Gander Mountain Company Announces Third Quarter 2009 Results

ST. PAUL, Minn., Dec. 3  /PRNewswire-FirstCall/ -- Gander Mountain Company (http://www.gandermtn.com/) (NASDAQ:GMTN), the nation's largest retail network of stores for hunting, fishing, camping, marine and outdoor lifestyle apparel and footwear, products and services today announced results for the third fiscal quarter ended October 31, 2009.

Fiscal 2009 third quarter consolidated sales were $276.6 million compared to consolidated sales of $269.9 million for the third quarter of fiscal 2008, a 2.5 percent increase.

Consolidated net income was $3.2 million for the fiscal 2009 third quarter compared to a consolidated net income of $0.8 million for the same quarter last year. Gander Mountain reported net earnings per share of $0.13 compared with $0.03 for the third quarter of fiscal 2008.

Retail segment sales for the third quarter were $261.0 million, an increase of $5.5 million or 2.2 percent, as compared to the fiscal 2008 third quarter. Direct segment sales were $15.6 million for the quarter, compared to $14.4 million for the same quarter last year, an increase of $1.2 million or 8.0 percent.

Comparable store sales during the third quarter of fiscal 2009 were a positive 1.0 percent. The firearms, ammunition, fishing, apparel, marine and camping categories all experienced above average comparable store sales gains during the quarter. During the second quarter of fiscal year 2009, Gander Mountain substantially completed its withdrawal from the boat, ATV and power sport services categories. Excluding the negative 2.7 percent impact of these categories, comparable store sales were a positive 3.7 percent during the third quarter.

Retail segment net income was $5.5 million compared to $3.7 million for the third quarter of last year.  Net losses for the direct segment were $2.3 million for the quarter, compared with $2.9 million for the third quarter of last year.

For the 39 weeks ended October 31, 2009, the company reported sales of $752.7 million, an increase of 3.0 percent over the same period in fiscal 2008.  Comparable store sales for the 39-week fiscal 2009 period were a positive 1.8 percent. Excluding the negative 3.8 percent impact of boat and ATV sales and power sport services, comparable store sales were a positive 5.6 percent for the 39-week fiscal 2009 period. The company reported a net loss for the 39-week period of $22.8 million, or $0.94 per share, compared with a net loss of $28.5 million, or $1.18 per share for the 39 weeks ended November 1, 2008.

About Gander Mountain Company

Gander Mountain Company (NASDAQ:GMTN), headquartered in Saint Paul, Minnesota, is the nation's largest retail network of stores for hunting, fishing, camping, marine, and outdoor lifestyle apparel and footwear, products and services. Established in 1960, the Gander Mountain brand has offered an expanding assortment of outdoor equipment, technical apparel and footwear, as well as gunsmith and archery services. The stores feature national, regional and local brands as well as the company's owned brands. Focused on a "We Live Outdoors" culture, Gander Mountain dedicates itself to creating outdoor memories. There are 116 conveniently located Gander Mountain outdoor lifestyle stores in 23 states and three outlet stores.  Customers may also shop at http://www.gandermtn.com/. For the nearest store location call 800-282-5993 or visit http://www.gandermtn.com/. Gander Mountain is also the parent company of Overton's (http://www.overtons.com/), a leading catalog and Internet based retailer of products for boating and other water sports enthusiasts.

Cautionary Note Regarding Forward-Looking Statements

Any statements in this release that are not historical or current facts are forward-looking statements. All forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the "Risk Factors" section of the company's Annual Report on Form 10-K for fiscal 2008 and other required reports, as filed with the SEC, which are available at http://www.gandermtn.com/ and at the SEC's Website at http://www.sec.gov/.

