Gander_Mountain_Company_Profile

Gander Mountain Company Inc. Summary Gander Mountain Company Inc. operates a retail network of outdoor specialty stores for hunting, fishing, camping, marine, and outdoor lifestyle products and services. It offers outdoor equipment, technical apparel, and rugged casual wear and footwear, as well as firearms, boating products, auto TV products, and gifts and recreation products. The company also operates as catalog and Internet based retailer of products for boating and other water sports enthusiasts. The company was formerly known as Gander Mountain, L.L.C. Gander Mountain Company Inc. was founded in 1960 and is based in St. Paul, Minnesota with locations in Alabama, Arkansas, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Mississippi, New York, North Carolina, North Dakota, Ohio, Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and Wisconsin. Early History Gander Mountain, Inc. was founded in 1960 by Robert Sturgis, an avid outdoorsman and lifelong resident of the state of Wisconsin. Living in the town of Wilmot, a rather isolated community within the state, Sturgis, along with his fellow hunters, was unhappy with his inability to get high-quality hunting accessories and equipment without having to drive a hundred miles to the nearest sportsman retail store. As a result, Sturgis decided to open a small store in the center of Wilmot that would market shooting supplies to gun owners and dealers by mail order. Not surprised by the response to his simple marketing techniques, Sturgis soon began to mail catalogs directly to consumers. By 1965, the budding entrepreneur had built an impressive reputation as a supplier of high-quality shooting equipment to hunters across the Midwest. Sturgis discovered that his mail catalog business was an overwhelming success. He marketed a wide range of products for the serious sportsman, including shotguns, an impressive array of unusual cartridges for high-powered hunting rifles, sophisticated archery equipment, and much more. As Gander Mountain's image grew, sportsmen from as far away as Montana and upstate New York began to order from the company's catalogs. In fact, nothing seemed like it would prevent the continued growth of his business. By 1968, Sturgis had opened a retail store in Wilmot to sell hard-to-get items to local hunters. Unfortunately, in 1968 legislation passed by the United States Congress prohibited the sale of firearms through a mail order or catalog business. Both senators and representatives were responding to the assassinations of the 1960s, including President John F. Kennedy, Robert Kennedy, and Martin Luther King, Jr., and the public's perception that obtaining a gun was easily done, and that individuals who were unstable might be able to procure a firearm through a mail-order catalog if a retail store had refused to sell them one. As a result, Gander Mountain's catalog sale of hunting weapons, including shotguns, high-powered deer hunting rifles, and small arms used for target sport, was discontinued. Sales of firearms from the catalog were one of the fastest-growing sources of revenue for the company. As it happened, the company was forced to expand and re-orient its product line to include more items for fishing and camping. From the late 1960s onward, primarily due to the federal curtailment of the sale of firearms through mail-order catalogs, Gander Mountain began to experience the volatility of the outdoor recreational equipment market. The company had been slow to adapt to the changes required by the 1968 federal legislation, and had turned initially to the sale of fishing rods, reels, bait, nets, lures, and other sundry items to replace the lost catalog market for firearms. But management soon discovered that the sale of fishing equipment was seasonal, with high revenues during the spring and summer months, and low revenues during the autumn and winter. To augment the cyclical nature of its sales, the company then decided to expand its catalog sales to include a wide variety of camping equipment and outerwear, including tents, lanterns, portable stoves, sleeping bags, and clothing such as shirts, woolen pants, boots, coats, and socks. But the demand for camping equipment was also seasonal, mostly from the latter spring to the early days of autumn, and management began to fear that the company needed an even greater expansion of its product line to garner a steady cash flow for its operations. The entire decade of the 1970s was dedicated to finding the right mix of products by the Gander Mountain management. Small variations in fishing equipment, camping equipment, and clothing did not, however, raise the volume of catalog sales. The expansion of the store in Wilmot, Wisconsin, to provide a larger selection of items for local customers did not seem to help either, since the company had based its reputation as a supplier of firearms through catalog sales. As the decade drew to a close, Gander Mountain found itself growing deeper in debt. Company at a glance Gander Mountain, Inc. has been one of America's leading specialty companies in the hunting, camping, and fishing equipment