UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
| x | QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended July 31, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 000-22754
Urban Outfitters, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Pennsylvania | 23-2003332 | |
| (State or Other Jurisdiction of Incorporation of Organization) |
(I.R.S. Employer Identification No.) |
| 1809 Walnut Street, Philadelphia, PA | 19103 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(215) 564-2313
(Registrant’s Telephone Number, Including Area Code)
Indicate by checkmark 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 ¨
Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common stock, $0.0001 par value—80,945,342 shares outstanding on September 1, 2004.
PART I
FINANCIAL INFORMATION
| Item 1. | Financial Statements (unaudited) |
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|
Condensed Consolidated Balance Sheets as of July 31, 2004, January 31, 2004 and July 31, |
1 | |||
| 2 | ||||
| 3 | ||||
| Condensed Consolidated Statements of Cash Flows for the six months ended July 31, 2004 and 2003 |
4 | |||
| 5 | ||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 | ||
| Item 3. | 20 | |||
| Item 4. | 20 | |||
| PART II | ||||
| OTHER INFORMATION | ||||
| Item 1. | 21 | |||
| Item 4. | 21 | |||
| Item 6. | 21 | |||
| 22 | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share data)
(Unaudited)
| July 31, 2004 |
January 31, 2004 |
July 31, 2003 | ||||||||
| ASSETS |
||||||||||
| Current assets: |
||||||||||
| Cash and cash equivalents |
$ | 64,213 | $ | 67,194 | $ | 50,452 | ||||
| Marketable securities |
38,073 | 19,979 | 9,501 | |||||||
| Accounts receivable, net of allowance for doubtful accounts of $813, $651 and $655, respectively |
10,420 | 6,711 | 6,402 | |||||||
| Inventories |
90,930 | 63,247 | 61,467 | |||||||
| Prepaid expenses, deferred taxes and other current assets |
18,707 | 18,704 | 14,917 | |||||||
| Total current assets |
222,343 | 175,835 | 142,739 | |||||||
| Property and equipment, net |
141,065 | 121,919 | 110,993 | |||||||
| Marketable securities |
60,195 | 52,315 | 44,237 | |||||||
| Deferred income taxes and other assets |
9,555 | 9,526 | 8,868 | |||||||
| $ | 433,158 | $ | 359,595 | $ | 306,837 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||
| Current liabilities: |
||||||||||
| Accounts payable |
$ | 37,214 | $ | 27,353 | $ | 26,664 | ||||
| Accrued expenses, accrued compensation and other current liabilities |
45,836 | 30,409 | 23,172 | |||||||
| Total current liabilities |
83,050 | 57,762 | 49,836 | |||||||
| Deferred rent and other liabilities |
12,164 | 11,703 | 11,047 | |||||||
| Total liabilities |
95,214 | 69,465 | 60,883 | |||||||
| Commitments and contingencies (see Note 5) |
||||||||||
| Shareholders’ equity: |
||||||||||
| Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued |
— | — | — | |||||||
| Common shares; $.0001 par value, 200,000,000 shares authorized, 80,895,742, 79,776,542 and 78,742,344 shares issued and outstanding, respectively |
8 | 8 | 8 | |||||||
| Additional paid-in capital |
99,517 | 83,279 | 73,118 | |||||||
| Unearned compensation |
(5,646 | ) | — | — | ||||||
| Retained earnings |
242,282 | 204,905 | 172,389 | |||||||
| Accumulated other comprehensive income |
1,783 | 1,938 | 439 | |||||||
| Total shareholders’ equity |
