Big 5 Sporting Goods Corp (BGFV) 2009 Q1 法說會逐字稿

... first quarter 2009 earnings conference call. (Operator instructions.)

On the call today from the Company we have Steve Miller, President and CEO, and Barry Emerson, CFO. Following today's presentation the conference will be open for questions. (Operator instructions.) This conference is being recorded today, Thursday, April 30th of 2009.

Now I would like to turn the conference over to Mr. Steven Miller, President and CEO. Please go ahead, sir.

Thank you. Good afternoon, everyone, and welcome to our fiscal 2009 first quarter conference call. Today we will review our financial results for the first quarter of 2009 and provide general updates on our business, as well as provide guidance for the second quarter. At the end of our remarks, we will open the call for questions.

I will now turn the call over to Barry to read our Safe Harbor Statement.

Thanks, Steve.

Except for statements of historical fact any remarks that we may make about our future expectations, plans, and prospects constitute forward-looking statements 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 our actual results in current and future periods to differ materially from forecasted results.

These risks and uncertainties include those more fully described in our Annual Report on Form 10-K for fiscal 2008 and other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statements that may be made from time to time by us or on our behalf.

Thank you, Barry.

Today we are pleased to report first quarter earnings significantly ahead of the guidance that we provided during our last call in late February. Since that time we have experienced a meaningful improvement in our sales trends, driven by both stronger traffic and a healthier average ticket.

We believe that in this challenging environment a strong value proposition that has been a hallmark of our business for over 50 years is resonating well with consumers and we are increasing market share. Our improved performance during the quarter enabled us to generate over $26 million in operating cash flow and pay-down roughly $20 million or 21% of our debt.

Now, let's talk about sales. In the first quarter sales were $210.3 million, down 1.2% from $212.9 million for the first quarter of fiscal 2008. Same store sales declined 4.8%.

As discussed on our last call, during the first two months of the quarter we comp down in the high single digits. We saw an abrupt and significant improvement in sales trends beginning in March and we comped positively over the last four weeks of the quarter. This included the benefit of an extra sales day due to the Easter, shift of Easter when our stores are closed, into April. However, even were we to factor out this benefit we would characterize our comps during this period as essentially flat.

Actually our same store sales declined 4.4% as opposed to 4.8%.

I'm sorry. Barry, thanks for the correction.

Looking back, I think a significant factor in our improved sales performance in March was that we were no longer being negatively impacted by weather comparisons. A lack of winter weather early in the quarter led to soft sales of winter products and February rains in some of our markets hurt the start of spring sports sales.

Recall that during last year's first quarter we enjoyed very favorable winter weather conditions which led to strong sales of winter product. Winter normalized this March in most of our markets, with snow in the mountains and dry ball fields, and that certainly benefits sales trends in a number of categories.

We also believe that consumers may be finding our value proposition increasingly attractive in the current environment. We are benefitting from a healthy opportunistic buying arena, and we think that more people across our markets may be recognizing and appreciating the tremendous values and quality merchandise that we provide.

During the first quarter our sales trends improved from the fourth quarter across all of our geographic areas. From a product standpoint, our footwork category was the strongest performer for the quarter, down low single digits. We experienced improvement in our core men's, women's, and children's footwear products.

Hard goods were also down in the low single digit range benefitting from the relative strength of our outdoor product category. We, like most in the industry, have experienced the increase in firearms and ammunition sales that has been widely reported. Our apparel category was down low teens due largely to soft winter product sales and possibly a greater impact from the weak economy and competitive activity.

Our merchandise margins declined 88 basis points due to the shift in our product sales mix that I just mentioned, inflationary pressures, and our efforts to ensure that our promotional pricing in this environment is appropriately competitive. The footwear and hard good categories are strongest for the quarter but did not enjoy the higher margins that we generally see in apparel.

On the expense side, we continue to maintain tight control and increase operating efficiencies where possible. During the first quarter we leveraged SG&A by lowering overall expense by $1.4 million compared to last year despite operating 17 more stores.

This was achieved through a combination of judiciously managing our ad spend to better align with sales levels and reducing administrative expense. These savings were partially offset by higher store related expenses to support our larger store base.

We remain pleased with our inventory management efforts. During the first quarter we continued to align inventories to our sales levels with total chain wide inventories down 3.5% from the prior year. On a per store basis inventories were down approximately 8% versus the prior year.

