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Sport Chalet Reports Third Quarter And Nine Months Fiscal 2013 Results

New Store Opening

As previously announced, the Company currently plans to open a next generation Sport Chalet this summer in Downtown Los Angeles. Designed by Gensler, the world's leading architect, this store will incorporate a new design template of enhanced displays, fixtures, and graphics to reinforce the Sport Chalet brand and its market positioning as a destination for premium brands, technical merchandise and the highest quality service offerings. Sport Chalet will be an anchor tenant at Brookfield Office Properties' FIGat7th, the destination retail center at the intersection of Figueroa Street and 7th Street that has undergone a $40 million redevelopment. The store will occupy 27,300 square feet of space at the lower courtyard level, and will join City Target as the first new anchors at the redeveloped FIGat7th.  While the Company currently has no plans to open additional stores and future store openings are dependent on the availability of financing, it believes this new concept will allow an immediate opportunity for growth across a wider geography.

Existing Store Closings

The Company currently plans to close two existing stores in fiscal 2014. The two stores, which are located in Antioch, California and Phoenix, Arizona, are being closed as part of the Company's ongoing and rigorous approach to its portfolio of stores, allocating resources towards the greatest growth opportunities, as well as unwavering commitment to its long-term business strategy of returning to sustained profitability.

Conference Call Info

The Company will be hosting a conference call and audio webcast, both open to the public, today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to review its financial results for the third quarter and nine months ended December 30, 2012.  Investors will have the opportunity to listen to the earnings conference call over the internet through an audio webcast located at http://www.media-server.com/m/p/pnqjom3g . To listen to the live call, please go to the website at least fifteen minutes early to register and download and install any necessary audio software. The conference call may also be accessed by dialing (866) 700-7441 and entering passcode 57175936. A dial-in replay of the call will be available approximately two hours after the conference call through Midnight Pacific Time on Friday, March 8, 2013 by dialing (888) 286-8010 and entering passcode 78384903.

About Sport Chalet, Inc.

Sport Chalet, founded in 1959 by Norbert Olberz, is a leading, full service specialty retailer with 54 stores in Arizona, California, Nevada and Utah; Sport Chalet online at www.sportchalet.com ; and a Team Sales Division. The Company offers over 50 specialty services for the sports enthusiast, including online same day delivery, climbing, backcountry skiing, ski mountaineering, avalanche education, and mountain trekking instruction, car rack installation, snowboard and ski rental and repair, Scuba training and certification, Scuba boat charters, team sales, gait analysis, baseball/softball glove steaming and lacing, racquet stringing, and bicycle tune-up and repair at its store locations.

The Sport Chalet, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10020

Forward-Looking Statements

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 negative effect of the economic downturn on the Company's sales, limitations on borrowing under the Company's bank credit facility, the Company's ability to control operating expenses and costs, the competitive environment of the sporting goods industry in general and in the Company's specific market areas, inflation, the challenge of maintaining its competitive position, the Company's ability to manage the growth of its Team Sales Division and online business, changes in costs of goods and services, and 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.
Sport Chalet, Inc.
         
Consolidated Statements of Operations (Unaudited)
         
   13 weeks ended   39 weeks ended 
  December 30, 2012 January 1, 2012 December 30, 2012 January 1, 2012
  (in thousands, except per share amounts)
Net sales   $ 97,567  $ 97,223  $ 272,868  $ 268,027
Cost of goods sold, buying and occupancy costs  70,642  70,917  197,356  192,198
Gross profit   26,925  26,306  75,512  75,829
         
Selling, general and administrative expenses   26,097  24,410  68,759  68,365
Depreciation and amortization  2,105  2,468  6,215  7,365
(Loss) income from operations   (1,277)  (572)  538  99
         
Interest expense   608  464  1,558  1,360
Loss before income taxes   (1,885)  (1,036)  (1,020)  (1,261)
         
Income tax provision  --   --   2  2
Net loss  $ (1,885)  $ (1,036)  $ (1,022)  $ (1,263)
         
Loss per share:        
Basic and diluted  $ (0.13)  $ (0.07)  $ (0.07)  $ (0.09)
         
Weighted average number of common shares outstanding:        
Basic and diluted  14,190  14,190  14,190  14,190
 
 
Sport Chalet, Inc.
     
