EXHIBIT 99.1
CONTACT:
Greg Weaver, Chairman, CEO (714) 414-4000
Carl Womack, Chief Financial Officer (714) 414-4003
FOR IMMEDIATE RELEASE
PACSUN ANNOUNCES FOURTH QUARTER
EARNINGS INCREASE 48% TO $34.3 MILLION
FISCAL 2003 EARNINGS INCREASE 61% TO $80.2 MILLION
ANAHEIM, CA/March 2, 2004-— Pacific Sunwear of California, Inc. (NASDAQ:PSUN) today reported results for the fourth quarter and year ended January 31, 2004.
Net income for the fourth quarter increased 48% to $34.3 million, or $.44 per share, basic, and $.43 per share, diluted, compared to $23.2 million, or $.31 per share, basic and diluted, for the fourth quarter of fiscal 2002. Total sales for the fourth quarter (13 weeks) ended January 31, 2004 were $326.3 million, an increase of 22.9% over total sales of $265.6 million for the fourth quarter (13 weeks) ended February 1, 2003. Same-store sales increased 12.0% for the comparable thirteen-week period ended January 31, 2004.
“I am pleased to report record quarterly earnings for PacSun of $34.3 million which was a 48% increase over fourth quarter last year,” stated Greg Weaver, Chairman and CEO. “For fiscal 2003, we achieved a 61% increase in net earnings with operating income of $128.2 million, or 12.3% of sales. At PacSun, we are improving market share with the help of multiple brands and the strength of our footwear and accessory businesses. At d.e.m.o., we substantially improved our overall merchandising in 2003, particularly in our girls and accessory businesses. d.e.m.o. same store sales grew 21% in 2003 on top of a 12.4% same store sales increase in 2002. For 2003, average new d.e.m.o. store sales are trending at nearly $1.1 million. Sales per square foot for the d.e.m.o. chain were $405 per foot for the year. For fiscal 2004, we plan to open 110 net new stores and expand or relocate approximately 35 stores with square footage growing approximately 15%. The 110 net new stores include 65 PacSun stores, 5 PacSun Outlet stores, and 40 d.e.m.o. stores. This will take the year-end 2004 store count to 987. Our financial guidance for fiscal 2004 is for earnings per share growth of 20% or better compared to 2003. Earnings growth of 20% equates to $1.22 and assumes same store sales growth of approximately 5%. The $1.22 equates to a pre-tax margin of approximately 13%,” concluded Mr. Weaver.
Total sales for fiscal 2003 (52 weeks) were $1.04 billion, an increase of 22.9% over sales of $846.4 million for fiscal 2002 (52 weeks). Same-store sales increased 13.1% for the comparable fifty-two week period ended January 31, 2004. Net income for fiscal 2003 increased 61% to $80.2 million, or $1.05 per share, basic, and $1.02 per share, diluted, compared to $49.7 million, or $0.67 per share, basic, and $0.66 per share, diluted, for fiscal 2002.
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. The Company ended fiscal 2003 operating 677 PacSun stores, 79 PacSun outlet stores and 121 d.e.m.o. stores, for a total of 877 stores in 50 states and Puerto Rico. As of March 2, 2004, the Company operated 680 PacSun stores, 79 PacSun outlet stores and 123 d.e.m.o. stores for a total of 882 stores in 50 states and Puerto Rico. PacSun’s website address is www.PacSun.com.
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3450 East Miraloma Avenue, Anaheim, CA 92806 (714) 414-4000
The matters discussed in this news release with respect to number of new stores, square footage growth of 15%, estimated 2004 earnings per share growth of 20%, estimated 2004 same store sales growth of 5%, and estimated 2004 pre-tax margin of 13%, respectively, are forward looking statements that involve risks and uncertainties, including 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. The historical results achieved are not necessarily indicative of future prospects of the Company.
More information on factors that could affect forward looking statements and 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.
