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: May 22, 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 May 22, 2014, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the first quarter ended May 3, 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: May 22, 2014 |
ZUMIEZ INC.
By: /s/ Richard M. Brooks |
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| Exhibit No. | Description |
| 99.1 | Press Release of Zumiez Inc. dated May 22, 2014 |
Company Reports First Quarter Diluted Earnings per Share of $0.09
LYNNWOOD, WA -- (Marketwired - May 22, 2014) - Zumiez Inc. (NASDAQ: ZUMZ), a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the first quarter ended May 3, 2014.
Total net sales for the first quarter ended May 3, 2014 (13 weeks) increased 9.7% to $162.9 million from $148.5 million in the first quarter ended May 4, 2013 (13 weeks). Comparable sales for the thirteen weeks ended May 3, 2014 increased 1.8% compared to a comparable store sales decrease of (0.7%) in the first quarter of 2013. Net income in the first quarter of fiscal 2014 was $2.5 million, or $0.09 per diluted share, compared to net income of $2.5 million, or $0.08 per diluted share, in the first 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 $0.05 per diluted share, for charges associated with the acquisition of Blue Tomato.
At May 3, 2014, the Company had cash and current marketable securities of $107.8 million compared to cash and current marketable securities of $97.6 million at May 4, 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, "Our merchandise and selling strategies helped deliver better than expected first quarter results, including positive comps, and continue to distinguish Zumiez as the leading global action sports lifestyle retailer. The investments we've made in our people and systems including expanding our digital capabilities are allowing us to better meet the needs of our North American and European customers and supporting full price selling in a challenging retail environment. We remain confident that our strategic course will continue to yield market share gains and improved profitability over the long-term."
Fiscal 2014 Second Quarter Outlook
The Company is introducing guidance for the three months ending August 2, 2014. Net sales are projected to be in the range of $167 to $171 million resulting in net income per diluted share of approximately $0.12 to $0.16, 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 store sales result in the range of a low single digit decrease to flat for the second quarter of fiscal 2014.
The Company currently intends to open approximately 55 new stores in fiscal 2014, including up to 7 stores in Canada and 5 stores in Europe.
A conference call will be held today to discuss first quarter fiscal 2014 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617) 614-4072 followed by the conference identification code of 17152136.
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 May 3, 2014 we operated 558 stores including 515 in the United States, 29 in Canada, and 14 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 annual report on Form 10-K for the year ended February 1, 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 OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
-----------------------------------
May 3, % of May 4, % of
2014 Sales 2013 Sales
--------- ------ --------- ------
Net sales $ 162,932 100.0% $ 148,496 100.0%
Cost of goods sold 112,399 69.0% 100,524 67.7%
--------- ------ --------- ------
Gross profit 50,533 31.0% 47,972 32.3%
Selling, general and administrative
expenses 46,820 28.7% 43,943 29.6%
--------- ------ --------- ------
Operating profit 3,713 2.3% 4,029 2.7%
Interest income, net 182 0.1% 215 0.1%
Other income (expense), net 86 0.0% (146) 0.0%
--------- ------ --------- ------
Earnings before income taxes 3,981 2.4% 4,098 2.8%
Provision for income taxes 1,485 0.9% 1,600 1.1%
--------- ------ --------- ------
Net income $ 2,496 1.5% $ 2,498 1.7%
========= ====== ========= ======
Basic earnings per share $ 0.09 $ 0.08
========= =========
Diluted earnings per share $ 0.09 $ 0.08
========= =========
Weighted average shares used in
computation of earnings per share:
Basic 28,861 29,714
Diluted 29,213 30,183
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
