ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
California | 95-3759463 |
(State of incorporation) | (I.R.S. Employer Identification No.) |
Large Accelerated Filer | ¨ | Accelerated Filer | ý |
Non-Accelerated Filer | ¨ | Smaller Reporting Company | ¨ |
Page | |
EX-31.1 | |
EX-32.1 | |
EX-101 INSTANCE DOCUMENT | |
EX-101 SCHEMA DOCUMENT | |
EX-101 CALCULATION LINKBASE DOCUMENT | |
EX-101 DEFINITION LINKBASE DOCUMENT | |
EX-101 LABEL LINKBASE DOCUMENT | |
EX-101 PRESENTATION LINKBASE DOCUMENT |
PACIFIC SUNWEAR OF CALIFORNIA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, All Amounts in Thousands Except Share and Per Share Amounts) | |||||||
August 1, 2015 | January 31, 2015 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 13,697 | $ | 22,588 | |||
Inventories | 128,565 | 81,658 | |||||
Prepaid expenses | 13,488 | 12,692 | |||||
Other current assets | 5,669 | 3,992 | |||||
Total current assets | 161,419 | 120,930 | |||||
Property and equipment, net | 86,989 | 88,751 | |||||
Deferred income taxes | 6,034 | 6,034 | |||||
Intangible assets, net | 10,742 | 11,069 | |||||
Other assets | 24,694 | 25,495 | |||||
TOTAL ASSETS | $ | 289,878 | $ | 252,279 | |||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 90,966 | $ | 36,775 | |||
Derivative liability | 3,650 | 28,448 | |||||
Other current liabilities | 49,500 | 48,183 | |||||
Total current liabilities | 144,116 | 113,406 | |||||
LONG-TERM LIABILITIES: | |||||||
Deferred lease incentives | 12,950 | 10,804 | |||||
Deferred rent | 14,541 | 14,694 | |||||
Long-term debt | 96,148 | 94,424 | |||||
Other liabilities | 25,527 | 28,368 | |||||
Total long-term liabilities | 149,166 | 148,290 | |||||
Commitments and contingencies (Note 11) | |||||||
SHAREHOLDERS’ DEFICIT: | |||||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 1,000 shares issued and outstanding, respectively | — | — | |||||
Common stock, $0.01 par value; 170,859,375 shares authorized; 70,075,507 and 69,265,844 shares issued and outstanding, respectively | 701 | 693 | |||||
Additional paid-in capital | 25,542 | 24,384 | |||||
Accumulated deficit | (29,647 | ) | (34,494 | ) | |||
Total shareholders’ deficit | (3,404 | ) | (9,417 | ) | |||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ | 289,878 | $ | 252,279 |
PACIFIC SUNWEAR OF CALIFORNIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS (Unaudited, All Amounts in Thousands Except Share and Per Share Amounts) | |||||||||||||||
For the Second Quarter Ended | For the First Half Ended | ||||||||||||||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | ||||||||||||
Net sales | $ | 195,622 | $ | 211,749 | $ | 362,125 | $ | 382,892 | |||||||
Cost of goods sold, including buying, distribution and occupancy costs | 145,139 | 150,210 | 266,997 | 276,690 | |||||||||||
Gross margin | 50,483 | 61,539 | 95,128 | 106,202 | |||||||||||
Selling, general and administrative expenses | 53,857 | 60,563 | 105,998 | 112,589 | |||||||||||
Operating income (loss) | (3,374 | ) | 976 | (10,870 | ) | (6,387 | ) | ||||||||
Gain on derivative liability | (15,717 | ) | (10,434 | ) | (24,798 | ) | (11,659 | ) | |||||||
Interest expense, net | 4,281 | 4,075 | 8,425 | 7,952 | |||||||||||
Income (loss) before income taxes | 8,062 | 7,335 | 5,503 | (2,680 | ) | ||||||||||
Income tax (benefit) expense | (275 | ) | (166 | ) | 656 | 216 | |||||||||
Net income (loss) | $ | 8,337 | $ | 7,501 | $ | 4,847 | $ | (2,896 | ) | ||||||
Comprehensive income (loss) | $ | 8,337 | $ | 7,501 | $ | 4,847 | $ | (2,896 | ) | ||||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 0.12 | $ | 0.11 | $ | 0.07 | $ | (0.04 | ) | ||||||
Diluted | $ | 0.12 | $ | 0.10 | $ | 0.07 | $ | (0.04 | ) | ||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 69,819,615 | 69,069,770 | 69,625,420 | 68,989,675 | |||||||||||
Diluted | 69,894,694 | 73,197,282 | 71,847,929 | 68,989,675 |
PACIFIC SUNWEAR OF CALIFORNIA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, All Amounts in Thousands) | |||||||
For the First Half Ended | |||||||
August 1, 2015 | August 2, 2014 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | $ | 4,847 | $ | (2,896 | ) | ||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 10,353 | 12,092 | |||||
Asset impairment | 602 | 1,663 | |||||
Loss on disposal of property and equipment | 47 | 106 | |||||
Gain on derivative liability | (24,798 | ) | (11,659 | ) | |||
Amortization of debt discount | 2,005 | 1,482 | |||||
Non-cash stock-based compensation | 1,414 | 837 | |||||
Change in assets and liabilities: | |||||||
Inventories | (46,907 | ) | (47,865 | ) | |||
Prepaid expenses and other current assets | (2,473 | ) | (4,193 | ) | |||
Other assets | 336 | (575 | ) | ||||
Accounts payable | 54,191 | 46,111 | |||||
Other current liabilities | (5,381 | ) | 6,923 | ||||
Deferred lease incentives | 2,146 | (349 | ) | ||||
Deferred rent | (153 | ) | (481 | ) | |||
Other long-term liabilities | (2,322 | ) | (91 | ) | |||
Net cash (used in) provided by operating activities | (6,093 | ) | 1,105 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property, equipment and intangible assets | (6,762 | ) | (7,919 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from credit facility borrowings | 15,000 | — | |||||
Payments under credit facility borrowings | (10,000 | ) | — | ||||
Proceeds from mortgage borrowings | — | 618 | |||||
Principal payments under mortgage borrowings | (267 | ) | (293 | ) | |||
Payments for debt issuance costs | — | (116 | ) | ||||
Principal payments under capital lease obligations | (520 | ) | (222 | ) | |||
Proceeds from issuance of stock-based compensation | 302 | 373 | |||||
Statutory withholding payments for stock-based compensation | (551 | ) | — | ||||
Net cash provided by financing activities | 3,964 | 360 | |||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (8,891 | ) | (6,454 | ) | |||
CASH AND CASH EQUIVALENTS, beginning of period | 22,588 | 27,769 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 13,697 | $ | 21,315 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | 2,938 | $ | 3,105 | |||
Cash paid for income taxes | $ | 277 | $ | 834 | |||
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS: | |||||||
Property, equipment and intangible asset purchases accrued at end of period | $ | 2,162 | $ | 1,776 |
For the Second Quarter Ended | For the First Half Ended | ||||||||||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | ||||||||