Commenting on store growth, as we discussed last quarter, we are taking a very cautious approach to store openings in fiscal 2009 and are waiting for clear indications of a broader economic recovery before resuming our historical pace of store growth.

We did not open or close any stores in the first quarter, and we continue to operate 381 stores. We have one store slated to open in the second quarter and we continue to expect to open substantially few stores in 2009 than we did in 2008.

Turning now to the second quarter, I'm pleased to report that in April the positive sales trends that we experienced in March have continued and actually seem to be improving. That being said, we certainly recognize that the overall consumer environment remains very challenging, and there is still tremendous uncertainty surrounding the broader economic recovery and the health of the consumer. Also, we should point out that the most important period of our quarter lies ahead of us with Memorial Day and Fathers Day.

All in all, we feel confident about our ability to position ourselves for long-term growth in these difficult times and continue to gain market share. We remain focused in managing all aspects of our business within our control, reducing our cost structure, maintaining a strong balance sheet, and providing our customers with the compelling values that are the foundation of our business model. While we believe that our model has been right for over 50 years, we think that it is arguably never been more right for the times than it is today.

Now, I will turn the call over to Barry, who will provide more information about the quarter, as well as speak to our balance sheet, our cash flows, and provide guidance.

Thanks, Steve.

Our gross profit margin for the first quarter was 31.9% of sales compared to 33.6% of sales for the first quarter of 2008. The decrease was due mainly to higher store occupancy costs associated with operating 17 more stores than the prior year and a decline of approximately 88 basis points in merchandise margins. As Steve mentioned, merchandise margins declined due primarily to shifts in our product sales mix, inflationary pressures, and slightly more promotional pricing.

Our selling and administrative expense as a percentage of net sales decreased to 29.4% in the first quarter versus 29.7% in the first quarter of the prior year. The improvement reflects our cost management efforts which enabled us to leverage expenses despite the increased store count. On an absolute basis our SG&A expense was down $1.4 million year-over-year.

Now, looking at our bottom line, net income for the first quarter was $2.8 million or $0.13 per diluted share, compared to net income in the first quarter of fiscal 2008 of $4.1 million or $0.19 per diluted share.

Turning to our balance sheet, we feel our inventory is in very good shape as we continue to successfully align it with our sales levels. Total chain inventory was $222.3 million at the end of the first quarter, which was down approximately $11 million from both our fiscal 2008 yearend and the first quarter last year. On a per store basis quarter end inventories were down approximately 8% from the first quarter last year.

Looking at our capital spending, CapEx excluding noncash acquisitions totaled $1.1 million for the first quarter of fiscal 2009 reflecting expenditures for store equipment, store remodeling, and IT systems.

As Steve mentioned, we continue to maintain a cautious approach to new store growth and expect to open substantially fewer stores in fiscal 2009 than we did in fiscal 2008. As a result, we expect total capital expenditures for the full year excluding noncash acquisitions in the range of $7 million to $9 million.

From a cash flow perspective we generated cash flow from operations of $26.6 million for the first quarter, compared to $20.0 million for the comparable period last year. We have historically used our operating cash flow for new store expansion, paying shareholder dividends, reducing debt or repurchasing the Company's common stock.

In the first quarter we primarily used our cash to pay-down borrowings and to pay our quarterly dividend of $0.05 per share. We did not buy-back any stock under our repurchase plan which is consistent with our strategy in the current challenging economic climate.

We believe that preserving our capital and maintaining the financial flexibility to pay-down debt is the best way to maintain a healthy financial condition in this environment. We are pleased with our ability to pay-down a healthy $20 million of debt during the first quarter. This brought our long-term debt at the end of the quarter to $76.5 million compared to $96.5 million at the end of fiscal 2008, and $97.3 million at the end of the first quarter last year.

We are comfortably in compliance with all covenants under our $175 million financing agreement and expect to remain in compliance with those covenants for the remainder of the year.

Now, I'll turn to guidance. While first quarter results exceeded our expectations they also underscored the unpredictability of customer traffic and sales and the challenge to accurately forecast. That being said, as Steve mentioned, we have been encouraged by recent trends and are cautiously optimistic about the second quarter.

For the second quarter we expect same store sales to be in the flat to positive low single digit range. We expect earnings per diluted share for the quarter in the range of $0.10 to $0.18. For comparative purposes and as a reminder, earnings per diluted share for the second quarter of fiscal 2008 were $0.08, including a nonrecurring charge of $0.04 per diluted share.

Operator, we are now ready to turn the call back to you for questions and answers.

