February 7, 2013
Via EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
Washington, D.C. 20549
Attention: Tia L. Jenkins, Senior Assistant Chief Accountant
Office of Beverages, Apparel and Mining
Re: | Hot Topic, Inc. |
Form 10-K for Fiscal Year Ended January 28, 2012 |
Filed March 21, 2012 |
File No. 000-28784 |
Dear Ms. Jenkins:
We are writing in response to comments received from the staff of the Commission (the “Staff”) by letter dated January 25, 2013 (the “Comment Letter”) with respect to the Annual Report on Form 10-K for the fiscal year ended January 28, 2012 (the “2011 Form 10-K”) of Hot Topic, Inc. (the “Company”) filed with the Securities and Exchange Commission (the “Commission”) on March 21, 2012; and the Quarterly Report on Form 10-Q for the fiscal quarter ended April 28, 2012 (the “First Quarter 2012 Form 10-Q”) of the Company filed with the Commission on May 23, 2012. The numbering of the paragraphs below corresponds to the numbering in the Comment Letter, the text of which we have incorporated into this response letter for convenience.
The Company acknowledges that:
● | it is responsible for the adequacy and accuracy of the disclosures in the 2011 Form 10-K and First Quarter 2012 Form 10-Q; |
● | Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the 2011 Form 10-K and First Quarter 2012 Form 10-Q; and |
● | the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
United States Securities and Exchange Commission
February 7, 2013
Page Two
Staff Comments and Company Responses
Form 10-K for Fiscal Year Ended January 28, 2012
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cost reduction plan, page 20
1. | Please provide us with additional information relating to the factors that contributed to your write-off of inventory, separate from store closures, in the amount of $9.6 million in the quarter ended April 30, 2011 and $0.5 million in the quarter ended July 30, 2011 included in the table on page 20. |
The Company acknowledges the Staff’s comment and respectfully submits that $9.6 million in the quarter ended April 30, 2011 and $0.5 million in the quarter ended July 30, 2011 relate to the Company’s ‘Strategic Business Changes’ approved by the Company’s Board of Directors in March 2011. The primary focus of our Strategic Business Changes was to improve our operating results and better position us for growth. As part of the changes we named a new Chief Executive Officer in March 2011. As a result of implementing our strategic business and operational initiatives, in the quarter ended April 30, 2011, approximately $6 million of inventory was written down and approximately $3.6 million of property and equipment was impaired. In the quarter ended July 30, 2011, approximately $0.2 million of inventory was written down and $0.3 million of property, equipment and other assets were impaired.
The Company respectfully advises the Staff that the inventory was written down, separate from store closures, in the quarters ended April 30, 2011 and July 30, 2011, because it was not representative of the Company’s new branding direction. Based on a review of our historical merchandising strategies, new leadership determined that certain inventory did not represent the Company’s dark, edgy brand or the target audience. Certain inventory was of a style, type and color that was inconsistent with our branding and geared toward the ‘tween’ market rather than to our older target audience of young men and women, as well as inventory that was not considered dark, edgy or unique enough. Consequently, the Company made changes to its merchandising strategy which included exiting the market for those inventory categories that were not in line with the new branding direction. As a result we used permanent markdowns to sell through the identified merchandise, resulting in the write down of approximately $6 million in the quarter ended April 30, 2011 and $0.2 million in the quarter ended July 30, 2011.
United States Securities and Exchange Commission
February 7, 2013
Page Three
Results of Operations, page 23
2. | We note e-commerce sales are 12.1% of net sales of which 9.1% relate to Hot Topic and 22.9% relate to Torrid for the fiscal year ended January 28, 2012. To help investors gain a more thorough understanding of your sales, trends in profitability, and potential variability, in future filings please provide a more robust discussion of e-commerce sales and their effect on gross profit for each period presented. Please also discuss historical trends, causative factors, and your consideration as to whether those trends are likely to continue. Please provide us with draft disclosure of your planned changes. Refer to SEC Release 33-8350 for guidance. |
The Company respectfully acknowledges the Staff’s comments and submits that it believes that adequate disclosure related to eCommerce is made in the Company’s filings. Please refer to the ‘eCommerce Operations’ section on page 5 of the Company’s 2011 Form 10-K filed with the Commission on March 21, 2012. In the event that the Company determines that significant trends impacting operations exist, appropriate disclosure will be made.
