Exhibit 99.1
CONTACT:
Gar Jackson
Director Investor Relations
(714) 414-4049
FOR IMMEDIATE RELEASE
PACIFIC SUNWEAR ANNOUNCES 21% INCREASE IN FIRST QUARTER EARNINGS PER SHARE
ANAHEIM, CA/May 12, 2005— Pacific Sunwear of California, Inc. (NASDAQ:PSUN) today reported results for the first quarter ended April 30, 2005. A telephone replay of the conference call will be available beginning approximately two hours following the call for 72 hours and can be accessed in the United States/Canada at (800) 642-1687 or internationally at (706) 645-9291; pass code: 6115210. For those unable to listen to the live Web broadcast or utilize the call-in replay, an archived version will be available on the company’s investor relations Web site through midnight, May 12, 2006.
Net income for the first quarter of fiscal 2005 increased 17.6% to $17.6 million, compared to $15.0 million in the prior year. Earnings per diluted share increased 21.1% to $0.23, compared to $0.19 per diluted share for the first quarter of fiscal 2004. Total sales for the first quarter (13 weeks) ended April 30, 2005 were $280.0 million, an increase of 14.1% over total sales of $245.5 million for the first quarter (13 weeks) ended May 1, 2004. Same-store sales increased 3.0% for the comparable thirteen-week period ended April 30, 2005.
“I am pleased with our first quarter results,” commented Seth Johnson, Chief Executive Officer of Pacific Sunwear. “We achieved a strong earnings increase through tight management of our inventory and expenses. This quarter we also passed the 1,000 store milestone with the opening of 23 net new stores.”
Pacific Sunwear, operating under two distinct retail concepts, 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 April 30, 2005, the Company operated 754 PacSun stores, 86 PacSun Outlet stores and 173 d.e.m.o. stores for a total of 1,013 stores in 50 states and Puerto Rico. PacSun’s website address is www.pacsun.com and merchandise carried at d.e.m.o. stores can be found at www.demostores.com.
Pacific Sunwear Safe Harbor
This press release contains “forward-looking statements” made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. The Company is hereby providing cautionary statements identifying important factors that could cause the Company’s actual results to differ materially from those projected in forward-looking statements of the Company herein. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, future events or performance (often, but not always through the use of words or phrases such as “will result,” “expects to,” “will continue,” “anticipates,” “plans,” “intends,” “estimated,” “projects” and “outlook”) are not
3450 East Miraloma Avenue, Anaheim, CA 92806 (714) 414-4000
historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. All forward-looking statements included in this press release are based on information available to the Company as of the date hereof, and the Company assumes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur after such statements are made. Such uncertainties include, among others, the following factors; changes in consumer demands and preferences, higher than estimated costs of goods sold or selling, general and administrative costs, competition from other retailers and uncertainties generally associated with apparel retailing; merchandising/fashion sensitivity; sales from private label merchandise; fluctuations in comparable store net sales results; expansion and management of growth; reliance on key personnel; dependence on single distribution facility; economic impact of terrorist attacks or war/threat of war; reliance on foreign sources of production; credit facility financial covenants and other risks outlined in the company’s SEC filings, including but not limited to the Annual Report on Form 10-K for the year ended January 29, 2005 and subsequent periodic reports filed with the Securities and Exchange Commission. Historical results achieved are not necessarily indicative of future prospects of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to update this forward-looking information. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
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3450 East Miraloma Avenue, Anaheim, CA 92806 (714) 414-4000
