UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the |
Date of Report: September 04, 2014
(Date of earliest event reported)
Zumiez Inc.
(Exact name of registrant as specified in its charter)
WA
(State or other jurisdiction
of incorporation)
000-51300
(Commission File Number)
91-1040022
(IRS Employer
Identification Number)
4001 204th Street SW, Lynnwood, WA
(Address of principal executive offices)
98036
(Zip Code)
4255511500
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
- o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
- o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
- o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
- o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
- o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Item 2.02. Results of Operations and Financial Condition On September 4, 2014, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the second quarter ended August 2, 2014, a copy of which is attached hereto as Exhibit 99.1 and the contents of which are incorporated herein by this reference. In accordance with General Instruction B.2. of Form 8-K, the information contained in this report and the Press Release shall not be deemed "Filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: September 04, 2014 |
ZUMIEZ INC.
By: /s/ Richard M. Brooks |
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| Exhibit No. | Description |
| 99.1 | Press Release of Zumiez Inc. dated September 04, 2014 |
Second Quarter 2014 Sales Increased 11.9% to $176.7 Million; Second Quarter 2014 Diluted EPS Increased 62.5% to $0.26; August 2014 Comparable Sales Increased 2.0%
LYNNWOOD, WA -- (Marketwired - September 04, 2014) - Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the second quarter ended August 2, 2014.
Total net sales for the second quarter ended August 2, 2014 (13 weeks) increased 11.9% to $176.7 million from $157.9 million in the quarter ended August 3, 2013 (13 weeks). Comparable sales for the thirteen weeks ended August 2, 2014 increased 3.4% on top of a comparable sales increase of 0.9% for the thirteen weeks ended August 3, 2013. Net income in the second quarter of fiscal 2014 increased 57.3% to $7.5 million, or $0.26 per diluted share, compared to net income of $4.7 million, or $0.16 per diluted share, in the second quarter of the prior fiscal year. The results for fiscal 2014 include costs of approximately $0.6 million, or $0.01 per diluted share, for charges associated with the acquisition of Blue Tomato, and the results for fiscal 2013 include approximately $1.7 million, or $0.04 per diluted share, of Blue Tomato acquisition related costs.
Total net sales for the six months (26 weeks) ended August 2, 2014 increased 10.9% to $339.6 million from $306.4 million reported for the six months (26 weeks) ended August 3, 2013. Comparable sales increased 2.6% for the twenty six weeks ended August 2, 2014 on top of a comparable sales increase of 0.2% for the twenty six weeks ended August 3, 2013.
Net income in the first six months of fiscal 2014 increased 37.5% to $10.0 million, or $0.34 per diluted share, compared to net income for the first six months of the prior fiscal year of $7.2 million, or $0.24 per diluted share. Results for the first six months of fiscal 2014 include approximately $1.3 million, or $0.03 per diluted share, for charges associated with the acquisition of Blue Tomato. Results for the first six months of fiscal 2013 include approximately $3.4 million, or $0.09 per diluted share, of Blue Tomato acquisition related costs.
At August 2, 2014, the Company had cash and current marketable securities of $113.4 million compared to cash and current marketable securities of $95.0 million at August 3, 2013. The increase in cash and current marketable securities is a result of cash generated through operations, partially offset by capital expenditures and stock repurchases.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We are pleased with our second quarter performance. Our ability to connect consumers with our unique assortment of brands drove higher than expected sales which allowed us to better leverage our expense. Our organization continues to get smarter and more efficient at executing our global omni-channel strategy and we believe there is still runway for added improvement in the years ahead."
August 2014 Sales
Total net sales for the four-week period ended August 30, 2014 increased 9.4% to $94.0 million, compared to $85.9 million for the four-week period ended August 31, 2013. The Company's comparable sales increased 2.0% for the four-week period ended August 30, 2014 on top of a comparable sales increase of 3.0% for the four-week period ended August 31, 2013.
