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 04, 2013
(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 5, 2013, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the third quarter ended November 2, 2013, 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 8.01. Other Events
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 05, 2013 |
ZUMIEZ INC.
By: /s/ Richard M. Brooks |
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| Exhibit No. | Description |
| 99.1 | Press Release of Zumiez Inc. dated December 05, 2013 |
Company Reports November Sales; Announces New Share Repurchase Program
LYNNWOOD, WA -- (Marketwired - December 05, 2013) - 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 2, 2013.
Total net sales for the third quarter ended November 2, 2013 (13 weeks) increased 6.2% to $191.1 million from $180.0 million in the quarter ended October 27, 2012 (13 weeks). Comparable store sales for the thirteen weeks ended November 2, 2013 increased 1.5% on top of a comparable store sales increase of 3.7% for the thirteen weeks ended October 27, 2012. Net income in the third quarter of fiscal 2013 was $11.9 million, or $0.39 per diluted share, compared to net income of $12.7 million, or $0.40 per diluted share, in the third quarter of the prior fiscal year. 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. The results for fiscal 2012 include $4.0 million of Blue Tomato acquisition related costs and operations and $0.5 million of exit costs associated with the relocation of our corporate offices to Lynnwood, Washington, or $0.11 per diluted share in total.
Total net sales for the nine months (39 weeks) ended November 2, 2013 increased 11.8% to $497.5 million from $445.0 million reported for the nine months (39 weeks) ended October 27, 2012. Comparable store sales increased 0.7% for the thirty nine weeks ended November 2, 2013 on top of a comparable store sales increase of 8.0% for the thirty nine weeks ended October 27, 2012.
The Company reported net income of $19.1 million or $0.63 per diluted share in the first nine months of fiscal 2013 compared to net income for the first nine months of the prior fiscal year of $19.3 million or $0.61 per diluted share. 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. Results for the first nine months of fiscal 2012 included approximately $8.9 million, or $0.22 per diluted share, of Blue Tomato acquisition related costs and operations and costs associated with the relocation the Company's ecommerce fulfillment center to Edwardsville, Kansas and corporate offices to Lynnwood, Washington from Everett, Washington.
At November 2, 2013, the Company had cash and current marketable securities of $94.2 million compared to cash and current marketable securities of $98.3 million at October 27, 2012. The decrease in cash and current marketable securities is a result of capital expenditures and stock repurchases, offset by cash generated through operations.
Rick Brooks, the Company's Chief Executive Officer, stated, "The quarter began with a solid Back to School season, and while softer traffic trends returned, we were able to maintain a positive comparable store sales result for the quarter. We believe the investments in our people, merchandise assortment planning and omni-channel capabilities are helping to further distinguish our concept and enabling us to gain market share. We are committed to selling the most compelling mix of brands and products coveted by our customer in a unique, personalized and efficient manner across all channels, and we believe our business is well positioned for the upcoming holiday season and more importantly the long-term."
November 2013 Sales
Total net sales for the four-week period ended November 30, 2013 increased 16.3% to $62.4 million, compared to $53.6 million for the four-week period ended November 24, 2012. The Company's comparable store sales increased 1.7% for the four-week period ended November 30, 2013 compared to a comparable store sales decrease of 4.2% for the four-week period ended November 24, 2012.
Fiscal 2013 Fourth Quarter Outlook
The Company is introducing guidance for the three months ending February 1, 2014. Net sales are projected to be in the range of $230 to $237 million resulting in net income per diluted share of approximately $0.60 to $0.66, which includes an estimated $1.7 million, or approximately $0.05 per diluted share, for charges associated with the acquisition of Blue Tomato. This guidance is based on anticipated comparable store sales in the range of (1%) to 2% for the fourth quarter of fiscal 2013. The Company is planning to open 59 new stores in fiscal 2013, including 9 in Canada and 6 in Europe.
New Share Repurchase Program
The Company is also announcing that, effective December 4, 2013, the Board of Directors of Zumiez Inc. has approved the repurchase of up to $30 million of its Common Stock. The repurchases will be made from time to time on the open market at prevailing market prices and is expected to continue through the fiscal year 2014 that will end on January 31, 2015, unless the time period is extended or shortened by the Board of Directors. The new repurchase program supersedes the previously approved repurchase program approved on December 17, 2012, which as of December 4, 2013 had $12.5 million of stock repurchase authorization.
A conference call will be held today to discuss third quarter fiscal 2013 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617) 399-5124 followed by the conference identification code of 42688272.
