CITY OF INDUSTRY, Calif., May 17, 2006 (PRIMEZONE) -- Hot Topic, Inc. (Nasdaq:HOTT), reported results for its first fiscal quarter (13 weeks) ended April 29, 2006.
The company incurred a net loss in the first quarter of $1.4 million, or $0.03 per diluted share, compared to net income of $5.0 million or $0.11 per diluted share for the comparable period last year. The first quarter 2006 results include approximately $0.02 per share of stock option expense. Net sales for the first quarter increased 3% to $154.0 million from $149.8 million for the first quarter of fiscal 2005.
As previously reported, comparable store sales decreased 9.6% for the quarter compared to an increase of 0.9% during the first quarter of fiscal 2005.
At the end of the quarter, the company operated 671 Hot Topic stores and 123 Torrid stores compared to 607 Hot Topic stores and 87 Torrid stores at the end of the first quarter of fiscal 2005. During the first quarter of fiscal 2006, the company opened a total of 10 Hot Topic stores and 3 Torrid stores. The company also closed 2 Hot Topic stores and remodeled or relocated 5 Hot Topic stores.
A conference call to discuss first quarter, business trends, guidance and other matters is scheduled for today at 4:30 PM (ET). The conference call number is 800-659-1942, pass code "Hot Topic," and will be accessible to all interested parties. It will also be webcast at www.companyboardroom.com. A replay will be available at 888-286-8010, pass code 76186881, for approximately two weeks.
Hot Topic, Inc. is a national mall-based specialty retailer. Hot Topic offers apparel, accessories and gifts to young men and women principally between the ages of 12 and 22. Torrid, the company's second concept, provides plus-size fashion-forward apparel and accessories that target young women principally between the ages of 15 and 29. As of April 29, 2006 the company operated 671 Hot Topic stores in all 50 states and Puerto Rico, 123 Torrid stores, and Internet stores www.hottopic.com and www.torrid.com.
In addition to historical information, this news release and the aforementioned conference call contain forward-looking statements, which include statements relating to financial results, guidance, projections and other financial performance, managing growth, and litigation matters and contingent liabilities. These statements involve risks and uncertainties, including risks and uncertainties associated with meeting expected financial results, management of growth, relationships with mall developers and operators, the risk that available cash or mall space will not be adequate for planned expansion, fluctuations in sales and comparable store sales results, risks and uncertainties with respect to new store openings including risks associated with the company's new store concepts and Internet stores, music and fashion trends, competition from other retailers, uncertainties generally associated with specialty retailing, the effect of economic conditions, the effect of severe weather or natural disasters, political and/or social changes or events that could negatively impact shopping patterns and/or mall traffic, litigation proceedings and contingent liabilities, as well as other risks detailed in the company's SEC reports including its Quarterly Reports on Form 10-Q and its Annual Report on Form 10-K for the year ended January 28, 2006. Historical results achieved are not necessarily indicative of the future prospects of the company, and actual results or circumstances could differ materially from the forward-looking statements.
HOT TOPIC, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
First Quarter Ended
--------------------------
Apr. 29, Apr. 30,
2006 2005
--------- ---------
Net sales $154,041 $149,762
Cost of goods sold, including
buying, distribution and
occupancy costs 105,784 98,597
Gross margin 48,257 51,165
Selling, general and
administrative expenses 50,942 43,401
(Loss) Income from operations (2,685) 7,764
Interest income-net 403 338
(Loss) Income before income
taxes (2,282) 8,102
(Benefit) Provision for income
taxes (874) 3,103
Net (loss) income $(1,408) $4,999
Net (loss) income per share
Basic $(0.03) $0.11
Diluted $(0.03) $0.11
Shares used in computing net
(loss) income per share:
Basic 44,065 44,748
Diluted 44,065 46,175
HOT TOPIC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Apr. 29, Apr. 30,
2006 2005
--------- ---------
Current Assets:
Cash, cash equivalents and
short-term investments $26,424 $55,963
Inventory 82,363 69,255
Prepaid expenses and other 17,014 12,567
Deferred tax assets 2,487 2,541
Total current assets 128,288 140,326
Property and equipment, net 173,198 146,437
Deposits and other 245 246
Total assets $301,731 $287,009
Current Liabilities:
Accounts payable $27,520 $18,862
Accrued liabilities 30,250 29,637
Income taxes payable - 2,224
Total current liabilities 57,770 50,723
Deferred rent 40,516 33,249
Deferred tax liability 579 6,076
Total liabilities 98,865 90,048
Shareholders' equity 202,866 196,961
Total liabilities and
shareholders' equity $301,731 $287,009
HOT TOPIC, INC.
OTHER DATA
(Dollars in thousands)
(Unaudited)
Three Months Ended
--------------------------
Apr. 29, Apr. 30,
2006 2005
--------- ---------
Depreciation and amortization $9,201 $6,897
Capital expenditures $11,217 $16,998
Number of stores open at end
of period:
Hot Topic 671 607
Torrid 123 87
Total store square footage 1,473,500 1,271,100