ANAHEIM, Calif., May 22, 2008 (PRIME NEWSWIRE) -- Pacific Sunwear of California, Inc. (Nasdaq:PSUN) (the "Company") today announced that total sales from continuing operations for the first quarter (13 weeks) of fiscal 2008 ended May 3, 2008, were $266.9 million versus total sales of $268.1 million from continuing operations for the first quarter (13 weeks) of fiscal 2007 ended May 5, 2007. Total Company same-store sales decreased one percent during the period.
The Company recorded a net loss from continuing operations of $12.0 million, or $0.17 per diluted share, for the first quarter of fiscal 2008 compared to a net loss of $0.3 million, or less than one cent per diluted share, for the first quarter of fiscal 2007. First quarter results for each period exclude the income statement impact of demo and One Thousand Steps due to their being designated as discontinued operations during the first quarter of fiscal 2008 and the fourth quarter of fiscal 2007, respectively. First quarter results for fiscal 2008 include an after-tax asset impairment charge of $4.9 million, or $0.07 per diluted share, associated with the Company's materials handling equipment in its closed Anaheim distribution center. Assuming all contingencies to closing are satisfied, the Company currently expects the previously announced sale of its Anaheim distribution center to be completed by the end of fiscal 2008.
"Although our first quarter was disappointing, we successfully accomplished four meaningful initiatives that position us well going forward. We completed the liquidation of our demo business; consolidated distribution activities to into our Olathe, Kansas Distribution Center; entered into an agreement to sell our Anaheim Distribution Center, and transitioned sneakers and fashion footwear from our PacSun stores," commented Sally Frame Kasaks, Chief Executive Officer. "I am proud of the efforts undertaken by our team during this difficult period of transition. With these significant activities behind us, we are singularly focused on our core PacSun business and remain committed to our business strategy."
Financial Outlook for Fiscal 2008
Given the difficult economic environment and the Company's regional exposures to the challenging retail markets of California, Florida, Nevada and Arizona, the Company is revising its outlook for the second quarter and full year of fiscal 2008. Assuming same-store sales in the range of negative three percent to flat for the second quarter of fiscal 2008, the Company anticipates earnings from continuing operations of $0.03 to $0.08 per diluted share. Further, assuming flat same-store sales for the second half of fiscal 2008, the Company anticipates non-GAAP earnings from continuing operations for fiscal 2008 in the range of $0.59 to $0.64 cents per diluted share. This range excludes the previously noted asset impairment charge of $0.07 per diluted share incurred in the first quarter of fiscal 2008 and the anticipated gain of approximately $0.23 per diluted share from the sale of the Company's closed Anaheim distribution center, which is currently expected to occur by the end of fiscal 2008. On a GAAP basis, after giving effect to the impairment charge and anticipated gain associated with the sale of the Anaheim distribution center, the Company anticipates earnings from continuing operations for fiscal 2008 in the range of $0.75 to $0.80 cents per diluted share. Further details concerning the Anaheim distribution center sale are part of the Company's Form 8-K filed with the SEC on May 2, 2008.
About Pacific Sunwear of California, Inc.
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 May 3, 2008, the Company operated 820 PacSun stores and 122 PacSun Outlet stores for a total of 942 stores in 50 states and Puerto Rico. PacSun's website address is www.pacsun.com.
The Pacific Sunwear of California logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2087
The Company will be hosting a conference call today at 1:30 p.m. Pacific Time. A telephonic replay of the conference call will be available beginning approximately two hours following the call for one week and can be accessed in the United States/Canada at (800) 642-1687 or internationally at (706) 645-9291; pass code: 47112660. For those unable to listen to the live Web broadcast on the Company's investor relations website www.pacsun.com, or utilize the call-in replay, an archived version will be available on the Company's investor relations website through midnight, May 22, 2009.
Pacific Sunwear Safe Harbor
This press release contains "forward-looking statements" including, without limitation, statements regarding the Company's earnings projections and same-store sales assumptions for the second quarter and full fiscal year of fiscal 2008 and the expected closing date and anticipated gain from the sale of the Company's Anaheim distribution center. In each case, these statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company intends that these forward-looking statements be subject to the safe harbors created thereby. These statements are not historical facts and involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in such forward-looking statements. Such uncertainties which could adversely affect our business and results include, among others, the following factors: our assumption of same-store sales during the second quarter and full year of fiscal 2008 may be wrong and actual same-store sales may be higher or lower; changes in consumer demands and preferences may adversely affect our performance; higher than anticipated markdowns and/or higher than estimated selling, general and administrative costs; competition from other retailers and uncertainties generally associated with apparel retailing; merchandising/fashion sensitivity; sales from private label merchandise, expansion and management of growth; reliance on key personnel; economic impact of natural disasters, terrorist attacks or war/threat of war; shortages of supplies and/or contractors, as a result of natural disasters or terrorist acts, could cause unexpected delays in new store openings, relocations or expansions; reliance on foreign sources of production 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 February 2, 2008 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 assumes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur after such statements are made. 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.
