Sportsman's Guide SGDE W
June 09, 2003 by charlie479
2003 2004
Price: 9.72 EPS
Shares Out. (in M): 0 P/E
Market Cap (in M): 46 P/FCF
Net Debt (in M): 0 EBIT 0 0
TEV: 0 TEV/EBIT

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Description

Sportsman’s Guide has an unleveraged return on equity of over 35% and trades at 4.85x free cash flow (defined as operating cash flow minus capital expenditures).

The company is a retailer of sporting gear and other outdoor items.  It sells its products primarily through its catalogs and web site.  If you are not familiar with this company’s wares, please check out www.sportsmansguide.com and spend freely.

1) The company has a strong niche brand.  Its customer following has been cultivated since Sportsman’s Guide was founded in 1970 as a catalog of products targeted at deer hunters.  Over the years, founder Gary Olen has broadened the original catalog into a business producing $180 mil in revenue per year through a series of monthly catalogs with a distribution of 46 million per year.

Indicative of the loyalty of the customers is the success of the company’s recent Buyer’s Club initiative.  Buyer’s Club members purchase a yearly membership for $29.99 to receive catalogs with limited run items available only to members.  Members also receive 5%-10% discounts on most items.  The number of members was 310,000 at 12/31/02.  Membership grew 22% last year and has continued to grow in the 1st quarter.

2) A key competitive advantage for a catalog marketer is its database of customer names.  85% of the company’s revenues come from existing names in its database of sporting and outdoor enthusiasts.  Sportsman’s Guide has 5.2 million names with demographic data and purchasing history in its customer files.  Of these, 1 million names have purchased a product within the last 12 months.  Over time, the company has used response data to subdivide this database into subsets of customers.  These subsets receive different specialty catalogs in addition to the main Sportsman’s catalog.  The specialty catalogs have different product focuses:  government surplus, camping, shooting, hunting, etc.  Subdivision improves response rates which reduces unnecessary mailing costs and improves economic returns.

Ever since the launch of the online Sportman’s catalog, the database has also been supplemented with email lists.  There are approximately 900k names in the email database and nearly all of them receive a broadcast email every 1 or 2 weeks.

3) The company’s “bargain” focus is hard to replicate.  The company has developed a customer following partially because of its history of value-priced bargain items in its catalogs.  These items are 25%-60% off retail.  The company is able to offer these prices to customers because the company's buying agents comb for discontinued/liquidation/overstock items through a network of 1200 supplier contacts.  Because the supply of overstock items is irregular, it’s critical to have the ability to purchase opportunistically and store cheaply.  All inventory is stocked in Sportsman’s warehouses in Minneapolis.  Catalogs are customized to include these overstock items shortly before printing so the inventory carrying period is minimized.  The company’s customer base of bargain hunters allows SGDE to move these items faster than other competing retailers.  What cannot be sold via its regular catalogs and online store is liquidated through its bargainoutfitters.com site and a small retail location the company has in Minnesota.  Everything from the low grade paper in the company’s catalogs to the incentive systems for maintaining high shipping accuracy is aimed at selling cheaply and producing a solid return on capital.  

4) I believe there is a fundamental shift in SGDE’s business that is reducing costs in the company and improving return on capital.  It’s this fancy new thing called the internet.

Up until 1998, all of the company’s business was done through print catalogs.  Millions of these catalogs were distributed each year with each one incurring shipping and printing costs.  There’s also higher production costs and longer product lead time required when doing business by catalog.

The company began its web site in 1998 and by February 1999 had its full product offering on the web.  Sales generated through its web site have grown each year from 1998 to 2002:  $1 mil, $14 mil, $24 mil, $36 mil, $53 mil.  The company is encouraging this transition by prominently mentioning the web site in the catalogs it continues to distribute.  In the 4Q of 2002, internet sales generated 30% of total company sales.

So what?  Well, aside from the reduced capital needs, the company has a chance to take out a major portion of its operating expenses if it can successfully transition its business to the internet.  Its current cost of distributing catalogs is approximately $30 mil a year.  A large portion of any reduction of this $30 mil in expenses would drop to the bottom line.  Considering that free cash flow is currently $8.3 mil, even a small amount of savings would produce a large effect.  The company has reduced catalogs mailed from 80 million in 1999 to 46 million in 2002.  SG&A (which include the catalog costs) has been falling:  34.8% of sales to 30.8% in 2001 to 29.3% in 2002.  These are the initial signs of the internet's impact on Sportsman's business.

