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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 11-K

 

ANNUAL REPORT

PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

x

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2002

 

OR

 

¨

TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                          to

 

Commission file number 0-16999

 

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A. Full title of the plan and address of the plan, if different from that of the issuer named below:

 

Urban Outfitters 401(k) Savings Plan

 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

 

Urban Outfitters, Inc.

1809 Walnut Street

Philadelphia, PA 19103

 

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URBAN OUTFITTERS 401(k) SAVINGS PLAN

YEAR ENDED DECEMBER 31, 2002

 

CONTENTS

 

 

		Page(s)
Independent auditor’s report		1
Financial statements:
Statements of net assets available for benefits		2
Statements of changes in net assets available for benefits		3
Notes to financial statements		4-8
Financial schedule:
Schedule of assets held for investment purposes at end of year at December 31, 2002		9
Signature		10

 

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Independent Auditor’s Report

 

To the Participants and Administrator of

Urban Outfitters 401(k) Savings Plan

Philadelphia, Pennsylvania

 

We have audited the accompanying statements of net assets available for benefits of Urban Outfitters 401(k) Savings Plan as of December 31, 2002 and 2001 and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of Urban Outfitters 401(k) Savings Plan as of December 31, 2002 and 2001 and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information included in the schedule of assets held for investment purposes at end of year at December 31, 2002 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The information in the schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

Mantas, Ohliger, McGary & Quinn, P.C.

King of Prussia, Pennsylvania

May 23, 2003

 

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URBAN OUTFITTERS 401(k) SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

 

		December 31,
		2002				2001
ASSETS
Investments, at fair value:
Urban Outfitters, Inc. common stock		$	1,613,675	(a)		$	1,826,824	(a)
Pooled shares of registered investment companies:
American Century Equity Growth Fund			93,137				51,772
American Century GNMA Fund			148,627				67,066
American Century Income and Growth Fund			166,596				109,941
American Century Ultra Fund			129,045				82,516
BlackRock Index Equity Class A Fund			232,337				161,869
BlackRock Money Market Fund			1,581,008	(a)			1,246,863	(a)
BlackRock Small Cap Growth Equity Class A Fund			87,604				76,145
Fidelity Advisor Government Investment Fund			167,219				79,483
Janus Adviser Capital Appreciation Fund			461,732	(a)			371,241	(a)
Janus Adviser Growth and Income Fund			422,446	(a)			344,835	(a)
Janus Adviser Growth Fund			283,056				246,065
Janus Adviser Worldwide Fund			322,077	(a)			259,008	(a)
Participant loans			125,642				83,876
			5,834,201				5,007,504
Contributions receivable:
Participants			55,617				48,614
Employer			10,714				9,397
			66,331				58,011
Total assets			5,900,532				5,065,515
LIABILITIES
Liabilities:
Accrued administrative fees			18,125				16,752
Refundable contributions			99,213				88,724
Total liabilities			117,338				105,476
Net assets available for benefits		$	5,783,194			$	4,960,039

 

(a)

represents 5% or more of net assets available for benefits

 

The accompanying notes are an integral part of these financial statements.

 

2

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URBAN OUTFITTERS 401(k) SAVINGS PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

 

		Year ended December 31,
		2002				2001
ADDITIONS
Additions (subtractions) to net assets attributed to:
Investment income, interest and dividends		$	41,427			$	53,546
Net appreciation (depreciation) in fair value of investments			(500,122	)			919,719
			(458,695	)			973,265
Contributions:
Participants			1,599,816				1,365,535
Employer			316,397				271,833
Rollovers from other plans			80,201				144,837
			1,996,414				1,782,205
Total additions			1,537,719				2,755,470
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants			664,506				397,381
Administrative expenses			50,058				37,841
Total deductions			714,564				435,222
Net increase			823,155				2,320,248
Net assets available for benefits:
Beginning			4,960,039				2,639,791
Ending		$	5,783,194			$	4,960,039

 

The accompanying notes are an integral part of these financial statements.

 

 

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URBAN OUTFITTERS 401(k) SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 2002 and 2001

 

1.

Description of Plan:

 

The following description of Urban Outfitters, Inc. (the “Company”) 401(k) Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan documents for a more complete description of the Plan’s provisions.

 

General:

 

The Plan is a defined contribution 401(k) plan covering all employees who have completed six months of service and have attained age 18. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

 

Contributions:

 

Participants may elect to contribute 1% to 20% (increased to 25% effective July 1, 2003) of their eligible compensation, as defined, to the Plan, subject to certain limitations as outlined in the Plan.

 

The Company may make matching contributions (allocated based on participant contributions for the year) and additional discretionary contributions (allocated based on participant compensation). To be eligible for employer contributions, a participant must have completed one year of continuous service. For the years ended December 31, 2002 and 2001, the Company made matching contributions equal to 25% of the first 6% of an employee’s compensation deferred under the Plan. No additional discretionary contributions were made.