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 30, 2013 we operated 551 stores including, 513 in the United States, 28 in Canada, and 10 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 3, 2013 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 2, % of October 27, % of
2013 Sales 2012 Sales
----------- ------ ----------- ------
Net sales $ 191,145 100.0% $ 180,023 100.0%
Cost of goods sold 120,356 63.0% 112,948 62.7%
----------- ------ ----------- ------
Gross profit 70,789 37.0% 67,075 37.3%
Selling, general and
administrative expenses 50,111 26.2% 45,674 25.4%
----------- ------ ----------- ------
Operating profit 20,678 10.8% 21,401 11.9%
Interest income, net 171 0.1% 235 0.1%
Other expense, net (587) (0.3%) (185) (0.1%)
----------- ------ ----------- ------
Earnings before income taxes 20,262 10.6% 21,451 11.9%
Provision for income taxes 8,402 4.4% 8,784 4.9%
----------- ------ ----------- ------
Net income $ 11,860 6.2% $ 12,667 7.0%
=========== ====== =========== ======
Basic earnings per share $ 0.40 $ 0.41
=========== ===========
Diluted earnings per share $ 0.39 $ 0.40
=========== ===========
Weighted average shares used in
computation of earnings per
share:
Basic 29,895 30,957
Diluted 30,257 31,416
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended
-------------------------------------------
November 2, % of October 27, % of
2013 Sales 2012 Sales
----------- ------- ------------ -------
Net sales $ 497,499 100.0% $ 444,988 100.0%
Cost of goods sold 323,618 65.0% 289,387 65.0%
----------- ------- ------------ -------
Gross profit 173,881 35.0% 155,601 35.0%
Selling, general and
administrative expenses 141,339 28.5% 123,160 27.7%
----------- ------- ------------ -------
Operating profit 32,542 6.5% 32,441 7.3%
Interest income, net 544 0.1% 1,152 0.2%
Other (expense) income, net (907) (0.1%) 443 0.1%
----------- ------- ------------ -------
Earnings before income taxes 32,179 6.5% 34,036 7.6%
Provision for income taxes 13,082 2.7% 14,756 3.3%
----------- ------- ------------ -------
Net income $ 19,097 3.8% $ 19,280 4.3%
=========== ======= ============ =======
Basic earnings per share $ 0.64 $ 0.62
=========== ============
Diluted earnings per share $ 0.63 $ 0.61
=========== ============
Weighted average shares used in
computation of earnings per
share:
Basic 29,806 30,884
Diluted 30,240 31,425
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
November 2, February 2, October 27,
2013 2013 2012
----------- ----------- -----------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 5,315 $ 17,579 $ 10,580
Marketable securities 88,861 85,593 87,751
Receivables 12,844 9,467 11,864
Inventories 126,687 77,598 109,786
Prepaid expenses and other 10,857 9,192 9,560
Deferred tax assets 5,464 3,885 4,881
----------- ----------- -----------
Total current assets 250,028 203,314 234,422
Fixed assets, net 129,285 115,474 116,547
Goodwill 64,191 64,576 61,926
Intangible assets, net 18,558 20,480 19,828
Long-term other assets 3,715 5,254 5,413
----------- ----------- -----------
Total long-term assets 215,749 205,784 203,714
Total assets $ 465,777 $ 409,098 $ 438,136
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 49,081 $ 16,052 $ 47,331
Accrued payroll and payroll taxes 8,198 11,057 9,996
Income taxes payable 3,768 6,957 7,354
Deferred rent and tenant allowances 5,760 4,901 4,797
Other liabilities 21,076 18,232 18,929
----------- ----------- -----------
Total current liabilities 87,883 57,199 88,407
Long-term deferred rent and tenant
allowances 41,809 36,928 37,190
Long-term deferred tax liabilities 2,984 5,544 5,407
Long-term debt and other liabilities 7,907 6,006 6,773
----------- ----------- -----------
Total long-term liabilities 52,700 48,478 49,370
----------- ----------- -----------
Total liabilities 140,583 105,677 137,777
----------- ----------- -----------
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; 30,282 shares issued
and outstanding at November 2, 2013,
30,114 shares issued and outstanding at
February 2, 2013 and 31,352 shares
issued and outstanding at October 27,
2012 115,595 108,360 106,509
Accumulated other comprehensive income 5,131 6,010 1,840
Retained earnings 204,468 189,051 192,010
----------- ----------- -----------
Total shareholders' equity 325,194 303,421 300,359
----------- ----------- -----------
Total liabilities and shareholders'
equity $ 465,777 $ 409,098 $ 438,136
=========== =========== ===========
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
--------------------------
November 2, October 27,
2013 2012
------------ ------------
Cash flows from operating activities:
Net income $ 19,097 $ 19,280
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion 19,517 16,661
Deferred taxes (2,365) (2,767)
Stock-based compensation expense 4,773 4,347
Excess tax benefit from stock-based compensation (1,154) (2,215)
Lease termination costs 193 1,404
Other 1,035 217
Changes in operating assets and liabilities:
Receivables (3,414) (5,007)
Inventories (49,206) (36,504)
Prepaid expenses and other (2,585) (1,506)
Trade accounts payable 32,515 25,578
Accrued payroll and payroll taxes (2,831) 183
Income taxes payable (2,015) 2,425
Deferred rent and tenant allowances 5,856 5,622
Other liabilities 2,247 468
------------ ------------
Net cash provided by operating activities 21,663 28,186
------------ ------------
Cash flows from investing activities:
Additions to fixed assets (27,179) (34,028)
Acquisitions, net of cash acquired - (69,685)
Purchases of marketable securities and other
investments (78,175) (95,268)
Sales and maturities of marketable securities
and other investments 73,674 164,231
------------ ------------
Net cash used in investing activities (31,680) (34,750)
------------ ------------
Cash flows from financing activities:
Payments on long-term debt (233) (183)
Repurchase of common stock (4,310) -
Proceeds from exercise of stock-based
compensation, net of withholding tax payments 1,308 534
Excess tax benefit from stock-based compensation 1,154 2,215
------------ ------------
Net cash (used in) provided by financing
activities (2,081) 2,566
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents (166) (201)
Net decrease in cash and cash equivalents (12,264) (4,199)
Cash and cash equivalents, beginning of period 17,579 14,779
------------ ------------
Cash and cash equivalents, end of period $ 5,315 $ 10,580
============ ============
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes $ 17,368 $ 15,077
Accrual for purchases of fixed assets 5,514 5,154
Company Contact: Brian Leith Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1610 Investor Contact: ICR Brendon Frey (203) 682-8200