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SUMMARY STATEMENTS OF OPERATIONS
(unaudited, in thousands except share and per share data)
First Quarter Ended
--------------------------
05/03/08 05/05/07
----------- -----------
Net sales $ 266,867 $ 268,106
Gross margin 75,465 75,198
Selling, G&A expenses 95,812 76,705
----------- -----------
Operating loss from continuing operations (20,347) (1,507)
Interest income, net 758 969
----------- -----------
Loss from continuing operations before
income taxes (19,589) (538)
Income tax benefit (7,620) (200)
----------- -----------
Loss from continuing operations (11,969) (338)
Loss from discontinued operations, net
of tax benefit (25,133) (4,720)
----------- -----------
Net loss $ (37,102) $ (5,058)
=========== ===========
Loss from continuing operations per
share, basic $ (0.17) $ (0.00)
=========== ===========
Loss from continuing operations per
share, diluted $ (0.17) $ (0.00)
=========== ===========
Net loss per share, basic $ (0.53) $ (0.07)
=========== ===========
Net loss per share, diluted $ (0.53) $ (0.07)
=========== ===========
Weighted average shares outstanding,
basic 69,915,802 69,578,259
=========== ===========
Weighted average shares outstanding,
diluted 69,915,802 69,578,259
=========== ===========
Note: All periods presented above exclude the income statement impact
to continuing operations of demo and One Thousand Steps, which were
designated as discontinued operations during the first quarter of
fiscal 2008 and the fourth quarter of fiscal 2007, respectively.
Continuing operations, as presented above, include the operations of
the Company's PacSun and PacSun Outlet stores only.
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
05/03/08 02/02/08
---------- ---------
ASSETS
Current assets:
Cash & cash equivalents $ 42,645 $ 97,587
Inventories 167,508 170,182
Other current assets 87,808 52,818
---------- ---------
Total current assets 297,961 320,587
Property and equipment, net 365,561 376,243
Other long-term assets 39,653 55,313
---------- ---------
Total assets $703,175 $752,143
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 72,711 $ 62,349
Other current liabilities 70,820 71,107
---------- ---------
Total current liabilities 143,531 133,456
Deferred lease incentives 61,375 74,012
Deferred rent 25,261 27,669
Other long-term liabilities 35,190 33,661
---------- ---------
Total liabilities 265,357 268,798
Total shareholder's equity 437,818 483,345
---------- ---------
Total liabilities and shareholders' equity $703,175 $752,143
========== =========
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(unaudited, in thousands)
FIRST QUARTER ENDED
05/03/08 05/05/07
-------- --------
Cash flows from operating activities:
Net loss $(37,102) $ (5,058)
Depreciation & amortization 21,647 18,736
Non-cash stock based compensation 1,289 1,536
Tax benefits related to exercise of stock
options (388) 98
Excess tax benefits related to stock-based
compensation 26 (81)
Loss on disposal/impairment of property and
equipment 9,190 464
Changes in operating assets and liabilities:
Inventories 2,674 (5,016)
Accounts payable and other current liabilities 11,436 (14,189)
Other assets and liabilities (32,856) (5,846)
-------- --------
Net cash used in operating activities (24,084) (9,356)
Cash flows from investing activities:
Purchases of short-term investments -- (78,400)
Maturities of short-term investments -- 90,300
Capital expenditures (21,525) (32,358)
-------- --------
Net cash used in investing activities (21,525) (20,458)
Cash flows from financing activities:
Repurchases of common stock (10,248) --
Excess tax benefits related to stock-based
compensation (26) 81
Proceeds from exercise of stock options 944 579
Net repayments under long-term leases (3) (24)
-------- --------
Net cash (used in)/provided by financing
activities (9,333) 636
-------- --------
Net decrease in cash and cash equivalents (54,942) (29,178)
Cash and cash equivalents, beginning of period 97,587 52,267
-------- --------
Cash and cash equivalents, end of period $ 42,645 $ 23,089
======== ========
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SELECTED STORE OPERATING DATA
Fiscal 2008 Fiscal 2007
----------- -----------
Stores open at beginning of fiscal year 1,107 1,199
Stores opened during the period 3 4
Stores closed during the period (168) (20)
----------- -----------
Stores open at end of period 942 1,183
Note: Fiscal 2008 store closures include 153 demo stores. demo became
a discontinued operation during the first quarter of fiscal 2008.
05/03/08 05/05/07
------------------- ------------------
Square Square
# of Footage # of Footage
Stores (000's) Stores (000's)
------------------- ------------------
PacSun stores 820 3,104 845 3,176
Outlet stores 122 492 117 474
demo stores -- -- 212 600
One Thousand Steps stores -- -- 9 24
------------------- ------------------
Total stores 942 3,596 1,183 4,274