 

Participant accounts:

 

Each participant’s account is credited with the participant’s elective and rollover contributions and an allocation of Plan investment earnings and the Company’s contribution, and charged with withdrawals and distributions and a share of Plan investment losses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. Effective July 1, 1999, for other than non-participant directed holdings of Urban Outfitters, Inc. common stock as of June 30, 1999 and Company discretionary contributions which will be used to purchase Urban Outfitters, Inc. common stock, participants are able to direct the investment of their accounts, including the purchase of additional shares of Urban Outfitters, Inc. common stock. Effective January 1, 2003, participants may direct previously non-directed Urban Outfitters, Inc. common stock into any Plan investment. Participants may change their self-directed investment options at any time.

 

Vesting:

 

Participants are immediately vested in their contributions plus or minus actual earnings or losses thereon. Vesting in the Company’s contributions is graded over five years of credited service. Participants become 100% vested if separated from service on account of retirement, death or disability.

 

 

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URBAN OUTFITTERS 401(k) SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 2002 and 2001

 

1.

Description of Plan (continued):

 

Forfeitures:

 

Forfeited Company contributions are used first to pay the administrative expenses of the Plan and then to reduce the Company’s contributions for such plan year. Forfeitures of $51,032 in 2002 and $9,601 in 2001 were used to pay administrative expenses of the plan and reduce employer contributions. Net assets available for benefits include forfeited balances of approximately $18,000 at December 31, 2002 and $34,000 at December 31, 2001.

 

Participant loans:

 

Participants may borrow from their vested accounts a minimum of $500 and up to a maximum equal to the lesser of $50,000 or 50% of the value of the participant’s vested interest in their account. Loan terms range from one to five years, or up to fifteen years for the purchase of a residence. The loans are secured by the balance in the participant’s account and bear interest at the prime rate plus 1%. Principal and interest are paid ratably through payroll deductions.

 

Payment of benefits:

 

A participant who separates from service before retirement, death or disability may request early payment of their vested benefits. Benefits are paid as soon as administratively feasible following the date on which a distribution is requested. A participant whose vested account exceeds $5,000 may elect to defer the payment of benefits until April 1 of the calendar year following the attainment of age 70½.

 

Separated participants may request an in-kind distribution of the portion of their vested account invested in Urban Outfitters, Inc. stock.

 

Participants, upon attainment of age 59½, may elect to receive in-service distributions. Hardship withdrawals are also permitted.

 

Plan assets allocated to the accounts of persons who have terminated employment with the Company but have not withdrawn from the Plan approximated $765,000 at December 31, 2002 and $620,000 at December 31, 2001.

 

2.

Summary of significant accounting policies:

 

Basis of accounting:

 

The financial statements of the Plan are prepared using the accrual basis of accounting.

 

Use of estimates:

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates.

 

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URBAN OUTFITTERS 401(k) SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 2002 and 2001

 

2.

Summary of significant accounting policies (continued):

 

Payment of benefits:

 

Benefits are recorded when paid.

 

Valuation of investments:

 

The Plan’s investments are stated at fair value and are maintained by PNC Bank, N.A. Urban Outfitters, Inc. common stock is stated at fair value using quoted market prices from a national securities exchange. Pooled shares of registered investment companies are valued at fair value and represent the net asset value of shares held by the Plan at year end. Participant loans are valued at cost which approximates fair value.

 

Investments subject the Plan to a concentration of market risk. Investments are subject to market volatility which could have a material effect on participant account balances.

 

Net appreciation (depreciation) in fair value of investments:

 

The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the net realized gains or losses and the unrealized appreciation or depreciation on these investments.

 

Administrative expenses:

 

The Company provides participant data services to the Plan at no charge. The Plan pays all administrative expenses.

 

Reclassification:

 

Certain items included in the 2001 financial statements have been reclassified to conform to the 2002 presentation.

 

3.

Net appreciation (depreciation) in fair value of investments:

 

During 2002, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:

		Year ended December 31,
		2002				2001
Urban Outfitters, Inc. common stock:
Participant-directed		$	(16,249	)		$	247,869
Nonparticipant-directed			(17,836	)			982,525
Registered investment companies			(466,037	)			(310,675	)
		$	(500,122	)		$	919,719

 

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URBAN OUTFITTERS 401(k) SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2002 and 2001

 

4.

Nonparticipant-directed investments:

 

Information about the net assets and the significant components of the changes in net assets relating to nonparticipant-directed investments is as follows:

 

		December 31,
		2002			2001
Urban Outfitters, Inc. common stock		$	1,266,165		$	1,441,275

 

		Year ended December 31,
		2002				2001
Changes in net assets:
Net appreciation (depreciation)		$	(17,836	)		$	982,525
Benefits paid to participants			(148,146	)			(62,103	)
Transfer of pre July 1, 1999 forfeitures to other funds			(9,128	)			(28,881	)
		$	(175,110	)		$	891,541

 

5.

Excess contributions:

 

Contributions received from participants for 2002 and 2001 have been reduced by, and refundable contributions at December 31, 2002 and 2001 include, $99,213 refunded in March 2003 and $88,724 refunded in March 2002 to return excess deferral contributions to certain active participants in order to satisfy the relevant nondiscrimination provisions of the Plan.

 

6.

Plan termination:

 

Although they have not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts.

 

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URBAN OUTFITTERS 401(k) SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 2002 and 2001

 

7.