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SUMMARY STATEMENT OF INCOME
(unaudited)
(in $000’s, except share and per share data)
FIRST QUARTER ENDED | ||||||||
APR 30, 2005 | MAY 1, 2004 | |||||||
Net sales | $ | 279,985 | $ | 245,501 | ||||
Gross margin | 97,350 | 86,205 | ||||||
Selling, G&A expense | 70,123 | 62,592 | ||||||
Operating income | 27,227 | 23,613 | ||||||
Interest income, net | 1,086 | 457 | ||||||
Income before taxes | 28,313 | 24,070 | ||||||
Income tax expense | 10,706 | 9,101 | ||||||
Net income | $ | 17,607 | $ | 14,969 | ||||
Net income per share, basic | $ | 0.23 | $ | 0.19 | ||||
Net income per share, diluted | $ | 0.23 | $ | 0.19 | ||||
Weighted average shares outstanding, basic | 75,292,587 | 78,157,771 | ||||||
Weighted average shares outstanding, diluted | 76,579,259 | 80,146,144 | ||||||
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in $000’s)
APR 30, 2005 | JAN. 29, 2005 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash & cash equivalents | $ | 79,964 | $ | 64,308 | ||||
Short-term investments | 81,431 | 79,223 | ||||||
Inventories | 172,128 | 175,081 | ||||||
Other current assets | 34,135 | 34,206 | ||||||
Total current assets | 367,658 | 352,818 | ||||||
Property and equipment, net | 313,917 | 304,222 | ||||||
Other long-term assets | 22,017 | 20,738 | ||||||
Total assets | $ | 703,592 | $ | 677,778 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 80,841 | $ | 87,781 | ||||
Income taxes payable | 3,645 | 5,993 | ||||||
Current portion of long-term debt and capital leases | 1,219 | 1,536 | ||||||
Total current liabilities | 85,705 | 95,310 | ||||||
Deferred lease incentives | 72,739 | 67,683 | ||||||
Deferred rent | 27,115 | 26,826 | ||||||
Other long-term liabilities | 31,075 | 29,925 | ||||||
Total long-term liabilities | 130,929 | 124,434 | ||||||
Total shareholder’s equity | 486,958 | 458,034 | ||||||
Total liabilities and shareholders’ equity | $ | 703,592 | $ | 677,778 | ||||
3450 East Miraloma Avenue, Anaheim, CA 92806 (714) 414-4000
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(unaudited)
(in $000’s)
FIRST QUARTER ENDED | ||||||||
APR 30, 2005 | MAY 1, 2004 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 17,607 | $ | 14,969 | ||||
Depreciation & amortization | 15,001 | 11,936 | ||||||
Loss on disposal of property and equipment | — | 1,851 | ||||||
Tax benefits related to exercise of stock options | 3,754 | 2,488 | ||||||
Changes in operating assets and liabilities: | ||||||||
Inventories | 2,953 | (10,161 | ) | |||||
Accounts payable and accrued expenses | (8,180 | ) | (5,740 | ) | ||||
Income taxes and deferred income taxes | (2,348 | ) | (9,701 | ) | ||||
Deferred lease incentives | 4,675 | 2,223 | ||||||
Other assets and liabilities | 176 | (2,083 | ) | |||||
Net cash provided by operating activities | 33,638 | 5,782 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (21,648 | ) | (17,122 | ) | ||||
Purchases of short-term investments | (250,158 | ) | (335,269 | ) | ||||
Maturities of short-term investments | 247,950 | 322,700 | ||||||
Net cash used in investing activities | (23,856 | ) | (29,691 | ) | ||||
Cash flows from financing activities: | ||||||||
Repayments of long-term debt and capital leases | (547 | ) | (463 | ) | ||||
Repurchase of common stock | — | (42,874 | ) | |||||
Proceeds from exercise of stock options | 6,421 | 5,334 | ||||||
Net cash provided by financing activities | 5,874 | (38,003 | ) | |||||
Net decrease in cash and cash equivalents | 15,656 | (61,912 | ) | |||||
Cash and cash equivalents, beginning of period | 64,308 | 109,640 | ||||||
Cash and cash equivalents, end of period | $ | 79,964 | $ | 47,728 | ||||
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SELECTED STORE OPERATING DATA
APR 30, 2005 | MAY 1, 2004 | |||||||
Stores open at beginning of first quarter | 990 | 877 | ||||||
Stores opened during first quarter | 27 | 31 | ||||||
Stores closed during first quarter | (4 | ) | (1 | ) | ||||
Stores open at end of first quarter | 1,013 | 907 | ||||||
Other operating data: | ||||||||
PacSun stores | 754 | 689 | ||||||
Outlet stores | 86 | 81 | ||||||
d.e.m.o. stores | 173 | 137 | ||||||
Total square footage at end of period (in thousands) | 3,548 | 3,117 |
3450 East Miraloma Avenue, Anaheim, CA 92806 (714) 414-4000