Thank you, sir. We will now begin the question and answer session. (Operator instructions.)

And the first question comes from the line of Mich Kaiser with Piper Jaffray. Please go ahead.

Thanks, guys. Good afternoon, and very nice quarter.

Thank you, Mich.

Could you give us a sense for the impact of the Easter shift, if you don't mind, on the quarter and then maybe how we should factor it into Q2? I know you've got, obviously provided guidance but we just want to understand the magnitude, if we could?

Sure, in Easter we are simply closed on Easter Sunday, so we lost -- we had an additional sales day to the first quarter which we'd lose in the second quarter. It's not a number, I guess an impact that we can precisely quantify. I think in round figures we would say maybe it benefitted Q1 by nearly 100 basis points and would have a similar impact into Q2, offsetting impact in Q2.

Okay, sounds good. And you talked about the promotional environment hurting gross margin a little bit. Is that something we should be factoring in going forward? I know you don't want to shed all your marketing plans, but would you expect that we might see some of that go forward, or--?

Well, I think we really evaluate our pricing and our pricing strategies on an arguably a day-to-day, week-to-week basis, and as you mentioned for competitive reasons we're not going to be very specific in ad strategy. So I think we try to make the appropriate calls on pricing the product as our business progresses throughout the year.

Okay, and everybody is talking about it, the firearm sales continue to be very strong. Just the sustainability of that in your estimation, is that something that I've heard others talking about stock-up, so they think it's going to be strong for at least a little while longer between the guns and the ammo. Could you -- give your perspective on that?

Well, I think it -- I mean it's hard to speculate on how long the increased demand might last, but I think it probably has some additional legs just for those reasons you mentioned.

Okay, and you made some nice -- looking at SG&A you mentioned the cuts, I think about down $1.4 million year-over-year, is that something, and I know if I look at it on a per store basis that's been a pretty nice, just in terms of the deleverage not being as bad -- do you think that's sustainable here for the next say three quarters or so?

Mich, our SG&A expenses were down $1.4 million, and we look to continue to be able to maintain pretty tight controls on SG&A, specifically advertising is a key for us, and interest is going to help us going forward here with our lower debt levels and so on.

We really kind of continue to press in all areas, and depending on business conditions certainly we'll continue to look at labor costs and things like that. So I mean we think we still have levers certainly in the SG&A area that we can tighten up.

Okay, and I know your net advertising was down just a touch in 2008. Would you expect that number to be down in 2009?

Well, Mitch, we're not giving full guidance here, but we do -- I will tell you this, that it was certainly down in the first quarter, and we expect it to be down in the second quarter.

Okay, sounds good, guys. Good luck.

Thank you.

Thanks.

Thank you. Our next question comes from the line of Sean McGowan with Needham & Company. Please go ahead.

Thank you. A couple of questions. First, just a quickie -- would you expect the tax rate shown in the first quarter to be indicative of what you'd have for the rest of the year?

Yes, Sean, I'd use the 39%.

Okay, and do you know at this point of anything that would cause that to change out in the future, you know, some companies I think that they know are going to pop-up in 2010?

Not that I'm aware of. I think if you go back and look at our tax rate over the last several years I think it ranged between 39% ad 39.4%, so its not going to change -- we don't expect it to change very much.

Okay, can you remind us what the charge was in the second quarter of last year and if you look at last year at $0.12, is there anything that, it's $0.12, and you've got a range that has that kind of in the middle, is there anything that would prevent the balance of the quarter or really the balance of the year from exhibiting the kind of leverage that you were able to get once things turned positive on the sales side?

Well, first of all, from a leverage standpoint we think we've reduced our expenses and managed those costs, and certainly the distribution center has been a big plus for us in terms of reducing costs. And, no, we think that if sales turn and when sales turn we're going to be able to achieve pretty healthy leverage on the bottom line.

I guess more specifically what I'm saying is are there expenditures that you're really putting off but can't wait to have an opportunity to make and that, therefore, the leverage might not be as great?

No, I don't think that's the case.

All right, thank you very much. What was the charge last year, you said?

Yes, during this, just for everybody's kind of knowledge here, during the second quarter of 2008 we reported a $1.5 million pretax charge to correct an error in our previously recognized straight line rent expense.

Oh, that's right, that's right.

Substantially all of which pertained to prior periods and accumulated over a period of 15 years, so it was really all prior period stuff and we recorded it in the second quarter last year, it was immaterial to that quarter and it was immaterial to our previously reported financial statements.

