any year fluctuate depending on the timing and number of store openings and relocations. Gain on Sale of...

  • Page 55
    ... its plan to open 38 new Dick's stores, relocate five Dick's stores and reposition one Golf Galaxy store during fiscal 2012, all of which the Company leased. Additionally, the Company completed construction of its 624,000 square foot distribution center in Goodyear, Arizona during fiscal 2012. The...

  • Page 56
    ...one Dick's store during fiscal 2013. The Company also expects to open one new Golf Galaxy store and relocate one Golf Galaxy store in fiscal 2013, both of which will be in a new, larger format. The Company plans to lease all of these stores. The Company expects to open two new True Runner stores and...

  • Page 57
    ... the Company's new distribution center in Goodyear, Arizona and investments in existing store locations and information systems. The Company opened 38 Dick's stores, relocated five Dick's stores and relocated one Golf Galaxy store during fiscal 2012, compared to opening 36 Dick's stores, remodeling...

  • Page 58
    ...February 2, 2013 relate to operating lease obligations, future minimum guaranteed contractual payments and letters of credit. The Company has excluded... Operating lease obligations (see Note 8) Unrecognized tax benefits (b) Naming rights, marketing, and other commitments (see Note 14) Future minimum...

  • Page 59
    ... are involved in preparing its consolidated financial statements. Inventory Valuation The Company values inventory using the lower of weighted average cost or market method. Market price is generally based on the current selling price of the merchandise. The Company regularly reviews inventories to...

  • Page 60
    ... current and future store performance, management periodically evaluates the need to close underperforming stores. Reserves are established when the Company ceases to use the location for the present value of any remaining operating lease obligations, net of estimated sublease income. If the timing...

  • Page 61
    ... of operations, financial condition or liquidity in future periods. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk The Company maintains a revolving credit facility to support potential liquidity and capital needs. Our interest rate under the Credit Agreement...

  • Page 62
    ... The Company's business is subject to seasonal fluctuations. Significant portions of the Company's net sales and profits are realized during the fourth quarter of the Company's fiscal year, which is due in part to the holiday selling season and in part to sales of cold weather sporting goods and...

  • Page 63
    ...Based on this evaluation, management concluded that the Company's internal control over financial reporting was effective as of February 2, 2013. Deloitte & Touche LLP, an independent registered public accounting firm, has issued an attestation report on the Company's internal control over financial...

  • Page 64
    ... REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Dick's Sporting Goods, Inc. Pittsburgh, Pennsylvania We have audited the internal control over financial reporting of Dick's Sporting Goods, Inc. and subsidiaries (the ''Company'') as of February 2, 2013, based...

  • Page 65
    ...The Dick's Sporting Goods Code of Business Conduct and Ethics'' that applies to all of its employees, including Executive Officers, and the Board of Directors, the complete text of which is available through the Investor Relations section of the Company's website at http://www.dickssportinggoods.com...

  • Page 66
    ... ''Certain Relationships and Transactions with Related Persons'' and ''Election of Directors - How does the Board determine which directors are considered independent?'' in the Company's 2013 Proxy Statement. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item is...

  • Page 67
    ...Annual Report on Form 10-K. Other schedules have not been included because they are not applicable or because the information is included elsewhere in this report... Annual Report on Form 10-K. Certain Exhibits are incorporated by reference from documents previously filed by the Company with the SEC ...

  • Page 68
    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm Consolidated Statements of Income for the Fiscal Years Ended February 2, 2013, January 28, 2012, and January 29, 2011 Consolidated Statements of Comprehensive Income for the Fiscal Years Ended ...

  • Page 69
    ... PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Dick's Sporting Goods, Inc. Pittsburgh, Pennsylvania We have audited the accompanying consolidated balance sheets of Dick's Sporting Goods, Inc. and subsidiaries (the ''Company'') as of February 2, 2013 and January 28, 2012...

  • Page 70
    ... 182,077 1.57 1.50 February 2, 2013 Net sales Cost of goods sold, including occupancy and distribution costs GROSS PROFIT Selling, general and administrative expenses Pre-opening expenses INCOME FROM OPERATIONS Impairment of available-for-sale investments Gain on sale of investment Interest expense...

  • Page 71
    ...in thousands) Fiscal Year Ended January 28, January 29, 2012 2011 $ 263,906 2,119 (8,738) (4) $ 257,283 $ $ 182,077 (250) 18 181,845 February 2, 2013 NET INCOME OTHER COMPREHENSIVE LOSS Unrealized (loss) gain on securities available-for-sale, net of tax Reclassification adjustment for impairment of...