Fiscal 2014 Third Quarter Outlook
The Company is introducing guidance for the three months ending November 1, 2014. Net sales are projected to be in the range $207 to $211 million resulting in net income per diluted share of approximately $0.47 to $0.50, which includes an estimated $0.6 million, or approximately $0.02 per diluted share, for charges associated with the acquisition of Blue Tomato. This guidance is based on anticipated comparable sales increase in the low single digit range for the third quarter of fiscal 2014.
The Company currently intends to open 56 new stores in fiscal 2014, including 7 stores in Canada and 6 stores in Europe.
A conference call will be held today to discuss second quarter fiscal 2014 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (857) 244-7310 followed by the conference identification code of 92759066.
About Zumiez Inc.
Zumiez is a leading multi-channel specialty retailer of action sports related apparel, footwear, equipment and accessories, focusing on skateboarding, snowboarding, surfing, motocross and BMX for young men and women. As of August 30, 2014 we operated 592 stores, included 543 in the United States, 34 in Canada, and 15 in Europe. We operate under the name Zumiez and Blue Tomato. Additionally, we operate ecommerce web sites at www.zumiez.com and www.blue-tomato.com.
Safe Harbor Statement
Certain statements in this press release and oral statements relating thereto made from time to time by representatives of the Company may constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, predictions and guidance relating to the Company's future financial performance, brand and product category diversity, ability to adjust product mix, integration of acquired businesses, growing customer demand for our products and new store openings. In some cases, you can identify forward-looking statements by terminology such as, "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation, those described in the Company's quarterly report on Form 10-Q for the quarter ended May 3, 2014 as filed with the Securities and Exchange Commission and available at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
--------------------------------------
August 2, % of August 3, % of
2014 Sales 2013 Sales
--------- -------- --------- -------
Net sales $ 176,709 100.0% $ 157,858 100.0%
Cost of goods sold 115,797 65.5% 102,738 65.1%
--------- -------- --------- -------
Gross profit 60,912 34.5% 55,120 34.9%
Selling, general and administrative
expenses 49,307 27.9% 47,285 29.9%
--------- -------- --------- -------
Operating profit 11,605 6.6% 7,835 5.0%
Interest income, net 146 0.1% 158 0.1%
Other income (expense), net 203 0.1% (174) (0.1%)
--------- -------- --------- -------
Earnings before income taxes 11,954 6.8% 7,819 5.0%
Provision for income taxes 4,498 2.6% 3,080 2.0%
--------- -------- --------- -------
Net income $ 7,456 4.2% $ 4,739 3.0%
========= ======== ========= =======
Basic earnings per share $ 0.26 $ 0.16
========= =========
Diluted earnings per share $ 0.26 $ 0.16
========= =========
Weighted average shares used in
computation of earnings per share:
Basic 28,776 29,842
Diluted 29,057 30,232
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Six Months Ended
--------------------------------------
August 2, % of August 3, % of
2014 Sales 2013 Sales
--------- -------- --------- -------
Net sales $ 339,641 100.0% $ 306,354 100.0%
Cost of goods sold 228,196 67.2% 203,262 66.3%
--------- -------- --------- -------
Gross profit 111,445 32.8% 103,092 33.7%
Selling, general and administrative
expenses 96,127 28.3% 91,228 29.8%
--------- -------- --------- -------
Operating profit 15,318 4.5% 11,864 3.9%
Interest income, net 328 0.1% 373 0.1%
Other income (expense), net 289 0.1% (320) (0.1%)
--------- -------- --------- -------
Earnings before income taxes 15,935 4.7% 11,917 3.9%
Provision for income taxes 5,983 1.8% 4,680 1.5%
--------- -------- --------- -------
Net income $ 9,952 2.9% $ 7,237 2.4%
========= ======== ========= =======
Basic earnings per share $ 0.35 $ 0.24
========= =========
Diluted earnings per share $ 0.34 $ 0.24
========= =========
Weighted average shares used in
computation of earnings per share:
Basic 28,819 29,770
Diluted 29,182 30,221
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