Okay, all right, thank you very much.

Sure.

Thank you. Our next question is from the line of David Magee with SunTrust Robinson Humphrey. Please go ahead.

Yes, hi, good afternoon, and good quarter.

Thank you, David.

A couple of things. One is do you have the opportunity this year to renegotiate store leases, either through co tenancy violations or just because they're up for renewal?

We do have the opportunity and we are.

Any number that you'd care to give us, Steven, on it?

Pardon me?

Any number that you'd care to give us on that, Steven?

I don't think we would quantify a number. I mean it's something that we're able to do as leases come up for renewal or expiration. It's not a figure that's -- it's a figure that's certainly positive and helpful. I wouldn't characterize it as overly material to our year this year, but it's something that will benefit certainly over the next five plus years, as well.

Okay, and secondly with regard to special buys are you seeing some consistent supply out there that you're able to make? Is it increasing or decreasing at this point in time?

We're encouraged by what we're seeing in the opportunistic buying arena, and we think it's healthy, and I would characterize it as better than typical. This certainly is an area of strength for us, we're -- our tremendous experienced team and longstanding vendor relationships is certainly an asset.

Thank you, and then lastly I know you're being cautious this year with your real estate. I'm curious how you feel about the class of 2008 adjusting for the environment? Are you pretty happy with the stores you opened last year/

We are, we're generally pleased thus far with the class of 2008, and like you mentioned I mean those stores have, like our existing stores, have been impacted by the macro environment, but we certainly believe strongly in the potential for those stores to be very positive contributors to the business.

Thanks, guys, and good luck.

Thank you.

Thank you. Our next question is form the line of Kristine Koerber with JMP Securities. Please go ahead.

Hi, this is Jennifer Bennett, filling in for Kristine. I have two questions for you. One, you mentioned that there were some inflationary pressures on gross margin, can you comment on those? And then you, the pay-down the $20 million pay-down of debt, should we expect further pay-downs?

All right, well, I'll take part one, Barry, if you'll take part two?

We saw a significant amount of inflation, particularly over the second half of 2008, and the affects of that inflation is still working its way through the business now. I think currently we're seeing, I would characterize a leveling off of the inflationary pressures. But right now I mean we've been kind of cautious in trying to be forecasting on all the price increases in this environment to make sure that it's something that the customers can probably accept.

Yes, Jennifer, on the debt side, as you mentioned, we paid down approximately $20 million of our debt since yearend in the first quarter.

With regard to the second quarter, we expect debt for the second quarter to be roughly flat to maybe down slightly from Q1. You have to remember that we'll -- we expect to build seasonal inventories during the second quarter, which does have an affect.

So I would look to something flat to perhaps down slightly. We do expect to use our free cash flow to further reduce debt during 2009, so that's our priority.

Okay, thank you. And just a quick follow-up on the first one, point -- are you passing those higher inflation costs on to the customer?

Well, as I tried to mention that we're -- in some cases, yes, and in some cases, I mean it's something that we may step into over a period of time. We're very sensitive to the pressures in the consumers' pocketbooks right now, and we're trying to make on an item-by-item basis the right decision for our business.

Okay, thank you.

Thank you. Our next question comes from the line of Reed Anderson with D.A. Davidson. Please go ahead.

Good afternoon. Hi, Steve. Say, a quick question kind of on the competitive landscape. I know, obviously, you've got a number of both public and private competitors in a number of your markets that are struggling, and I guess I'm not asking you to comment on them per se but just is it your perception that either your benefitting from kind of their dislocation or do you think there's been a change in the last few months to your benefit? Any thoughts relative to your position there?

Well, you're right, Reed, it's certainly been a pretty dynamic competitive market over the last few months, and we think we are seeing some competitive rationalization, not unlike what we've seen in the past. I would maintain that periodic rationalization of the competitive environment is a good thing for us.

We think we're gaining market share. I mean right at the moment I mean it's hard to figure out day to day what the impact is, we're facing various liquidation sales in our marketplace, but there's an awful lot, as you mentioned going on in the competitive arena right now.

Okay, but it doesn't seem like that liquidation is really having a huge impact on you beyond what you would have expected from a timing standpoint, at least now?

It's a tough one to measure. I mean there's so many, in a short period of time there's so many other variables that impact our business, weather, Easter, flip-flops and the like. I mean there's certainly some impact from the liquidation activity.

