Fitness financials: Nasdaq threatens to delist Big 5, Bally to speak with investors, plus Wal-Mart, Costco, Cybex

Big 5 to restate 2002-2004 results, Nasdaq threatens delisting
On April 8, Big 5 Sporting Goods Corp. (Nasdaq: BGFV) reported that it received a notice from Nasdaq saying that it fails to comply with Nasdaq listing standards due to the delayed filing of its annual report on Form 10-K with the Securities and Exchange Commission and that its securities are therefore subject to delisting from the Nasdaq National Market.

The day before, Big 5 had said it was restating 2002, 2003 and 2004 financial results to reflect accounting changes, including lease accounting, and said it was again delaying the filing of its 2004 annual report. Due to the amount of additional work associated with the restatements, the company’s financial statements and the associated audit will not be completed by the deadline and Big 5 expects to file its annual report on Form 10-K within the next few weeks.

As a result of the delay in filing the Form 10-K, effective April 11, the fifth character “E” will be appended to Big 5’s trading symbol on the Nasdaq Stock Market, indicating that the company is delinquent in its filings with the SEC. Accordingly, the trading symbol for the its common stock will be BGFVE.

Big 5 said it intends to appeal the determination, which will stay the delisting until the appeal has been heard and a Nasdaq panel has rendered its decision. Big 5 said it intends to submit a written request for hearing to Nasdaq’s Office of Listing Qualifications Hearings, but has no assurance that the panel will grant its request for continued listing.

Big 5’s filing delays are a result of an adjustment related to a previously disclosed allowance for sales returns, which is expected to add about 2 cents per share to previously reported fiscal 2004 results and to reduce earnings per share for fiscal 2002 by 1 cent. The adjustment is not expected to change earnings per share for fiscal 2003. The lease accounting adjustments are not expected to change earnings per share for fiscal 2002 or 2004, and are expected to reduce fiscal 2003 earnings per share by 1 cent, it added.

Despite its challenges, Big 5 also reported that it achieved its 37th consecutive quarter of positive same-store sales performance for the fiscal quarter ended April 3, 2005. It expects to report, based upon preliminary sales results, a same-store sales increase of 1.7 percent for the first fiscal quarter compared to last year.

Bally speaks with investors
Bally Total Fitness Holding (NYSE: BFT) has filed a form 8-K with the SEC. The form said that it has secured an amendment and waiver to its existing credit agreement with its revolving credit and term loan lenders. The amendment provides Bally with additional covenant flexibility by exempting from the calculation certain costs incurred by Bally Total Fitness in connection with the SEC and Department of Justice investigations and other matters. The amendment also waives certain technical defaults. The company also announced that it would hold a conference call with investors on April 12 to discuss its financial situation and to answer questions.  

Wal-Mart reports March sales
Wal-Mart Stores Inc. (NYSE: WMT) saw its same-store sales for March rise 4.3 percent. Total sales for the month were $27.98 billion, up 11.3 percent from $25.13 billion last year. It’s ranked as the 12th largest store in the world, according to Forbes.

Costco’s same-store sales up 7 percent
Costco Wholesale (NasdaqNM: COST) reported a 7 percent increase in same-stores sales in March. Total sales for the five weeks ended April 3 rose 10 percent to $4.87 billion. Forbes said it is ranked as the 245th largest store in the world.

Adams Harkness initiates coverage of Cybex
On April 6, coverage was initiated on Cybex International (AMEX: CYB) by Adams Harkness. The investment group has given it the “buy” stamp of approval.

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