(in thousands) | |||||||||||
Shares used in computing basic net income (loss) per share | 69,820 | 69,070 | 69,625 | 68,990 | |||||||
Dilutive effect of options, restricted stock and convertible preferred stock | 75 | 4,127 | 2,223 | — | |||||||
Shares used in computing diluted net income (loss) per share | 69,895 | 73,197 | 71,848 | 68,990 |
For the Second Quarter Ended | For the First Half Ended | ||||||||||||||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | ||||||||||||
(In thousands) | |||||||||||||||
Impairment charges | $ | 61 | $ | 880 | $ | 602 | $ | 1,663 |
August 1, 2015 | August 2, 2014 | ||||||
(In thousands) | |||||||
Carrying value of assets tested for impairment | $ | 825 | $ | 2,341 | |||
Carrying value of assets with impairment | $ | 89 | $ | 1,198 | |||
Fair value of assets impaired | $ | 28 | $ | 318 | |||
Number of stores tested for impairment | 20 | 47 | |||||
Number of stores with impairment | 4 | 17 |
August 1, 2015 | January 31, 2015 | ||||||
(In thousands) | |||||||
Accrued compensation and benefits | $ | 8,930 | $ | 12,528 | |||
Accrued gift cards | 6,707 | 8,905 | |||||
Credit facility borrowings | 5,000 | — | |||||
Sales taxes payable | 3,234 | 3,720 | |||||
Other | 25,629 | 23,030 | |||||
Total other current liabilities | $ | 49,500 | $ | 48,183 |
(In thousands) | |||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | |||||||||||||||||||||
Mortgage Debt | $ | 555 | $ | 585 | $ | 616 | $ | 649 | $ | 684 | $ | 24,572 | $ | 27,661 | |||||||||||||
Term Loan (1) | — | 75,623 | — | — | — | — | 75,623 | ||||||||||||||||||||
Total | $ | 555 | $ | 76,208 | $ | 616 | $ | 649 | $ | 684 | $ | 24,572 | $ | 103,284 | |||||||||||||
Less: Term Loan discount | (6,581 | ) | |||||||||||||||||||||||||
Less: Current portion of long-term debt | (555 | ) | |||||||||||||||||||||||||
Total long-term debt | $ | 96,148 |
Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Yrs.) | Aggregate Intrinsic Value ($000s) | |||||||||
Outstanding at January 31, 2015 | 1,913,227 | $ | 4.11 | |||||||||
Granted | — | — | ||||||||||
Exercised | — | — | ||||||||||
Forfeited or expired | (75,925 | ) | 12.63 | |||||||||
Outstanding at August 1, 2015 | 1,837,302 | $ | 3.75 | 1.3 | $ | — | ||||||
Vested and expected to vest at August 1, 2015 | 1,836,958 | $ | 3.76 | 1.3 | $ | — | ||||||
Exercisable at August 1, 2015 | 1,830,436 | $ | 3.76 | 1.3 | $ | — |
Shares | Weighted- Average Grant-Date Fair Value | |||||
Outstanding at January 31, 2015 | 964,001 | $ | 1.99 | |||
Granted | 2,750,000 | 2.81 | ||||
Vested | (359,268 | ) | 2.16 | |||
Forfeited | (25,749 | ) | 2.13 | |||
Outstanding at August 1, 2015 | 3,328,984 | $ | 2.65 |
Shares | Weighted- Average Grant-Date Fair Value | |||||
Outstanding at January 31, 2015 | 150,000 | $ | 2.25 | |||
Granted | 125,000 | 1.42 | ||||
Vested | (150,000 | ) | 2.25 | |||
Forfeited | — | — | ||||
Outstanding at August 1, 2015 | 125,000 | $ | 1.42 |
• | Level 1 — quoted prices for identical instruments in active markets. |
• | Level 2 — inputs other than Level 1 inputs, which are observable either directly or indirectly. |
• | Level 3 — unobservable inputs. |
August 1, 2015 | August 2, 2014 | ||
Stock price | $0.64 | $1.93 | |
Conversion price | $1.75 | $1.75 | |
Expected volatility | 68% | 76% | |
Expected term (in years) | 6.4 | 7.4 | |
Risk free interest rate | 1.83% | 2.16% | |
Expected dividends | $— | $— |
August 1, 2015 | August 2, 2014 | ||||||
(In thousands) | |||||||
Beginning balance | $ | 28,448 | $ | 30,720 | |||
Gain on change in fair value | (9,081 | ) | (1,225 | ) | |||
Balance at end of first quarter | $ | 19,367 | $ | 29,495 | |||
Gain on change in fair value | (15,717 | ) | (10,434 | ) | |||
Balance at end of second quarter | $ | 3,650 | $ | 19,061 |
• | the sufficiency of operating cash flows, working capital and available credit to meet our operating and capital expenditure requirements; |
• | our capital expenditure plans for the remainder of fiscal 2015; and |
• | potential recording of non-cash impairment charges for under-performing stores in future quarters. |
For the Second Quarter Ended | For the First Half Ended | ||||||||||
August 1, 2015 | August 2, 2014 | August 1, 2015 | August 2, 2014 | ||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Cost of goods sold, including buying, distribution and occupancy costs | 74.2 | 70.9 | 73.7 | 72.3 | |||||||
Gross margin | 25.8 | 29.1 | 26.3 | 27.7 | |||||||
Selling, general and administrative expenses | 27.5 | 28.6 | 29.3 | 29.4 | |||||||
Operating income (loss) | (1.7 | ) | 0.5 | (3.0 | ) | (1.7 | ) | ||||
Gain on derivative liability | (8.0 | ) | (4.9 | ) | (6.8 | ) | (3.0 | ) | |||
Interest expense, net | 2.2 | 1.9 | 2.3 | 2.0 | |||||||
Income (loss) before income taxes | 4.1 | 3.5 | 1.5 | (0.7 | ) | ||||||
Income tax (benefit) expense | (0.2 | ) | — | 0.2 | 0.1 | ||||||
Net income (loss) | 4.3 | % | 3.5 | % | 1.3 | % | (0.8 | )% |
$ millions | Attributable to | ||
$ | (12.8 | ) | Decrease in comparable store sales. |
(3.3 | ) | Decrease in non-comparable sales. | |
$ | (16.1 | ) | Total |
% | Attributable to | |
(1.1 | ) | Decrease in merchandise margin to 51.2% from 52.3%. |
(1.8 | ) | Increase in occupancy costs as a percentage of net sales. |
(0.4 | ) | Increase in buying, distribution and shipping costs. |
(3.3 | ) | Total |
% | Attributable to | |
1.0 | Increase in payroll and payroll related costs. | |
(2.1 | ) | Decrease in depreciation, consulting and other costs. |
(1.1 | ) | Total |
$ millions | Attributable to | ||
$ | (16.2 | ) | Decrease in comparable store sales. |
(4.6 | ) | Decrease in non-comparable sales. | |
$ | (20.8 | ) | Total |
% | Attributable to | |
(1.3 | ) | Increase in occupancy costs as a percentage of net sales. |
(0.1 | ) | Increase in buying and distribution costs. |
(1.4 | ) | Total |
% | Attributable to | |
1.2 | Increase in payroll and payroll related costs as a percentage of net sales. | |
(1.3 | ) | Decrease in depreciation, consulting and other costs. |
(0.1 | ) | Total |
For the First Half Ended | |||||||
August 1, 2015 | August 2, 2014 | ||||||
(In thousands) | |||||||
Net cash (used in) provided by operating activities | $ | (6,093 | ) | $ | 1,105 | ||
Net cash used in investing activities | (6,762 | ) | (7,919 | ) | |||
Net cash provided by financing activities | 3,964 | 360 | |||||
Net decrease in cash and cash equivalents | $ | (8,891 | ) | $ | (6,454 | ) |
