EXHIBIT 99.1
** NEWS RELEASE **
HOT TOPIC, INC. REPORTS FIRST QUARTER EPS INCREASES 22%
TO A RECORD $0.11 PER DILUTED SHARE
CITY of INDUSTRY, CA, May 19, 2004 -- Hot Topic, Inc. (Nasdaq National
Market: HOTT), reported company-record results for the first quarter (13 weeks)
ended May 1, 2004.
Net income in the first quarter increased to $5.4 million or $0.11 per
diluted share, from $4.4 million or $0.09 per diluted share for the first
quarter of the last fiscal year. Net sales for the first quarter increased 27%
to $128.1 million, from $100.7 million for the first quarter of fiscal 2003.
As previously reported, comparable store sales increased 4.0% for the
quarter compared to the first quarter of fiscal 2003.
At the end of the quarter, the company operated 581 stores, including
52 Torrid stores, compared to 468 stores, including 34 Torrid stores, at the end
of the first quarter of fiscal 2003.
A conference call to discuss first quarter results, business trends,
and other matters will be conducted today at 4:30 PM Eastern time. The
conference call number is 800-370-0869, and will be accessible to all interested
parties. The conference call will also be webcast at www.companyboardroom.com. A
replay will be available at 877-519-4471, pass code 4735750, for approximately
10 days.
Hot Topic, Inc. is a national mall-based specialty retailer. Hot Topic
offers apparel, accessories and gifts to young men and women principally between
the ages of 12 and 22. Torrid, the company's second concept, provides plus-size
fashion-forward apparel and accessories that target young women principally
between the ages of 15 and 29. The company currently operates 534 Hot Topic
stores in 49 states and Puerto Rico, 53 Torrid stores, and Internet stores
www.hottopic.com and www.torrid.com.
In addition to the historical information contained herein, this news
release may contain forward-looking statements, including statements relating to
financial results, guidance, projections and other financial performance, and
managing growth. These statements involve risks and uncertainties, including
risks and uncertainties associated with meeting expected financial results,
management of growth, relationships with mall developers and operators, the risk
that available cash or mall space will not be adequate for planned expansion,
fluctuations in sales and comparable store sales results, risks and
uncertainties with respect to new store openings including risks associated with
the company's new store concepts and Internet stores, music and fashion trends,
competition from other retailers, uncertainties generally associated with
specialty retailing, the effect of economic conditions, the effect of severe
weather or natural disasters, political and/or social changes or events that
could negatively impact shopping patterns and/or mall traffic as well as other
risks detailed in the company's SEC reports, including its Annual Report on Form
10-K for the year ended January 31, 2004. The historical results achieved are
not necessarily indicative of the future prospects of the company.
Contact:
Hot Topic, Inc., City of Industry, CA
Mr. Jim McGinty, CFO (626) 839-4681 x2675
Mr. Marc Campbell, Director of IR (626) 839-4681 x2419
HOT TOPIC, INC.
SUMMARY STATEMENTS OF INCOME
(Unaudited)
First Quarter Ended
-------------------
May 1, 2004 May 3, 2003
----------- -----------
(In thousands, except per share amounts)
Net sales $ 128,143 $ 100,657
Cost of goods sold, including buying,
distribution and occupancy costs 83,826 65,043
Gross margin 44,317 35,614
Selling, general and administrative expenses 35,985 28,859
Operating income 8,332 6,755
Interest income-net 352 358
Income before income taxes 8,684 7,113
Provision for income taxes 3,326 2,703
Net income $ 5,358 $ 4,410
Earnings per share
Basic $ 0.11 $ 0.09
Diluted $ 0.11 $ 0.09
Weighted average shares outstanding
Basic 48,019 46,968
Diluted 50,131 48,567
HOT TOPIC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
May 1, 2004 May 3, 2003
----------- -----------
Current Assets:
Cash, cash equivalents and short-term investments $ 86,271 $ 71,520
Inventory 57,623 43,945
Prepaid expenses and other 11,089 8,950
Deferred tax assets 2,259 2,093
Total current assets 157,242 126,508
Leaseholds, fixtures and equipment - net 96,236 76,547
Deposits and other 193 171
Deferred tax assets -- 683
Total assets $ 253,671 $ 203,909
Current Liabilities:
Accounts payable $ 22,042 $ 15,922
Accrued liabilities 22,913 17,378
Income taxes payable 2,269 290
Total current liabilities 47,224 33,590
Deferred rent 3,368 2,528
Deferred tax liability 3,316 --
Total liabilities 53,908 36,118
Shareholders' equity 199,763 167,791
Total liabilities and shareholders' equity $ 253,671 $ 203,909
HOT TOPIC, INC.
OTHER DATA
(Dollars in thousands)
(Unaudited)
First Quarter Ended
-------------------
May 1, 2004 May 3, 2003
----------- -----------
Depreciation and amortization $ 5,018 $ 4,359
Capital expenditures $ 12,978 $ 8,773
Number of stores open at end of period:
Hot Topic 529 434
Torrid 52 34
Total store square footage 1,044,700 833,600