In addition, the Company will disclose the effect of e-commerce sales on gross profit for each period in future filings. An example of the disclosure is presented as follows:
Gross margin decreased approximately $0.4 million, which includes a $0.1 million increase from the internet, or 0.2%, to $232.9 million in fiscal 2012 from $233.3 million in fiscal 2011. As a percentage of net sales, gross margin increased to 33.4% in fiscal 2012 from 32.9% in fiscal 2011.
Consolidated Financial Statements
Consolidated Statements of Operations, page F-2
3. | Please provide us with your analysis supporting your apparent conclusion that the operations of ShockHound did not require discontinued operations presentation pursuant to FASB ASC 205-20. |
The Company respectfully acknowledges the Staff’s comments and submits that due to the immaterial nature of ShockHound, as discussed in SAB Topic 1.M.1, discontinued operations presentation pursuant to FASB ASC 205-20 Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”) was not required. The guidance in ASC 205-20 does not address the manner in which an entity should assess the materiality of a component of an entity’s operations to determine whether they must be classified as discontinued in the statement of operations. However, the Company recognizes that the evaluation of materiality requires that all the relevant circumstances need to be considered as there may be instances where qualitative factors may cause operations of quantitatively small amounts to be material.
United States Securities and Exchange Commission
February 7, 2013
Page Four
The table below reflects the quantitative and qualitative analysis performed by the Company before arriving at the conclusion that the operations of ShockHound did not require discontinued operations presentation pursuant to FASB ASC 205-20.
Consideration | Analysis | Material? |
Determine the magnitude of ShockHound’s operations (sales, gross margin, selling, general and administrative (“SG&A”) expenses, operating loss and net loss) relative to the Company as a whole at the time of discontinuation in fiscal 2011. | Each at approximately 2% or less | No |
Determine the magnitude of the full impairment charge taken for ShockHound in fiscal 2010 relative to the SG&A expenses of the Company as a whole during the same year. | Approximately 1% | No |
Determine the level of precision needed to measure the magnitude of the discontinued operations (precise vs. based on estimates). | The operations of ShockHound and all relevant amounts can be measured precisely. | No |
Will the magnitude of the discontinued operations hide a failure to meet analysts’ consensus expectations for the Company? | No | No |
Will the magnitude of the discontinued operations mask a change in earnings or other trends? | No | No |
Will the magnitude of the discontinued operations change a loss into income or vice versa? | No | No |
Has ShockHound been identified as playing a significant role in the Company’s operations or profitability? | No | No |
Will the magnitude of the discontinued operations affect the Company’s compliance with regulatory requirements? | No | No |
Will the magnitude of the discontinued operations affect the Company’s compliance with loan covenants or other material contractual requirements? | No | No |
Will the magnitude of the discontinued operations have the effect of increasing management’s compensation? | No | No |
Will the magnitude of the discontinued operations conceal an unlawful transaction? | No | No |
Based on the analysis above, the Company concluded that the operations of ShockHound did not require discontinued operations presentation pursuant to FASB ASC 205-20.