$ millions | Description | ||
$ | 7.5 | Working capital at January 31, 2015 | |
(8.9 | ) | Decrease in cash and cash equivalents. | |
(7.3 | ) | Decrease in inventories, net of accounts payable. | |
24.8 | Decrease in derivative liability. | ||
1.2 | Increase in other current assets, net of other current liabilities. | ||
$ | 17.3 | Working capital at August 1, 2015 |
Payments Due by Period | |||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
(In millions) | |||||||||||||||||||
Operating lease obligations | $ | 357 | $ | 76 | $ | 127 | $ | 79 | $ | 75 | |||||||||
Term loan | 92 | 4 | 88 | — | — | ||||||||||||||
Mortgage debt | 36 | 2 | 4 | 4 | 26 | ||||||||||||||
Letters of credit | 8 | 8 | — | — | — | ||||||||||||||
Guaranteed minimum royalties | 6 | 2 | 3 | 1 | — | ||||||||||||||
Capital lease obligations | 1 | 1 | — | — | — | ||||||||||||||
Total | $ | 500 | $ | 93 | $ | 222 | $ | 84 | $ | 101 |
PACIFIC SUNWEAR OF CALIFORNIA, INC. (Registrant) | |||
Date: September 10, 2015 | By: | /s/ GARY H. SCHOENFELD | |
Gary H. Schoenfeld | |||
President, Chief Executive Officer and Director | |||
(Principal Executive Officer) | |||
Date: September 10, 2015 | By: | /s/ CHRISTOPHER R. TEDFORD | |
Christopher R. Tedford | |||
Vice President and Interim Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
Incorporated by Reference | ||||
Exhibit # | Exhibit Description | Form | Filing Date | |
3.1 | Third Amended and Restated Articles of Incorporation of the Company | 10-Q | 8/31/2004 | |
3.2 | Certificate of Determination of Preferences of Series A Junior Participating Preferred Stock of the Company | 8-K | 12/24/1998 | |
3.3 | Sixth Amended and Restated Bylaws of the Company | 10-Q | 9/6/2013 | |
3.4 | Certificate of Determination of Preferences of Convertible Series B Preferred Stock of the Company | 8-K | 12/7/2011 | |
31.1+ | Certification of Gary H. Schoenfeld pursuant to section 302 of the Sarbanes-Oxley Act of 2002 | |||
31.2+ | Certification of Christopher R. Tedford pursuant to section 302 of the Sarbanes-Oxley Act of 2002 | |||
32.1+ | Certifications of Gary H. Schoenfeld and Christopher R. Tedford pursuant to section 906 of the Sarbanes-Oxley Act of 2002 | |||
101.INS** | XBRL Instance Document | |||
101.SCH** | XBRL Taxonomy Extension Schema Document | |||
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB** | XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
+ | Filed herewith |
** | These interactive files are deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and are otherwise not subject to liability under these sections. |
1. | I have reviewed this quarterly report on Form 10-Q of Pacific Sunwear of California, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: September 10, 2015 | /s/ GARY H. SCHOENFELD |
Gary H. Schoenfeld | |
President, Chief Executive Officer and Director |
1. | I have reviewed this quarterly report on Form 10-Q of Pacific Sunwear of California, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: September 10, 2015 | /s/ CHRISTOPHER R. TEDFORD |
Christopher R. Tedford | |
Vice President and Interim Chief Financial Officer |
(i) | the Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: September 10, 2015 | /s/ GARY H. SCHOENFELD |
Gary H. Schoenfeld | |
President, Chief Executive Officer and Director Pacific Sunwear of California, Inc. | |
(Principal Executive Officer) | |
Dated: September 10, 2015 | /s/ CHRISTOPHER R. TEDFORD |
Christopher R. Tedford | |
Vice President and Interim Chief Financial Officer Pacific Sunwear of California, Inc. | |
(Principal Financial and Accounting Officer) |
Segment Reporting - Additional Information (Detail) |
3 Months Ended |
---|---|
Aug. 01, 2015
Segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reporting segments | 1 |
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Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2015 |
Aug. 02, 2014 |
Aug. 01, 2015 |
Aug. 02, 2014 |
|
Fair Value Disclosures [Abstract] | ||||
Impairment charges | $ 61 | $ 880 | $ 602 | $ 1,663 |
Debt - Term Loan - Additional Information (Detail) - USD ($) $ in Millions |
Aug. 01, 2015 |
Dec. 07, 2011 |
---|---|---|
Cash and Cash Equivalents [Member] | Five Year Term Loan [Member] | Five-Year Senior Secured Term Loan [Member] | ||
Term Loan [Line Items] | ||
Interest rate | 5.50% | |
Cash [Member] | Term Loan [Member] | ||
Term Loan [Line Items] | ||
Accrued interest | $ 4 | |
Payment in kind [Member] | Term Loan [Member] | ||
Term Loan [Line Items] | ||
Interest rate | 7.50% |
Summary of Significant Accounting Policies - Antidilutive Shares (Details) shares in Millions |
6 Months Ended |
---|---|
Aug. 02, 2014
shares
| |
Accounting Policies [Abstract] | |
Antidilutive securities excluded from computation of EPS (in shares) | 5.2 |
Shareholders' Equity - Preferred Stock - Additional Information (Detail) - Series B Preferred Stock [Member] - $ / shares |
6 Months Ended | |
---|---|---|
Aug. 02, 2014 |
Feb. 02, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Right to purchase common stock | 13,500,000.0 | |
Exercise price | $ 1.75 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions |
Aug. 01, 2015 |
Jan. 31, 2015 |
---|---|---|
Guarantee obligations [Member] | ||
Loss Contingencies [Line Items] | ||
Guarantees in the form of commercial letters of credit | $ 7.7 | $ 7.0 |
Minimum [Member] | ||
Loss Contingencies [Line Items] | ||
Guaranteed royalty payments | $ 6.0 | $ 6.0 |
Impairment of Long-Lived Assets |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of Long-Lived Assets | IMPAIRMENT OF LONG-LIVED ASSETS The Company assesses long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets (or asset group) may not be recoverable. Based on management’s review of the historical operating performance, including sales trends, gross margin rates, current cash flows from operations and the projected outlook for each of the Company’s stores, the Company determined that certain stores would not be able to generate sufficient cash flows over the remaining term of the related leases to recover the Company’s investment in the respective stores. As a result, the Company recorded the following non-cash impairment charges related to its retail stores within the accompanying Condensed Consolidated Statements of Operations and Comprehensive Operations, to write-down the carrying value of its long-lived store assets to their estimated fair values.
