EXHIBIT 99.1
CONTACT:
Carl Womack, Chief Financial Officer (714) 414-4003
FOR IMMEDIATE RELEASE
PACSUN (PACIFIC SUNWEAR) REPORTS SECOND QUARTER
NET INCOME INCREASES 84%
ANAHEIM, CA/August 11, 2003-— Pacific Sunwear of California, Inc. (NASDAQ:PSUN) reported today that net income for the second quarter of fiscal 2003 was $13.4 million, or $.26 per share, basic and diluted, an increase of 84% over net income of $7.3 million, or $.15 per share, basic and diluted, for the second quarter of fiscal 2002.
Sales for the second quarter of fiscal 2003 were $234.4 million, an increase of 22.8% over sales of $190.9 million for the second quarter of fiscal 2002. Company same-store sales increased 13.9% for the second quarter of fiscal 2003 with PacSun same-store sales up 13.2% and d.e.m.o. same-store sales up 21.9%.
“I’m very pleased with our second quarter performance,” stated Greg Weaver, Chairman and CEO. “Operating margins were significantly improved, driven by strong same store sales increases at both PacSun and d.e.m.o. We are pleased with our merchandise assortment and encouraged about early back to school results. Longer term, we believe we are on track to achieve our operating margin goal of 12% for fiscal 2004,” concluded Mr. Weaver.
Net income for the first half of fiscal 2003 was $21.4 million, or $.43 per share, basic, and $.41 per share, diluted, an increase of 102% over net income of $10.6 million, or $.21 per share, basic and diluted, for the first half of fiscal 2002. Sales for the first half of fiscal 2003 were $432.7 million, an increase of 22.7% over sales of $352.6 million for the first half of fiscal 2002. Company same-store sales increased 13.6% for the first half of fiscal 2003 with PacSun same-store sales up 11.9% and d.e.m.o. same-store sales up 29.1%.
On August 7, 2003 the Company announced a three-for-two stock split. The record date for the split is August 25, 2003. Shareholders of record as of that date will receive one new share of common stock for every two shares they owned on the record date. The additional shares will be mailed on or about September 5, 2003.
Pacific Sunwear is a leading specialty retailer of everyday casual apparel, accessories and footwear designed to meet the needs of active teens and young adults. As of August 2, 2003, the Company operated 650 PacSun stores, 75 PacSun outlet stores and 114 d.e.m.o. stores, for a total of 839 stores in 49 states and Puerto Rico. PacSun’s website address is www.pacsun.com.
The comments in this press release with respect to the outlook for back to school sales and operating margin goals are forward looking statements and involve risks and uncertainties, including changes in consumer demands and preferences, competition from other retailers and uncertainties generally associated with apparel retailing. The historical results achieved are not necessarily indicative of future prospects of the Company.
More information on factors that could affect the Company’s financial results is included in the Company’s Report on Form 10-K for the year ended February 1, 2003 and subsequent periodic reports filed with the Securities and Exchange Commission.
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PACIFIC SUNWEAR OF CALIFORNIA, INC.
SUMMARY STATEMENT OF INCOME
(unaudited)
(in $ thousands, except share and per share data)
SECOND QUARTER ENDED | FIRST HALF ENDED | |||||||||||||||
AUG. 2, 2003 | AUG. 3, 2002 | AUG. 2, 2003 | AUG. 3, 2002 | |||||||||||||
Net sales | $ | 234,392 | $ | 190,854 | $ | 432,723 | $ | 352,564 | ||||||||
Gross margin | 79,834 | 60,605 | 143,689 | 109,772 | ||||||||||||
Selling, G&A expense | 58,180 | 48,454 | 109,141 | 92,168 | ||||||||||||
Operating income | 21,654 | 12,151 | 34,548 | 17,604 | ||||||||||||
Interest income (expense) | 69 | (306 | ) | 129 | (453 | ) | ||||||||||
Income before taxes | 21,723 | 11,845 | 34,677 | 17,151 | ||||||||||||
Income tax expense | 8,343 | 4,549 | 13,318 | 6,586 | ||||||||||||
Net income | $ | 13,380 | $ | 7,296 | $ | 21,359 | $ | 10,565 | ||||||||
Net income per share, basic * | $ | 0.26 | $ | 0.15 | $ | 0.43 | $ | 0.21 | ||||||||
