SGDE Sportsmans Guide

Continued Strong Performance at The Golf Warehouse and Strong Sales Growth at The Sportsman's Guide Help Company Report Record Q2 Results SOUTH ST. PAUL, Minn., Aug. 9 /PRNewswire-FirstCall/ -- The Sportsman's Guide, Inc. (NASDAQ:SGDE) today reported results for the quarter ended June 30, 2005 that, with respect to fully diluted earnings per share, were above most recent guidance and, with respect to net sales, were at the high end of that guidance. Net sales for the Company's second quarter were $63.8 million, compared with $39.6 million reported for the same period in 2004. The quarter over quarter 61.2% increase in consolidated net sales was primarily the result of including net sales from The Golf Warehouse ("TGW") and higher net sales from The Sportsman's Guide ("TSG"). The acquisition of TGW was effective June 29, 2004, making the third quarter of 2004 the first quarter for inclusion of TGW's net sales, operations and earnings. Net sales for TSG increased 9.1% when compared to the three months ended June 30, 2004 as a result of higher Internet sales. For the six months ended June 30, 2005, net sales were $128.4 million, a 52.1% increase over the $84.4 million reported for the first half of 2004. Net earnings for the quarter were $2.5 million, or $0.31 per fully diluted share, a 102% increase over the $1.2 million, or $0.16 per fully diluted share, reported for the same period in 2004. For the first two quarters of 2005 net earnings were $4.8 million, or $0.59 per fully diluted share, compared to $2.5 million, or $0.32 per fully diluted share for the first six months of 2004. The earnings per share numbers for 2004 have been restated to reflect the Company's recently announced change in accounting policy for Buyer's Club revenues and adjusted to reflect the 3-for-2 stock split, distributed April 15, 2005. Gregory R. Binkley, President and Chief Executive Officer of the Company, stated, "We had a very strong second quarter due to a continuation of the strong, positive trends that have been affecting our business. We saw strong net sales at both TGW and TSG. TSG's nearly double digit sales growth was extremely positive and due to our continuing success in generating higher levels of Internet-related sales. The increase in total net sales and in the percentage of Internet-related sales is also the result of the continued strong performance of TGW. The impact of these factors once again pushed consolidated Internet-related sales for the second quarter to nearly 60% of total catalog and Internet sales." The Company will hold a conference call to discuss the results of the quarter at 10:30 am, CDT, Wednesday, August 10, 2005. Gregory R. Binkley, President and Chief Executive Officer of the Company, and Charles B. Lingen, Executive Vice President and Chief Financial Officer, will be present on the call. Participants may access the call by dialing 1-800-362-0571 and asking for The Sportsman's Guide conference call. The call may also be accessed via the Internet at http://www.sportsmansguideir.com/ . The Sportsman's Guide is an Internet and catalog retailer offering value- priced outdoor gear and general merchandise, with a special emphasis on outdoor clothing, outdoor equipment, golf apparel and equipment and footwear. The Company sells through both Internet Web sites and catalogs. The Company's Web sites include http://www.sportsmansguide.com/ , http://www.tgw.com/ and http://www.bargainoutfitters.com/ . This release contains forward looking statements which are subject to change based on various important factors, including but not limited to general economic conditions, a changing market environment for the Company's products and the market acceptance of the Company's catalogs, Internet sites and offerings. The Sportsman's Guide, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) (In thousands of dollars) June 30, June 30, December 31, 2005 2004 2004 (Restated) ASSETS CURRENT ASSETS Cash and cash equivalents $3,555 $16,534 $8,616 Accounts receivable - net 2,437 1,935 3,955 Inventory 35,032 25,315 29,148 Promotional material 3,961 2,590 3,578 Prepaid expenses and other 3,558 2,416 3,123 Deferred income taxes 1,752 3,221 1,767 Total current assets 50,295 52,011 50,187 PROPERTY AND EQUIPMENT, NET 2,472 1,813 2,693 OTHER ASSETS Goodwill 17,193 -- 17,176 Trade and domain name 10,200 -- 10,200 Other intangibles 1,311 -- 658 Total other assets 28,704 -- 28,034 Total assets $81,471 $53,824 $80,914 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $22,820 $15,040 $23,832 Accrued expenses and other current liabilities 18,212 14,074 21,822 Total current liabilities 41,032 29,114 45,654 LONG-TERM LIABILITIES 5,631 133 5,388 Total liabilities 46,663 29,247 51,042 SHAREHOLDERS' EQUITY 34,808 24,577 29,872 Total liabilities and shareholders' equity $81,471 $53,824 $80,914 The Sportsman's Guide, Inc. and Subsidiaries Consolidated Statements of Earnings (Unaudited) (In thousands, except per share data) Three months ended Six months ended June 30, June 30, 2005 2004 2005 2004 (Restated) (Restated) Net sales $63,778 $39,553 $128,356 $84,364 Cost of sales 44,334 26,724 88,878 57,190 Gross profit 19,444 12,829 39,478 27,174 Selling, general and administrative expenses 15,476 10,929 31,948 23,275 Earnings from operations 3,968 1,900 7,530 3.899 Interest expense (82) -- (146) -- Miscellaneous income (expense), net 91 38 159 80 Earnings before income taxes 3,977 1,938 7,543 3,979 Income tax expense 1,470 698 2,779 1,431 Net earnings $2,507 $1,240 $4,764 $2,548 Net earnings per share: Basic $.35 $.18 $.67 $.36 Diluted $.31 $.16 $.59 $.32 Weighted average common and common equivalent shares outstanding: Basic 7,120 7,055 7,113 7,093 Diluted 8,175 7,919 8,120 7,985 The Sportsman's Guide, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2005 and 2004 (In thousands) 2005 2004 (Restated) Cash flows from operating activities: Net earnings $4,764 $2,548 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation and amortization 763 628 Other 394 1,309 Changes in operating assets and liabilities: Accounts receivable 1,518 1,099 Inventory (5,884) (6,441) Promotional material (383) (25) Prepaid expenses and other (435) (545) Other long-term assets (744) -- Income taxes payable 210 (2,690) Accounts payable (1,012) (3,910) Accrued expenses and other current liabilities (3,851) (2,982) Cash flows used in operating activities (4,660) (11,009) Cash flows from investing activities: Purchases of property and equipment (451) (193) Other (17) -- Cash flows used in investing activities (468) (193) Cash flows from financing activities: Repurchase of common stock -- (5,148) Other 67 830 Cash flows provided by (used in) in financing activities 67 (4,318) Decrease in cash and cash equivalents (5,061) (15,520) Cash and cash equivalents at beginning of the period 8,616 32,054 Cash and cash equivalents at end of the period $3,555 $16,534 CONTACT: William P. Bartkowski MeritViewPartners 612.605.8616 DATASOURCE: The Sportsman's Guide CONTACT: William P. Bartkowski of MeritViewPartners, +1-612-605-8616 Web site: http://www.sportsmansguideir.com/ http://www.sportsmansguide.com/ http://www.tgw.com/ http://www.bargainoutfitters.com/

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