industry. Employees Has 2,325 employees as of 2012 Market Gander Mountain is a privately owned business so it does not have stock. Important People Mr. David C. Pratt – Chairman Mr. Ronald A. Erickson – Founder Mr. Robert J. Vold – Chief Financial Officer Mr. Michael J. Owens - Chief Operating Officer and Executive Vice President Mr. Eric R. Jacobsen – Executive Vice President   Income Statement 2005 2004 2003 Net Sales Revenue $644,014,000 $489,530,000 $357,441,000 Revenues Cost of Goods Sold $479,662,000 $370,532,000 $271,991,000 Gross Profit $164,352,000 $118,998,000 $85,450,000 General and Administrative Expenses $27,876,000 $21,719,000 $20,864,000 Selling, General and Administrative Expenses Business Exit Costs Impairment of Goodwill Other Restructuring, Remediation and Impairment Provisions Pre - Opening Costs $8,194,000 $4,921,000 $700,000 Expense $121,575,000 $86,125,000 $67,122,000 Operating Income/(Loss) $6,707,000 $6,233,000 ($3,236,000) Net Interest Income/(Expense) ($5,137,000) ($4,760,000) ($7,314,000) Gain/(Loss) Related to Litigation Settlement $0 Other Non-operating Gains/(Losses) $0 Non-operating Expense - Other $0 Income/(Loss) from Continuing Operations Before Income Taxes $1,570,000 $1,473,000 ($10,550,000) Provision for Income Taxes $0 $0 $2,274,000 Net Income (Loss) $1,570,000 $1,473,000 ($12,824,000) Preferred Stock Dividends $4,305,000 $16,523,000 $10,057,000 Net Income Applicable to Common Stockholders ($2,735,000) ($15,050,000) ($22,881,000) Balance Sheet 2005 2004 Cash and Cash Equivalents $1,033,000 $970,000 Net Accounts Receivable Trade $9,347,000 $6,610,000 Net Income Taxes Receivable Net Inventories $264,138,000 $180,361,000 Prepaid Expenses $5,806,000 $3,599,000 Current Assets $280,324,000 $191,540,000 Net Property, Plant and Equipment $101,430,000 $53,854,000 Goodwill Net Finite-Lived Intangible Assets - Other Noncurrent Other Assets $4,089,000 $4,307,000 Assets $385,843,000 $249,701,000 Accounts Payable $38,808,000 $35,957,000 Accrued Expenses - Other $39,348,000 $30,097,000 Accrued Expenses Current Notes Payable - Related Parties Current Line of Credit $114,441,000 $102,058,000 Current Portion of Long-Term Debt Current Liabilities $192,597,000 $168,112,000 Unsecured Debt - Long-Term $0 Convertible Debt Other Long Term Debt Long-Term Debt Deferred Tax Liability Noncurrent Other Liabilities $30,938,000 $17,091,000 Preferred Stock - Value (Excluding Additional Paid in Capital) $0 $0 Convertible Preferred Stock - Value (Excluding Additional Paid in Capital) $2,000 Common Stock - Value (Excluding Additional Paid in Capital) $142,000 $9,000 Additional Paid in Capital $191,434,000 $95,325,000 Retained Earnings ($25,168,000) ($26,738,000) Equity - Other ($4,100,000) ($4,100,000) Stockholders' Equity $162,308,000 $64,498,000 Liabilities and Stockholders' Equity $385,843,000 $249,701,000 Cash Flow Statement 2005 2004 2003 Operating Activities Beginning Net Income $1,570,000 $1,473,000 ($12,824,000) Depreciation and Amortization $12,213,000 $9,054,000 $7,763,000 Adjustment for Equity Based Compensation Expense $21,000 Total Adjustment Employee Compensation $0 Adjustment Write Off of Goodwill Adjustment Realized Gains Losses On Sale Asset $955,000 Adjustment Write Off Property Plant Equipment $21,000 $462,000 Adjustments to Reserve for Business Exit Costs Deferred Income Taxes $2,274,000 Other Adjustments to Common Stockholders' Net Income - Increase/(Decrease) $0 Change Accounts Receivable $2,737,000 $3,017,000 ($571,000) Increase/(Decrease) in Inventories $83,777,000 $70,399,000 $14,572,000 Change Prepaid Expenses Other Current Assets Change Prepaid Expenses Other Assets $2,544,000 $2,643,000 ($23,000) Deferred Income Taxes Increase/(Decrease) in Other Non-operating Assets Increase/(Decrease) in Accounts Payable $24,135,000 $24,756,000 $21,020,000 Net Cash Flows Provided By/(Used In) Operating Activities ($50,164,000) ($40,755,000) $4,717,000 Purchase of Property, Plant and Equipment $48,532,000 $25,617,000 $6,942,000 Acquisition of Businesses, Net of Cash Acquired Proceeds from Life Insurance Policies Proceeds from Sale of Other Assets $0 Net Other Investing Activities $0 Net Cash Flows Provided By/(Used In) Investing Activities ($48,532,000) ($25,617,000) ($6,942,000) Proceeds from Lines of Credit $56,911,000 $7,241,000 Net Change Line Credit $12,383,000 Proceeds Convertible Debt $0 Proceeds from Related Party Debt Other Proceeds from Issuance of Long Term Debt Net Proceeds from Issuance of Long-Term Debt and Capital Securities $0 Repayments of Related Party Debt $9,840,000 Other Repayments of Long Term Debt $0 Repayments of Long-Term Debt and Capital Securities Net Change Notes Payable $9,840,000 ($59,609,000) Proceeds from Issuance of Common Stock $96,216,000 $0 $54,609,000 Proceeds from Stock Options Exercised $0 $0 Net Cash Flows Provided By/(Used In) Financing Activities $98,759,000 $66,751,000 $2,241,000 Increase/(Decrease) in Cash and Cash Equivalents $63,000 $379,000 $16,000 Cash and cash equivalents at the beginning of the year $970,000 $591,000 $575,000 Total Cash and cash equivalents at the end of the year $1,033,000 $970,000 $591,000