Logically, I mean the liquidation has to impact our business, but on the other hand some of these retailers as they're liquidating their inventory, you know, they're not receiving fresh product so that could be an offsetting benefit for us. Honestly, it's a tough read in a short period of time.

Sure, and then on the comps, I believe it was -- you said footwear was down low single digits and it was your best performing area. Just curious within that did that category benefit more than the others, say, from either special buys or special makeups or is it just overall it was just your better category?

Well, our footwear business always benefits from special buys and then special makeup products, I mean that's a big part, it's a core strength of ours, and but I think very -- at this point in time this category is benefitting from the tremendous value proposition that we're able to present to our consumers. We've got a tremendous reputation in our marketplace for terrific prices and quality footwear, and I'd argue that's just what the consumer is looking for today.

And so within that, is it a fair assumption that perhaps maybe your average price point or selling point in that category was maybe just a little bit lower this year versus a year ago?

Yes, we wouldn't comment on that, I don't have that information even available at this point in time. I'm not sure I can answer that question.

Okay, that's fine. Good luck.

Thank you.

Thank you. (Operator instructions.)

And our next question is from the line of Bill Dezellem with Tieton Capital Management. Please go ahead.

Yes, thank you. First of all, you had made a reference in your opening remarks to the relative strength of the different regions, and I didn't quite catch it, so would you kind of dial into what you are seeing from a region by region perspective?

And then, secondarily, and I apologize for asking the question, I could go figure it out on my own here, but if you have it handy what is the typical decline in sales in Q1 versus Q4? I mean it was only 4.5% this quarter and that seems low to me.

All right, well, let me talk to the comment that I made in my prepared remarks about geography was that we saw improved sales trends in all of our geographic areas in Q1 of 2009 versus Q4 in 2008.

And would you please discuss the relative strength of each of those areas, please?

I'm sorry, relative strength?

Or the relative sales strength rebound, costs, or however we would like to look at that?

I guess the point I was trying to make is that we saw strength across our total geography. Logically, we have some areas that perform better than others but for competitive reasons we're certainly not going to get into specific geographical performance.

And then relative to the Q1 sales decline versus Q4 is it fair to say that that 4.5% decline that you had was lower than what would be typical, as a matter of fact quite a bit lower?

Well, Bill, I don't have, you know, Q4. I don't have any real history here, but I guess I can say that our same store sales were down 8.6% in the fourth quarter and our same store sales were down 4.4% in the first quarter. So that in and of itself is a pretty skewed comparison.

So it's very dynamic out there, it's very difficult to really kind of do that comparison. I'll say that in the fourth quarter the October, November period are usually some of our softest sales, made-up for by December. So from a retail perspective our fourth quarter is usually not as dramatic an impact for the whole year. Obviously it's most important but it's not as important as for some.

I might add, the first quarter is typically our most weather impacted quarter of the year, and this year weather was certainly not favorable in terms of the comparisons versus a year ago, so keep that in mind.

Thank you. Our next question is from the line of Ian Corydon with B. Riley & Company. Please go ahead.

Thanks. I was just wondering if you could provide a little color on how much the increase in guns and ammunition impacted the comp in the quarter?

It's certainly been a positive category for us, Ian, but we're not going to get overly specific about the individual category performance due to competitive reasons.

Okay, thank you.

Thank you. Our next question comes from the line of Anthony Ledbiedzinski with Sidoti & Company. Please go ahead.

Hi, good afternoon. Looking at your March and April sales that you have commented don, have you seen the sales that your positive comps are slightly positive, are they across all of your markets or are there any particular markets that are doing better than others, just for April and March?

Well, I mean again for March and April we did have a pickup for the most part across all of our geographies, again, as I just mentioned. I mean obviously we have some areas that are performing better than others but for competitive reasons I mean we're not going to be too specific on that.

Okay, and as far as the product categories that you were seeing sales shrink, can you comment a little bit about that, as well for March and April?

Yes, well, for March and April I mean we saw a general improvement across a broad array of our product lines. Again, we're early into the second quarter and we're not going to -- we'll have certainly a lot more to say about that in our second quarter call.

In the first quarter I mean we saw a particular strength in our core footwear business, the outdoor categories, firearms and ammunition that we spoke of, and a particular weakness over the course of the first quarter in winter related products.

Also, were opportunistic buys or special makeup products, were those types of products higher as a percent of sales than what you see normally in the first quarter?

I don't have that information available.

But, Anthony --

I mean I would not call it significant, if at all.