                            Gander Mountain Company
               Consolidated Statements of Operations - Unaudited
                     (In thousands, except per share data)

                                13 Weeks Ended     39 Weeks Ended
                                --------------     --------------
                                 October 31,         November 1,
                                2009     2008      2009      2008
                                ----     ----      ----      ----
  Sales                       $276,594 $269,920  $752,661  $730,455
  Cost of goods sold           201,389  200,160   566,185   551,183
                               -------  -------   -------   -------
  Gross profit                  75,205   69,760   186,476   179,272
  Operating expenses:
    Selling, general and
     administrative expenses    68,814   64,975   199,425   190,871
    Exit costs and related
     Charges                       492   (1,112)    1,165       (20)
    Pre-opening expenses           -        -         299     2,035
                                   ---      ---       ---     -----
    Income (loss) from
     Operations                  5,899    5,897   (14,413)  (13,614)
    Interest expense, net        2,579    4,950     7,807    14,301
                                 -----    -----     -----    ------
    Income (loss) before
     income taxes                3,320      947   (22,220)  (27,915)
    Income tax provision           151      182       591       619
                                   ---      ---       ---       ---
    Net income (loss)           $3,169     $765  $(22,811) $(28,534)
                                ======     ====  ========  ========

    Basic and diluted income
     (loss) per common share     $0.13    $0.03    $(0.94)   $(1.18)

    Weighted average common
     shares outstanding         24,200   24,162    24,196    24,086







                          Gander Mountain Company
                        Consolidated Balance Sheets
                             (In thousands)

                                            October 31, January 31,
                                                2009      2009
                                                ----      ----
                                             unaudited

   Assets
   Current assets:
        Cash and cash equivalents              $1,680    $1,655
        Accounts receivable                    21,736    10,784
        Income taxes receivable                     -        62
        Inventories                           428,172   358,127
        Prepaids and other current assets      11,214    12,132
                                               ------    ------
   Total current assets                       462,802   382,760
   Property and equipment, net                150,134   162,180
   Goodwill                                    47,114    47,114
   Acquired intangible assets, net             18,365    19,130
   Other assets, net                            1,541     1,936
                                                -----     -----
   Total assets                              $679,956  $613,120
                                             ========  ========

   Liabilities and shareholders'
    equity
   Current liabilities:
        Borrowings under credit facility     $292,106  $204,514
        Accounts payable                       80,245    63,863
        Accrued and other current
         Liabilities                           49,511    55,456
        Notes payable - related parties        10,000    10,000
        Current maturities of long
         term debt                             16,676    15,628
                                               ------    ------
   Total current liabilities                  448,538   349,461

   Long term debt                              40,775    50,402
   Deferred income taxes                        6,204     5,954
   Other long term liabilities                 26,922    27,398

   Shareholders' equity:
        Preferred stock ($.01 par value,
         5,000,000 shares authorized; no
         shares issued and
         outstanding)                             -         -
        Common stock ($.01 par value,
         100,000,000 shares authorized;
         24,197,733 and 24,195,736
         shares issued and outstanding)           242       242
        Additional paid-in-capital            279,114   278,691
        Accumulated deficit                  (121,839)  (99,028)
                                             --------   -------
   Total shareholders' equity                 157,517   179,905
                                              -------   -------
   Total liabilities and
    shareholders' equity                     $679,956  $613,120
                                             ========  ========







                             Gander Mountain Company
             Consolidated Statements of Cash Flows - Unaudited
                                (In thousands)