Catalyst

The company has recently initiated a share repurchase program to retire up to 10% of its outstanding stock.  The company has a history of returning capital to stakeholders.  $7.4 mil of debt was paid down in 2000.  $5.2 mil of debt was paid down in 2001.  (In 2002, cash simply built up because debt was retired).  Now that the company is debt free, it is using a portion of its cash hoard (currently equal to about 20% of market cap) to retire a substantial number of outstanding shares.

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    Description

    Sportsman’s Guide has an unleveraged return on equity of over 35% and trades at 4.85x free cash flow (defined as operating cash flow minus capital expenditures).

    The company is a retailer of sporting gear and other outdoor items.  It sells its products primarily through its catalogs and web site.  If you are not familiar with this company’s wares, please check out www.sportsmansguide.com and spend freely.

    1) The company has a strong niche brand.  Its customer following has been cultivated since Sportsman’s Guide was founded in 1970 as a catalog of products targeted at deer hunters.  Over the years, founder Gary Olen has broadened the original catalog into a business producing $180 mil in revenue per year through a series of monthly catalogs with a distribution of 46 million per year.

    Indicative of the loyalty of the customers is the success of the company’s recent Buyer’s Club initiative.  Buyer’s Club members purchase a yearly membership for $29.99 to receive catalogs with limited run items available only to members.  Members also receive 5%-10% discounts on most items.  The number of members was 310,000 at 12/31/02.  Membership grew 22% last year and has continued to grow in the 1st quarter.

    2) A key competitive advantage for a catalog marketer is its database of customer names.  85% of the company’s revenues come from existing names in its database of sporting and outdoor enthusiasts.  Sportsman’s Guide has 5.2 million names with demographic data and purchasing history in its customer files.  Of these, 1 million names have purchased a product within the last 12 months.  Over time, the company has used response data to subdivide this database into subsets of customers.  These subsets receive different specialty catalogs in addition to the main Sportsman’s catalog.  The specialty catalogs have different product focuses:  government surplus, camping, shooting, hunting, etc.  Subdivision improves response rates which reduces unnecessary mailing costs and improves economic returns.

    Ever since the launch of the online Sportman’s catalog, the database has also been supplemented with email lists.  There are approximately 900k names in the email database and nearly all of them receive a broadcast email every 1 or 2 weeks.

    3) The company’s “bargain” focus is hard to replicate.  The company has developed a customer following partially because of its history of value-priced bargain items in its catalogs.  These items are 25%-60% off retail.  The company is able to offer these prices to customers because the company's buying agents comb for discontinued/liquidation/overstock items through a network of 1200 supplier contacts.  Because the supply of overstock items is irregular, it’s critical to have the ability to purchase opportunistically and store cheaply.  All inventory is stocked in Sportsman’s warehouses in Minneapolis.  Catalogs are customized to include these overstock items shortly before printing so the inventory carrying period is minimized.  The company’s customer base of bargain hunters allows SGDE to move these items faster than other competing retailers.  What cannot be sold via its regular catalogs and online store is liquidated through its bargainoutfitters.com site and a small retail location the company has in Minnesota.  Everything from the low grade paper in the company’s catalogs to the incentive systems for maintaining high shipping accuracy is aimed at selling cheaply and producing a solid return on capital.  

    4) I believe there is a fundamental shift in SGDE’s business that is reducing costs in the company and improving return on capital.  It’s this fancy new thing called the internet.

    Up until 1998, all of the company’s business was done through print catalogs.  Millions of these catalogs were distributed each year with each one incurring shipping and printing costs.  There’s also higher production costs and longer product lead time required when doing business by catalog.

    The company began its web site in 1998 and by February 1999 had its full product offering on the web.  Sales generated through its web site have grown each year from 1998 to 2002:  $1 mil, $14 mil, $24 mil, $36 mil, $53 mil.  The company is encouraging this transition by prominently mentioning the web site in the catalogs it continues to distribute.  In the 4Q of 2002, internet sales generated 30% of total company sales.

