-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N4AMu7LY7hC97GilJ4bRWgZQUO3EszA491wZUv0kGnCt3qZ9QbA9Vi45pKRlpHdB zXt8SNBSk2HUlrRR0UEiog== 0000892569-98-001734.txt : 19980629 0000892569-98-001734.hdr.sgml : 19980629 ACCESSION NUMBER: 0000892569-98-001734 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980503 FILED AS OF DATE: 19980609 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC SUNWEAR OF CALIFORNIA INC CENTRAL INDEX KEY: 0000874841 STANDARD INDUSTRIAL CLASSIFICATION: 5600 IRS NUMBER: 953759463 STATE OF INCORPORATION: CA FISCAL YEAR END: 0202 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21296 FILM NUMBER: 98644519 BUSINESS ADDRESS: STREET 1: 5037 E HUNTER AVE CITY: ANAHEIM STATE: CA ZIP: 92807 BUSINESS PHONE: 7146938066 MAIL ADDRESS: STREET 1: 5037 E HUNTER AVENUE CITY: ANAHEIM STATE: CA ZIP: 92807 10-Q 1 FORM 10-Q FOR PERIOD ENDING MAY 3, 1998 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MAY 3, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-21296 PACIFIC SUNWEAR OF CALIFORNIA, INC. CALIFORNIA 95-3759463 (State of Incorporation) (I.R.S Employer Identification No.) 5200 EAST LA PALMA AVENUE ANAHEIM, CALIFORNIA 92807 (Address of principal executive offices) (Zip code) (714) 693-8066 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] The number of shares outstanding of the registrant's Common Stock, par value $.01 per share, at May 29, 1998 was 13,838,862. 2 PACIFIC SUNWEAR OF CALIFORNIA, INC. FORM 10-Q FOR THE QUARTER ENDED MAY 3, 1998 INDEX
PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements: Balance Sheets as of May 3, 1998 (unaudited) and February 1, 1998.................................................................3 Statements of Operations (unaudited) for the thirteen weeks ended May 3, 1998 and May 4, 1997.................................4 Statements of Cash Flows (unaudited) for the thirteen weeks ended May 3, 1998 and May 4, 1997.................................5 Notes to Financial Statements......................................6-7 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations.........................................8-10 PART II. OTHER INFORMATION Item 1. Legal Proceedings.....................................................11 Item 2. Changes in Securities.................................................11 Item 3. Defaults Upon Senior Securities.......................................11 Item 4. Submission of Matters to a Vote of Security Holders...................11 Item 5. Other Information.....................................................11 Item 6. Exhibits and Reports on Form 8-K......................................11 SIGNATURE PAGE........................................................12
2 3
PACIFIC SUNWEAR OF CALIFORNIA, INC. BALANCE SHEETS ASSETS MAY 3, FEBRUARY 1, CURRENT ASSETS: 1998 1998 ---- ---- (Unaudited) Cash and cash equivalents (Note 2) $ 18,520,729 $ 14,781,566 Short-term investments (Note 2) 2,885,488 12,742,666 1,249,488 1,009,839 Accounts receivable 1,295,381 1,009,839 Merchandise inventories 33,837,257 32,122,341 Prepaid expenses, includes $2,930,239 and $2,832,739 of prepaid rent, respectively 4,327,576 4,364,537 Deferred taxes 1,916,935 1,916,935 ------------- ------------- Total current assets 62,783,366 66,937,884 PROPERTY AND EQUIPMENT: Leasehold improvements 39,055,113 36,327,054 Furniture, fixtures and equipment 34,833,479 29,416,189 ------------- ------------- 73,888,592 65,743,243 Less accumulated depreciation and amortization (21,081,359) (20,342,749) ------------- ------------- Net property and equipment 52,807,233 45,400,494 OTHER ASSETS: Goodwill ,net of accumulated amortization of $519,768 and $440,297, respectively 7,843,975 7,923,446 Deposits and other assets 1,467,733 1,404,234 ------------- ------------- Total other assets 9,311,708 9,327,680 ------------- ------------- Total assets $ 124,902,307 $ 121,666,058 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 10,680,645 $ 8,916,915 Accrued liabilities (Note 6) 6,341,326 8,834,161 Income taxes payable 32,815 1,068,276 ------------- ------------- Total current liabilities 17,054,786 18,819,352 DEFERRED COMPENSATION 1,693,198 1,114,374 DEFERRED RENT 4,133,007 3,746,246 DEFERRED TAXES 1,423,029 1,423,029 SHAREHOLDERS' EQUITY: Preferred stock, par value $.01; authorized, 5,000,000; none issued and outstanding Common stock, par value $.01; authorized 33,750,000 shares; issued and outstanding, 13,819,289 and 13,744,891 shares, respectively 138,193 137,449 Additional paid-in capital 64,487,382 63,339,810 Retained earnings 35,972,712 33,085,798 ------------- ------------- Total shareholders' equity 100,598,287 96,563,057 ------------- ------------- Total liabilities and shareholders' equity $ 124,902,307 $ 121,666,058 ============= =============