Yes, from an opportunistic buy standpoint over most of 2008 I mean it was healthy but it wasn't as beneficial as you might think. In the first quarter we're seeing improved opportunities out there from an opportunistic buy standpoint, but that's kind of -- and those I think will actually help the second quarter and beyond.

Also, any ideas as to what CapEx is going to be for this year?

$7 million to $9 million, Anthony.

$7 million -- Okay, so that's still consistent. And then can we assume that you're going to use pretty much all of your free cash flow for debt reduction?

We evaluate the best use of cash routinely but I would certainly say that that's a priority for us this year.

Okay. All right, thank you.

Thanks, Anthony.

Thank you. Our next question is a follow-up from the line of Mich Kaiser with Piper Jaffray. Please go ahead.

Thanks, guys. Just a couple follow-ups. The inflation pressures that you talked about I am assuming freight might have been part of that, or if you work through that and is it actually a benefit now? And were there other inflationary pressures that we should be thinking about?

Well, I think freight costs are moderating a little bit, Mich, than what they were last year, certainly from a distribution standpoint that was a big benefit this year for us in the first quarter versus last year. So I think that probably the freight is certainly moderating.

Okay, so it doesn't take awhile to -- are you -- you are on LIFO, aren't you? Isn't that right?

No, we're average cost.

You're average cost, okay, I'm sorry, that's right. Okay.

And then your typical lease term is how many years?

Oh, they may vary -- I'm not sure we have a typical lease term, it could be anywhere's from a five, five to 10-year initial term with a series of options beyond that.

Okay, so if you just work the math through on that then, if it's just say seven then mathematically about 15% of your leases come due every year then, assuming you're at kind of constant store openings?

Yes, I mean I'd say in any given year probably 10% to 15% of our leases come due. I mean, again, more mature stores typically have options that kick in every five years. We have some stores that may be going through an initial 10-year term, and if you take the weighted average I suspect something like a 10% to 15% of our leases.

Okay, that sounds good. It just helps in the thinking around how we should be thinking about rent expense and those things, so appreciate it, thanks.

You're welcome.

Thank you. And our next question is also a follow-up from the line of Sean McGowan with Needham & Company. Please go ahead.

Thanks, again. Two areas of questions. One, Steve, was there anything that you can recall last year in terms of unusually favorable or unfavorable weather in your markets for the second quarter, or are we kind of, was last year more normal?

It was not particularly favorable, certainly over Memorial Day, as I recall last year's Memorial Day weather was disappointingly cold in many of our key markets, not a huge factor but I would say if anything it was not positive, so hopefully we can have some up side if we can get some good start to the summer selling season.

Okay, but no like major flooding or something that really hurt?

Nothing, nothing.

Okay, the second area, for Barry, can you tell us if in terms of -- or above and beyond whatever is required, and I know you'll be paying down debt but are there any scheduled mandatory payments over the next several years?

Well, there aren't, Sean. I mean our credit agreement comes up for renewal in 2011, so we'll have to renegotiate that and, of course, we'll be way out in front of that.

You'd want to be at least a year, right?

Absolutely.

Yes, but there's no big chunky payments that are coming up, we should just figure you'll pay it as you can?

That's right, it's strictly a revolver and it goes up and down depending on business needs, but there's no payment requirement up until it comes due in 2011.

Now, is that the end of 2011?

It's in March of 2011.

So about by this time next year we really ought to have a new one in place probably?

We certainly will be actively discussing it.

Okay, all right, thank you very much.

Thanks, Sean.

Thank you. And we have time for one final question, and the final question comes from the line of Bill Dezellem, also a follow-up from Tieton Capital Management. Please go ahead.

Thank you. Would you please characterize the consistency of the improved sales that you experienced in the last four weeks of the quarter and here in the month of April so far?

Characterize the consistency? I would characterize it as generally consistent. I mean we basically feel we've had eight pretty solid and encouraging weeks of business. Again, we have flip-flops of Easter and that impacts week-to-week number comparisons versus the prior year. What's more important to us is just the fact that we see more encouraging trends and trends that we're certainly cautiously optimistic that it can continue.

Thank you, again.

Thank you. And, at this time, I'd like to turn the conference back to Mr. Miller for any closing remarks.

Thank you, Operator.

We appreciate your interest in today's call, and certainly look forward to speaking with you on our next call. Have a good day.

Thank you, sir.

Ladies and gentlemen, that does conclude the Big 5 Sporting Goods' first quarter 2009 earnings conference call. Thank you very much for your participation. You may now disconnect.