    So what?  Well, aside from the reduced capital needs, the company has a chance to take out a major portion of its operating expenses if it can successfully transition its business to the internet.  Its current cost of distributing catalogs is approximately $30 mil a year.  A large portion of any reduction of this $30 mil in expenses would drop to the bottom line.  Considering that free cash flow is currently $8.3 mil, even a small amount of savings would produce a large effect.  The company has reduced catalogs mailed from 80 million in 1999 to 46 million in 2002.  SG&A (which include the catalog costs) has been falling:  34.8% of sales to 30.8% in 2001 to 29.3% in 2002.  These are the initial signs of the internet's impact on Sportsman's business.

    Catalyst

    The company has recently initiated a share repurchase program to retire up to 10% of its outstanding stock.  The company has a history of returning capital to stakeholders.  $7.4 mil of debt was paid down in 2000.  $5.2 mil of debt was paid down in 2001.  (In 2002, cash simply built up because debt was retired).  Now that the company is debt free, it is using a portion of its cash hoard (currently equal to about 20% of market cap) to retire a substantial number of outstanding shares.

    Messages


    SubjectIt appears cash flow is less t
    Entry06/09/2003 10:45 AM
    Memberben111
    Thanks for posting this. Wish you had told us about it two years ago before it went from $2 to $10.

    It appears to me that this is not trading for the free cash flow multiple you outlined in the post.

    For the trailing 4 quarters,
    It looks to me like 7.4 million
    and capex looks like .9 million
    so free cash was 6.5 million

    On a 45 million dollar market cap that is a 6.9 free cash flow multiple

    If we subtract 11 million in net cash on the balance sheet from the 45 million dollar market cap we get 34 million dollar enterprise value

    So Enterprise value / Free cash is 5.2 times.

    Please help me understand how you came up with your 4.85 times free cash number for this


    SubjectRe: cash flow
    Entry06/09/2003 11:01 AM
    Membergrant387
    Charlie, I think this is a fantastic idea.

    Ben, in regard to cash flow figures, if you look back over the past three years, you'll get an average FCF (CFF0 - PPE) = $9.8MM.

    If you take an EV of about $37MM now, I get a EV/FCF of 3.78.

    If the top line continues to grow a bit and they keep wacking away at the expense side, cash flow will continue to grow at a healthy rate. This is a very good story.

    Charlie, I also really liked your QUIPS write-up and your legal analysis was 100% correct...it is a shame that big money sometimes tramples over the little money in this world, leaving the little guy with no leverage whatsoever.

    SubjectComments on insider sales?
    Entry06/09/2003 11:23 AM
    Memberzzz007
    Wondering if you have any thoughts on recent insider sales by Shiel and Paletz. I realize that the sales aren't large in relation to their overall holdings, but find it interesting that they are sellers for the first time in nearly a year. It seems as if their sales have historically been good short term indicators of near-term stock price performance.

    Subjectben111 Free cash flow
    Entry06/09/2003 12:48 PM
    Membercharlie479
    I've been measuring free cash flow over calendar year periods so that may produce our difference in calculations.

    For the last 3 years, I have:

    Year OCF - Capex = FCF
    2002 9.2 - 0.9 = 8.3
    2001 13.0 - 0.5 = 12.5
    2000 10.2 - 1.5 = 8.7

    I chose to use the 2002 $8.3 mil for free cash flow in my calculation. For enterprise value, I get $40.3 mil ($46.3 mil market cap plus $4.9 mil for options minus $10.9 mil of cash at 3/31/03). This gives me a EV/FCF multiple of 4.85x.

    I suppose it doesn't matter much whether multiple is 4.85x or 5.2x. It's pretty cheap either way. There are few companies with free cash flow yields of around 20%.

    >Thanks for posting this. Wish you had told us about it two years ago before it went from $2 to $10.

    I'll post it earlier next time :) But, hey, I wish someone would have told me about Berkshire Hathaway decades ago.

    I try not to look at the historical charts too much. They should be irrelevant to investment decisions today. I've found that staring at the charts sometimes leads to irrational (and sometimes harmful) buy/sell decisions.

    Subjectgrant387
    Entry06/09/2003 01:12 PM
    Membercharlie479
    Thank you for your comments on SGDE and the QUIPs.

    Regarding the QUIPs, it does seem that justice has failed the little guy this time. I'm saving my comments until after the bankruptcy case and hope to post a follow up. My main regret is that I should have posted the MCI Bonds idea intead of the QUIPs and I feel terrible that VICers may have lost money on the trade. Hopefully VICers will make some money on SGDE or the 3 other ideas I have posted on VIC.

