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: December 02, 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 December 4, 2014, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the third quarter ended November 1, 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 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
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: December 04, 2014 |
ZUMIEZ INC.
By: /s/ Richard M. Brooks |
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| Exhibit No. | Description |
| 99.1 | Press Release of Zumiez Inc. dated December 04, 2014 |
Third Quarter 2014 Sales Increased 11.6% to $213.3 Million; Third Quarter 2014 Diluted EPS Increased 38.5% to $0.54; November 2014 Comparable Sales Increased 6.3%
LYNNWOOD, WA -- (Marketwired - December 04, 2014) - Zumiez Inc. (NASDAQ: ZUMZ), a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the third quarter ended November 1, 2014.
Total net sales for the third quarter ended November 1, 2014 (13 weeks) increased 11.6% to $213.3 million from $191.1 million in the quarter ended November 2, 2013 (13 weeks). Comparable sales for the thirteen weeks ended November 1, 2014 increased 3.7% on top of a comparable sales increase of 1.5% for the thirteen weeks ended November 2, 2013. Net income in the third quarter of fiscal 2014 increased 32.6% to $15.7 million, or $0.54 per diluted share, compared to net income of $11.9 million, or $0.39 per diluted share, in the third quarter of the prior fiscal year. The results for fiscal 2014 include costs of approximately $0.6 million, or $0.02 per diluted share, for charges associated with the acquisition of Blue Tomato, and the results for fiscal 2013 include costs of $1.7 million for charges associated with the acquisition of Blue Tomato and $1.3 million for the conditional settlement of a previously disclosed California class action wage and hour lawsuit, or $0.07 per diluted share in total.
Total net sales for the nine months (39 weeks) ended November 1, 2014 increased 11.2% to $553.0 million from $497.5 million reported for the nine months (39 weeks) ended November 2, 2013. Comparable sales increased 3.0% for the thirty nine weeks ended November 1, 2014 on top of a comparable sales increase of 0.7% for the thirty nine weeks ended November 2, 2013.
Net income in the first nine months of fiscal 2014 increased 34.5% to $25.7 million, or $0.88 per diluted share, compared to net income for the first nine months of the prior fiscal year of $19.1 million, or $0.63 per diluted share. Results for the first nine months of fiscal 2014 include approximately $1.9 million, or $0.05 per diluted share, for charges associated with the acquisition of Blue Tomato. Results for the first nine months of fiscal 2013 include approximately $6.3 million, or $0.16 per diluted share, for charges associated with the acquisition of Blue Tomato and the conditional settlement of a California class action wage and hour lawsuit.
At November 1, 2014, the Company had cash and current marketable securities of $108.7 million compared to cash and current marketable securities of $94.2 million at November 2, 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 delivered double digit earnings growth in the third quarter driven by higher than expected sales along with lower than planned operating expenses. The merchandising, selling and marketing strategies we've implemented across our global platform are resonating with consumers and strengthening our brand position as a leading lifestyle retailer. We are optimistic about our growth prospects this holiday season and more importantly over the long-term."
November 2014 Sales
Total net sales for the four-week period ended November 29, 2014 increased 12.6% to $70.3 million, compared to $62.4 million for the four-week period ended November 30, 2013. The Company's comparable sales increased 6.3% for the four-week period ended November 29, 2014 on top of a comparable sales increase of 1.7% for the four-week period ended November 30, 2013.
Fiscal 2014 Fourth Quarter Outlook
The Company is introducing guidance for the three months ending January 31, 2015. Net sales are projected to be in the range $249 to $251 million resulting in net income per diluted share of approximately $0.69 to $0.72, 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 an anticipated comparable sales increase in the 3% to 4% range for the fourth 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 third quarter fiscal 2014 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (857) 244-7312 followed by the conference identification code of 49051764.