The long-lived assets disclosed above that were written down to their respective fair values consisted primarily of leasehold improvements, furniture, fixtures and equipment. The Company recognized impairment charges of $0.1 million and $0.9 million, respectively, during the second quarters ended August 1, 2015 and August 2, 2014 and $0.6 million and $1.7 million during the first half of fiscal 2015 and 2014, respectively. The decrease in the number of stores tested for impairment year-over-year was primarily related to the Company's closure of certain underperforming stores. See Note 10, "Fair Value Measurements" for further discussion related to impairment of long-lived assets. |
Shareholders' Equity - Employee Stock Purchase Plan - Additional Information (Detail) - shares |
6 Months Ended | |||
---|---|---|---|---|
Aug. 01, 2015 |
Aug. 02, 2014 |
Mar. 20, 2014 |
Mar. 19, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | ||
Employee Stock Purchase Plan (“ESPP”) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of discount in purchasing common stock from fair market value under ESPP | 10.00% | |||
Period of service for eligibility in the ESPP | 3 months | |||
Number of authorized shares | 2,500,000 | 2,100,000 | ||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 294,743 | 174,335 |
Impairment of Long-Lived Assets - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2015 |
Aug. 02, 2014 |
Aug. 01, 2015 |
Aug. 02, 2014 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment charges | $ 61 | $ 880 | $ 602 | $ 1,663 |
Fair value of assets impaired | $ 28 | $ 318 |
Impairment of Long-Lived Assets - Details of Long-Lived Assets Tested and Impaired (Detail) $ in Thousands |
6 Months Ended | |
---|---|---|
Aug. 01, 2015
USD ($)
Store
|
Aug. 02, 2014
USD ($)
Store
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Carrying value of assets tested for impairment | $ 825 | $ 2,341 |
Carrying value of assets with impairment | 89 | 1,198 |
Fair value of assets impaired | $ 28 | $ 318 |
Number of stores tested for impairment | Store | 20 | 47 |
Number of stores with impairment | Store | 4 | 17 |
Fair Value Measurements - Summary of Fair Value Assumptions for Derivative Liabilities (Detail) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Aug. 01, 2015 |
Aug. 02, 2014 |
Jan. 31, 2015 |
|
Fair Value Disclosures [Abstract] | |||
Share Price | $ 0.64 | $ 1.93 | |
Conversion price | $ 1.75 | $ 1.75 | |
Expected volatility | 68.00% | 76.00% | |
Expected term (in years) | 6 years 5 months | 7 years 5 months | |
Risk free interest rate | 1.83% | 2.16% |
Derivative Liability (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Aug. 01, 2015 |
Jan. 31, 2015 |
Dec. 07, 2011 |
|
Derivative [Line Items] | |||
Derivative liability | $ 3,650,000 | $ 28,448,000 | |
Series B Preferred Stock [Member] | |||
Derivative [Line Items] | |||
Preferred stock, shares issued | 1,000 | ||
Fair value of Series B Preferred Stock | $ 15,000,000 | ||
Five-Year Senior Secured Term Loan [Member] | Senior Secured Term Loan [Member] | |||
Derivative [Line Items] | |||
Term loan maturity period | 5 years | ||
Debt Instrument, Face Amount | $ 60,000,000 |
Other Current Liabilities - Schedule of Other Current Liabilities (Detail) - USD ($) $ in Thousands |
Aug. 01, 2015 |
Jan. 31, 2015 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Accrued compensation and benefits | $ 8,930 | $ 12,528 |
Accrued gift cards | 6,707 | 8,905 |
Credit facility borrowings | 5,000 | 0 |
Sales taxes payable | 3,234 | 3,720 |
Other | 25,629 | 23,030 |
Total other current liabilities | $ 49,500 | $ 48,183 |
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Information regarding significant accounting policies is contained in Note 1, “Nature of Business and Summary of Significant Accounting Policies,” of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for fiscal 2014 (the "Report"). Presented below in the following notes is supplemental information that should be read in conjunction with “Notes to Consolidated Financial Statements” included in the Report. Income Taxes The Company calculates its interim income tax provision in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270, “Interim Reporting” (“ASC 270”) and ASC Topic 740, “Accounting for Income Taxes” (“ASC 740”). At the end of each interim period, the Company estimates the annual effective tax rate and applies that rate to its ordinary quarterly earnings. The tax expense or benefit related to significant, unusual, or extraordinary items is recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including the expected operating income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current fiscal year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or the tax environment changes. Earnings Per Share Basic earnings per share is computed using the weighted-average number of common shares outstanding. Diluted earnings per share is computed using the weighted-average number of common shares outstanding adjusted for the incremental shares attributed to outstanding options to purchase common stock and nonvested restricted stock using the treasury stock method, if dilutive. In periods where a net loss is reported, incremental shares are excluded as their effect would be anti-dilutive. In such circumstances, the weighted-average number of shares outstanding in the basic and diluted earnings per common share calculations will be the same. Anti-dilutive options and nonvested shares are excluded from the computation of diluted earnings per share because either the option exercise price or the grant date fair value of the nonvested share is greater than the market price of the Company’s common stock. Options to purchase 5.2 million shares of common stock in the first half of 2014 were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive.
Recent Accounting Pronouncements In April 2015, the FASB issued ASU 2015-03, "Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs", which requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The standard is effective for periods beginning after December 15, 2015. The new guidance is not expected to have a material impact on the Company's financial position. In June 2015, the FASB issued ASU 2015-15, "Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements", which permits an entity to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The new guidance is not expected to have a material impact on the Company's financial position. |
Shareholders' Equity - Stock Options - Additional Information (Detail) - shares |
6 Months Ended | |
---|---|---|
Aug. 01, 2015 |
Aug. 02, 2014 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares exercised | 0 | 0 |
Fair Value Measurements - Summary of Activity Recorded for Derivatives Using Level 3 Inputs (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 01, 2015 |
May. 02, 2015 |
Aug. 02, 2014 |
May. 03, 2014 |
Aug. 01, 2015 |
Aug. 02, 2014 |
|
Derivative Liability [Roll Forward] | ||||||
Beginning balance as of beginning of period | $ 19,367 | $ 28,448 | $ 29,495 | $ 30,720 | $ 28,448 | $ 30,720 |
Loss (Gain) on change in fair value | (15,717) | (9,081) | (10,434) | (1,225) | (24,798) | (11,659) |
Ending balance as of end of period | $ 3,650 | $ 19,367 | $ 19,061 | $ 29,495 | $ 3,650 | $ 19,061 |
Nature of Business |
6 Months Ended |
---|---|
Aug. 01, 2015 | |
Accounting Policies [Abstract] | |
Nature of Business | NATURE OF BUSINESS Pacific Sunwear of California, Inc. (together with its wholly-owned subsidiaries, the “Company” or “PacSun”) is a leading specialty retailer rooted in the action sports, fashion and music influences of the California lifestyle. The Company sells a combination of branded and proprietary casual apparel, accessories and footwear designed to appeal to teens and young adults. It operates a nationwide, primarily mall-based chain of retail stores under the names “Pacific Sunwear” and “PacSun.” In addition, the Company operates an e-commerce website at www.pacsun.com which sells PacSun merchandise online, provides content and community for its target customers and provides information about the Company. The Company, a California corporation, was incorporated in August 1982. As of August 1, 2015, the Company leased and operated 608 stores in each of the 50 states and Puerto Rico. |
Debt - Summary of Remaining Aggregate Principal Payments Due Under Term Loan and Mortgage Debt (Details) $ in Thousands |
Aug. 01, 2015
USD ($)
|
|||
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
2015 | $ 555 | |||
2016 | 76,208 | |||
2017 | 616 | |||
2018 | 649 | |||
2019 | 684 | |||
Thereafter | 24,572 | |||
Total | 103,284 | |||
Less: Term Loan discount | (6,581) | |||
Less: Current portion of long-term debt | (555) | |||
Total long-term debt | 96,148 | |||
Mortgage Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
2015 | 555 | |||
2016 | 585 | |||