See accompanying notes 3 4
PACIFIC SUNWEAR OF CALIFORNIA, INC STATEMENTS OF OPERATIONS (Unaudited) FOR THE THIRTEEN WEEKS ENDED ----------------------------- MAY 3, 1998 MAY 4, 1997 ----------- ----------- Net sales $61,162,250 $38,932,736 Cost of goods sold, including buying, distribution, and occupancy costs 41,555,214 27,225,628 ----------- ----------- Gross margin 19,607,036 11,707,108 Selling, general and administrative expenses 15,147,526 9,942,532 ----------- ----------- Operating income 4,459,510 1,764,576 Interest income 320,404 95,702 ----------- ----------- Income before income tax expense 4,779,914 1,860,278 Income tax expense (Note 5) 1,893,000 736,000 ----------- ----------- Net income $ 2,886,914 $ 1,124,278 =========== =========== Net income per share, basic (Note 4) $ 0.21 $ 0.09 ----------- ----------- Net income per share, diluted (Note 4) $ 0.20 $ 0.09 ----------- ----------- Weighted average shares outstanding, basic (Note 4) 13,783,570 12,177,375 =========== =========== Weighted average shares outstanding, diluted (Note 4) 14,330,603 12,664,187 =========== =========== PRO-FORMA STOCK SPLIT: (NOTE 8) Net income per share, basic $ 0.14 $ 0.06 ----------- ----------- Net income per share, diluted $ 0.13 $ 0.06 ----------- ----------- Weighted average shares outstanding, basic 20,675,355 18,266,063 =========== =========== Weighted average shares outstanding, diluted 21,495,905 18,996,281 =========== ===========
See accompanying notes 4 5
PACIFIC SUNWEAR OF CALIFORNIA, INC STATEMENTS OF CASH FLOWS (Unaudited) FOR THE THIRTEEN WEEKS ENDED ------------------------------- MAY 3, 1998 MAY 4, 1997 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,886,914 $ 1,124,278 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,133,131 1,474,235 Change in: Accounts receivable (285,542) (219,556) Merchandise inventories (1,714,916) (2,701,512) Prepaid expenses 36,961 180,113 Deposits and other assets (75,999) (171,340) Accounts payable 1,763,730 1,815,534 Accrued liabilities (2,492,835) (790,400) Income taxes and deferred income taxes (154,105) (324,350) Deferred rent 386,761 115,267 Deferred compensation 578,824 283,940 ------------ ------------ Net cash provided by operating activities 3,062,924 786,209 CASH FLOWS FROM INVESTING ACTIVITIES: Short term investment maturities 9,857,178 -- Investment in property and equipment (9,447,899) (3,656,932) ------------ ------------ Net cash provided by (used in) investing activities 409,279 (3,656,932) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 266,960 105,053 ------------ ------------ Net cash provided by financing activities 266,960 105,053 ------------ ------------ NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS: 3,739,163 (2,765,670) CASH AND CASH EQUIVALENTS, beginning of period 14,781,566 9,962,626 ------------ ------------ CASH AND CASH EQUIVALENTS, end of period $ 18,520,729 $ 7,196,956 ============ ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ -- $ 478 Income taxes $ 2,047,105 $ 1,060,350
- - ---------------------------------------------------------------------------- Non-cash transaction: During the thirteen weeks ended May 3, 1998 and May 4, 1997, the Company recorded an increase to additional paid-in capital of $881,356 and $449,448, respectively, related to tax benefits associated with the exercise of non-qualified stock options. See accompanying notes 5 6 PACIFIC SUNWEAR OF CALIFORNIA, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The accompanying financial statements are unaudited except for the February 1, 1998 balance sheet. These statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The Company's fiscal year is the 52- or 53-week period which ends on the Sunday closest to the end of January. "Fiscal 1998" is a 52-week period which ends January 31, 1999. In the opinion of management, all adjustments consisting only of normal recurring entries necessary for a fair presentation have been included. The preparation of financial statements in conformity with generally accepted accounting principles necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported expenses during the reported period. Actual results could differ from these estimates. The