  • Page 72
    DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share data) February 2, 2013 ASSETS CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Income taxes receivable Inventories, net Prepaid expenses and other current ...

  • Page 73
    ... taxes of $11 Unrealized loss on securities available-for-sale, net of taxes of $148 BALANCE, January 29, 2011 Exercise of stock options Restricted stock vested Minimum tax withholding requirements Net income Stock-based compensation Total tax benefit from exercise of stock options Foreign currency...

  • Page 74
    ...,230 February 2, 2013 CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Impairment of available-for-sale investments Deferred income taxes Stock-based compensation Excess tax benefit from...

  • Page 75
    ..., competitively priced brand name sporting goods equipment, apparel and footwear in a specialty store environment. Fiscal Year - The Company's fiscal year ends on the Saturday closest to the end of January. Fiscal years 2012, 2011 and 2010 ended on February 2, 2013, January 28, 2012 and January 29...

  • Page 76
    ... fair value. A reporting unit is the operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by management. Intangible Assets - Intangible assets consist primarily of trademarks and acquired trade names...

  • Page 77
    ... - Selling, general and administrative expenses include store and field support payroll and fringe benefits, advertising, bank card charges, information systems, marketing, legal, accounting, other store expenses and all expenses associated with operating the Company's corporate headquarters. 55

  • Page 78
    ...characteristics of the store formats, the similar nature of the products sold, the type of customer, and method of distribution, the Company's operating segments are aggregated within one reportable segment. The following table sets forth the approximate amount of net sales attributable to hardlines...

  • Page 79
    ... 15, 2011 with prospective application required. The Company adopted ASU 2011-04 during the first quarter of 2012. The adoption of this guidance did not have a significant impact on the Company's Consolidated Financial Statements. Recently Issued Accounting Pronouncements - In February 2013, the...

  • Page 80
    ... the Company's intangible assets in fiscal 2012, 2011 and 2010. On March 30, 2012, the Company purchased the intellectual property rights to the Top-Flite brand from Callaway Golf Company for $20.0 million. The intellectual property rights acquired include all Top-Flite trademarks and service marks...

  • Page 81
    DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The components of intangible assets were as follows (in thousands): 2012 Gross Accumulated Amount Amortization Trademarks (indefinite-lived) Trade name (indefinite-lived) Customer list Favorable ...

  • Page 82
    ... property and equipment Accrued sales tax Other accrued expenses Total accrued expenses 6. Deferred Revenue and Other Liabilities Deferred revenue and other liabilities consist of the following as of the end of the fiscal periods (in thousands): 2012 Current: Deferred gift card revenue Deferred...

  • Page 83
    DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 7. Debt The Company's outstanding debt at February 2, 2013 and January 28, 2012 was as follows (in thousands): 2012 Revolving line of credit Capital leases Financing leases Other debt Total debt ...

  • Page 84
    ... amounts. Rent expense under these operating leases was approximately $388.3 million, $360.3 million and $347.4 million for fiscal 2012, 2011 and 2010, respectively. The Company entered into sale-leaseback transactions related to store fixtures, buildings and equipment that resulted in cash receipts...

  • Page 85
    ... Compensation and Employee Stock Plans The Company has the ability to grant restricted shares of common stock and options to purchase common stock under the Dick's Sporting Goods, Inc. 2012 Stock and Incentive Plan (the ''Plan''). As of February 2, 2013, shares of common stock available for future...

  • Page 86
    ... used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and the Company's experience. These options are expensed on a straight-line basis over the vesting period, which is considered to be the requisite service period. Compensation...

  • Page 87
    ...,380 103,516 156,272 The aggregate intrinsic value reported in the table above is based on the Company's closing stock prices for the last business day of the period indicated. The total intrinsic value for stock options exercised during 2012, 2011 and 2010 was $186.5 million, $61.3 million and $72...

  • Page 88
    ... on the third anniversary of the date of grant, subject to the employee's continuing employment as of that date. The restricted stock activity from January 30, 2010 through February 2, 2013 is presented in the following table: Weighted Average Grant Date Fair Value $ 19.71 26.48 23.12 24.11 39.54 27...

  • Page 89
    DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) In March 2010, the Company issued a special grant of performance-based restricted stock in support of the Company's long-term strategic initiatives which vests, in whole or in part, at the end of a ...