August 2, February 1, August 3,
2014 2014 2013
----------- ----------- -----------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 22,037 $ 19,634 $ 19,098
Marketable securities 91,408 97,521 75,901
Receivables 16,611 10,294 15,597
Inventories 119,916 87,182 113,249
Prepaid expenses and other 12,365 10,021 11,474
Deferred tax assets 6,901 5,194 4,849
----------- ----------- -----------
Total current assets 269,238 229,846 240,168
Fixed assets, net 138,972 127,343 124,569
Goodwill 63,701 64,195 63,071
Intangible assets, net 16,630 17,970 18,727
Long-term other assets 7,515 4,049 4,428
----------- ----------- -----------
Total long-term assets 226,818 213,557 210,795
Total assets $ 496,056 $ 443,403 $ 450,963
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 66,636 $ 18,343 $ 53,596
Accrued payroll and payroll taxes 10,899 10,581 9,674
Income taxes payable 2,147 4,696 111
Deferred rent and tenant allowances 7,091 6,478 5,633
Other liabilities 26,247 21,276 20,546
----------- ----------- -----------
Total current liabilities 113,020 61,374 89,560
Long-term deferred rent and tenant
allowances 43,627 37,658 41,359
Long-term deferred tax liabilities 2,826 4,649 3,567
Long-term debt and other liabilities 3,977 4,068 7,062
----------- ----------- -----------
Total long-term liabilities 50,430 46,375 51,988
----------- ----------- -----------
Total liabilities 163,450 107,749 141,548
----------- ----------- -----------
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value, 20,000
shares authorized; none issued and
outstanding - - -
Common stock, no par value, 50,000
shares authorized; 29,204 shares issued
and outstanding at August 2, 2014,
29,619 shares issued and outstanding at
February 1, 2014, 30,251 shares issued
and outstanding at August 3, 2013 120,060 114,983 113,569
Accumulated other comprehensive income 4,078 4,710 3,238
Retained earnings 208,468 215,961 192,608
----------- ----------- -----------
Total shareholders' equity 332,606 335,654 309,415
----------- ----------- -----------
Total liabilities and shareholders'
equity $ 496,056 $ 443,403 $ 450,963
=========== =========== ===========
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
--------------------------
August 2, August 3,
2014 2013
------------ ------------
Cash flows from operating activities:
Net income $ 9,952 $ 7,237
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion 14,099 12,694
Deferred taxes (3,659) (1,384)
Stock-based compensation expense 2,106 3,165
Excess tax benefit from stock-based compensation (474) (1,168)
Other 251 282
Changes in operating assets and liabilities:
Receivables (5,641) (5,457)
Inventories (32,791) (36,064)
Prepaid expenses and other (5,685) (3,057)
Trade accounts payable 47,953 35,315
Accrued payroll and payroll taxes 320 (1,344)
Income taxes payable (3,255) (6,415)
Deferred rent and tenant allowances 6,523 5,263
Other liabilities 816 809
------------ ------------
Net cash provided by operating activities 30,515 9,876
------------ ------------
Cash flows from investing activities:
Additions to fixed assets (18,301) (14,505)
Purchases of marketable securities and other
investments (36,547) (38,991)
Sales and maturities of marketable securities
and other investments 41,762 47,760
------------ ------------
Net cash used in investing activities (13,086) (5,736)
------------ ------------
Cash flows from financing activities:
Proceeds from revolving credit facilities 2,044 -
Payments on long-term debt and revolving credit
facilities (1,040) (153)
Repurchase of common stock (19,557) (4,310)
Proceeds from exercise of stock-based
compensation, net of withholding tax payments 2,997 876
Excess tax benefit from stock-based compensation 474 1,168
------------ ------------
Net cash used in financing activities (15,082) (2,419)
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents 56 (202)
Net increase in cash and cash equivalents 2,403 1,519
Cash and cash equivalents, beginning of period 19,634 17,579
------------ ------------
Cash and cash equivalents, end of period $ 22,037 $ 19,098
============ ============
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes $ 12,840 $ 12,428
Accrual for purchases of fixed assets 6,929 7,514
Company Contact: Brian Leith Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1610 Investor Contact: ICR Brendon Frey (203) 682-8200