2017 | 616 | |||
2018 | 649 | |||
2019 | 684 | |||
Thereafter | 24,572 | |||
Total | 27,661 | |||
Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
2015 | [1] | 0 | ||
2016 | [1] | 75,623 | ||
2017 | [1] | 0 | ||
2018 | [1] | 0 | ||
2019 | 0 | |||
Thereafter | 0 | |||
Total | [1] | 75,623 | ||
Due and payable upon Term Loan maturity | 26,600 | |||
PIK interest included in Term Loan balance | 15,600 | |||
Accrued interest | $ 2,900 | |||
|
Shareholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 01, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option (Incentive and Nonqualified) Activity |
|
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Summary of Service-Based Restricted Stock Awards and Units Activity |
|
Income Taxes - Additional Information (Detail) - Aug. 01, 2015 - USD ($) $ in Millions |
Total |
---|---|
Income Tax Disclosure [Abstract] | |
Net state deferred tax assets | $ 4 |
Acquisition and disposition ownership interest period | 3 years |
Nature of Business - Additional Information (Detail) - Aug. 01, 2015 |
State
Store
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of stores leased and operated | 608 |
Number of states | State | 50 |
Basis of Presentation |
6 Months Ended |
---|---|
Aug. 01, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying Condensed Consolidated Financial Statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2015 (“fiscal 2014”) filed with the SEC. The Condensed Consolidated Financial Statements include the accounts of Pacific Sunwear of California, Inc. and its wholly-owned subsidiaries (Pacific Sunwear Stores Corp., a California corporation (“PacSun Stores”) and Miraloma Borrower Corporation, a Delaware corporation (“Miraloma”)). All intercompany transactions have been eliminated in consolidation. In the opinion of management, all adjustments consisting only of normal recurring entries necessary for a fair presentation have been included. The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements as well as the reported revenues and expenses during the reporting period. Actual results could differ from these estimates. The results of operations for the Company’s fiscal quarter ended and first half ended August 1, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending January 30, 2016 (“fiscal 2015”). |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Aug. 01, 2015 |
Jan. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 170,859,375 | 170,859,375 |
Common stock, shares issued | 70,075,507 | 69,265,844 |
Common stock, shares outstanding | 70,075,507 | 69,265,844 |
Segment Reporting |
6 Months Ended |
---|---|
Aug. 01, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | SEGMENT REPORTING The Company operates exclusively in the retail apparel industry. The Company designs, produces and distributes clothing and related products catering to teens and young adults primarily through its mall-based PacSun retail stores. The Company has identified two operating segments: PacSun stores and www.pacsun.com. The two operating segments have been aggregated into one reportable segment based on the similar nature of products sold, production, merchandising and distribution processes involved, target customers, and economic characteristics among the two operating segments. |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Aug. 01, 2015 |
Sep. 08, 2015 |
|
Document Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 01, 2015 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | PSUN | |
Entity Registrant Name | PACIFIC SUNWEAR OF CALIFORNIA INC | |
Entity Central Index Key | 0000874841 | |
Current Fiscal Year End Date | --01-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 70,079,068 |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
---|---|
Aug. 01, 2015 | |
Accounting Policies [Abstract] | |
Income Taxes | Income Taxes The Company calculates its interim income tax provision in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 270, “Interim Reporting” (“ASC 270”) and ASC Topic 740, “Accounting for Income Taxes” (“ASC 740”). At the end of each interim period, the Company estimates the annual effective tax rate and applies that rate to its ordinary quarterly earnings. The tax expense or benefit related to significant, unusual, or extraordinary items is recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including the expected operating income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current fiscal year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or the tax environment changes. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed using the weighted-average number of common shares outstanding. Diluted earnings per share is computed using the weighted-average number of common shares outstanding adjusted for the incremental shares attributed to outstanding options to purchase common stock and nonvested restricted stock using the treasury stock method, if dilutive. In periods where a net loss is reported, incremental shares are excluded as their effect would be anti-dilutive. In such circumstances, the weighted-average number of shares outstanding in the basic and diluted earnings per common share calculations will be the same. Anti-dilutive options and nonvested shares are excluded from the computation of diluted earnings per share because either the option exercise price or the grant date fair value of the nonvested share is greater than the market price of the Company’s common stock. Options to purchase 5.2 million shares of common stock in the first half of 2014 were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
Stock Compensation | The Company accounts for stock-based compensation expense in accordance with ASC Topic 718, “Stock Compensation”. The Company uses the Black-Scholes option-pricing model to estimate the grant date fair value of its stock options. Forfeitures are estimated at the date of grant based on historical rates and reduce the compensation expense to be recognized during the vesting period. The expected term of options granted is derived primarily from historical data on employee exercises adjusted for expected changes to option terms, if any. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. Expected volatility is based primarily on the historical volatility of the Company’s common stock. The Company records stock-based compensation expense using the straight-line method over the vesting period, which is generally three to four years. The Company’s stock-based awards generally begin vesting one year after the grant date and, for stock options, expire in seven to ten years or three months after termination of employment with the Company. The Company’s stock-based compensation expense resulted from awards of stock options, restricted stock, and stock appreciation rights, as well as from shares issued under the ESPP. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2015 |
Aug. 02, 2014 |
Aug. 01, 2015 |
Aug. 02, 2014 |
|
Income Statement [Abstract] | ||||
Net sales | $ 195,622 | $ 211,749 | $ 362,125 | $ 382,892 |
Cost of goods sold, including buying, distribution and occupancy costs | 145,139 | 150,210 | 266,997 | 276,690 |
Gross margin | 50,483 | 61,539 | 95,128 | 106,202 |
Selling, general and administrative expenses | 53,857 | 60,563 | 105,998 | 112,589 |
Operating income (loss) | (3,374) | 976 | (10,870) | (6,387) |
Gain on derivative liability | (15,717) | (10,434) | (24,798) | (11,659) |
Interest expense, net | 4,281 | 4,075 | 8,425 | 7,952 |
Income (loss) before income taxes | 8,062 | 7,335 | 5,503 | (2,680) |
Income tax (benefit) expense | (275) | (166) | 656 | 216 |
Net income (loss) | 8,337 | 7,501 | 4,847 | (2,896) |
Comprehensive income (loss) | $ 8,337 | $ 7,501 | $ 4,847 | $ (2,896) |
Net income (loss) per share: | ||||
Earnings Per Share, Basic | $ 0.12 | $ 0.11 | $ 0.07 | $ (0.04) |
Earnings Per Share, Diluted | $ 0.12 | $ 0.10 | $ 0.07 | $ (0.04) |
Weighted-average shares outstanding: | ||||
Shares used in computing basic net (loss) income per share, basic | 69,819,615 | 69,069,770 | 69,625,420 | 68,989,675 |