Consolidated Balance Sheets
     
  December 30, April 1,
  2012 2012
  (Unaudited)  
Assets (in thousands, except share amounts)
Current assets:    
Cash and cash equivalents  $ 7,867  $ 2,811
Accounts receivable, net  8,049  2,777
Merchandise inventories   110,051  98,181
Prepaid expenses and other current assets   1,618  1,603
Total current assets   127,585  105,372
     
Fixed assets, net  19,165  22,081
Total assets   $ 146,750  $ 127,453
     
Liabilities and stockholders' equity    
Current liabilities:    
Accounts payable   $ 46,654  $ 28,220
Loan payable to bank  37,333  41,255
Salaries and wages payable   5,345  2,980
Other accrued expenses   22,878  17,370
Total current liabilities   112,210  89,825
     
Deferred rent  17,067  19,340
Commitments and contingencies    
     
Stockholders' equity:    
Preferred stock, $.01 par value:    
Authorized shares – 2,000,000    
Issued and outstanding shares – none  --   -- 
Class A Common Stock, $.01 par value:    
Authorized shares – 46,000,000    
Issued and outstanding shares – 12,414,490 at    
December 30, 2012 and April 1, 2012  124  124
Class B Common Stock, $.01 par value:    
Authorized shares – 2,000,000    
Issued and outstanding shares – 1,775,821 at    
December 30, 2012 and April 1, 2012  18  18
Additional paid-in capital   37,228  37,021
Accumulated deficit  (19,897)  (18,875)
Total stockholders' equity   17,473  18,288
Total liabilities and stockholders' equity   $ 146,750  $ 127,453
 
 
Sport Chalet, Inc.
     
Consolidated Statements of Cash Flows (Unaudited)
     
   39 weeks ended 
  December 30, 2012 January 1, 2012
  (in thousands)
Operating activities    
Net loss  $ (1,022)  $ (1,263)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization   6,215  7,365
(Gain) loss on disposal of property and equipment  (16)  43
Share-based compensation  207  801
Changes in operating assets and liabilities:    
Accounts receivable   (5,272)  (2,649)
Merchandise inventories   (11,870)  (13,416)
Prepaid expenses and other current assets   (15)  (5)
Accounts payable   16,639  22,261
Salaries and wages payable   2,365  1,623
Other accrued expenses   4,984  3,603
Deferred rent  (2,273)  (2,119)
Net cash provided by operating activities   9,942  16,244
     
Investing activities    
Purchase of fixed assets   (980)  (2,980)
Proceeds from sale of assets  16  60
Net cash used in investing activities   (964)  (2,920)
     
Financing activities    
Proceeds from bank borrowing  279,734  273,584
Repayment of bank borrowing  (283,656)  (285,933)
Net cash used in financing activities  (3,922)  (12,349)
     
Increase in cash and cash equivalents   5,056  975
Cash and cash equivalents at beginning of period  2,811  51
Cash and cash equivalents at end of period  $ 7,867  $ 1,026
     
Supplemental disclosure of cash flow information    
Cash paid during the period for:     
Interest   $ 1,558  $ 1,338
Income tax  $ 2  $ 2
     
Supplemental disclosure of non-cash investing and financing activities    
Purchases of fixed assets on credit  983  -- 
Fixed assets acquired under capital leases  $ 524  $ 722
CONTACT: Howard Kaminsky, Chief Financial Officer
         investorrelations@sportchalet.com
         (818) 949-5300 ext. 5728

Sport Chalet

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