Sport Chalet Announces Review of Accounting for Leases
16 Maggio 2005 - 11:20PM
PR Newswire (US)
Sport Chalet Announces Review of Accounting for Leases LOS ANGELES,
May 16 /PRNewswire-FirstCall/ -- Sport Chalet, Inc. (NASDAQ:SPCH)
today announced that, as a result of a clarification issued by the
Securities and Exchange Commission ("SEC") on February 7, 2005
affecting many retail companies, the Company has reviewed and
corrected its lease accounting practices to (a) treat construction
allowances from landlords as deferred rent liabilities instead of a
reduction in fixed assets and capital expenditures, (b) revise the
amortization period for leasehold improvements in certain
situations, and (c) commence expensing of rent at the date the
Company occupies the leased premises (generally for the build-out
period) rather than the date of the store opening. Based on this
review, the Company expects to restate its previously filed annual
and quarterly financial statements as applicable. The effect on the
Company's previously released Consolidated Statements of Income
will be an increase in net income of $97,000 for the fiscal year
ended March 31, 2004, and a reduction of net income of $117,000 and
$353,000 for the fiscal years ended March 31, 2003 and March 31,
2002, respectively. The impact on previously released earnings per
share is expected to be an increase of $0.01 for the fiscal year
ended March 31, 2004, and a reduction in earnings per share of
$0.02 and $0.05 for the fiscal years ended March 31, 2003 and March
31, 2002, respectively. The restatement of previously issued
consolidated financial statements will not have an impact on total
net cash flows during any of the periods amended. The Company's
previously issued consolidated financial statements, including
those in the Company's Annual Report on Form 10-K for the year
ended March 31, 2004 and in the Company's Quarterly Reports on
Forms 10-Q for the quarters ended June 30, 2004, September 30, 2004
and December 31, 2004, should no longer be relied upon. For
additional information, refer to Form 8-K filed concurrently with
this press release. Sport Chalet, founded in 1959 by Norbert
Olberz, is a leading operator of full-service specialty sporting
goods superstores in California and Southern Nevada. The Company
offers over 40 services for the serious sports enthusiast,
including backpacking, canyoneering, and kayaking instruction,
custom golf club fitting and repair, ski rental and repair, SCUBA
training and certification, SCUBA boat charters, team sales,
racquet stringing, and bicycle tune up and repair throughout its
current 36 locations. The address for Sport Chalet's web site is
http://www.sportchalet.com/. Except for historical information
contained herein, the statements in this release are
forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause the Company's actual results in future
periods to differ materially from forecasted results. Those risks
include, among other things, the preliminary status of the change
and effect of the Company's lease accounting as described above,
the possibility that the Company's independent auditors may
identify additional issues or other considerations while they
complete their review of the Company's financial statements,
rapidly changing accounting rules, regulations and interpretations,
the competitive environment in the sporting goods industry in
general and in the Company's specific market areas, inflation, the
challenge of implementing the Company's expansion plans in Northern
California and Arizona and maintaining its competitive position in
Southern California, changes in costs of goods and services, the
weather and economic conditions in general and in specific market
areas. These and other risks are more fully described in the
Company's filings with the Securities and Exchange Commission.
DATASOURCE: Sport Chalet, Inc. CONTACT: Howard Kaminsky, Exec.
VP-CFO of Sport Chalet, Inc., +1-818-949-5386 Web site:
http://www.sportchalet.com/
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