<PAGE> 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.
<PAGE> 2
PACIFIC SUNWEAR OF CALIFORNIA, INC.
FORM 10-Q
FOR THE QUARTER ENDED MAY 3, 1998
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C> <C>
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
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
PACIFIC SUNWEAR OF CALIFORNIA, INC.
BALANCE SHEETS
ASSETS
MAY 3, FEBRUARY 1,
CURRENT ASSETS: 1998 1998
---- ----
(Unaudited)
<S> <C> <C>
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
============= =============
</TABLE>
See accompanying notes
3
<PAGE> 4
<TABLE>
<CAPTION>
PACIFIC SUNWEAR OF CALIFORNIA, INC
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THIRTEEN WEEKS ENDED
-----------------------------
MAY 3, 1998 MAY 4, 1997
----------- -----------
<S> <C> <C>
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
=========== ===========
</TABLE>
See accompanying notes
4
<PAGE> 5
<TABLE>
<CAPTION>
PACIFIC SUNWEAR OF CALIFORNIA, INC
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THIRTEEN WEEKS ENDED
-------------------------------
MAY 3, 1998 MAY 4, 1997
------------ ------------
<S> <C> <C>
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
</TABLE>
- - ----------------------------------------------------------------------------
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
<PAGE> 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
<PAGE> 7
The following table summarizes the computation of EPS:
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED: MAY 3, 1998 MAY 4, 1997
------------------------------------- -------------------------------------
NET PER SHARE NET PER SHARE
INCOME SHARES AMOUNT INCOME SHARES AMOUNT
------ ------ --------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
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
</TABLE>
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:
<TABLE>
<CAPTION>
MAY 3, FEBRUARY 1,
1998 1998
---------- -----------
<S> <C> <C>
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
========== ==========
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-02-1998
<PERIOD-END> MAY-03-1998
<CASH> 18,520,729
<SECURITIES> 2,885,488
<RECEIVABLES> 1,295,381
<ALLOWANCES> 0
<INVENTORY> 33,837,257
<CURRENT-ASSETS> 62,783,366
<PP&E> 73,888,592
<DEPRECIATION> (21,081,359)
<TOTAL-ASSETS> 124,902,307
<CURRENT-LIABILITIES> 17,054,786
<BONDS> 0
0
0
<COMMON> 138,193
<OTHER-SE> 100,460,094
<TOTAL-LIABILITY-AND-EQUITY> 124,902,307
<SALES> 61,162,250
<TOTAL-REVENUES> 61,162,250
<CGS> 41,555,214
<TOTAL-COSTS> 15,147,526
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (320,404)
<INCOME-PRETAX> 4,779,914
<INCOME-TAX> 1,893,000
<INCOME-CONTINUING> 2,886,914
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,886,914
<EPS-PRIMARY> $0.21
<EPS-DILUTED> $0.20
</TABLE>