United States Securities and Exchange Commission
February 7, 2013
Page Five
Notes to Consolidated Financial Statements
Note 1. Organization and Summary of Significant Accounting Policies
Organization and Business Activities, page F-6
4. | We note you have one reportable segment which includes the results of both Hot Topic and Torrid. Your aggregation is based on similar economic characteristics of each concept. Please clarify for us what you consider an operating segment and provide us with your detailed analysis of FASB ASC 280-10-55-7A through C to support your conclusion that aggregation is appropriate. In connection with your response, please provide us with your most recent reporting package provided to your Chief Operating Decision Maker. |
The Company respectfully acknowledges the Staff’s comments and submits that in accordance with FASB ASC 280 Segment Reporting (“ASC 280”), the Company considers an operating segment to be a component of a public entity that has all of the following characteristics:
a. | It engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity). |
- | The Company’s two operating segments, Hot Topic (“HT”) and Torrid, engage in, and derive substantially all their revenues from, providing store-based/online apparel and accessories to a young customer market. |
b. | Its operating results are regularly reviewed by the public entity's chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance. |
United States Securities and Exchange Commission
February 7, 2013
Page Six
- | The internal reporting results for the HT division (including internet) and the Torrid division (including internet) are generated and reviewed separately by the CODM to make resource allocation decisions and assess performance for each division. |
c. | Its discrete financial information is available. |
- | Discrete financial information down to the bottom line (gross and net profit levels) from the internal reports is available for both the HT division and Torrid division (separate general ledgers are generated and maintained for each). |
In accordance with ASC 280-10-55-7A through C, the Company respectfully submits that aggregation of the HT and Torrid operating segments is appropriate as their economic characteristics are similar currently, and are expected to remain similar in the future. The similarities of the merchandise margins and other economic characteristics of HT and Torrid are not only being evaluated based on current indicators but on future trends also. The company expects the merchandise margins of HT and Torrid to continue to be within 10% of each other for the foreseeable future, in spite of current and future plans to implement a vertically integrated production model for a majority of the Torrid business and for a portion of the HT business, respectively. The Company is not aware of any other significant future prospects that may affect the similarity of the economic characteristics of HT and Torrid.
The Company also believes that aggregation of the HT and Torrid operating segments is appropriate as it is consistent with the objective and basic principles of ASC 280 which is to provide information about the different types of business activities in which a public entity engages and the different economic environments in which it operates in order to help users of financial statements better understand the public entity's performance, better assess its prospects for future net cash flows, and make more informed judgments about the public entity as a whole.
- | the Company discloses information about the business activities of HT and Torrid in its current filings and disaggregation will not improve the quality of this information as the activities are so similar; |
- | the Company discloses information about the economic environments of HT and Torrid in its current filings and disaggregation will not improve the quality of this information as the environments are so similar. |
Based on the analysis above, the Company believes that aggregation of the HT and Torrid operating segments is appropriate under ASC 280-10-55-7A through C. The Company will continue to analyze the decision to aggregate as the segments change and/or grow. In the event that the Company determines that they should be separate reportable segments in the future, their reporting formats will be changed to reflect disaggregated HT and Torrid segments.
In response to the Staff’s request, please find enclosed in this response letter the form of the most recent quarterly reporting package regularly provided to the Company’s Chief Operating Decision Maker.
United States Securities and Exchange Commission
February 7, 2013
Page Seven
Valuation of Long-Lived Assets, page F-8
5. | We note you recognized asset impairment charges related to store assets during the last three fiscal years. We also note the store level is the lowest level for which individual cash flows can be identified. Please provide us with the following information on how you tested the long-lived assets for recoverability: |
● | Clarify how many asset groups (e.g. stores) were tested for impairment during the most recent fiscal year |
● | Clarify how many asset groups were considered at risk of impairment (i.e. the asset group has a fair value that is not substantially in excess of its carrying value) |
For any at-risk asset group, provide us with (i) the percentage by which fair value exceeded carrying value as of the date of the most recent test, (ii) a description of the methods and key assumptions used and how the key assumptions were determined, (iii) a detailed discussion of the degree of uncertainty associated with the key assumptions (e.g., the valuation model assumes recovery from a business downturn within a defined period of time), and (iv) a description of potential events and/or changes in circumstances that could reasonably be expected to negatively affect the key assumptions.