    Subjectzzz007 Insider sales
    Entry06/09/2003 01:23 PM
    Membercharlie479
    I don't typically look at insider sales because it's as critical to me as the quality of the business and other factors. It is an interesting fact that you point out, though. I believe Paletz is retired and draws no salary from the company (the other co-founder is still an employee) so he may be selling shares to provide for some retirement expenses.

    Shiel had plans to retire this year from the board of directors. I suspect that his selling is related to his retirement as well.

    SubjectCharlie, It looks as though
    Entry06/09/2003 03:12 PM
    Memberzzz007
    Charlie,

    It looks as though a significant portion of FCF generation over the last couple of years has been accomplished through working capital reductions and a positive D&A - CapEx spread. When do you think their NWC becomes optimal and starts to approcximate net income? Is it this year? Seems likely as their NWC ex-cash looks close to zero.

    Also, do you have any sense from the company as to what the eventual split of internet vs. catalog sales may be?

    Thanks

    SubjectShare Repurchase
    Entry06/10/2003 09:23 AM
    Memberdavid101
    Charlie,

    I am trying rationalize the 10% share repurchase when this is trading at 2.3X book value. That seems like an expensive use of cash. Given the new tax laws, declaring a dividend might be a more attractive use of that cash. Any idea of whether management would consider a dividend?

    David

    SubjectAm I being resonable?
    Entry06/10/2003 10:32 AM
    Memberdoobadoo802
    Assuming $.90/share in '03, 10% eps growth for 5 years, and a terminal multiple of 11.5 x eps. Discount rate of 13%....

    Then the operations are worth about $13.31, the cash another $2.xx/share or so, the whole monster $15.50...

    As you pointed out CF is far exceeding eps. How long can that continue? Is this an amazon.com? (which is eps negative but all is over stocked with ppe, so FCF is far sweeter than earnings and will stay that way for some time?)

    Another poster asked if it was wise to repurchase shares at $10. If you think this one is cheap, then you should be pro stock buyback. If my $16 is anywhere near right (again i only spent all of 5 minutes on this model), the repurchases are about a 1.66 CVA, discounted at 13% (my estimate of cost of equity capital). I use CVA = $13/8; where $13 is the 13% discounted value of the eps stream, and 8 is the current price the market places on the eps stream. Or in undiscounted terms, its an IRR of 29%!

    For this thing to be fairly priced it must either:
    Grow eps at 10% for 5 years (then an 11.5x eps term mult) and be discounted at 29%.

    Or never growth eps after $.90/share for 5 years, have a 10x terminal multiple and be discounted at 13%.

    Looks like the current shareprice doesn't price in any growth, and that the current cashflow or eps justifies the current shareprice (my definition of a solvent deal). The growth would just be gravy.

    Any thoughts?

    --
    doob

    SubjectNet working capital
    Entry06/10/2003 10:40 AM
    Membercharlie479
    Yes, free cash flow has benefitted from working capital reductions and a positive D&A - Capex spread.

    I believe much of the working capital reduction is due to a permanent improvement in the underlying business rather than a temporary fluctuation in the WC. For example, deferred revenue has been increasing because of the Buyer's Club program which began in earnest in Fall 2000. The subscription payments received by the company are not recognized in the income statement until members buy items and utilize the member discount. If members don't utilize it then the excess is not recognized until the end of the subscription period. I believe the income statement plus the change in the deferred revenues better approximates the current earnings power for this company; GAAP income stmt currently understates it.

    The company has also been moving inventory levels downward. Part of this is a one-time benefit from the elevated inventory levels in 1999 when management pursued a "strategic initiative" to expand SKUs and increase categories into better margin products. But the other reason inventory levels are falling is that inventory turns are increasing because of the new web channel of sales. The amount of time between the purchase of a product by the company to the time the product is listed for sale is shorter for the web than for a catalog. There's no time needed for printing up the catalog and mailing it and then waiting for the customer to mail back their order.

    I don't know when these improvements will stop but I'm not sure I would assume that a zero net working capital level means improvements are over. While this company is no Amazon (thankfully), it's useful to look at that pure web retailer's economics to get a sense for the potential WC possibilities. AMZN has a negative NWC level of $750 mil so it's possible SGDE's WC could be very negative. Not only that, but the deficit seems to increase as sales increase because payments come in faster than payments to suppliers.

