UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended March 31, 2004 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission File No. 000 – 22207 |
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GUITAR CENTER, INC.
(Exact Name of Registrant as Specified in its Charter)
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DELAWARE |
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95-4600862 |
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(State or other
jurisdiction of |
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(I.R.S. Employer |
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5795
LINDERO CANYON ROAD |
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91362 |
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(Address of principal executive offices) |
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(Zip Code) |
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(818) 735-8800 |
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Registrant’s telephone number, including area code |
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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.
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Yes ý |
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No o |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
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Yes ý |
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No o |
As of May 3, 2004, 22,344,001 shares of our Common Stock, $.01 par value, were outstanding.
Guitar Center, Inc. and subsidiaries
INDEX
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Part I. |
Financial Information |
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Item 1. Consolidated Financial Statements (Unaudited) |
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Consolidated Balance Sheets – March 31, 2004 and December 31, 2003 |
3 |
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Consolidated Statements of Income – Three months ended March 31, 2004 and 2003 |
4 |
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Consolidated Statements of Cash Flows – Three months ended March 31, 2004 and 2003 |
5 |
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6 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
8 |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
22 |
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23 |
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Part II. |
Other Information |
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23 |
2
Guitar Center, Inc. and subsidiaries
Consolidated Balance Sheets
(In thousands, except per share amounts)
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March 31, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
18,961 |
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$ |
5,350 |
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Accounts receivable, net |
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20,358 |
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23,814 |
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Merchandise inventories |
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289,708 |
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288,873 |
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Prepaid expenses and deposits |
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9,992 |
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11,543 |
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Deferred income taxes |
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5,631 |
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5,631 |
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Total current assets |
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344,650 |
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335,211 |
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Property and equipment, net |
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92,779 |
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93,347 |
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Goodwill |
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25,995 |
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25,995 |
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Deposits and other assets, net |
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6,237 |
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6,318 |
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$ |
469,661 |
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$ |
460,871 |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
55,990 |
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$ |
47,778 |
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Accrued expenses and other current liabilities |
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54,622 |
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71,616 |
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Merchandise advances |
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16,388 |
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17,104 |
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Total current liabilities |
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127,000 |
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136,498 |
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Other long-term liabilities |
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6,252 |
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5,982 |
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Deferred income taxes |
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4,220 |
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4,220 |
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Long-term debt |
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100,000 |
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100,000 |
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Total liabilities |
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237,472 |
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246,700 |
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Stockholders’ equity: |
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Preferred Stock; authorized 5,000 shares at March 31, 2004 and December 31, 2003, none issued and outstanding |
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— |
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— |
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Common Stock, $0.01 par value, authorized 55,000 shares, issued and outstanding 24,321 at March 31, 2004 and 23,998 at December 31, 2003 |
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243 |
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240 |
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Additional paid in capital |
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282,468 |
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276,233 |
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Accumulated deficit |
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(50,522 |
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(62,302 |
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Total stockholders’ equity |
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232,189 |
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214,171 |
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$ |
469,661 |
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$ |
460,871 |
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See accompanying notes to consolidated financial statements.
3
Guitar Center, Inc. and subsidiaries
Consolidated Statements of Income
(In thousands, except per share data)
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Three months ended March 31, |
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2004 |
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2003 |
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Net sales |
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$ |
349,703 |
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$ |
287,542 |
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Cost of goods sold, buying and occupancy |
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255,020 |
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212,886 |
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Gross profit |
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94,683 |
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74,656 |
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Selling, general and administrative expenses |
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74,318 |
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62,998 |
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Operating income |
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20,365 |
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11,658 |
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Interest expense, net |
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1,363 |
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3,139 |
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Income before income taxes |
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19,002 |
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8,519 |
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Income taxes |
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7,222 |
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3,242 |
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Net income |
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$ |
11,780 |
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$ |
5,277 |
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Net income per share |
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Basic |
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$ |
0.49 |
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$ |
0.23 |
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Diluted |
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$ |
0.46 |
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$ |
0.22 |
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Weighted average shares outstanding |
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Basic |
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24,188 |
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22,791 |
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Diluted |
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25,501 |
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23,652 |
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See accompanying notes to consolidated financial statements.
4
Guitar Center, Inc. and subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
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Three months ended March 31, |
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2004 |
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2003 |
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Operating activities: |
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Net income |
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$ |
11,780 |
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$ |
5,277 |
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Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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