The Company respectfully acknowledges the Staff’s comments and submits that impairment tests of long-lived assets are performed whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Management has determined that when an individual store has an undiscounted historical trailing twelve-month cash flow of less than $25,000, it is an indication that the carrying value of that store may not be recoverable. Each store that has an undiscounted cash flow of less than $25,000 for a trailing twelve-month period is tested every quarter for impairment and as such, we have included information for the most recent fiscal quarter (the third quarter of fiscal 2012). During the third quarter of fiscal 2012, nine stores were tested for impairment, i.e. they had undiscounted cash flows of less than $25,000; and eight of them were considered at risk of impairment, i.e. their fair values were not substantially in excess of their carrying values.
United States Securities and Exchange Commission
February 7, 2013
Page Eight
The table below reflects the percentage by which fair value exceeded the carrying value for the eight stores that were considered at risk of impairment as of the most recent fiscal quarter (the third quarter of fiscal 2012).
Q3 2012 IMPAIRMENT ANALYSIS | |||
Asset Group / Store | Carrying Value ($'000) | Percentage by Which FV Exceeded Carrying Value* | |
1 | 39 | 67 | % |
2 | 16 | 6 | % |
3 | 71 | 175 | % |
4 | 11 | 200 | % |
5 | 10 | 30 | % |
6 | 13 | 15 | % |
7 | 19 | 232 | % |
8 | 8 | 188 | % |
*Computed by dividing the difference between the fair value and carrying value by the carrying value and multiplying the result by 100
The impairment test involves computing the undiscounted projected future cash flow for the remaining useful life of the store asset group to arrive at a total undiscounted cash flow amount. This total undiscounted cash flow amount is compared to the net book value of the store’s assets and to the extent that the net book value of the store’s assets is greater than the total undiscounted cash flows, the Company records impairment for the difference between the discounted future cash flows and the net book value of the store’s assets.
For the eight stores that were considered at risk of impairment as of the most recent fiscal quarter (the third quarter of fiscal 2012), the table below reflects:
- | a description of the methods and key assumptions used; |
- | how the key assumptions were determined; |
- | a detailed discussion of the degree of uncertainty associated with the key assumptions; and |
- | a description of potential events and/or changes in circumstances that could reasonably be expected to negatively affect the key assumptions. |
United States Securities and Exchange Commission
February 7, 2013
Page Nine
Key Assumption | Method of Determination | Degree of Uncertainty | Potential Events and/or Changes in Circumstances Reasonably Expected to Negatively Affect Key Assumptions | |||
Sales | Current year: Actuals are used through the date of the analysis; the remaining year is forecasted by the planning group based on historical and future trends of the Company as well as input from merchandising and store operations teams; Subsequent years: Based on the planning group's projections as well as input from merchandising and store operations teams considering mall closings, relocations from a desirable location to an undesirable one or vice versa, upgrading staff, etc. | The model assumes sales increases based on expected store improvements in conversion rates, productivity per associate, customer traffic, etc | - Economic downturn / crisis. - Decreased store traffic. - Less than optimal merchandise assortment. - Cannibalisation from a new competitor or another HT / Torrid nearby. | |||
multiplied by: | ||||||
Merchandise Margin Percentage | Current year: Actual amounts from a trailing twelve-month period; Subsequent years: Based on the planning group's projections as well as input from merchandising and store operations teams considering current and future store trends, merchandising mix, nature of the store such as clearance store, potential store closings, etc. | The model assumes built-in merchandise margin improvements in subsequent years which may not exceed the Company's actual merchandise margin. | - Less than optimal merchandise assortment. - Increased markdowns. | |||
to arrive at: | ||||||
Merchandise Margin | Sales x Merchandise Margin Percentage | N/A | N/A | |||
from which you deduct: | ||||||
