Hibbett Sports 2012 Annual Report Download - page 34

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Dividend Policy
We have never declared or paid any dividends on our common stock. We currently intend to retain our future earnings to
finance the growth and development of our business and for our stock repurchase program, and therefore do not anticipate declaring
or paying cash dividends on our common stock for the foreseeable future. Any future decision to declare or pay dividends will be at
the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, capital
requirements and such other factors as our Board of Directors deems relevant.
Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in
our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer (see “Part II, Item 9A, Controls and Procedures”).
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Investment and Credit Availability Risk
We manage cash and cash equivalents in various institutions at levels beyond federally insured limits per institution,
and we may purchase investments not guaranteed by the FDIC. Accordingly, there is a risk that we will not recover the full
principal of our investments or that their liquidity may be diminished. In an attempt to mitigate this risk, our investment policy
emphasizes preservation of principal and liquidity.
We also have financial institutions that are committed to provide loans under our revolving credit facilities. There is a
risk that these institutions cannot deliver against these obligations. For a further discussion of this risk and risks related to our
deposits, see “Risk Factors” beginning on Page 10.
Interest Rate Risk
Our net exposure to interest rate risk results primarily from interest rate fluctuations on our credit facilities, which bear
an interest at a rate which varies with LIBOR, prime or federal funds rates. At the end of Fiscal 2012 and Fiscal 2011, we had no
borrowings outstanding under any credit facility.
During Fiscal 2012, we did not have any borrowings against either of the facilities. There were 10 days during Fiscal
2011, where we incurred borrowings against our credit facilities for an average borrowing of $5.3 million. During Fiscal 2011,
the maximum amount outstanding against these agreements was $10.8 million and the weighted average interest rate was 2.28%.
Quarterly and Seasonal Fluctuations
We experience seasonal fluctuations in our net sales and results of operations. Customer buying patterns around the
spring sales period and the holiday season historically result in higher first and fourth quarter net sales. Over the past few years,
our third quarter has experienced higher than historical net sales, resulting from back-to-school shopping combined with tax-free
holidays in many of our markets. In addition, our quarterly results of operations may fluctuate significantly as a result of a
variety of factors, including the timing of new store openings, the amount and timing of net sales contributed by new stores,
merchandise mix and demand for apparel and accessories driven by local interest in sporting events.
Although our operations are influenced by general economic conditions, we do not believe that, historically, inflation has
had a material impact on our results of operations as we are generally able to pass along inflationary increases in costs to our
customers.
Tax Matters
We do not believe that there are any tax matters that could materially affect our financial condition, results of
operations or cash flows.