337,944 | 290,130 | 245,954 | |||||||
| $ | 433,158 | $ | 359,595 | $ | 306,837 | |||||
See accompanying notes
1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except share and per share data)
(Unaudited)
| Three Months Ended July 31, |
Six Months Ended July 31, | |||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||
| Net sales |
$ | 189,484 | $ | 122,879 | $ | 359,774 | $ | 229,907 | ||||
| Cost of sales, including certain buying, distribution and occupancy costs |
112,466 | 77,231 | 212,862 | 146,326 | ||||||||
| Gross profit |
77,018 | 45,648 | 146,912 | 83,581 | ||||||||
| Selling, general and administrative expenses |
42,898 | 30,147 | 84,396 | 57,420 | ||||||||
| Income from operations |
34,120 | 15,501 | 62,516 | 26,161 | ||||||||
| Other income, net |
346 | 410 | 302 | 494 | ||||||||
| Income before income taxes |
34,466 | 15,911 | 62,818 | 26,655 | ||||||||
| Income tax expense |
13,958 | 6,444 | 25,441 | 10,795 | ||||||||
| Net income |
$ | 20,508 | $ | 9,467 | $ | 37,377 | $ | 15,860 | ||||
| Net income per common share: |
||||||||||||
| Basic |
$ | 0.25 | $ | 0.12 | $ | 0.46 | $ | 0.20 | ||||
| Diluted |
$ | 0.25 | $ | 0.12 | $ | 0.45 | $ | 0.20 | ||||
| Weighted average common shares and common share equivalents outstanding: |
||||||||||||
| Basic |
80,554,025 | 78,195,568 | 80,421,047 | 77,925,640 | ||||||||
| Diluted |
83,411,392 | 80,404,412 | 83,174,091 | 79,801,388 | ||||||||
See accompanying notes
2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(amounts in thousands, except share data)
(Unaudited)
| Comprehensive Income (Loss) |
Common Shares |
Additional Paid-in Capital |
Unearned Compensation |
Retained Earnings |
Accumulated Other Comprehensive Income |
Total |
|||||||||||||||||||||||||
| Quarter |
Year to-Date |
Number of Shares |
Par Value |
||||||||||||||||||||||||||||
| Balances at February 1, 2004 |
79,776,542 | $ | 8 | $ | 83,279 | $ | — | $ | 204,905 | $ | 1,938 | $ | 290,130 | ||||||||||||||||||
| Net income |
$ | 20,508 | $ | 37,377 | — | — | — | — | 37,377 | — | 37,377 | ||||||||||||||||||||
| Foreign currency translation |
413 | 229 | — | — | — | — | — | 229 | 229 | ||||||||||||||||||||||
| Unrealized gain/(loss) on marketable securities, net |
1 | (384 | ) | — | — | — | — | — | (384 | ) | (384 | ) | |||||||||||||||||||
| Comprehensive income |
$ | 20,922 | $ | 37,222 | |||||||||||||||||||||||||||
| Restricted stock issued |
200,000 | — | 5,766 | (5,646 | ) | — | — | 120 | |||||||||||||||||||||||
| Exercise of stock options |
919,200 | — | 4,274 | — | — | — | 4,274 | ||||||||||||||||||||||||
| Tax effect of exercises |
— | — | 6,198 | — | — | — | 6,198 | ||||||||||||||||||||||||
| Balances at July 31, 2004 |
80,895,742 | $ | 8 | $ | 99,517 | $ | (5,646 | ) | $ | 242,282 | $ | 1,783 | $ | 337,944 | |||||||||||||||||
| Balances at February 1, 2003 |
77,526,544 | $ | 8 | $ | 67,156 | $ | — | 156,529 | $ | 692 | $ | 224,385 | |||||||||||||||||||
| Net income |
$ | 9,467 | $ | 15,860 | — | — | — | — | 15,860 | — | 15,860 | ||||||||||||||||||||
| Foreign currency translation |
74 | (111 | ) | — | — | — | — | — | (111 | ) | (111 | ) | |||||||||||||||||||
| Unrealized loss on marketable securities, net |
(146 | ) | (142 | ) | — | — | — | — | — | (142 | ) | (142 | ) | ||||||||||||||||||
| Comprehensive income |
$ | 9,395 | $ | 15,607 | |||||||||||||||||||||||||||