Payroll | Current year: Actual amounts from a trailing twelve-month period; Subsequent years: Kept at similar payroll : sales ratios as the first year. Also considers law changes that could impact pay rates as well as input from store operations team regarding current and future significant staffing changes. | The model typically mirrors normal staffing trends and pay rates through the term of the lease. | - Increases in benefit costs. - Change in laws leading to pay increases. |
United States Securities and Exchange Commission
February 7, 2013
Page Ten
Continued:
Key Assumption | Method of Determination | Degree of Uncertainty | Potential Events and/or Changes in Circumstances Reasonably Expected to Negatively Affect Key Assumptions | |||
Occupancy | Current year: Actual amounts from a trailing twelve-month period; Subsequent years: Applies a 2% increase in occupancy dollars each year to mimic the built-in pay increases present in our lease agreements. Also considers input from the real estate team regarding current and future store relocations, kick out clauses, reduced rent, etc. | The model typically mirrors trends based on actual lease contracts. | - Unfavorable changes in the lease contract terms. | |||
Other | Current year: Actual amounts from a trailing twelve-month period; Subsequent years: Applies a 3% increase in store other dollars each year to mimic the periodic increase in costs typically imposed by credit card companies, marketing vendors, etc. | The model typically mirrors normal payment trends to third party vendors. | - Increased costs from third party vendors. | |||
to arrive at: | ||||||
Undiscounted Cash Flow | N/A | N/A | N/A | |||
multiplied by: | ||||||
Discount Rate | This is the Company's estimated weighted average cost of capital ("WACC") currently estimated at approximately 13% and computed by averaging eight of the Company's historical quarter's WACCs. Each quarter's WACC incorporates data such as company and peer average debt and equity as a percentage of total market capitalization, risk free rates, risk free premiums, cost of debt and cost of equity of the Company and peer companies, etc | The model assumes no significant changes in the assumptions used to calculate WACC. | - Significant increase in the cost of debt and equity for the Company's peers. - Significant increase in risk premiums. | |||
to arrive at: | ||||||
Discounted Cash Flow | N/A | N/A | N/A |
United States Securities and Exchange Commission
February 7, 2013
Page Eleven
Form 10-Q for the Fiscal Quarter Ended April 28, 2012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Comparable Sales and Store Count, page 22
6. | We note you changed your presentation of comparable sales to now include internet sales. This does not appear to embody what the comparable store sales metric measures given there are no “new” internet sales. In order to provide an investor with a better understanding of the drivers of your same store data, please provide us with, and confirm in future periodic Exchange Act reports you will disclose, same store sales excluding internet sales activity. As an alternative, you may disclose the dollar amount of internet sales for each period and the amount of change between periods. |
The Company respectfully acknowledges the Staff’s comments and hereby confirms that in future periodic Exchange Act reports, the dollar amount of internet sales for each period and the amount of change between periods will be disclosed. An example of the disclosure is presented as follows:
The following table shows our Internet sales results by division for the third quarter of fiscal 2012 and 2011 and fiscal year-to-date 2012 and 2011 (in thousands).
Third Quarter | 2012 | 2011 | Change | Year-to-date | 2012 | 2011 | Change | |||||||||||||||||||
Hot Topic | $ | 10,825 | $ | 10,000 | $ | 825 | Hot Topic | $ | 43,300 | $ | 40,000 | $ | 3,300 | |||||||||||||
Torrid | $ | 8,250 | $ | 7,500 | $ | 750 | Torrid | $ | 33,000 | $ | 30,000 | $ | 3,000 | |||||||||||||
Total Company | $ | 19,075 | $ | 17,500 | $ | 1,575 | Total Company | $ | 76,300 | $ | 70,000 | $ | 6,300 |
**********
The Company respectfully requests the Staff’s assistance in completing the review of the Company’s response as soon as possible. Please advise us if we can provide any further information or assistance to facilitate your review. Please direct any further comments or questions regarding this response letter to me at (626) 839-4682, extension 2174.
Sincerely,
Hot Topic, Inc.
/s/ GEORGE WEHLITZ, JR.
