Exhibit 99.1
[LOGO]
CONTACT:
Carl Womack, Chief Financial Officer (714) 414-4003
FOR IMMEDIATE RELEASE
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PACIFIC SUNWEAR REPORTS THIRD QUARTER
NET INCOME INCREASES 54%, EXCEEDS CONSENSUS EPS ESTIMATES BY $.02,
YEAR TO DATE NET INCOME UP 73%
ANAHEIM, CA/NOVEMBER 10, 2003 --- Pacific Sunwear of California, Inc.
(NASDAQ:PSUN) reported today that net income for the third quarter of fiscal
2003 was $24.5 million, or $.32 per share, basic, and $.31 per share, diluted,
an increase of 54% over net income of $15.9 million, or $.22 per share, basic,
and $.21 per share, diluted, for the third quarter of fiscal 2002.
Sales for the third quarter of fiscal 2003 were $281.3 million, an
increase of 23.3% over sales of $228.2 million for the third quarter of fiscal
2002. Company same-store sales increased 13.8% for the third quarter of fiscal
2003 with PacSun same-store sales up 13.2% and d.e.m.o. same-store sales up
19.9%.
"I am very proud of the Company's successes during the first nine months
of fiscal 2003. We have made great strides in all product areas and expect to
have significant improvement in sales per square foot and operating margin in
2003. For the fourth quarter of fiscal 2003, the Company is comfortable with the
mean consensus earnings per share estimate of analysts of $.37, and is based on
our assumption of a 5-6% same store sales increase for the quarter. We enter
Holiday 2003 feeling very good about our assortments. For fiscal 2004, our
guidance is for 20% earnings growth over fiscal 2003. In 2003, d.e.m.o. has
become a strong second concept that in no way erodes our core business. We
remain very much on track to grow to 1,400 stores by the end of 2007, which will
incorporate 1,000 PacSun stores and 400 d.e.m.o. stores", stated Greg Weaver,
Chairman and Chief Executive Officer.
Net income for the first nine months of fiscal 2003 was $45.9 million,
or $.60 per share, basic, and $.59 per share, diluted, an increase of 73% over
net income of $26.5 million, or $.36 per share, basic, and $.35 per share,
diluted, for the first nine months of fiscal 2002. Sales for the first nine
months of fiscal 2003 were $714.0 million, an increase of 22.9% over sales of
$580.8 million for the first nine months of fiscal 2002. Company same-store
sales increased 13.7% for the first nine months of fiscal 2003 with PacSun
same-store sales up 12.4% and d.e.m.o. same-store sales up 25.5%.
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 November 1, 2003, the Company operated 664 PacSun stores, 78
PacSun outlet stores and 121 d.e.m.o. stores, for a total of 863 stores in 50
states and Puerto Rico. PacSun's website address is www.pacsun.com.
The comments in this press release with respect to our assortment for
the upcoming holidays, fourth quarter sales and earnings estimates, fiscal 2004
earnings growth of 20%, the potential for 1,400 stores by fiscal 2007 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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3450 East Miraloma Avenue * Anaheim, CA 92806 * (714)414-4000
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SUMMARY STATEMENT OF INCOME
(UNAUDITED)
(IN $ THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
THIRD QUARTER ENDED NINE MONTHS ENDED
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NOV. 1, 2003 NOV. 2, 2002 NOV. 1, 2003 NOV. 2, 2002
------------ ------------ ------------ ------------
Net sales $ 281,253 $ 228,239 $ 713,976 $ 580,803
Gross margin 100,617 78,915 244,305 188,687
Selling, G&A expense 61,358 52,959 170,499 145,126
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Operating income 39,259 25,956 73,806 43,561
Interest income (expense) 213 (140) 342 (593)
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Income before taxes 39,472 25,816 74,148 42,968
Income tax expense 14,963 9,914 28,281 16,500
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Net income $ 24,509 $ 15,902 $ 45,867 $ 26,468
Net income per share, basic * $ 0.32 $ 0.22 $ 0.60 $ 0.36
Net income per share, diluted * $ 0.31 $ 0.21 $ 0.59 $ 0.35
Weighted average shares
outstanding, basic * 77,685,516 73,955,606 76,031,944 73,879,124
Weighted averaged shares
outstanding, diluted * 79,876,426 74,923,747 78,322,218 74,947,662
* Prior year shares outstanding and earnings per share have been adjusted for
the three-for-two stock splits effected December 18, 2002, and August 25, 2003.
3450 East Miraloma Avenue * Anaheim, CA 92806 * (714)414-4000
BALANCE SHEET HIGHLIGHTS
(UNAUDITED)
(IN $ THOUSANDS)
NOV. 1, 2003 FEB. 1, 2003 NOV. 2, 2002
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ASSETS
Current assets:
Cash & cash equivalents $ 83,495 $ 36,438 $ --
Short-term investments 10,410 -- --
Inventories 169,184 123,433 150,027
Other current assets 25,395 22,762 21,043
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Total current assets 288,484 182,633 171,070
Property and equipment, net 203,763 201,513 197,128
Other long-term assets 16,802 15,597 16,560
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Total assets $509,049 $399,743 $384,758
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit -- -- 9,000
Accounts payable and accrued expenses 78,842 62,978 68,170
Income taxes payable 7,450 8,000 10,189
Current portion of long-term debt and capital
leases 1,952 2,350 1,625
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Total current liabilities 88,244 73,328 88,984
Long-term portion of debt and capital leases 1,935 3,338 1,472
Other long-term liabilities 29,084 20,686 17,285
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Total liabilities 119,263 97,352 107,741
Total shareholder's equity 389,786 302,391 277,017
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Total liabilities and shareholders' equity $509,049 $399,743 $384,758
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
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NOV. 1, 2003 NOV. 2, 2002
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Cash flows from operating activities:
Net income $ 45,867 $ 26,468
Depreciation & amortization 26,939 24,903
Loss on disposal of property and equipment 1,492 3,125
Changes in operating assets and liabilities:
Inventories (45,751) (47,515)
Accounts payable and accrued expenses 15,864 12,934
Income taxes and deferred income taxes 13,899 1,447
Other assets and liabilities 4,560 923
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Net cash provided by operating activities 62,870 22,285
Cash flows from investing activities:
Short-term investment purchases (10,410) --
Capital expenditures (30,681) (30,127)
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Net cash used in investing activities (41,091) (30,127)
Cash flows from financing activities:
Proceeds from exercise of stock options 27,111 1,609
Repayments under long-term debt and capital leases (1,800) (25,903)
Cancellation of fractional shares due to 3-for-2
stock split (33) --
Net borrowings under credit facility -- 9,000
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Net cash provided by/(used in) financing activities 25,278 (15,294)
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Net increase/(decrease) in cash and cash equivalents 47,057 (23,136)
Cash and cash equivalents, beginning of period 36,438 23,136
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Cash and cash equivalents, end of period $ 83,495 $ --
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SELECTED STORE OPERATING DATA
NOV. 1, 2003 NOV. 2, 2002
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Stores open at beginning of fiscal year 791 718
Stores opened during first nine months 75 78
Stores closed during first nine months (3) (9)
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Stores open at end of third quarter 863 787
Other operating data:
PacSun stores 664 607
Outlet stores 78 71
d.e.m.o. stores 121 109
Total square footage at end of period (in thousands) 2,937 2,626
3450 East Miraloma Avenue * Anaheim, CA 92806 * (714)414-4000