    I think the D&A / capex discrepancy can be sustained for a while longer. Up until the launch of the web site in 98/99 the company had been investing in its web site, computer servers and warehouse enhancements. If these investments don't need to be repeated then the current capex level is a reasonable approximation of maintenance levels.

    Subjectdavid101 repurchase versus div
    Entry06/10/2003 10:55 AM
    Membercharlie479
    I hadn't thought to ask management about a dividend. You raise an interesting topic, though, about the relative attractiveness of the share repurchase versus the dividend.

    I had been happy that management was returning cash to shareholders via a buyback. Since I believe the shares are underpriced relative to the PV of the future FCF, a dollar of repurchase would generate more than a dollar dividended out. And as long as we're all long term holders then isn't the marginal tax rate the same regardless of whether the dollar gained is in dividend form or capital gains form?

    I may be missing something here because I think you suggested in your question it may be more efficient to do a dividend. Can you elaborate? Thanks.

    Subjectdoob
    Entry06/10/2003 11:11 AM
    Membercharlie479
    I didn't go through the calculations you did but I share the same general thought process on this one. I assume the long term growth rate of FCF is zero (for most companies, this is not necessarily a conservative assumption) and so I'm typically looking for the free cash flow yield to justify the necessary return. Any growth I get on top of that is just gravy. Now and then I find one where I have some confidence that the long term FCF growth is greater than zero so I compare the FCF yield plus growth to my hurdle rate. Whatever the assumption for g, though, I think the returns in SGDE should be more than adequate.

    SubjectDividends
    Entry06/10/2003 01:18 PM
    Memberdavid101
    Charlie,

    I would not say that dividends are any more efficient, but they are more attractive. Let's look at the possibilities. The company has committed to buying back 10% of their stock, which is about 476,000 shares. At $10.32/share, that's $4.9 million that they are spending on buybacks. Or they could use that same money and declare a special dividend of $1. Or they could institute regular dividends of $0.50 per share per year, for a 4.8% yield, which would represent about 55% of earnings. Given the low investment yields in today's market place, a 4.8% dividend yield that has the potential to grow will look very attractive to the equity income crowd.

    It is pretty easy to understand when a company buys back its stock when its trading at a significant discount to book value. I can almost rationalize your argument that buy backs below your intrinsic value are okay, but your value is really dependent upon steady cash flow. That's not necessarily bad, just subject to more flucuations, and hence more risk.

    Consider for a moment CI. They spent something like $4-5 billion on buybacks in the last 5 years and the purchases were all made well above book value. When they ran into problems last year, the stock got crushed and obliterated any benefit from the buybacks. I am not saying that will happen to SGDE, but it does highlight the risk. The benefits of buy backs above book are dependent upon a steady earnings stream.

    That said, I really do like this idea. Thanks.

    David


    Subjectbasic stuff
    Entry06/17/2003 09:53 PM
    Memberpaul118
    pardon my ignorance, but some basic questions?

    - you at all concerned about the option grants, 250k the last 2 years on a 10m share base? Seems more than a little excessive on the face of it

    - what happened in 2000? Start-up costs? what is that severance committments they talk about? equity placement?

    - since book value is essentially inventory, what assurance do we have that the inventory is worth what they say it is worth?

    - if this company has produced this much free cash flow, why do they only have 20m in book value at this point?

    - could you speak to the proxy? Esp. trends over the past few years? The CEO's latest pay - 219k base, 394k bonus, 50,000 options looks pretty fat for a company this size

    - what is your estimate, guess as to the long-term growth prospects from here?

    Thanks for posting this idea...

    Subjecttypo
    Entry06/20/2003 02:13 PM
    Memberpaul118
    250k on a 5m share base, I mean...

    SubjectOptions dilution
    Entry06/21/2003 11:39 AM
    Memberzzz007
    I have to agree with Paul118; the options grants are pretty hefty for a company like this. There are 2.5mm options out (including the warrants), or roughly 50% of primary shares. Average strike include the warrants is $7/shr. So, dilution is accelerating rapidly as the stock climbs here.