                                                       39 Weeks Ended
                                                       --------------
                                                    October 31, November 1,
    Operating activities                                2009      2008
                                                        ----      ----
    Net loss                                        $(22,811) $(28,534)
    Adjustments to reconcile net
     loss to net cash used in operating
     activities:
       Depreciation and amortization                  23,098    23,434
         Exit costs and related charges                1,115    (1,205)
         Stock-based compensation expense                411       989
         Loss (gain) on disposal of assets                10       (62)
       Change in operating assets
        and liabilities:
             Accounts receivable                     (10,891)  (10,380)
             Inventories                             (70,044)  (38,177)
             Prepaids and other current assets           914      (567)
             Other assets                                (65)     (121)
             Accounts payable and other liabilities    9,922     4,786
             Deferred income taxes                       250       293
                                                         ---       ---
    Net cash used in operating activities            (68,091)  (49,544)
                                                     -------   -------
    Investing activities
    Purchases of property and equipment               (9,679)  (16,195)
    Acquisition related expenses                           -      (172)
    Proceeds from sale of assets                         112        77
                                                         ---       ---
    Net cash used in investing activities             (9,567)  (16,290)
                                                      ------   -------
    Financing activities
    Borrowings under credit facility, net             87,592    60,251
    Proceeds from short term notes
     payable - related parties                             -    10,000
    Reductions in long term debt                      (9,921)   (5,623)
    Proceeds from exercise of stock options and
     employee stock purchases                             12       235
                                                         ---       ---
    Net cash provided by financing activities         77,683    64,863
                                                      ------    ------

    Net increase (decrease) in cash                       25      (971)
    Cash, beginning of period                          1,655     2,622
                                                       -----     -----
    Cash, end of period                               $1,680    $1,651
                                                      ======    ======

  Non-cash investing activities: During the 39 weeks ended October 31, 2009
  and November 1, 2008, the Company acquired equipment totaling
  approximately $1.3 million and $4.1 million, respectively, that was
  financed through capital leases. These amounts are excluded from
  Purchases of property and equipment in this statement of cash flows.







                          Gander Mountain Company
              Consolidated Segment Information - Unaudited
                              (In thousands)

  Statement of
   Operations
   data:              13 Weeks Ended           13 Weeks Ended
                     October 31, 2009         November 1, 2008
                     ----------------         ----------------
                 Retail   Direct    Total    Retail    Direct   Total
                 -------  ------   -------  -------   ------   -------

  Sales         $261,030 $15,564  $276,594 $255,506  $14,414  $269,920
  Depreciation
   and
   amortization    7,474     268     7,742    7,447      326     7,773
  Exit costs
   and
   related
   charges           492       -       492   (1,112)       -    (1,112)
  Income (loss)
   from
   operations      7,715  (1,816)    5,899    8,086   (2,189)    5,897
  Net income
   (loss)         $5,475 $(2,306)   $3,169   $3,705  $(2,940)     $765





                       39 Weeks Ended                39 Weeks Ended
                      October 31, 2009              November 1, 2008
                      ----------------              ----------------
                  Retail   Direct   Total     Retail    Direct   Total
                  ------   ------   -----     ------    ------   -------
  Sales         $681,736  $70,925  $752,661  $656,644  $73,811  $730,455
   Depreciation
   and
   amortization    22,315      783    23,098    22,319    1,115    23,434
  Exit costs
   and
   related
   charges         1,165        -     1,165       (20)       -       (20)
  Income (loss)
   from
   operations    (13,231)  (1,182)  (14,413)  (13,630)      16   (13,614)
  Net Loss      $(19,954) $(2,857) $(22,811) $(25,940) $(2,594) $(28,534)





  Balance
   Sheet        As of October 31, 2009    As of January 31, 2009
   data:        ----------------------    ----------------------
                Retail   Direct  Total    Retail   Direct   Total
                ------   ------  -----    ------   ------  -------
  Total
   Assets      $590,166 $89,790 $679,956 $517,812 $95,308 $613,120
  Inventories   408,997  19,175  428,172  334,868  23,259  358,127
  Goodwill and
   acquired
   intangibles        -  65,479   65,479      400  65,844   66,244
  Long term
   Debt         $15,775 $25,000  $40,775  $20,402 $30,000  $50,402


DATASOURCE: Gander Mountain Company



CONTACT:  Investor Relations, Bob Vold, [phone], or Media, David

Ewald, [phone], Cell, [phone], both of Gander Mountain

Company



Web Site:  http://www.gandermtn.com/

http://www.overtons.com/ 

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