CITY OF INDUSTRY, Calif., March 14, 2007 (PRIME NEWSWIRE) -- Hot Topic, Inc. (Nasdaq:HOTT) today announced that net earnings for the fiscal fourth quarter of 2006 (14 weeks ended February 3, 2007) were $8.9 million, or $0.20 per diluted share, compared with $10.6 million, or $0.23 per diluted share, for the fiscal fourth quarter of 2005 (13 weeks ended January 28, 2006).
As previously reported, total sales for the 14 weeks ended February 3, 2007 increased 4% to $240.5 million compared to $230.4 million for the 13 week period ended January 28, 2006. Comparable store sales decreased 5.3% for the fourth quarter of 2006. Due to the 53rd week in fiscal 2006, fourth quarter comparable store sales are compared to the corresponding 14 week period ended February 4, 2006.
Results for the fourth quarter of 2006 include an asset impairment charge of $2.8 million, or $0.04 per diluted share, in selling, general and administrative expenses in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". The fourth quarter 2006 results also include approximately $0.01 per diluted share of stock-based compensation.
Fourth quarter of 2005 results included an asset impairment charge of $1.7 million, or $0.02 per diluted share, in selling, general and administrative expenses. The fourth quarter of 2005 results also included other income of $3.1 million, or $0.04 per diluted share, associated with gift card breakage.
At the end of the fourth quarter of fiscal 2006, the company operated 694 Hot Topic stores and 131 Torrid stores compared to 663 Hot Topic stores and 120 Torrid stores at the end of the fourth quarter of fiscal 2005. During the fourth quarter of fiscal 2006, the company opened a total of 2 Hot Topic stores and 2 Torrid stores and closed 1 Hot Topic store. The company also remodeled or relocated 2 Hot Topic stores during the quarter.
A conference call to discuss fourth quarter and fiscal year end business trends, guidance and other matters is scheduled for today at 4:30 PM Eastern time. The conference call number is 866-700-0133, pass code "Hot Topic", and will be accessible to all interested parties. The conference call will also be webcast at www.earnings.com. A replay will be available at 888-286-8010, pass code 94816544, 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 March 3, 2007 the company operated 694 Hot Topic stores in all 50 states and Puerto Rico, 131 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)
Fourth Quarter Ended
-----------------------
Feb. 3, Jan. 28,
2007 2006
-------- --------
Net sales $240,500 $230,399
Cost of goods sold, including buying,
distribution and occupancy costs 158,842 156,469
Gross margin 81,658 73,930
Selling, general & administrative expenses 67,192 60,052
Income from operations 14,466 13,878
Other income / expense -- 2,945
Interest income, net 530 213
Income before income taxes 14,996 17,036
Provision for income taxes 6,128 6,440
Net income $8,868 $10,596
Earnings per share:
Basic $0.20 $0.24
Diluted $0.20 $0.23
Weighted average shares outstanding
Basic 44,218 44,762
Diluted 44,775 45,350
Fiscal Years Ended
-----------------------
Feb. 3, Jan. 28,
2007 2006
-------- --------
Net sales $751,558 $725,142
Cost of goods sold, including buying,
distribution and occupancy costs 502,408 488,948
Gross margin 249,150 236,194
Selling, general & administrative expenses 227,580 203,995
Income from operations 21,570 32,199
Other income / expense -- 2,945
Interest income, net 1,450 1,054
Income before income taxes 23,020 36,198
Provision for income taxes 9,394 13,779
Net income 13,626 22,419
Earnings per share:
Basic $0.31 $0.50
Diluted $0.30 $0.49
Weighted average shares outstanding
Basic 44,167 44,924
Diluted 44,752 45,877
HOT TOPIC, INC.
OTHER DATA
(Dollars in thousands)
(Unaudited)
Fiscal Years Ended
-----------------------
Feb. 3, Jan. 28,
2007 2006
-------- --------
Cash, cash equivalents and short-term
investments $55,490 $37,674
Inventory $73,868 $71,160
Depreciation and amortization $38,941 $32,396
Capital expenditures $38,617 $69,419
Number of stores open at end of period:
Hot Topic 694 663
Torrid 131 120
Total store square footage 1,541,300 1,452,700