  • Page 90
    ... fiscal periods ended (in thousands): 2012 Store closing expense Stock-based compensation Capital loss carryforward Employee benefits Other accrued expenses not currently deductible for tax purposes Deferred rent Insurance Gift cards Deferred revenue currently taxable Non income-based tax reserves...

  • Page 91
    ... February 2, 2013, January 28, 2012 and January 29, 2011, the Company recorded $0.8 million, $1.3 million and $1.2 million, respectively, for the accrual of interest and penalties in its Consolidated Statements of Income. The Company has federal, state and local examinations currently ongoing. It...

  • Page 92
    ... Revenue Code, covers regular status full-time hourly and salaried employees as of their date of hire and part-time regular employees that have worked 1,000 hours or more in a year and attained 21 years of age. Under the terms of the retirement savings plan, the Company may make a discretionary...

  • Page 93
    .... The aggregate payments made under these agreements requiring minimum guaranteed contractual amounts were $17.8 million, $9.0 million and $11.4 million during fiscal 2012, 2011 and 2010, respectively. The Company also has certain naming rights, marketing and other commitments extending through 2026...

  • Page 94
    ... JJB Sports for impairment during the fiscal quarter ended July 28, 2012. Declines in the fair value of available-for-sale debt securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses...

  • Page 95
    ... cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated book value due to the short-term nature of these instruments at both February 2, 2013 and January 28, 2012. The Company uses quoted prices in active markets to determine the fair value of the...

  • Page 96
    ... business on March 8, 2013. On March 7, 2013, our Board of Directors authorized a five-year share repurchase program of up to $1 billion of the Company's common stock. The Company currently expects to finance the repurchases from cash on hand and if necessary, availability under its Credit Agreement...

  • Page 97
    ...duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DICK'S SPORTING GOODS, INC. (Registrant) By: /s/ TIMOTHY E. KULLMAN Timothy E. Kullman Executive Vice President - Finance, Administration and Chief Financial Officer Date: March 22, 2013 Pursuant to the...

  • Page 98
    ... REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Dick's Sporting Goods, Inc. Pittsburgh, Pennsylvania We have audited the consolidated financial statements of Dick's Sporting Goods, Inc. and subsidiaries (the ''Company'') as of February 2, 2013 and January 28, 2012...

  • Page 99
    ... of Period Fiscal 2010 Inventory reserve Allowance for doubtful accounts Reserve for sales returns Fiscal 2011 Inventory reserve Allowance for doubtful accounts Reserve for sales returns Fiscal 2012 Inventory reserve Allowance for doubtful accounts Reserve for sales returns Allowance for deferred...

  • Page 100
    ...executive officers, directors and employees under Registrant's Amended and Restated 2002 Stock and Incentive Plan Option Agreement between Registrant and Edward W. Stack Amended and Restated Lease Agreement, originally dated February 4, 1999, for distribution center located in Smithton, Pennsylvania...

  • Page 101
    ...Golf Galaxy, Inc. 2004 Stock Incentive Plan 10.11 Offer Letter between Dick's Sporting Goods, Inc. and Timothy E. Kullman, dated February 5, 2007, as amended by letter dated February 9, 2007 First Amendment to Registrant's Supplemental Smart Savings Plan Registrant's Amended and Restated Officers...

  • Page 102
    ... joint lead arrangers and joint book managers. Offer Letter between the Company and Lauren R. Hobart, Senior Vice President and Chief Marketing Officer Lease Agreement originally dated June 25, 2007, for distribution center located in East Point, Georgia, between Duke Realty Limited Partnership and...

  • Page 103
    ... Registrant's 2012 Stock and Incentive Plan Form of Stock Option Award Agreement granted under Registrant's 2012 Stock and Incentive Plan Retention Agreement between the Company and Timothy E. Kullman, Executive Vice President- Finance, Administration and Chief Financial Officer Subsidiaries Consent...

  • Page 104
    ... Filed herewith Attached as Exhibits 101 to this report are the following financial statements from the Company's Annual Report on Form 10-K for the year ended February 2, 2013 formatted in XBRL (''eXtensible Business Reporting Language''): (i) the Consolidated Statements of Income, (ii) the...