Interim Chief Financial Officer
Enclosure
cc: | Lisa Harper, Hot Topic, Inc. |
Jonathan Block, Hot Topic, Inc. |
Jason Kent, Cooley LLP |
Hot Topic, Inc. | ENCLOSURE FOR RESPONSE TO JANUARY 25, 2013 HOTT COMMENT LETTER | |||||||||||||||
Income Statement | ||||||||||||||||
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October 2012 | ||||||||||||||||
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ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | |||
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Hot Topic, Inc. | ||||||||||||||||
Income Statement | ||||||||||||||||
Hot Topic Division | ||||||||||||||||
October 2012 | ||||||||||||||||
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Hot Topic, Inc. | ||||||||||||||||
Income Statement | ||||||||||||||||
Torrid Division | ||||||||||||||||
October 2012 | ||||||||||||||||
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THIS YEAR | LAST YEAR | VARIANCE | THIS YEAR | LAST YEAR | VARIANCE | |||||||||||
ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | |||
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Hot Topic, Inc. | ||||||||||||||||
Income Statement | ||||||||||||||||
Blackheart Division | ||||||||||||||||
October 2012 | ||||||||||||||||
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THIS YEAR | LAST YEAR | VARIANCE | THIS YEAR | LAST YEAR | VARIANCE | |||||||||||
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(including buying, distribution | ||||||||||||||||
and occupancy costs) | ||||||||||||||||
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PREOPENING | ||||||||||||||||
MARKETING | ||||||||||||||||
OTHER G & A | ||||||||||||||||
PERFORMANCE-BASED BONUS | ||||||||||||||||
STOCK OPTION EXPENSE | ||||||||||||||||
SELLING, GENERAL & | ||||||||||||||||
ADMINISTRATIVE EXPENSES | ||||||||||||||||
OPERATING INCOME | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||
INTEREST EXP/OTHER INCOME | ||||||||||||||||
PRE TAX INCOME | ||||||||||||||||
INCOME TAX / EFFEC. RATE | ||||||||||||||||
NET INCOME | ||||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||
NUMBER OF STORES OPEN | ||||||||||||||||
STORE CONTRIBUTION | ||||||||||||||||
EBITDA | ||||||||||||||||
SHARES | ||||||||||||||||
Hot Topic, Inc. | ||||||||
Balance Sheet | ||||||||
Consolidated | ||||||||
October 2012 | ||||||||
(In $000) | ||||||||
VARIANCE | ||||||||
THIS YEAR | LAST YEAR | BUDGET | LY ACTUAL | |||||
ACTUAL | BUDGET | ACTUAL | $ | % | $ | % | ||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
CASH & CASH EQUIVALENT | ||||||||
SHORT-TERM INVESTMENTS | �� | |||||||
TOTAL CASH & SHORT-TERM INVESTMENTS | ||||||||
HOT TOPIC INVENTORY | ||||||||
TORRID INVENTORY | ||||||||
BLACKHEART INVENTORY | ||||||||
TOTAL INVENTORY | ||||||||
PREPAID EXPENSES AND OTHER | ||||||||
CURRENT: DEFERRED TAX ASSET | ||||||||
TOTAL CURRENT ASSETS | ||||||||
PROPERTY & EQUIPMENT | ||||||||
TOTAL FIXED ASSETS | ||||||||
ACCUM DEPR. & AMORT. | ||||||||
NET FIXED ASSETS | ||||||||