Shares used in computing diluted net (loss) income per share, diluted | 69,894,694 | 73,197,282 | 71,847,929 | 68,989,675 |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Credit Facility On December 7, 2011, the Company entered into a 5-year, $100 million revolving credit facility with Wells Fargo Bank, N.A (the “Wells Credit Facility”). Borrowings under the Wells Credit Facility bear interest at a floating rate (as defined in the Wells Credit Facility, 1.94% as of August 1, 2015) which, at the Company’s option, may be determined by reference to a LIBOR Rate or a Base Rate. Extensions of credit under the Wells Credit Facility are limited to a borrowing base consisting of specified percentages of eligible categories of assets. The Wells Credit Facility is available for direct borrowings and allows for the issuance of letters of credit, and up to $12.5 million is available for swing-line loans. The Wells Credit Facility is secured by liens and security interests with (a) a first priority security interest in the current and certain related assets of the Company including cash, cash equivalents, deposit accounts, securities accounts, credit card receivables and inventory, and (b) a second priority security interest in all assets and properties of the Company that are not secured by a first lien and security interest. The Wells Credit Facility also contains covenants that, subject to specified exceptions, restrict the Company’s ability to, among other things, incur additional indebtedness, incur liens, liquidate or dissolve, sell, transfer, lease or dispose of assets, or make loans, investments or guarantees. The Wells Credit Facility is scheduled to mature on December 7, 2016. As of August 1, 2015, the Company had $5.0 million of direct borrowings and $7.7 million in letters of credit outstanding under the Wells Credit Facility. The remaining availability under the Wells Credit Facility at August 1, 2015 was $70.6 million. During the third quarter of fiscal 2015, the Company borrowed an additional $10 million on the Wells Credit Facility primarily to fund inventory purchases for the peak back-to-school selling season, and subsequently repaid $10 million. The Company is not subject to any financial covenant restrictions under the Wells Credit Facility. Although the Company made progress with respect to its comparable store net sales and gross margins in fiscal 2014, the Company experienced declines in comparable store sales and gross margins in the first half of fiscal 2015. If the Company were to continue to experience a decline in same-store sales and gross margins in the future, the Company may be required to access most, if not all, of the Wells Credit Facility and would potentially require other sources of financing to fund the Company's operations, which sources might not be available. Based on current forecasts, the Company believes that its cash flows from operations and working capital, along with the availability under the Wells Credit Facility, will be sufficient to meet the Company's operating and capital expenditure needs for the next twelve months. Term Loan On December 7, 2011, the Company obtained the Term Loan funded by an affiliate of Golden Gate Capital. The Term Loan bears interest at a rate of 5.50% per annum to be paid in cash, due and payable quarterly in arrears, and 7.50% per annum, due and payable in kind (“PIK”) annually in arrears, with such PIK interest then due and payable being added to the outstanding principal balance of the Term Loan at the end of each fiscal year, and with adjustments to the cash and PIK portion of the interest rate in accordance with the Term Loan agreement, following principal prepayments. Annual cash interest for fiscal 2015 is expected to be approximately $4 million. The Term Loan is guaranteed by each of the Company’s subsidiaries and will be guaranteed by any future domestic subsidiaries of the Company. The Term Loan is secured by liens and security interests with (a) a first priority security interest in all long-term assets of the Company and PacSun Stores and all other assets not subject to a first lien and security interest pursuant to the Wells Credit Facility, (b) a first priority pledge of the equity interests of Miraloma and (c) a second priority security interest in all assets of the Company and PacSun Stores subject to a first lien and security interest pursuant to the Wells Credit Facility. The Term Loan also contains covenants substantially identical to those in the Wells Credit Facility. The principal balance and any unpaid interest related to the Term Loan is due on December 7, 2016. The Company is not subject to any financial covenant restrictions under the Term Loan. Mortgage Debt On August 20, 2010, the Company, through its wholly-owned subsidiaries, Miraloma and PacSun Stores, executed two promissory notes pursuant to which borrowings in an aggregate amount of $29.8 million from American National Insurance Company (“ANICO”) were incurred. The principal and interest payments are based on a 25-year amortization schedule, with the remaining principal balances and any accrued and unpaid interest due on September 1, 2017. The original note executed by Miraloma (the "Miraloma Note") is secured by a deed of trust on the building and land comprising the Company’s principal executive offices in Anaheim, California and is non-recourse to the Company. The Miraloma Note does not contain any financial covenants. In connection with this transaction, the Company transferred the building and related land securing the Miraloma Note to Miraloma and entered into a lease for the building and land with Miraloma. The original note executed by PacSun Stores (the "PacSun Stores Note") is secured by a mortgage on the Company’s leasehold interest in the building and land comprising the Company’s distribution center in Olathe, Kansas, and is unconditionally guaranteed by the Company. The PacSun Stores Note does not contain any financial covenants. On July 1, 2014, the Company modified certain terms associated with the Miraloma Note and the PacSun Stores Note. The note modification executed by Miraloma (the "New Miraloma Note”) (i) provided for an additional advance of $0.3 million to fund the payment of fees, commissions and expenses incurred by the Company in connection with the New Miraloma Note, resulting in a new principal balance of $15.9 million; (ii) extended the maturity date of the Miraloma Note to July 1, 2021; (iii) reduced the interest rate to 5.25% per annum; and (iv) provided that the Miraloma Note may not be prepaid prior to July 1, 2017 and thereafter may be prepaid only upon payment of prepayment fees pursuant to a schedule set forth in the New Miraloma Note. The amended note executed by PacSun Stores (the "New PacSun Stores Note”) (i) provided for an additional advance of $0.2 million to fund the payment of fees, commissions and expenses incurred by the Company in connection with the New PacSun Stores Note, resulting in a new principal balance of $12.3 million; (ii) extended the maturity date of the PacSun Stores Note to July 1, 2021; (iii) reduced the interest rate to 5.25% per annum; and (iv) provided that the PacSun Stores Note may not be prepaid prior to July 1, 2017 and thereafter may be prepaid only upon payment of prepayment fees pursuant to a schedule set forth in the New PacSun Stores Note. As of August 1, 2015, the remaining aggregate principal payments due under the Term Loan and the Mortgage Debt are as follows:
(1) Upon maturity of the Term Loan, $26.6 million of PIK interest will become due and payable, of which $15.6 million is included in the Term Loan balance and $2.9 million is accrued and included in other current liabilities as of August 1, 2015. The Company recorded interest expense of $4.3 million and $4.1 million during the second quarters of fiscal 2015 and 2014, respectively, and $8.4 million and $8.0 million in the first half of fiscal 2015 and 2014, respectively. |
Other Current Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | OTHER CURRENT LIABILITIES Other current liabilities consisted of the following:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value Assumptions for Derivative Liabilities | The fair value of the Series B Preferred shares was estimated using an option-pricing model that requires Level 3 inputs, which are highly subjective and determined using the following significant assumptions as of:
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Summary of Activity Recorded for Derivatives Using Level 3 Inputs | The following table presents the activity recorded for the derivative liability during the first half ended:
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Impairment of Long-Lived Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Lived Assets Tested for Impairment |
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Details of Long-Lived Assets Tested and Impaired |
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company measures its financial assets and liabilities at fair value on a recurring basis and measures its nonfinancial assets and liabilities at fair value as required or permitted. Fair value is defined as the price that would be received pursuant to the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. In order to determine the fair value of certain assets and liabilities, the Company applies the three-level hierarchy of valuation techniques based upon whether the inputs reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs) or reflect the Company’s assumptions of market participant valuation (unobservable inputs) and requires the use of observable inputs if such data is available without undue cost and effort. The hierarchy is as follows:
Level 3 assumptions are, by their nature, inherently uncertain and the effect of changes in estimates may result in a significantly lower or higher fair value measurement. Recurring Fair Value Measurements Derivative Liability The Series B Preferred shares are required to be measured at fair value each reporting period. The fair value of the Series B Preferred shares was estimated using an option-pricing model that requires Level 3 inputs, which are highly subjective and determined using the following significant assumptions as of:
The following table presents the activity recorded for the derivative liability during the first half ended:
Changes in the fair value of the derivative liability are included in gain on derivative liability in the accompanying Condensed Consolidated Statement of Operations and Comprehensive Operations. Non-Recurring Fair Value Measurements On a non-recurring basis, using a discounted cash flow model, the Company measures certain of its store-level long-lived assets at fair value based on Level 3 inputs including, but not limited to, comparable store sales and margin growth, projected operating costs based primarily on historical trends, and an estimated weighted-average cost of capital rate. During the first half of fiscal 2015 and 2014 the Company recorded $0.6 million and $1.7 million of impairment charges, respectively, in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Operations. |
Income Taxes |
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Aug. 01, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The provisions codified within ASC 740 require companies to assess whether valuation allowances should be established against their deferred tax assets based on consideration of all available evidence using a “more likely than not” standard. In accordance with ASC 740, a full valuation allowance was established during the fourth quarter of fiscal 2009 and continues to be maintained on all federal and the majority of state deferred tax assets. Remaining net state deferred tax assets of approximately $4 million were not reserved as the Company concluded it is more likely than not that these net deferred tax assets would be utilized before expiration. The Company has discontinued recognizing federal and certain state income tax benefits until it is determined that it is more likely than not that the Company will generate sufficient taxable income to realize the deferred income tax assets. The Company continues to monitor whether an ownership change has occurred under Internal Revenue Code Section 382 (“Section 382”). Based on available information at the reporting date, the Company believes it has not experienced an ownership change through the quarter ended August 1, 2015. The determination of whether or not an ownership change under Section 382 has occurred requires the Company to evaluate certain acquisitions and dispositions of ownership interests over a rolling three-year period. As a result, future acquisitions and dispositions could result in an ownership change of the Company under Section 382. If an ownership change were to occur, the Company’s ability to utilize federal net operating loss carryforwards could be significantly limited. |
Shareholders' Equity |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | SHAREHOLDERS’ DEFICIT Preferred Stock In conjunction with the Term Loan, the Company issued the Series B Preferred to an affiliate of Golden Gate Capital which, based on the initial conversion ratio, gives that affiliate the right to purchase up to 13.5 million shares of the Company’s common stock. The Series B Preferred shares have an exercise price initially equal to $1.75 per share of the Company’s underlying common stock. The initial holder of the Series B Preferred is entitled to customary registration rights with respect to the underlying common stock. See Note 10, “Fair Value Measurements–Recurring Fair Value Measurements” for further discussion on the accounting treatment of the Series B Preferred. Stock-Based Compensation During the first half of fiscal 2015, the Company maintained three stock-based incentive plans: (1) the 2005 Performance Incentive Plan (the "2005 Plan”), (2) the 2015 Long-Term Incentive Plan (the "2015 Plan") and (3) the amended and restated Employee Stock Purchase Plan (the “ESPP”). The types of awards that could be granted under the 2005 Plan included stock options, stock appreciation rights, restricted stock, and other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock. Persons eligible to receive awards under the 2005 Plan included officers or employees of the Company or any of its subsidiaries, directors of the Company and certain consultants and advisors to the Company or any of its subsidiaries. The vesting of awards under the 2005 Plan was determined at the date of grant. Each award expires on a date determined at the date of grant; however, the maximum term of options and stock appreciation rights under the 2005 Plan is ten years after the grant date of the award. The 2005 Plan expired on March 22, 2015. Therefore, as of August 1, 2015, there were no remaining shares of the Company's common stock available for award grants under the 2005 Plan. On March 19, 2015, the Board of Directors approved the 2015 Plan to replace the expiring 2005 Plan. On June 4, 2015, the 2015 Plan was approved by the Company’s shareholders. Initially, 7.0 million shares were available for grants under the 2015 Plan. The types of awards that can be granted under the 2015 Plan include stock options, stock appreciation rights, restricted stock and other forms of awards granted or denominated in the Company's common stock or units of the Company's common stock. Persons eligible to receive awards under the 2015 Plan include officers or employees of the Company or any of its subsidiaries, directors of the Company and certain consultants and advisors to the Company or any of its subsidiaries. The vesting of awards under the 2015 Plan are determined at the date of grant. Each award expires on a date determined at the date of grant; however, the maximum term of options and stock appreciation rights under the 2015 Plan is ten years after the grant date of the award. Any shares subject to awards under prior stock plans that are canceled, forfeited or otherwise terminate without having vested or been exercised, will become available for future award grants under the 2015 Plan. As of August 1, 2015, there were 6.8 million shares of the Company's common stock available for award grants under the 2015 Plan. The Company accounts for stock-based compensation expense in accordance with ASC Topic 718, “Stock Compensation”. The Company uses the Black-Scholes option-pricing model to estimate the grant date fair value of its stock options. Forfeitures are estimated at the date of grant based on historical rates and reduce the compensation expense to be recognized during the vesting period. The expected term of options granted is derived primarily from historical data on employee exercises adjusted for expected changes to option terms, if any. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. Expected volatility is based primarily on the historical volatility of the Company’s common stock. The Company records stock-based compensation expense using the straight-line method over the vesting period, which is generally three to four years. The Company’s stock-based awards generally begin vesting one year after the grant date and, for stock options, expire in seven to ten years or three months after termination of employment with the Company. The Company’s stock-based compensation expense resulted from awards of stock options, restricted stock, and stock appreciation rights, as well as from shares issued under the ESPP. Stock Options Under the 2005 Plan, incentive and nonqualified stock options have been granted to employees and directors to purchase common stock at prices equal to the fair value of the Company’s common shares at the respective grant dates. No stock options were granted by the Company during the first half of fiscal 2015 or fiscal 2014 under either the 2005 Plan or the 2015 Plan. A summary of stock option (incentive and nonqualified) activity for the first half of fiscal 2015 is presented below:
There were no stock options exercised during the first half of fiscal 2015 or 2014. Restricted Stock Awards A summary of service-based restricted stock awards activity under the 2005 Plan for the first half of fiscal 2015 is presented in the following table. No restricted stock awards were granted under the 2015 Plan during the first half of fiscal 2015. Except as described below, such restricted stock awards contain a service-based restriction as to vesting. These awards generally vest over 4 years with 25% of the shares vesting each year on the anniversary of the grant date.