results of operations for the first quarter ended May 3, 1998 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 1999. For further information, refer to the financial statements and notes thereto as of and for the years ended February 1, 1998, February 2, 1997 and February 4, 1996. NOTE 2 - CASH AND CASH EQUIVALENTS; SHORT-TERM INVESTMENTS Cash and cash equivalents include cash on hand and marketable securities with original maturities of three months or less. Short-term investments consist of highly liquid investments with original maturities between three and twelve months. Management determines the proper classifications of investments at the time of purchase and reevaluates such designations as of each balance sheet date. At May 3, 1998, all securities were classified as held- to-maturity under the provisions of SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" based on the Company's positive intent and ability to hold the securities to maturity. In accordance with SFAS No. 115, these securities are carried at amortized cost, which approximates fair market value. NOTE 3 - FOLLOW-ON OFFERING During fiscal 1997 the Company issued an aggregate of 1,307,250 shares of its common stock in a follow-on stock offering. The sale of shares yielded net proceeds to the Company, after deducting expenses associated with the offering, of $30.1 million. NOTE 4 - NET INCOME PER SHARE, BASIC AND DILUTED The Company adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128), in the fourth quarter of fiscal 1997. SFAS 128 simplifies the computation of earnings per share ("EPS") previously required in Accounting Principles Board (APB) Opinion No. 15, "Earnings Per Share," by replacing primary and fully diluted EPS with basic and diluted EPS. Earnings per share for the three months ended May 4, 1997 have been restated in accordance with SFAS 128. 6 7 The following table summarizes the computation of EPS:
THIRTEEN WEEKS ENDED: MAY 3, 1998 MAY 4, 1997 ------------------------------------- ------------------------------------- NET PER SHARE NET PER SHARE INCOME SHARES AMOUNT INCOME SHARES AMOUNT ------ ------ --------- ------ ------ ---------- BASIC EPS: Net Income $2,886,914 13,783,570 $0.21 $1,124,278 12,177,375 $0.09 DILUTED EPS: Effect of dilutive stock options 547,033 486,812 Net Income $2,886,914 14,330,603 $0.20 $1,124,278 12,664,187 $0.09
Options to purchase 2,808 and 1,363 shares of common stock in the first thirteen weeks of fiscal 1998 and the first thirteen weeks of fiscal 1997, respectively, were not included in the computation of diluted earnings per common share because the option exercise price was greater than the average market price of the common stock. Stock Split - On October 9, 1997, the Company effected a three-for-two stock split. Earnings per share and share outstanding amounts have been restated to give retroactive effect to the stock split in these financial statements. NOTE 5 - FEDERAL AND STATE INCOME TAX EXPENSE The combined federal and state income tax expense was calculated using estimated effective annual tax rates. NOTE 6 - ACCRUED LIABILITIES Accrued liabilities consist of the following:
MAY 3, FEBRUARY 1, 1998 1998 ---------- ----------- Accrued compensation and benefits $2,132,073 $4,185,159 Reserve for store expansion/relocation and closing costs 893,941 954,823 Accrued costs related to corporate relocation 296,319 1,205,202 Sales tax payable 1,166,031 568,931 Gift certificates and store merchandise credits 542,353 778,390 Other accrued liabilities 1,310,609 1,141,656 ---------- ---------- $6,341,326 $8,834,161 ========== ==========
NOTE 7 - ACQUISITION In September 1997, the Company acquired from Good Vibrations, Inc. the store assets, including inventory, leasehold improvements and lease rights pertaining to 15 retail stores. The purchase price aggregated $10.4 million and resulted in the Company recording goodwill of $7.3 million. Details of the transaction and the accounting effects were disclosed in the Company's Form 10-K for the year ended February 1, 1998. The first thirteen weeks of 1998 includes sales results from these 15 retail stores. NOTE 8 - SUBSEQUENT EVENT On May 21, 1998 the Company announced a three-for-two stock split. The record date for the split is June 8, 1998. Shareholders of record as of that date will receive one new share of Common Stock for every two shares 7 8 they owned on the record date. The additional shares will be mailed on June 19, 1998. Cash will be paid in lieu of issuing fractional shares based on the closing price of the Company's Common Stock on June 8, 1998. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The thirteen weeks ended May 3, 1998 as compared to the thirteen weeks ended May 4, 1997 Net Sales Net sales increased to $61.2 million for the first thirteen weeks of fiscal 1998 from $38.9 million for the first thirteen weeks of fiscal 1997, an increase of $22.3 million, or 57.3%. Of this $22.3 million increase, $10.5 million was attributable to net sales generated by new stores opened in fiscal 1997 not yet included in the comparable store base, $5.1 million was attributable to a 14.8% increase in comparable store net sales in the first thirteen weeks of fiscal 1998, $3.4 million was attributable to the 15 Good Vibrations stores acquired in fiscal 1997 not yet included in the comparable store base, $2.1 million was attributable to 22 stores that have been expanded or relocated to the larger format and not yet included in the comparable store base and $1.4 million was attributable to net sales generated by 19 new stores opened in fiscal 1998 not yet included in the comparable store base. Partially offsetting this increase was a $.2 million decrease in net sales attributable to the closing of four stores during fiscal 1997. The increase in comparable store net sales was primarily attributable to the addition of footwear and juniors to certain of the Company's stores and, to a lesser extent, increases in sales of young men's merchandise. Net sales of footwear and junior female apparel represented approximately 29% of total net sales for the first thirteen weeks of fiscal 1998 compared to 19% for the first thirteen weeks of fiscal 1997. Retail prices of the Company's merchandise remained relatively unchanged in the first thirteen weeks of fiscal 1998 compared to the first thirteen weeks of fiscal 1997 and had no significant impact on the net sales increase for the first thirteen weeks of fiscal 1998. Gross Margin Gross margin, after buying, distribution and occupancy costs, increased to $19.6 million for the first thirteen weeks of fiscal 1998 from $11.7 million for the first thirteen weeks of fiscal 1997, an increase of $7.9 million, or 67.5%. As a percentage of net sales, gross margin increased to 32.1% from 30.1%. Of this 2.0% increase, net merchandise margins increased 1.1% as a percentage of net sales for the first thirteen weeks of fiscal 1998 compared to the first thirteen weeks of fiscal 1997 due to an increase in initial markup and a decrease in markdowns as a percentage of net sales and .9% was due to a decrease in occupancy costs as a percentage of net sales which was related to higher comparable store net sales. Selling, General and Administrative Expenses Selling, general and administrative expenses increased to $15.1 million for the first thirteen weeks of fiscal 1998 from $9.9 million for the first thirteen weeks of fiscal 1997, an increase of $5.2 million, or 52.5%. As a percentage of net sales, these expenses decreased to 24.8% from 25.5%. This .7% decrease as a percentage of net sales was primarily attributable to a decrease in store selling expenses as a percentage of net sales primarily as a result of an increase in comparable store net sales and higher total net sales. Income Tax Expense Income tax expense was $1.9 million in the first thirteen weeks of fiscal 1998 compared to $.7 million for the first thirteen weeks of fiscal 1997. The effective income tax rate was 39.6% for both the first thirteen weeks of fiscal 1998 and fiscal 1997. 8 9 LIQUIDITY AND CAPITAL RESOURCES The Company has financed its operations from internally generated cash flow, short-term borrowings and equity financing. The Company's primary capital requirements have been for the construction of new stores, remodeling, expansion, or relocation of selected stores and financing of inventories. During the first thirteen weeks of fiscal 1998, the Company also used funds for the relocation of its corporate offices and distribution facility. Net cash provided by operating activities for the first thirteen weeks of fiscal 1998 was $3.1 million compared to $.8 million for the first thirteen weeks of fiscal 1997. This $2.3 million increase was attributable to an increase in net income of $1.8 million, an increase in accounts payable net of merchandise inventories of $.9 million, an increase in depreciation and amortization of $.6 million, net increases of other items of $.5 million, offset