Exhibit 99.1
CONTACT:
Frank Schools, Vice President Finance (714) 414-4062
FOR IMMEDIATE RELEASE
PACIFIC SUNWEAR REPORTS THIRD QUARTER
NET INCOME INCREASES 30%, TO $31.9 MILLION,
YEAR TO DATE NET INCOME UP 44%
ANAHEIM, CA/November 8, 2004— Pacific Sunwear of California, Inc. (NASDAQ:PSUN) today reported record results for the third quarter ended October 30, 2004. Net income for the third quarter increased 30% to $31.9 million, or $.43 per share, basic, and $.42 per share, diluted, compared to $24.5 million, or $.32 per share, basic, and $.31 per share, diluted, for the third quarter of fiscal 2003.
Total sales for the third quarter of fiscal 2004 (thirteen weeks) were $329.1 million, an increase of 17.0% over total sales of $281.3 million for the third quarter of fiscal 2003 (thirteen weeks). Company same store sales increased 6.6% for the third quarter of fiscal 2004 with PacSun same store sales up 6.8% and d.e.m.o. same store sales up 4.8%.
“I am pleased to report another strong earnings quarter in 2004 for Pacific Sunwear,” stated Greg Weaver, Chairman and CEO. “Third quarter earnings were up 30% and operating margin increased to 15.5% vs. 14.0% last year. Year to date, our operating margin has increased to 12.4% vs. 10.3% last year.”
“Our same store sales guidance for the fourth quarter is for same store sales growth of 5%. We are comfortable with the current consensus earnings per share estimates of analysts for the fourth quarter of fiscal 2004 of $0.52. This takes our full year fiscal 2004 earnings per share guidance to $1.36.”
“As previously announced, Seth Johnson has joined Pacific Sunwear as of November 1st as Chief Operating Officer and as a member of our Board of Directors. We are pleased to have him on board,” concluded Mr. Weaver.
Net income for the first nine months of fiscal 2004 was $66.2 million, or $.87 per share, basic, and $.85 per share, diluted, an increase of 44% over net income of $45.9 million, or $.60 per share, basic, and $.59 per share, diluted, for the first nine months of fiscal 2003. Total sales for the nine months of fiscal 2004 were $849.0 million, an increase of 18.9% over total sales of $714.0 million for the nine months of fiscal 2003. Company same-store sales increased 8.4% for the first nine months of fiscal 2004 with PacSun same-store sales up 8.8% and d.e.m.o. same-store sales up 4.7%.
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3450 East Miraloma Avenue • Anaheim, CA 92806 • (714) 414-4000
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 October 30, 2004, the Company operated 734 PacSun stores, 84 PacSun outlet stores and 159 d.e.m.o. stores, for a total of 977 stores in 50 states and Puerto Rico. PacSun’s website address is www.pacsun.com.
The matters discussed in this news release with respect to earnings per share guidance for the fourth quarter and full year fiscal 2004, as well as fourth quarter same-store sales guidance, are forward-looking statements that involve risks and uncertainties, including changes in customer demands and preferences, lower than expected same store sales, competition from other retailers, higher than anticipated costs 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 January 31, 2004 and subsequent periodic reports filed with the Securities and Exchange Commission. We undertake no obligation to update our forward-looking statements to reflect new information or events or for any other reason.
Pacific Sunwear of California, Inc. releases are available on Pacific Sunwear’s Corporate News on the Net site at http://www.businesswire.com/cnn/psun.htm.
PACIFIC SUNWEAR OF CALIFORNIA, INC.