  • Page 105
    ...'s of Virginia, Inc., a Virginia corporation Galyan's Nevada, Inc., a Nevada corporation Golf Galaxy, LLC, a Minnesota limited liability company Golf Galaxy GolfWorks, Inc., an Ohio corporation Criterion Golf Technology, Inc., a Canada corporation Chick's Sporting Goods, LLC, a California limited...

  • Page 106
    ... of Dick's Sporting Goods, Inc. and subsidiaries' internal control over financial reporting, appearing in this Annual Report on Form 10-K of Dick's Sporting Goods, Inc. and subsidiaries for the fiscal year ended February 2, 2013. /s/ Deloitte & Touche LLP Pittsburgh, Pennsylvania March 22, 2013 84

  • Page 107
    ... fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 22, 2013 b) /s/ EDWARD W. STACK Edward W. Stack Chairman and Chief Executive Officer Dick's Sporting Goods, Inc. 85

  • Page 108
    ... involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 22, 2013 b) /s/ TIMOTHY E. KULLMAN Timothy E. Kullman Executive Vice President - Finance, Administration and Chief Financial Officer Dick's Sporting Goods...

  • Page 109
    ... with the Annual Report on Form 10-K of Dick's Sporting Goods, Inc. (the ''Company'') for the period ended February 2, 2013, as filed with the Securities and Exchange Commission on the date hereof (the ''Report''), I, Edward W. Stack, Chief Executive Officer of the Company, certify, pursuant...

  • Page 110
    ...(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ TIMOTHY E. KULLMAN Timothy E. Kullman Executive Vice President - Finance, Administration and Chief Financial Officer Dick's Sporting Goods, Inc...

  • Page 111
    This Page Intentionally Left Blank 89

  • Page 112
    ... to exclude an impairment of available-for-sale investments, a gain on sale of investment, the impact of a litigation settlement and Golf Galaxy store closing costs. All fiscal years presented include 52 weeks of operations except fiscal 2012, which includes 53 weeks. EBITDA EBITDA should not be...

  • Page 113
    ... (ROIC) 2012 (Dollars in thousands) 2011 2010 2009 2008 2007 Net income (loss) Impairment of goodwill and other intangible assets, after tax Impairment of store assets, after tax Merger and integration costs, after tax Gain on sale of asset, after tax Golf Galaxy store closing costs, after...

  • Page 114
    NON-GA AP NET INCOME AND EARNINGS PER SHARE RECONCILIATION Year Ended February 2, 2013 (In thousands, except per share data) As Reported Impairment of Investments 1 Non-GAAP Total Net sales Cost of goods sold, including occupancy and distribution costs Gross Profit Selling, general and ...

  • Page 115
    ...-GA AP NET INCOME AND EARNINGS PER SHARE RECONCILIATION Year Ended January 28, 2012 (In thousands, except per share data) As Reported Gain on Sale of Investment1 Litigation Settlement2 Non-GAAP Total Net sales Cost of goods sold, including occupancy and distribution costs Gross Profit Selling...

  • Page 116
    ... data) As Reported Golf Galaxy Store Closing Costs1 Litigation Settlement Charge2 Non-GAAP Total Net sales Cost of goods sold, including occupancy and distribution costs Gross Profit Selling, general and administrative expenses Pre-opening expenses Income From Operations Interest expense Other...

  • Page 117
    ... 2008 in the Company's common stock, the S&P 500 and the S&P Specialty Retail Index and that all dividends were reinvested. â- Dick's Sporting Goods (DKS) S&P 500...7/27/12 DATE OF CLOSING PRICE The stock performance graph is not necessarily indicative of future performance. 10/26/12 2/1/13 95

  • Page 118
    CORPORATE AND STOCKHOLDER INFORMATION Corporate Office 345 Court Street Coraopolis, PA 15108 724-273-3400 The DICK'S Sporting Goods Website www.DicksSportingGoods.com Transfer Agent and Registrar American Stock Transfer & Trust Company 59 Maiden Lane New York, NY 10038 Independent Registered Public...

  • Page 119
    ... 2007 Previous President & Chief Operating Officer Lowe's Companies, Inc. Allen R. Weiss Director since 2011 Previous President of Worldwide Operations Walt Disney Parks and Resorts 2012 CORPORATE OFFICERS Edward W. Stack Chairman & Chief Executive Officer John G. Duken Executive Vice President...

  • Page 120
    DICK'S SPORTING GOODS, INC. 345 Court Street Coraopolis, PA 15108 724-273-3400 www.DicksSportingGoods.com