by a decrease in accrued liabilities and taxes of $1.5 million. Working capital at May 3, 1998 was $45.7 million compared to $48.1 million at February 1, 1998, a decrease of $2.4 million. The decrease in working capital was primarily due to capital expenditures for the new corporate offices and distribution facilities, as well as the construction of 19 new stores and eight expansions/relocations opened in the first thirteen weeks of fiscal 1998, offset by higher operating cash flows. Inventories at May 3, 1998 were $33.8 million compared to $32.1 million at February 1, 1998, an increase of $1.7 million. This increase was primarily related to opening 19 new stores and relocating eight stores with 50% larger average square footage than existing stores. The increase in accounts payable of $1.8 million at May 3, 1998 compared to February 1, 1998 was primarily attributable to the increase in inventories at May 3, 1998. Net cash provided by (used in) investing activities was $.4 million for the first thirteen weeks of fiscal 1998 compared to ($3.7) million for the first thirteen weeks of fiscal 1997. Of this $4.1 million increase, $9.9 million was provided by short term investment maturities, offset by net cash invested in property and equipment of $9.4 million for the first thirteen weeks of fiscal 1998 compared to $3.7 million for the first thirteen weeks of fiscal 1997. The increase in capital expenditures was due to an increase in the number of new stores opened and, to a lesser extent, an increase in the number of stores expanded/relocated in the first thirteen weeks of fiscal 1998 compared to the first thirteen weeks of fiscal 1997, as well as capital expenditures for the new corporate offices and distribution facilities in the first thirteen weeks of fiscal 1998. Net cash provided by financing activities for the first thirteen weeks of fiscal 1998 was $.3 million compared to $.1 million for the first thirteen weeks of fiscal 1997. In the first thirteen weeks of fiscal 1998, the Company received proceeds of $.3 million from the exercise of stock options compared to $.1 million in the first thirteen weeks of fiscal 1997. At May 3, 1998, the Company had $3.5 million in letters of credit outstanding. The Company plans to open approximately 51 stores and expand or relocate approximately seven existing stores during the remainder of fiscal 1998. The Company estimates that capital expenditures during the remainder of fiscal 1998 will be approximately $22 million. The Company reviews the operating performance of its stores on an ongoing basis to determine which stores, if any, to close and records closing costs as stores are closed or identified to be closed. The Company closed no stores in the first quarter of fiscal 1998. The Company anticipates closing one store in the second quarter of fiscal 1998 and one store in the fourth quarter of fiscal 1998. Management believes that the Company's working capital, bank line of credit and cash flows from operating activities will be sufficient to meet the Company's operating and capital expenditure requirements through the end of fiscal 1999. INFLATION The Company does not believe that inflation has had a material effect on the results of operations during the past three years. There can be no assurance that the Company's business will not be affected by inflation in the future. 9 10 NEW ACCOUNTING PRONOUNCEMENTS Comprehensive Income --The Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130), in the first quarter 1998. SFAS 130 establishes standards for the reporting and display of comprehensive income. Components of comprehensive income include net earnings (loss), and foreign currency translation adjustments. The adoption of SFAS 130 required no additional disclosure for the Company and did not have a material effect on the Company's financial position or results of operations. SEASONALITY AND QUARTERLY RESULTS The Company's business is seasonal by nature, with the Christmas and back-to-school periods historically accounting for the largest percentage of annual net sales. The Company's first quarter historically accounts for the smallest percentage of annual net sales. In fiscal 1997 and fiscal 1996, excluding net sales generated by new and relocated/expanded stores, the Christmas and back-to-school periods together accounted for approximately 35% and 36%, respectively, of the Company's annual net sales and a higher percentage of the Company's operating income. In fiscal 1997, excluding