3450 East Miraloma Avenue • Anaheim, CA 92806 • (714) 414-4000
SUMMARY STATEMENTS OF INCOME
(unaudited)
(in $ thousands, except share and per share data)
| | | | | | | | | | | | | | | | | |
| | | Third Quarter Ended
| | Nine Months Ended
|
| | | OCT. 30, | | NOV. 1, | | OCT. 30, | | NOV. 1, |
| | | 2004
| | 2003
| | 2004
| | 2003
|
| Net sales | | $ | 329,083 | | | | 281,253 | | | $ | 849,011 | | | $ | 713,976 | |
| Gross margin | | | 118,880 | | | | 100,617 | | | | 297,272 | | | | 244,305 | |
| Selling, G&A expenses | | | 67,993 | | | | 61,358 | | | | 192,004 | | | | 170,499 | |
| | | |
| | | |
| | | |
| | | |
| |
| Operating income | | | 50,887 | | | | 39,259 | | | | 105,268 | | | | 73,806 | |
| Interest income, net | | | 403 | | | | 213 | | | | 1,176 | | | | 342 | |
| | | |
| | | |
| | | |
| | | |
| |
| Income before taxes | | | 51,290 | | | | 39,472 | | | | 106,444 | | | | 74,148 | |
| Income tax expense | | | 19,394 | | | | 14,963 | | | | 40,248 | | | | 28,281 | |
| | | |
| | | |
| | | |
| | | |
| |
| Net income | | $ | 31,896 | | | $ | 24,509 | | | $ | 66,196 | | | $ | 45,867 | |
| | | |
| | | |
| | | |
| | | |
| |
| Net income per share, basic | | $ | 0.43 | | | $ | 0.32 | | | $ | 0.87 | | | $ | 0.60 | |
| | | |
| | | |
| | | |
| | | |
| |
| Net income per share, diluted | | $ | 0.42 | | | $ | 0.31 | | | $ | 0.85 | | | $ | 0.59 | |
| | | |
| | | |
| | | |
| | | |
| |
| Weighted avg. shares outstanding, basic | | | 74,415,403 | | | | 77,685,516 | | | | 76,298,445 | | | | 76,031,944 | |
| | | |
| | | |
| | | |
| | | |
| |
| Weighted avg. shares outstanding, diluted | | | 75,919,451 | | | | 79,876,426 | | | | 77,996,056 | | | | 78,322,218 | |
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| | | |
| | | |
| | | |
| |
3450 East Miraloma Avenue • Anaheim, CA 92806 • (714) 414-4000
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in $ thousands)
| | | | | | | | | | | | | |
| | | OCT. 30, | | JAN. 31, | | NOV. 1, |
| | | 2004
| | 2004
| | 2003
|
| ASSETS | | | | | | | | | | | | |
| Current assets: | | | | | | | | | | | | |
| Cash & cash equivalents | | $ | 45,951 | | | $ | 142,840 | | | $ | 83,495 | |
| Short-term investments | | | 38,573 | | | | 33,035 | | | | 10,410 | |
| Inventories | | | 201,010 | | | | 147,751 | | | | 169,184 | |
| Other current assets | | | 37,139 | | | | 29,910 | | | | 25,395 | |
| | | |
| | | |
| | | |
| |
| Total current assets | | | 322,673 | | | | 353,536 | | | | 288,484 | |
| Property and equipment, net | | | 220,844 | | | | 203,644 | | | | 203,763 | |
| Other long-term assets | | | 19,222 | | | | 18,081 | | | | 16,802 | |
| | | |
| | | |
| | | |
| |
| Total assets | | $ | 562,739 | | | $ | 575,261 | | | $ | 509,049 | |
| | | |
| | | |
| | | |
| |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | |
| Current liabilities: | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 105,844 | | | $ | 93,634 | | | $ | 78,842 | |
| Income taxes payable | | | 12,007 | | | | 15,024 | | | | 7,450 | |
| Current portion of long-term debt and capital leases | | | 1,762 | | | | 1,886 | | | | 1,952 | |
| | | |
| | | |
| | | |
| |
| Total current liabilities | | | 119,613 | | | | 110,544 | | | | 88,244 | |
| Long-term portion of debt and capital leases | | | 736 | | | | 1,455 | | | | 1,936 | |
| Other long-term liabilities | | | 36,255 | | | | 34,500 | | | | 29,084 | |
| | | |
