The company ended the first quarter of fiscal 2013 with 638 stores.
On a GAAP basis, the company reported a loss from continuing operations of $24.2 million, or 35 cents per diluted share, for the first quarter of fiscal 2013, compared to a loss from continuing operations of $15.2 million, or 22 cents per diluted share, for the first quarter of fiscal 2012. The loss from continuing operations for the Company's first quarter of fiscal 2013 included a non-cash loss of $9.3 million, or 13 cents per diluted share, compared to a non-cash gain of $6.3 million, or $0.09 per diluted share, for the first quarter of fiscal 2012 related to a derivative liability that resulted from the issuance of the Convertible Series B Preferred Stock (the "Series B Preferred") in connection with the term loan financing the Company completed in December 2011.
On a non-GAAP basis, excluding store closure related charges of $0.2 million and the non-cash loss on the derivative liability of $9.3 million, and using a normalized annual income tax rate of approximately 37 percent, the Company would have incurred a loss from continuing operations for the first quarter of fiscal 2013 of $9.4 million, or 14 cents per diluted share, as compared to a loss from continuing operations of $13.5 million, or 20 cents per diluted share, for the same period a year ago. The 53rd week retail calendar shift contributed $0.03 per share of the $0.06 per share improvement compared to last year.
"After a slower than expected start to the spring selling season, we are pleased with our overall first quarter performance which was led by strength in our women's business," said Gary H. Schoenfeld, President and Chief Executive Officer. "This marks our fifth consecutive quarter of positive comps since affecting our real estate restructuring at the end of fiscal 2011. We believe our results continue to validate our core turnaround strategies tied to great brands, on-trend merchandising and re-establishing PacSun's distinct identity through the creativity, diversity and optimism of the California lifestyle."
Financial Outlook for Second Fiscal Quarter of 2013
The Company's guidance range for the second quarter of fiscal 2013 contemplates a non-GAAP (loss) income per diluted share from continuing operations of between $(0.05) and $0.02, compared to $(0.09) in the second quarter of fiscal 2012.
The forecasted second quarter non-GAAP (loss) income from continuing operations per diluted share guidance range is based on the following assumptions:
- Comparable store sales from flat to 5 percent;
- Revenue from $209 million to $219 million;
- Gross margin rate, including buying, distribution and occupancy, of 28 percent to 30 percent;
- SG&A expenses in the range of $59 million to $61 million;
- A normalized annual income tax rate of approximately 37 percent; and
- An estimated $10 million shift in revenue from the third quarter to the second quarter and a corresponding shift of $0.05 per diluted share as a result of the 53rd week calendar shift.
In accordance with applicable accounting literature and consistent with the Company's financial statement presentation in its fiscal 2012 annual report, the Company has reclassified the results of operations of its closed stores as discontinued operations for all periods presented, as applicable.
In fiscal 2011, as a result of the issuance of the Series B Preferred in connection with the Company's $60 million senior secured term loan financing with an affiliate of Golden Gate Capital, the Company recorded a derivative liability equal to approximately $15.0 million, which represents the fair value of the Series B Preferred upon issuance. In accordance with applicable U.S. GAAP, the Company has marked this derivative liability to fair value through earnings and will continue to do so on a quarterly basis until the shares of Series B Preferred are either converted into shares of the Company's common stock or until the conversion rights expire (December 2021). The Company's second fiscal quarter of 2013 earnings guidance excludes the quarterly impact of the change in the fair value of the derivative liability due to the inherently variable nature of this financial instrument.
As of May 22, 2013, the Company operates 639 stores in all 50 states and Puerto Rico.
Source Pacific Sunwear through SportsOneSource
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