DEPOSITS & OTHER | ||||||||
LONG TERM: INVESTMENTS | ||||||||
LONG TERM: DEFERRED TAX ASSET | ||||||||
TOTAL ASSETS | ||||||||
LIABILITIES AND | ||||||||
SHAREHOLDERS EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
ACCOUNTS PAYABLE | ||||||||
ACCRUED PAYROLL & OTHER EXP LIAB. | ||||||||
GIFT CARDS/STORE CREDITS REDEEMABLE | ||||||||
ACCRUED SALES & USE TAXES | ||||||||
CAPITAL LEASE OBLIGATION: CURRENT | ||||||||
INCOME TAX PAYABLE | ||||||||
TOTAL CURRENT LIABILITIES | ||||||||
DEFERRED RENT | ||||||||
LONG TERM: DEFERRED TAX LIABILITY | ||||||||
CAPITAL LEASE OBLIGATION: LONG TERM | ||||||||
DEFERRED COMP LIABILITIY: LONG TERM | ||||||||
INCOME TAX PAYABLE: LONG TERM | ||||||||
TOTAL LONG-TERM LIABILITIES | ||||||||
SHAREHOLDERS EQUITY | ||||||||
COMMON STOCK, NO PAR VALUE | ||||||||
XXX,XXX,XXX SHARES AUTHORIZED | ||||||||
XX,XXX,XXX SHARES ISSUED & OUTSTANDING | ||||||||
APIC FAS123R | ||||||||
REPURCHASED SHARES | ||||||||
RETAINED EARNINGS | ||||||||
RETAINED EARNINGS - DIVIDENDS | ||||||||
CURRENT YEAR PROFIT (LOSS) | ||||||||
ACCUM OTHER COMPREHENSIVE INC/(LOSS) | ||||||||
TOTAL SHAREHOLDERS EQUITY | ||||||||
TOTAL LIABILITIES & | ||||||||
TOTAL LIABILITIES & SHAREHOLDERS EQUITY |
Hot Topic, Inc. | |||||||||||
Cash Flow | |||||||||||
Consolidated | |||||||||||
October 2012 | |||||||||||
(In $000) | |||||||||||
QUARTER TO DATE | YEAR TO DATE | ||||||||||
THIS YEAR | LAST YEAR | VARIANCE | THIS YEAR | LAST YEAR | VARIANCE | VARIANCE | |||||
ACTUAL | BUDGET | ACTUAL | BUDGET $ | ACTUAL | BUDGET | ACTUAL | BUDGET $ | LAST YEAR $ | |||
OPERATING ACTIVITIES | |||||||||||
NET INCOME (LOSS) | |||||||||||
ADJUSTMENTS TO RECON NET INC TO NET CASH | |||||||||||
DEPRECIATION AND AMORTIZATION | |||||||||||
TAX BENEFIT FROM EXERCISE OF STOCK OPTIONS | |||||||||||
FAS 123R EXCESS TAX BENEFIT | |||||||||||
STOCK -BASED COMPENSATION | |||||||||||
LOSS ON DISPOSAL OF FIXED ASSETS | |||||||||||
IMPAIRMENT OF FIXED ASSETS | |||||||||||
DEFERRED COMPENSATION | |||||||||||
DEFERRED TAXES | |||||||||||
GIFT CARD BREAKAGE | |||||||||||
CHANGES IN OPERATING ASSETS & LIABILITIES | |||||||||||
INVENTORY | |||||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |||||||||||
DEPOSITS & OTHER ASSETS | |||||||||||
ACCOUNTS PAYABLE | |||||||||||
ACCRUED LIABILITIES | �� | ||||||||||
SALES TAXES | |||||||||||
DEFERRED RENT | |||||||||||
INCOME TAXES PAYABLE | |||||||||||
FOREIGN CURRENCY TRANSACTION GAIN/LOSS | |||||||||||
NET CASH FLOWS PROVIDED (USED) | |||||||||||
BY OPERATING ACTIVITIES | |||||||||||
INVESTING ACTIVITIES | |||||||||||
PURCHASES OF PROPERTY & EQUIPMENT | |||||||||||
PROCEEDS FROM SALE OF INVESTMENTS | |||||||||||
NET PURCHASE OF INVESTMENTS | |||||||||||
NET CASH FROM SALES/PURCH. OF INVESTMENTS | |||||||||||
NET CASH FLOWS PROVIDED (USED) | |||||||||||
BY INVESTING ACTIVITIES | |||||||||||
FINANCING ACTIVITIES | |||||||||||
CAPITAL LEASE OBLIGATIONS | |||||||||||
PROCEEDS FROM SALE OF SHARES | |||||||||||
RET. EARNINGS - DIVIDENDS | |||||||||||