Net income per share, diluted * | $ | 0.26 | $ | 0.15 | $ | 0.41 | $ | 0.21 | ||||||||
Weighted average shares outstanding, basic * | 50,590,427 | 49,257,374 | 50,136,729 | 49,227,255 | ||||||||||||
Weighted averaged shares outstanding, diluted * | 52,069,358 | 49,844,660 | 51,554,346 | 49,973,906 |
* | Prior year shares outstanding and earnings per share have been adjusted for the three-for-two stock split effected December 18, 2002. |
BALANCE SHEET HIGHLIGHTS
(unaudited)
(in $ thousands)
AUG. 2, 2003 | FEB. 1, 2003 | AUG. 3, 2002 | |||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash & cash equivalents | $ | 62,836 | $ | 36,438 | $ | 4,171 | |||||||
Inventories | 186,033 | 123,433 | 153,205 | ||||||||||
Income tax receivable | 2,708 | — | — | ||||||||||
Other current assets | 25,730 | 22,762 | 23,626 | ||||||||||
Total current assets | 277,307 | 182,633 | 181,002 | ||||||||||
Property and equipment, net | 201,279 | 201,513 | 199,600 | ||||||||||
Other long-term assets | 16,061 | 15,597 | 17,479 | ||||||||||
Total assets | $ | 494,647 | $ | 399,743 | $ | 398,081 |
3450 East Miraloma Avenue • Anaheim, CA 92806 • (714) 414-4000
AUG. 2, 2003 | FEB. 1, 2003 | AUG. 3, 2002 | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Line of credit | $ | — | $ | — | $ | 11,700 | |||||||
Accounts payable and accrued expenses | 109,977 | 62,978 | 77,352 | ||||||||||
Income taxes payable | — | 8,000 | 2,321 | ||||||||||
Current portion of long-term debt and capital leases | 2,101 | 2,350 | 26,625 | ||||||||||
Total current liabilities | 112,078 | 73,328 | 117,998 | ||||||||||
Long-term portion of debt and capital leases | 2,410 | 3,338 | 1,927 | ||||||||||
Other long-term liabilities | 24,779 | 20,686 | 17,375 | ||||||||||
Total liabilities | 139,267 | 97,352 | 137,300 | ||||||||||
Total shareholder’s equity | 355,380 | 302,391 | 260,781 | ||||||||||
Total liabilities and shareholders’ equity | $ | 494,647 | $ | 399,743 | $ | 398,081 |
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(unaudited)
(in $ thousands)
FOR THE FIRST HALF ENDED | ||||||||||
AUG. 2, 2003 | AUG. 3, 2002 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 21,359 | $ | 10,565 | ||||||
Depreciation & amortization | 17,752 | 16,057 | ||||||||
Loss on disposal of property and equipment | 1,085 | 2,110 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Inventories | (62,600 | ) | (50,693 | ) | ||||||
Accounts payable and accrued expenses | 46,999 | 22,116 | ||||||||
Income taxes and deferred income taxes | (581 | ) | (6,466 | ) | ||||||
Other assets and liabilities | 661 | (2,485 | ) | |||||||
Net cash provided by/(used in) operating activities | 24,675 | (8,796 | ) | |||||||
Cash flows from investing activities: | ||||||||||
Capital expenditures | (18,603 | ) | (22,742 | ) | ||||||
Net cash used in investing activities | (18,603 | ) | (22,742 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Net borrowings under credit facility | — | 11,700 | ||||||||
Repayments under long-term debt and capital leases | (1,177 | ) | (448 | ) | ||||||
Proceeds from exercise of stock options | 21,503 | 1,321 | ||||||||
Net cash provided by financing activities | 20,326 | 12,573 | ||||||||
Net increase/(decrease) in cash and cash equivalents | 26,398 | (18,965 | ) | |||||||
Cash and cash equivalents, beginning of period | 36,438 | 23,136 | ||||||||
Cash and cash equivalents, end of period | $ | 62,836 | $ | 4,171 |
3450 East Miraloma Avenue • Anaheim, CA 92806 • (714) 414-4000
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SELECTED STORE OPERATING DATA
AUG. 2, 2003 | AUG 3, 2002 | |||||||
Stores open at beginning of fiscal year | 791 | 718 | ||||||
Stores opened during first half | 51 | 67 | ||||||
Stores closed during first half | (3 | ) | (8 | ) | ||||
Stores open at end of first half | 839 | 777 | ||||||
Other operating data: | ||||||||
PacSun stores | 650 | 599 | ||||||
Outlet stores | 75 | 70 | ||||||
d.e.m.o. stores | 114 | 108 | ||||||
Total square footage at end of period (in thousands) | 2,844 | 2,577 |
3450 East Miraloma Avenue • Anaheim, CA 92806 • (714) 414-4000