    SubjectCorrection
    Entry06/21/2003 12:48 PM
    Memberzzz007
    Sorry, my last post was way off the mark. 1.15mm options + warrants @ $5.35/shr average; not nearly as bad. Punched in the wrong number on the warrants when I was calculating the average.

    Subjectpaul118
    Entry06/27/2003 04:48 PM
    Membercharlie479
    I'm never a fan of options grants. The only semi-comforting thing I can say is that in 2000 it was only 50k.

    In 2000, earnings were hurt by the closure of a retail store, and an equity placement that never materialized. They had also been expanding the warehouse and building out the internet fulfilment capability. Some of these latter items were capitalized in 99 but didn't fully start hitting the income statement until 2000.

    I believe the inventory is fairly clean. We're not dealing with a serial one-time expenser in SGDE. If you look through the last 9 or 10 years' worth of financial results, you'll see there aren't any inventory writedowns or extraordinary adjustment items. Also, inventory has actually shrunk from $37,403 at 12/31/98 to $20,593 at 12/31/02. So the company has been able to liquidate the inventory at carrying value (more, actually) over the last 4 years. Inventory should be in much better shape now than it has been in the past.

    Shareholders' equity was $3.3 mil in 1994 so it has grown to $20 mil last year. To be honest, though, I don't focus much on book value. It's inversely proportional to the attractiveness of the business in my view.

    The $394k bonus was pretty big in 2002. I'm hoping all the VICers on this board will call and scold the ceo for that :) In 2000, though, note that the top 3 guys didn't get any bonuses. My impression is that they will not reward if the results don't warrant it.

    I haven't been trying to estimate the long-term growth prospects for the business. This stock is more of a play on the conversion of the existing business over to a more efficient model that requires fewer expenditures on catalogs. I think even if the overall business does not grow much, you can have a decent return solely from this conversion.

    Subjectthanks for your response
    Entry06/28/2003 10:30 PM
    Memberpaul118
    You said, "To be honest, though, I don't focus much on book value. It's inversely proportional to the attractiveness of the business in my view."

    Fwiw, I find myself paying attention to book value growth a lot more than I used to, if only to put in even greater perspective the bonehead capital allocation moves by management teams over the years. Sure, you can fudge any number it seems these days, but at least cash still seems to be real enough. And it can be a quick and dirty way to look at an unknown company's progress over a longer period of time. Simplistic, but I've found it useful...

    SubjectThe Sportsman's Guide Updates
    Entry07/10/2003 06:12 PM
    Membercharlie479
    The company issued a press release stating that 2Q sales and earnings will be higher than estimates.

    Gregory R. Binkley, President and Chief Executive Officer of the Company, stated, "We expect to report a much stronger than anticipated second quarter. We are especially pleased to note that Internet-related sales as percentage of total sales reached 36.5 percent, an all time record high, compared to just under 30 percent for the same period one year ago."

    Subjectsourcing
    Entry08/21/2003 02:24 PM
    Membermatthew618
    Charlie,

    Thanks for a great idea.

    Just so I understand, in their press release, they do go on to say that "total catalog circulation for the quarter was 9.2 million compared to 8.8 million for the same period in 2002" - are they including email solicitations in that number? Was just struck that it grew year on year given your thesis on their lowering catalog distribution costs.

    Also, was wondering if they have buying agents in Asia and other low-cost areas. Maybe thats not their game but seems like if you had the contacts you could find quite a bit of overstock type items and would be a way to expand margins.

    Thanks again,

    Matt

    Subjectmatthew
    Entry09/22/2003 01:09 PM
    Membercharlie479
    The circulation number in their press release does not include email solicitations. Circulation increased to 9.2 mil from 8.8 mil. I wouldn't focus too much on the quarterly circulation because it tends to fluctuate as catalogs shift back and forth into adjoining quarters. In this quarter, the company shipped the same number of catalogs (7) this year and last. Their mailing list is growing and that is why circulation was up this quarter despite the same number of catalogs produced.

    I believe the longer term trend is still towards fewer catalogs, and less expense per dollar of sales as a result. For example, the company mailed 16 catalogs in the first half of this year versus 18 last year. Sales still managed to increase because of more recipients per catalog and also because of rising internet sales. Internet sales rose to 36.5% of total sales in the 2Q. Ad expense and SG&A as a % of sales fell as a result.