net sales generated by new and relocated/expanded stores, approximately 43% of the Company's annual net sales occurred in the first half of the fiscal year and 57% in the second half. The Company's quarterly results of operations may also fluctuate significantly as a result of a variety of factors, including the timing of store openings; the amount of revenue contributed by new stores; the timing and level of markdowns; the timing of store closings, expansions and relocations; competitive factors; and general economic conditions. YEAR 2000 DATE CONVERSION The Company has conducted a review of its computer systems regarding the year 2000 date conversion and has developed a plan and time line to address the year 2000 conversion on a timely basis. The Company expects to complete the year 2000 conversion for all its computer systems by the end of fiscal 1998. The costs of this project are not expected to be material to the Company's financial results. None of the Company's vendors accounted for more than 9% of the Company's net sales for fiscal 1997. The Company does not expect any material adverse impact on its business operations by the failure of any of its vendors to complete any required changes related to the year 2000 date conversion. SAFE HARBOR STATEMENT The preceding "Management's Discussion and Analysis of Financial Condition and Results of Operations" section contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), and the Company intends that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements include the plans and objectives of management for future operations, including plans and objectives relating to the future economic performance of the Company. The forward-looking statements and associated risks set forth herein may include or relate to: (i) the planned opening of approximately 51 stores and expansion or relocation of seven stores during the remainder of fiscal 1998; (ii) the anticipated closing of two stores in fiscal 1998; (iii) the $22 million estimate of capital expenditures for the remainder of fiscal 1998, (iv) sufficiency of the Company's working capital, bank line of credit and cash flows from operating activities for the Company's future operating and capital requirements and (v) the Company's plans to complete its year 2000 conversion on a timely basis and the ability of the Company's vendors to resolve the year 2000 issues. . The forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, including, without limitation, the following: (i) the ability of the Company to locate and obtain favorable store sites, negotiate acceptable lease terms, and hire and train employees; (ii) management's ability to manage the Company's planned expansion; (iii) the availability of merchandise from the Company's vendors and private brand sources; (iv) any unexpected delays in the timing of the availability of the Company's distribution center; (v) the effect of economic conditions; and (vi) the effect of competitive pressures from other retailers. Results actually achieved thus may differ materially from expected results in these statements. 10 11 PART II-OTHER INFORMATION Item 1 - Legal Proceedings - Not Applicable Item 2 - Changes in Securities - Not Applicable Item 3 - Defaults Upon Senior Securities - Not Applicable Item 4 - Submission of Matters to a Vote of Security Holders - Not Applicable Item 5 - Other Information - Not Applicable Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits: (27) Financial Data Schedule (b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter for which this report is filed. 11 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Pacific Sunwear of California, Inc. (Registrant) Date: June 8, 1998 \s\ GREG H. WEAVER --------------------- Greg H. Weaver Chairman of the Board and Chief Executive Officer Date: June 8, 1998 \s\ CARL W. WOMACK --------------------- Carl W. Womack Senior Vice President, Chief Financial Officer and Secretary 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PACIFIC SUNWEAR OF CALIFORNIA, INC'S FORM 10Q FOR THE QUARTERLY PERIOD ENDED MAY 3, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10Q. 3-MOS JAN-31-1999 FEB-02-1998 MAY-03-1998 18,520,729 2,885,488 1,295,381 0 33,837,257 62,783,366 73,888,592 (21,081,359) 124,902,307 17,054,786 0 0 0 138,193 100,460,094 124,902,307 61,162,250 61,162,250 41,555,214 15,147,526 0 0 (320,404) 4,779,914 1,893,000 2,886,914 0 0 0 2,886,914 $0.21 $0.20
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