UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 25, 2005
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HOT TOPIC, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-28784 77-0198182
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
18305 E. SAN JOSE AVENUE,
CITY OF INDUSTRY, CALIFORNIA 91748
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (626) 839-4681
NOT APPLICABLE.
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
Attached hereto as Exhibit 99.1 is a copy of a press release that Hot
Topic, Inc. issued on March 2, 2005. The press release includes certain sales
information of the Registrant for the fiscal month ended February 26, 2005. In
addition, the release includes certain additional information relating to past
reporting periods.
The information in this Item 2.02 and the corresponding exhibit are
being furnished and shall not be deemed "filed" for the purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that Section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, regardless of any general incorporation language
in such filing.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review.
(a) On February 25, 2005, the Audit Committee of the Board of Directors
of the Registrant met with the Registrant's management and independent
registered public accounting firm to discuss the correction of certain errors
related to the Registrant's lease accounting that were recently identified by
the Registrant's management.
Specifically, the Registrant previously reflected the unamortized
portion of construction allowances as a reduction of capital expenditures rather
than recording those transactions as a deferred rent credit. In addition, the
Registrant previously recognized straight-line rent expense for leases beginning
on the rent commencement date (i.e., store opening date), which had the effect
of excluding the build-out period from the calculation of the period over which
rent is expensed.
The Registrant's Audit Committee and management concluded that (i) the
Registrant's consolidated financial statements as of January 31, 2004 and
February 1, 2003 and for the fiscal years ended January 31, 2004, February 1,
2003 and February 2, 2002 and (ii) the Registrant's consolidated financial
statements as of and for the interim periods ended October 30, 2004, July 31,
2004, May 1, 2004, November 1, 2003, August 2, 2003, and May 3, 2003, should be
restated to reflect adjustments required to correct these errors. Accordingly,
those previously filed financial statements should no longer be relied upon.
The Registrant believes that these adjustments are consistent with
similar adjustments currently being made by many other retailers and other
publicly traded companies related to accounting for leases. These adjustments
are not being made as a result of a determination of any fraudulent activity or
misconduct of the Registrant, its Board of Directors, its Audit Committee, or
its management. The Registrant intends to file this restated financial
information together with its Form 10-K for the fiscal year ended January 29,
2005.
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The restatement will increase property and equipment, as well as
increase the deferred rent liability, for the consolidated balance sheet
included within the affected financial statements. The restatement is expected
to reduce net income per diluted share by $0.01 for each of fiscal years 2004,
2003 and 2002. In addition, the Registrant estimates that net income per diluted
share will be lower by approximately $0.01 in fiscal 2005 as a result of these
adjustments. While the adjustments have no effect on the cash flow of the
Registrant in the aggregate, cash flow from operations will increase, offset by
an increase in cash used for capital expenditures.
The Registrant believes the restatement will comply with Statement of
Financial Accounting Standards No. 13, "Accounting for Leases"; Financial
Accounting Standards Board Technical Bulletin No. 88-1, "Issues Relating to
Accounting for Leases"; Financial Accounting Standards Board Technical Bulletin
No. 85-3, "Accounting for Operating Leases with Scheduled Rent Increases"; and
the views of the Office of the Chief Accountant of the Securities and Exchange
Commission expressed in its letter related to these matters dated February 7,
2005.
The Audit Committee of the Registrant reviewed the accounting treatment
and disclosures referred to in this Item 4.02(a) and discussed such treatment
and disclosures with the Registrant's independent registered public accounting
firm.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits:
Exhibit No. Description
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99.1 Press Release issued by Hot Topic, Inc.
on March 2, 2005
[Remainder of page intentionally left blank; signature on following page.]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOT TOPIC, INC.
By: /s/ JAMES MCGINTY
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James McGinty
CHIEF FINANCIAL OFFICER
Date: March 2, 2005
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INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
99.1 Press Release issued by Hot Topic, Inc. on March 2,
2005
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