    My understanding is that most (if not all) of their buyers are located in the US. They regularly troll for discontinued/overstocked items from a large number of manufacturers, wholesalers, etc. But I do not know how many of these suppliers are from Asia.

    SubjectSGDE updates 3Q guidance
    Entry10/09/2003 10:39 AM
    Membercharlie479
    SOUTH ST. PAUL, Minn., Oct. 9 /PRNewswire-FirstCall/ -- The Sportsman's Guide, Inc. (Nasdaq: SGDE) today announced that the Company expects to report total sales of approximately $41.0 million and earnings per share of $0.12 to $0.13 for its third quarter ended September 30, 2003. This would compare to third quarter 2002 results of $36.7 million in sales and earnings of $0.05 per share. Earnings will be above the consensus First Call(R) estimate, which is $0.09 per share. The Company plans to report its final quarterly results at 5:00 pm CDT on Tuesday, October 28, 2003.

    Gregory R. Binkley, President and Chief Executive Officer of the Company, stated, "Our trend of reporting stronger than anticipated results continues with our third quarter. Internet-related sales as a percentage of total sales will
    once again exceed 36 percent, compared to 30 percent for the same period one year ago."

    Subjectcharlie, any update?
    Entry04/28/2004 10:17 PM
    Memberchuck307
    Charlie, thanks for the great idea. The company continues to execute and is doing very good business. Any updates?

    Subjectchuck307
    Entry04/29/2004 01:28 PM
    Membercharlie479
    Hi, I didn't think anyone was still reading the Sgde board. I don't really have anything new to add to the analysis but there was a conference call today that you may want to check out if you missed it.

    SubjectManagement
    Entry04/30/2004 09:55 AM
    Memberrobert511
    I listened to the conference call yesterday and was shaken by how evasive and uninformed management seemed to be. They really didn't seem to have a handle on many basic metrics. This was the first CC of their I listened to; does anyone have a feel for whether this is SOP for them or a change?

    Subjectcharlie
    Entry05/25/2004 03:42 PM
    Memberchuck307
    I did listen. Nothing Earth shattering. Did you notice that this SGDE board disappeared for a while? For about two months, it was M.I.A. Odd.

    SubjectQuestion
    Entry05/11/2005 11:14 AM
    Memberglasshalf902
    Charlie,
    Your recent post in AZO, in which you asked about redeployment of capital, attracted my attention; so I searched this site for your ideas and found they were all high-quality ideas more or less falling in two buckets: deep discounts to balance-sheet or liquidation value, and businesses with high ROIC and a history of sensible capital allocation. I also found your thoughts to be presented in clear sentences in well-written English.
    I'm writing you this brief note not just to compliment you, but also to mention that I can't find any ideas from you since June 2003, in the hopes that this might perhaps prompt you to post a new idea. I sure would look forward to it.
    Warm regards,
    Glasshalf
    PS: I though one had to provide at least two ideas every year -- is this is still the case?

    Subjectglasshalf
    Entry05/12/2005 01:11 PM
    Membercharlie479
    You've caught me. I have not posted anything in a long time. I don't get many good ideas and sometimes there are long stretches of nothing. As far as I know, the two ideas per year requirement is still in effect. I had been hoping that I'd slip through the cracks in the system. I promise that if I find something worthwhile I will post it.

    SubjectLOL
    Entry05/13/2005 10:00 AM
    Memberglasshalf902
    Charlie, take it as a compliment (which it is). I'm looking forward to your next writeup. Enjoy the weekend. Warm regards,
    Glasshalf

    SubjectCompliment?
    Entry05/13/2005 11:45 AM
    Memberzzz007
    Sounds more like a tattletale to me. When my kids do that, I give them a firm spanking.

    SubjectThat wasn't the intention...
    Entry05/13/2005 12:46 PM
    Memberglasshalf902
    ...seriously.

    Subjectzzz007...
    Entry05/13/2005 05:35 PM
    Membertbzeej825
    Quite the comedian. Not quite as funny as your comment on RIMM but keep the jokes a'coming slugger.

    Subjecttbzeej825...
    Entry05/14/2005 09:05 AM
    Memberzzz007
    Wasn't a joke. I don't think it's any board member's business whether another member has fulfilled his requirements. That's up to the webmaster. If somebody wants to be an enforcer they should set up their own site, not cling onto somebody else's coattails.
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