| | | |
| | | |
| |
| Total liabilities | | | 156,604 | | | | 146,499 | | | | 119,264 | |
| Total shareholder’s equity | | | 406,135 | | | | 428,762 | | | | 389,785 | |
| | | |
| | | |
| | | |
| |
| Total liabilities and shareholders’ equity | | $ | 562,739 | | | $ | 575,261 | | | $ | 509,049 | |
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| | | |
| |
3450 East Miraloma Avenue • Anaheim, CA 92806 • (714) 414-4000
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(unaudited)
(in $ thousands)
| | | | | | | | | |
| | | FOR THE NINE MONTHS ENDED
|
| | | OCT. 30, 2004
| | NOV. 1, 2003
|
| Cash flows from operating activities: | | | | | | | | |
| Net income | | $ | 66,196 | | | $ | 45,867 | |
| Depreciation & amortization | | | 29,661 | | | | 26,939 | |
| Loss on disposal of property and equipment | | | 2,474 | | | | 1,492 | |
| Tax benefits related to exercise of stock options | | | 4,429 | | | | 14,449 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Inventories | | | (53,259 | ) | | | (45,751 | ) |
| Accounts payable and accrued expenses | | | 14,274 | | | | 12,904 | |
| Income taxes and deferred income taxes | | | (3,017 | ) | | | (550 | ) |
| Other assets and liabilities | | | (6,615 | ) | | | 4,560 | |
| | | |
| | | |
| |
| Net cash provided by operating activities | | | 54,143 | | | | 59,910 | |
| Cash flows from investing activities: | | | | | | | | |
| Purchases of short-term investments | | | (23,374 | ) | | | (10,410 | ) |
| Maturities of short-term investments | | | 17,836 | | | | — | |
| Increase in accrued capital expenditures | | | 3,407 | | | | 2,960 | |
| Purchases of property and equipment | | | (48,693 | ) | | | (30,681 | ) |
| | | |
| | | |
| |
| Net cash used in investing activities | | | (50,824 | ) | | | (38,131 | ) |
| Cash flows from financing activities: | | | | | | | | |
| Repurchases of common stock | | | (109,502 | ) | | | — | |
| Proceeds from exercise of stock options | | | 10,779 | | | | 27,111 | |
| Repayments under long-term debt and capital leases | | | (1,485 | ) | | | (1,800 | ) |
| Cash paid in-lieu of fractional shares | | | — | | | | (33 | ) |
| | | |
| | | |
| |
| Net cash (used in)/provided by financing activities | | | (100,208 | ) | | | 25,278 | |
| | | |
| | | |
| |
| Net (decrease)/increase in cash and cash equivalents | | | (96,889 | ) | | | 47,057 | |
| Cash and cash equivalents, beginning of period | | | 142,840 | | | | 36,438 | |
| | | |
| | | |
| |
| Cash and cash equivalents, end of period | | $ | 45,951 | | | $ | 83,495 | |
| | | |
| | | |
| |
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SELECTED STORE OPERATING DATA
| | | | | | | | | |
| | | OCT. 30, | | NOV. 1, |
| | | 2004
| | 2003
|
| Stores open at beginning of fiscal year | | | 877 | | | | 791 | |
| Stores opened during first nine months | | | 105 | | | | 75 | |
| Stores closed during first nine months | | | (5 | ) | | | (3 | ) |
| | | |
| | | |
| |
| Stores open at end of third quarter | | | 977 | | | | 863 | |
| |
| Other operating data: | | | | | | | | |
| PacSun stores | | | 734 | | | | 664 | |
| Outlet stores | | | 84 | | | | 78 | |
| d.e.m.o. stores | | | 159 | | | | 121 | |
| | | |
| | | |
| |
| | | | 977 | | | | 863 | |
| |
| Total square footage at end of period (in thousands) | | | 3,391 | | | | 2,937 | |
3450 East Miraloma Avenue • Anaheim, CA 92806 • (714) 414-4000