Tax status:

 

The Plan has not yet received a determination letter from the Internal Revenue Service stating that the plan, as designed, is in compliance with the applicable requirements of the Internal Revenue Code. However, the plan administrator and the Plan’s tax counsel believe that the plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

 

8.

Reconciliation of financial statements to Form 5500:

 

The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500:

 

 

		December 31,
		2002			2001
Net assets available for benefits per the financial statements		$	5,783,194		$	4,960,039
Amounts allocated for refundable contributions			99,213			88,724
Net assets available for benefits per Form 5500		$	5,882,407		$	5,048,763

 

The following is a reconciliation of participant contributions per the financial statements to Form 5500:

 

		Year ended December 31,
		2002			2001
Participant contributions per the financial statements		$	1,599,816		$	1,365,535
Add: Amounts allocated for refundable contributions at December 31			99,213			88,724
Participant contributions per Form 5500		$	1,699,029		$	1,454,259

 

Amounts reported as refundable contributions at December 31, 2001 in the amount of $88,724 are reflected as corrective distributions on the income and expense statement in the 2002 Form 5500.

 

Amounts allocated for refundable contributions to certain participants of the Plan were recorded as a liability of the Plan at December 31, 2002 and 2001, because they had not been paid as of those dates.

 

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Plan Name: Urban Outfitters 401(k) Savings Plan		Plan Number: 002
Plan Sponsor: Urban Outfitters, Inc.		EIN: 23-2003332

 

Schedule of Assets Held for Investment Purposes at End of Year December 31, 2002 Attachment for Schedule H, Line 4i
(a)		(b) Identity of issue, borrower, lessor, or similar party		(c) Description of investment including maturity date, rate of interest, collateral, par, or maturity value		(d) Cost		(e) Current value
***		Urban Outfitters, Inc.		Common stock		965,930		1,613,675
***		PNC Bank		Pooled American Century Ultra Fund		161,666		129,045
***		PNC Bank		Pooled American Century Income and Growth Fund		204,986		166,596
***		PNC Bank		Pooled American Century GNMA Fund		145,829		148,627
***		PNC Bank		Pooled American Century Equity Growth Fund		112,778		93,137
***		PNC Bank		Pooled Fidelity Advisor Government Investment Fund		160,061		167,219
***		PNC Bank		Pooled Janus Adviser Capital Appreciation Fund		521,476		461,732
***		PNC Bank		Pooled Janus Adviser Growth Fund		355,416		283,056
***		PNC Bank		Pooled Janus Adviser Growth and Income Fund		494,988		422,446
***		PNC Bank		Pooled Janus Adviser Worldwide Fund		397,551		322,077
***		PNC Bank		Pooled BlackRock Index Equity Class A Fund		278,770		232,337
***		PNC Bank		Pooled BlackRock Money Market Fund		1,581,008		1,581,008
***		PNC Bank		Pooled BlackRock Small Cap Growth Equity Class A Fund		102,960		87,604
		Participant loans		Prime + 1%		0		125,642

 

***

Party-in-interest

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other person(s) who administer(s) the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				URBAN OUTFITTERS 401(K) SAVINGS PLAN
Date: June 27, 2003				By:		/s/    STEPHEN A. FELDMAN
						Stephen A. Feldman Plan Administrator

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Exhibit Index

 

Exhibit 23.1		Consent of Independent Auditors
Exhibit 99.1		Certification of the President (Principal Executive Officer) of Urban Outfitters, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 regarding facts and circumstances relating to the Exchange Act filings.
Exhibit 99.2		Certification of the Chief Financial Officer (Principal Executive Officer) of Urban Outfitters, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 regarding facts and circumstances relating to the Exchange Act filings.

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT AUDITORS

 

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-84333) of Urban Outfitters, Inc. of our report dated May 23, 2003 relating to the financial statements and financial schedule of Urban Outfitters 401(k) Savings Plan, which appear in this Form 11-K.

 

Mantas, Ohliger, McGary & Quinn, P.C.

King of Prussia, Pennsylvania

June 27, 2003

Exhibit 99.1

 

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the Annual Report of the Urban Outfitters 401(k) Savings Plan (the “Plan”) on Form 11-K for the period ended December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard Hayne, President of Urban Outfitters, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that (1) the Form 11-K of the Plan for the fiscal year ended December 31, 2002 (the “Form 11-K”), fully complies with requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (2) the information contained in the Form 11-K fairly presents, in all material respects, the financial condition and results of operations of the Plan.

 

Date: June 27, 2003

 

 

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Additionally, a signed original of this certification required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 99.2

 

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the Annual Report of the Urban Outfitters 401(k) Savings Plan (the “Plan”) on Form 11-K for the period ended December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen A. Feldman, Chief Financial Officer of Urban Outfitters, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that (1) the Form 11-K of the Plan for the fiscal year ended December 31, 2002 (the “Form 11-K”), fully complies with requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (2) the information contained in the Form 11-K fairly presents, in all material respects, the financial condition and results of operations of the Plan.

 

Date: June 27, 2003

 

 

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Additionally, a signed original of this certification required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.