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SUMMARY STATEMENT OF INCOME
(unaudited)
(in $000’s, except share and per share data)
FOURTH QUARTER ENDED | TWELVE MONTHS ENDED | |||||||||||||||
01/31/04 | 02/01/03 | 01/31/04 | 02/01/03 | |||||||||||||
Net sales | 326,318 | 265,590 | 1,040,294 | 846,393 | ||||||||||||
Gross margin | 119,011 | 94,997 | 363,317 | 283,683 | ||||||||||||
Selling, G&A expense | 64,569 | 57,320 | 235,068 | 202,445 | ||||||||||||
Operating income | 54,442 | 37,677 | 128,249 | 81,238 | ||||||||||||
Interest income/(expense) | 391 | (1 | ) | 732 | (594 | ) | ||||||||||
Income before taxes | 54,833 | 37,676 | 128,981 | 80,644 | ||||||||||||
Income tax expense | 20,487 | 14,467 | 48,768 | 30,967 | ||||||||||||
Net income | 34,346 | 23,209 | 80,213 | 49,677 | ||||||||||||
Net income per share, basic * | 0.44 | 0.31 | 1.05 | 0.67 | ||||||||||||
Net income per share, diluted * | 0.43 | 0.31 | 1.02 | 0.66 | ||||||||||||
Weighted average shares outstanding, basic * | 78,287,219 | 74,088,657 | 76,595,758 | 73,931,520 | ||||||||||||
Weighted average shares outstanding, diluted * | 80,226,072 | 75,765,821 | 78,849,651 | 75,146,991 | ||||||||||||
* | Prior year share and per share amounts have been adjusted for the three-for-two stock split effected August 25, 2003. |
3450 East Miraloma Avenue, Anaheim, CA 92806 (714) 414-4000
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in $000’s)
01/31/04 | 02/01/03 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash & cash equivalents | 142,840 | 36,438 | ||||||
Short-term investments | 33,035 | — | ||||||
Inventories | 147,751 | 123,433 | ||||||
Other current assets | 29,910 | 22,762 | ||||||
Total current assets | 353,536 | 182,633 | ||||||
Property and equipment, net | 203,644 | 201,513 | ||||||
Other long-term assets | 18,081 | 15,597 | ||||||
Total assets | 575,261 | 399,743 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | 38,668 | 28,456 | ||||||
Accrued expenses | 54,966 | 34,522 | ||||||
Income taxes payable | 15,024 | 8,000 | ||||||
Current portion of long-term debt and capital leases | 1,886 | 2,350 | ||||||
Total current liabilities | 110,544 | 73,328 | ||||||
Long-term portion of debt and capital leases | 1,455 | 3,338 | ||||||
Other long-term liabilities | 34,500 | 20,686 | ||||||
Total liabilities | 146,499 | 97,352 | ||||||
Total shareholders’ equity | 428,762 | 302,391 | ||||||
Total liabilities and shareholders’ equity | 575,261 | 399,743 | ||||||
3450 East Miraloma Avenue, Anaheim, CA 92806 (714) 414-4000
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(unaudited)
(in $000’s)
FOR THE FISCAL YEAR ENDED | ||||||||
01/31/04 | 02/01/03 | |||||||
Cash flows from operating activities: | ||||||||
Net income | 80,213 | 49,677 | ||||||
Depreciation & amortization | 36,246 | 32,453 | ||||||
Loss on disposal of property and equipment | 1,834 | 4,240 | ||||||
Changes in operating assets and liabilities: | ||||||||
Inventories | (24,318 | ) | (20,921 | ) | ||||
Accounts payable | 10,212 | (9,037 | ) | |||||
Accrued expenses | 20,444 | 16,751 | ||||||
Income taxes and deferred income taxes | 28,099 | 3,235 | ||||||
Other assets and liabilities | (1,083 | ) | 225 | |||||
Net cash provided by operating activities | 151,647 | 76,623 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (40,211 | ) | (40,423 | ) | ||||
Purchases of short-term investments | (33,035 | ) | — | |||||
Net cash used in investing activities | (73,246 | ) | (40,423 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 30,381 | 3,444 | ||||||
Cash paid in lieu of fractional shares in stock split | (33 | ) | (14 | ) | ||||
Repayments of long-term debt obligations | (825 | ) | (25,504 | ) | ||||
Principal payments under capital leases | (1,522 | ) | (824 | ) | ||||
Net cash provided by/(used in) financing activities | 28,001 | (22,898 | ) | |||||
Net increase in cash and cash equivalents | 106,402 | 13,302 | ||||||
Cash and cash equivalents, beginning of period | 36,438 | 23,136 | ||||||
Cash and cash equivalents, end of period | 142,840 | 36,438 | ||||||
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SELECTED STORE OPERATING DATA
JAN. 31, 2004 | FEB. 1, 2003 | |||||||
Stores open at beginning of year | 791 | 718 | ||||||
Stores opened during year | 90 | 85 | ||||||
Stores closed during year | (4 | ) | (12 | ) | ||||
Stores open at end of year | 877 | 791 | ||||||
Stores open at beginning of fourth quarter | 863 | 787 | ||||||
Stores opened during fourth quarter | 15 | 7 | ||||||
Stores closed during fourth quarter | (1 | ) | (3 | ) | ||||
Stores open at end of fourth quarter | 877 | 791 | ||||||
Other operating data: | ||||||||
PacSun stores | 677 | 612 | ||||||
Outlet stores | 79 | 72 | ||||||
d.e.m.o. stores | 121 | 107 | ||||||
Total square footage at end of period (in thousands) | 2,997 | 2,647 |
3450 East Miraloma Avenue, Anaheim, CA 92806 (714) 414-4000