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 November 29, 2014 we operated 604 stores, included 552 in the United States, 35 in Canada, and 17 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 August 2, 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
-------------------------------------------------
November 1, November 2,
2014 % of Sales 2013 % of Sales
----------- ---------- ----------- ----------
Net sales $ 213,341 100.0% $ 191,145 100.0%
Cost of goods sold 135,481 63.5% 120,356 63.0%
----------- ---------- ----------- ----------
Gross profit 77,860 36.5% 70,789 37.0%
Selling, general and
administrative expenses 52,885 24.8% 50,111 26.2%
----------- ---------- ----------- ----------
Operating profit 24,975 11.7% 20,678 10.8%
Interest income, net 147 0.1% 171 0.1%
Other income (expense),
net (220) (0.1%) (587) (0.3%)
----------- ---------- ----------- ----------
Earnings before income
taxes 24,902 11.7% 20,262 10.6%
Provision for income
taxes 9,175 4.3% 8,402 4.4%
----------- ---------- ----------- ----------
Net income $ 15,727 7.4% $ 11,860 6.2%
=========== ========== =========== ==========
Basic earnings per share $ 0.54 $ 0.40
=========== ===========
Diluted earnings per
share $ 0.54 $ 0.39
=========== ===========
Weighted average shares
used in computation of
earnings per share:
Basic 28,857 29,895
Diluted 29,147 30,257
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended
-----------------------------------------------
November 1, November 2,
2014 % of Sales 2013 % of Sales
----------- ---------- ----------- ----------
Net sales $ 552,982 100.0% $ 497,499 100.0%
Cost of goods sold 363,677 65.8% 323,618 65.0%
----------- ---------- ----------- ----------
Gross profit 189,305 34.2% 173,881 35.0%
Selling, general and
administrative expenses 149,012 26.9% 141,339 28.5%
----------- ---------- ----------- ----------
Operating profit 40,293 7.3% 32,542 6.5%
Interest income, net 475 0.0% 544 0.1%
Other income (expense),
net 69 0.0% (907) (0.1%)
----------- ---------- ----------- ----------
Earnings before income
taxes 40,837 7.3% 32,179 6.5%
Provision for income taxes 15,158 2.7% 13,082 2.7%
----------- ---------- ----------- ----------
Net income $ 25,679 4.6% $ 19,097 3.8%
=========== ========== =========== ==========
Basic earnings per share $ 0.89 $ 0.64
=========== ===========
Diluted earnings per share $ 0.88 $ 0.63
=========== ===========
Weighted average shares
used in computation of
earnings per share:
Basic 28,832 29,806
Diluted 29,177 30,240
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
November 1, February 1, November 2,
2014 2014 2013
------------ ------------ ------------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 13,785 $ 19,634 $ 5,315
Marketable securities 94,902 97,521 88,861
Receivables 14,638 10,294 12,844
Inventories 133,411 87,182 126,687
Prepaid expenses and other 12,451 10,021 10,857
Deferred tax assets 6,828 5,194 5,464
------------ ------------ ------------
Total current assets 276,015 229,846 250,028
Fixed assets, net 140,364 127,343 129,285
Goodwill 60,551 64,195 64,191
Intangible assets, net 15,047 17,970 18,558
Long-term other assets 7,595 4,049 3,715
------------ ------------ ------------
Total long-term assets 223,557 213,557 215,749
Total assets $ 499,572 $ 443,403 $ 465,777
============ ============ ============
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 61,394 $ 18,343 $ 49,081
Accrued payroll and payroll taxes 10,131 10,581 8,198
Income taxes payable 3,762 4,696 3,768
Deferred rent and tenant allowances 7,176 6,478 5,760
Other liabilities 25,357 21,276 21,076
------------ ------------ ------------
Total current liabilities 107,820 61,374 87,883
Long-term deferred rent and tenant
allowances 43,264 37,658 41,809
Long-term deferred tax liabilities 1,622 4,649 2,984
Long-term debt and other liabilities 2,666 4,068 7,907
------------ ------------ ------------
Total long-term liabilities 47,552 46,375 52,700
------------ ------------ ------------
Total liabilities 155,372 107,749 140,583
------------ ------------ ------------
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; 29,225 shares
issued and outstanding at November
1, 2014, 29,619 shares issued and
outstanding at February 1, 2014,
30,282 shares issued and
outstanding at November 2, 2013 121,703 114,983 115,595
Accumulated other comprehensive
income (1,698) 4,710 5,131
Retained earnings 224,195 215,961 204,468
------------ ------------ ------------
Total shareholders' equity 344,200 335,654 325,194
------------ ------------ ------------
Total liabilities and
shareholders' equity $ 499,572 $ 443,403 $ 465,777
============ ============ ============
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
----------------------------
November 1, November 2,
2014 2013
------------- -------------
Cash flows from operating activities:
Net income $ 25,679 $ 19,097
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and accretion 21,556 19,517
Deferred taxes (4,735) (2,365)
Stock-based compensation expense 3,258 4,773
Excess tax benefit from stock-based
compensation (558) (1,154)
Other 431 1,228
Changes in operating assets and liabilities:
Receivables (4,259) (3,414)
Inventories (47,703) (49,206)
Prepaid expenses and other (5,990) (2,585)
Trade accounts payable 42,971 32,515
Accrued payroll and payroll taxes (377) (2,831)
Income taxes payable (1,087) (2,015)
Deferred rent and tenant allowances 6,355 5,856
Other liabilities (1,106) 2,247
------------- -------------
Net cash provided by operating activities 34,435 21,663
------------- -------------
Cash flows from investing activities:
Additions to fixed assets (28,972) (27,179)
Purchases of marketable securities and other
investments (74,398) (78,175)
Sales and maturities of marketable securities
and other investments 75,652 73,674
------------- -------------
Net cash used in investing activities (27,718) (31,680)
------------- -------------
Cash flows from financing activities:
Proceeds from revolving credit facilities 6,056 -
Payments on long-term debt and revolving
credit facilities (2,874) (233)
Repurchase of common stock (19,557) (4,310)
Proceeds from exercise of stock-based
compensation, net of withholding tax payments 3,411 1,308
Excess tax benefit from stock-based
compensation 558 1,154
------------- -------------
Net cash used in financing activities (12,406) (2,081)
------------- -------------
Effect of exchange rate changes on cash and
cash equivalents (160) (166)
Net increase in cash and cash equivalents (5,849) (12,264)
Cash and cash equivalents, beginning of
period 19,634 17,579
------------- -------------
Cash and cash equivalents, end of period $ 13,785 $ 5,315
============= =============
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes $ 20,931 $ 17,368
Accrual for purchases of fixed assets 5,046 5,514
Company Contact: Brian Leith Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1610 Investor Contact: ICR Brendon Frey (203) 682-8200