REPURCHASE OF COMMON STOCK | |||||||||||
EXCESS TAX BENEFIT FROM SHARE-BASED COMPENSATION | |||||||||||
RET. EARNINGS-STOCK REPURCHASE | |||||||||||
NET CASH PROV/(USED) BY FINANCING ACTIVITIES | |||||||||||
INC. (DEC.) IN CASH & EQUIVALENTS | |||||||||||
EFFECT OF EXCHANGE RATE CHANGES IN CASH | |||||||||||
CASH & EQUIVALENTS - BEG. OF PERIOD | |||||||||||
CASH & EQUIVALENTS - END OF PERIOD | |||||||||||
SUPPLEMENTAL INFORMATION: | |||||||||||
CASH PAID FOR INTEREST | |||||||||||
CASH PAID FOR INCOME TAXES | |||||||||||
CASH PAID FOR CAPITAL LEASE OBLIGATIONS | |||||||||||
Hot Topic, Inc. | |||||||||||||||||
Merchandise Margin | |||||||||||||||||
Total Company | |||||||||||||||||
October 2012 | |||||||||||||||||
(In $000) | |||||||||||||||||
QUARTER TO DATE | YEAR TO DATE | ||||||||||||||||
THIS YEAR | LAST YEAR | VARIANCE | THIS YEAR | LAST YEAR | VARIANCE | ||||||||||||
ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | LY % | ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | LY % | ||
SALES | |||||||||||||||||
REALIZED MARKUP | |||||||||||||||||
TOTAL COST OF SALES BREAKDOWN | |||||||||||||||||
Product COGS | |||||||||||||||||
Markdowns and Adjustments at Cost - Net | |||||||||||||||||
Shrink | |||||||||||||||||
Employee Discount | |||||||||||||||||
Freight and Other Costs | |||||||||||||||||
TOTAL COST OF SALES | |||||||||||||||||
MERCHANDISE MARGIN | |||||||||||||||||
Hot Topic, Inc. |
Merchandise Margin |
Hot Topic Division |
October 2012 |
(In $000) |
QUARTER TO DATE | YEAR TO DATE | ||||||||||||||||
THIS YEAR | LAST YEAR | VARIANCE | THIS YEAR | LAST YEAR | VARIANCE | ||||||||||||
ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | LY % | ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | LY % | ||
SALES | |||||||||||||||||
REALIZED MARKUP | |||||||||||||||||
TOTAL COST OF SALES BREAKDOWN | |||||||||||||||||
Product COGS | |||||||||||||||||
Markdowns and Adjustments at Cost - Net | |||||||||||||||||
Shrink | |||||||||||||||||
Employee Discount | |||||||||||||||||
Freight and Other Costs | |||||||||||||||||
TOTAL COST OF SALES | |||||||||||||||||
MERCHANDISE MARGIN | |||||||||||||||||
Hot Topic, Inc. | |||||||||||||||||
Merchandise Margin | |||||||||||||||||
Torrid Division | |||||||||||||||||
October 2012 | |||||||||||||||||
(In $000) | |||||||||||||||||
QUARTER TO DATE | YEAR TO DATE | ||||||||||||||||
THIS YEAR | LAST YEAR | VARIANCE | THIS YEAR | LAST YEAR | VARIANCE | ||||||||||||
ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | LY % | ACTUAL | % | BUDGET | % | ACTUAL | % | BUDGET $ | LY % | ||
SALES | |||||||||||||||||
REALIZED MARKUP | |||||||||||||||||
�� | |||||||||||||||||
TOTAL COST OF SALES BREAKDOWN | |||||||||||||||||
Product COGS | |||||||||||||||||
Markdowns and Adjustments at Cost - Net | |||||||||||||||||
Shrink | |||||||||||||||||
Employee Discount | |||||||||||||||||
Freight and Other Costs | |||||||||||||||||
TOTAL COST OF SALES | |||||||||||||||||
MERCHANDISE MARGIN | |||||||||||||||||