The weighted-average grant-date fair value per share of service-based restricted stock awards granted during the first half of fiscal 2015 and 2014 was $2.81 and $2.86, respectively. The total fair value of service-based restricted stock awards vested during the first half of fiscal 2015 and 2014 was $1.0 million and $1.2 million, respectively. Performance-Based Restricted Stock Awards During the first quarter of fiscal 2012, the Company granted 675,000 performance-based restricted stock awards under the 2005 Plan which only vest upon the achievement of certain financial targets. The weighted-average grant-date fair value per share of performance-based restricted stock awards granted during fiscal 2012 was $1.77. During the first quarter of fiscal 2015, 200,000 shares with a fair value totaling $0.6 million vested as a result of the Company achieving certain financial targets in fiscal 2014. There were no performance-based restricted stock awards granted in the first half of fiscal 2015. Restricted Stock Units A summary of restricted stock units activity under the 2005 Plan and the 2015 Plan for the first half of fiscal 2015 is presented below. Restricted stock units contain a service-based restriction as to vesting. These awards generally vest 100% on the first anniversary of the grant date.
The weighted-average grant-date fair value per share of restricted stock units granted during the first half of fiscal 2015 and 2014 was $1.42 and $2.25, respectively. The total fair value of awards vested during the first half of fiscal 2015 and 2014 was $0.2 million and $0.3 million, respectively. Stock-based compensation expense recognized related to nonvested stock options, restricted stock awards and restricted stock units during the second quarter of fiscal 2015 and 2014 was $0.7 million and $0.3 million, respectively, and during the first half of fiscal 2015 and 2014 was $1.4 million and $0.8 million, respectively. At August 1, 2015, the Company had approximately $6.3 million of stock-based compensation cost related to non-vested stock options, service-based restricted stock awards, performance-based restricted stock awards, and restricted stock units expected to be recognized over a weighted-average period of approximately 3.2 years. Employee Stock Purchase Plan (“ESPP”) The Company’s ESPP provides a method for Company employees to voluntarily purchase Company common stock at a 10% discount from fair market value as of the beginning or the end of each annual purchasing period, whichever is lower. The ESPP covers substantially all employees who have three months of service with the Company, excluding senior executives. The ESPP is intended to constitute an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended. On March 20, 2014, the Board of Directors approved an amendment to the ESPP to increase the number of authorized shares thereunder from 2.1 million shares to 2.5 million shares. Such amendment was approved by the shareholders at the 2014 annual meeting of shareholders. Shares issued under the ESPP during the first half of fiscal 2015 and 2014 were 294,743 and 174,335, respectively. |
Commitments and Contingencies |
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Aug. 01, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Litigation Charles Pfeiffer, individually and on behalf of other aggrieved employees vs. Pacific Sunwear of California, Inc. and Pacific Sunwear Stores Corp., Superior Court of California, County of Riverside, Case No. 1100527. On January 13, 2011, the plaintiff in this matter filed a lawsuit against the Company under California’s private attorney general act alleging violations of California’s wage and hour, overtime, meal break and rest break rules and regulations, among other things. The complaint seeks an unspecified amount of damages and penalties. The Company has filed an answer denying all allegations regarding the plaintiff’s claims and asserting various defenses. The Company is currently in the discovery phase of this case. As the ultimate outcome of this matter is uncertain, no amounts have been accrued by the Company as of the date of this report. Depending on the actual outcome of this case, provisions could be recorded in the future which may have a material adverse effect on the Company’s operating results. Tamara Beeney, individually and on behalf of other members of the general public similarly situated vs. Pacific Sunwear of California, Inc. and Pacific Sunwear Stores Corporation, Superior Court of California, County of Orange, Case No. 30-2011-00459346-CU-OE-CXC. On March 18, 2011, the plaintiff in this matter filed a putative class action lawsuit against the Company alleging violations of California’s wage and hour, overtime, meal break and rest break rules and regulations, among other things. The complaint seeks class certification, the appointment of the plaintiff as class representative, and an unspecified amount of damages and penalties. The Company has filed an answer denying all allegations regarding the plaintiff’s claims and asserting various defenses. On February 21, 2014, the plaintiff filed her motion to certify a class with respect to several claims. The Company’s opposition to such motion was filed on June 30, 2014 and the plaintiff's reply to such opposition was filed on November 4, 2014. The hearing on the plaintiff’s motion will now be held on November 24, 2015. As the ultimate outcome of this matter is uncertain, no amounts have been accrued by the Company as of the date of this report. Depending on the actual outcome of this case, provisions could be recorded in the future which may have a material adverse effect on the Company’s operating results. The Company is also involved from time to time in other litigation incidental to its business. The Company currently cannot assess whether the outcome of current litigation will likely have a material adverse effect on its results of operations or financial condition and, from time to time, the Company may make provisions for probable litigation losses. Depending on the actual outcome of pending litigation, charges in excess of any provisions could be recorded in the future, which may have a material adverse effect on the Company’s operating results. Indemnities, Commitments and Guarantees During the normal course of business, the Company agreed to certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities, commitments and guarantees include those given to various lessors in connection with facility leases for certain claims arising from such facility or lease and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of California. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities, commitments and guarantees in the accompanying Condensed Consolidated Balance Sheets other than as disclosed below. Letters of Credit The Company has issued guarantees in the form of commercial letters of credit, of which there were approximately $8 million and $7 million outstanding at August 1, 2015 and January 31, 2015, respectively, as security for merchandise shipments from overseas. All in-transit merchandise covered by letters of credit is accrued for in accounts payable. Minimum Royalties The Company has licensing arrangements under which the Company sells certain branded apparel and pays the licensor royalties. The contractually obligated minimum guaranteed royalty payments were approximately $6 million at both August 1, 2015 and January 31, 2015. |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | As of August 1, 2015, the remaining aggregate principal payments due under the Term Loan and the Mortgage Debt are as follows:
(1) Upon maturity of the Term Loan, $26.6 million of PIK interest will become due and payable, of which $15.6 million is included in the Term Loan balance and $2.9 million is accrued and included in other current liabilities as of August 1, 2015. |
Summary of Significant Accounting Policies - Reconciliation of Denominator of Each Net Income (Loss) per Share Calculation (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2015 |
Aug. 02, 2014 |
Aug. 01, 2015 |
Aug. 02, 2014 |
|
Accounting Policies [Abstract] | ||||
Shares used in computing basic net (loss) income per share | 69,819,615 | 69,069,770 | 69,625,420 | 68,989,675 |
Dilutive effect of options, restricted stock and convertible preferred stock | 75,000 | 4,127,000 | 2,223,000 | 0 |
Shares used in computing diluted net (loss) income per share | 69,894,694 | 73,197,282 | 71,847,929 | 68,989,675 |
Derivative Liability |
6 Months Ended |
---|---|
Aug. 01, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | DERIVATIVE LIABILTY As disclosed in Note 9, "Shareholders' Equity," the Company issued 1,000 shares of its Convertible Series B Preferred Stock (the “Series B Preferred”) in connection with the 5-year, $60 million senior secured term loan (the “Term Loan”), funded by an affiliate of Golden Gate Capital. The fair value of the Series B Preferred at issuance was approximately $15 million which was recorded as a derivative liability. As of August 1, 2015 and January 31, 2015, the fair value of the derivative liability was $3.7 million and $28.4 million, respectively. See Note 10, “Fair Value Measurements” for further discussion on the derivative liability. |
Impairment of Long-Lived Assets - Long-Lived Assets Tested for Impairment (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 01, 2015 |
Aug. 02, 2014 |
Aug. 01, 2015 |
Aug. 02, 2014 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment charges | $ 61 | $ 880 | $ 602 | $ 1,663 |
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