May 3, November 1, May 4,
2014 2014 2013
------------- ------------- -------------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 21,079 $ 19,634 $ 14,661
Marketable securities 86,682 97,521 82,986
Receivables 11,478 10,294 10,466
Inventories 97,608 87,182 90,870
Prepaid expenses and other 9,874 10,021 9,456
Deferred tax assets 6,163 5,194 4,104
------------- ------------- -------------
Total current assets 232,884 229,846 212,543
Fixed assets, net 131,577 127,343 117,826
Goodwill 65,432 64,195 62,539
Intangible assets, net 17,803 17,970 19,097
Long-term other assets 6,759 4,049 4,979
------------- ------------- -------------
Total long-term assets 221,571 213,557 204,441
Total assets $ 454,455 $ 443,403 $ 416,984
============= ============= =============
Liabilities and Shareholders'
Equity
Current liabilities
Trade accounts payable $ 42,989 $ 18,343 $ 36,210
Accrued payroll and payroll taxes 8,070 10,581 6,745
Income taxes payable 2,324 4,696 971
Deferred rent and tenant
allowances 6,574 6,478 5,252
Other liabilities 20,471 21,276 16,307
------------- ------------- -------------
Total current liabilities 80,428 61,374 65,485
Long-term deferred rent and tenant
allowances 41,995 37,658 38,863
Long-term deferred tax liabilities 3,871 4,649 5,074
Long-term debt and other
liabilities 4,022 4,068 6,321
------------- ------------- -------------
Total long-term liabilities 49,888 46,375 50,258
------------- ------------- -------------
Total liabilities 130,316 107,749 115,743
------------- ------------- -------------
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; 29,030 shares
issued and outstanding at May 3,
2014, 29,619 shares issued and
outstanding at February 1, 2014,
30,163 shares issued and
outstanding at May 4, 2013 116,111 114,983 110,784
Accumulated other comprehensive
income 7,011 4,710 2,588
Retained earnings 201,017 215,961 187,869
------------- ------------- -------------
Total shareholders' equity 324,139 335,654 301,241
------------- ------------- -------------
Total liabilities and
shareholders' equity $ 454,455 $ 443,403 $ 416,984
============= ============= =============
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
------------------------
May 3, 2014 May 4, 2013
----------- -----------
Cash flows from operating activities:
Net income $ 2,496 $ 2,498
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion 7,009 6,331
Deferred taxes (1,869) (260)
Stock-based compensation expense 948 1,513
Excess tax loss (benefit) from stock-based
compensation 62 (529)
Other (26) 114
Changes in operating assets and liabilities:
Receivables (1,115) (1,068)
Inventories (10,011) (13,685)
Prepaid expenses and other (2,480) (440)
Trade accounts payable 24,635 19,848
Accrued payroll and payroll taxes (2,543) (4,272)
Income taxes payable (2,448) (5,415)
Deferred rent and tenant allowances 4,374 2,324
Other liabilities (2,462) (2,557)
----------- -----------
Net cash provided by operating activities 16,570 4,402
----------- -----------
Cash flows from investing activities:
Additions to fixed assets (6,781) (6,374)
Purchases of marketable securities and other
investments (11,714) (15,137)
Sales and maturities of marketable securities and
other investments 22,100 17,315
----------- -----------
Net cash provided by (used in) investing
activities 3,605 (4,196)
----------- -----------
Cash flows from financing activities:
Proceeds from revolving credit facilities 634 -
Payments on long-term debt and revolving credit
facilities (81) (77)
Repurchase of common stock (19,553) (3,680)
Proceeds from exercise of stock-based
compensation, net of withholding tax payments 242 382
Excess tax (loss) benefit from stock-based
compensation (62) 529
----------- -----------
Net cash used in financing activities (18,820) (2,846)
----------- -----------
Effect of exchange rate changes on cash and cash
equivalents 90 (278)
Net increase (decrease) in cash and cash
equivalents 1,445 (2,918)
Cash and cash equivalents, beginning of period 19,634 17,579
----------- -----------
Cash and cash equivalents, end of period $ 21,079 $ 14,661
=========== ===========
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes $ 5,783 $ 7,266
Accrual for purchases of fixed assets 4,480 3,534
Company Contact: Brian Leith Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1610 Investor Contact: ICR Brendon Frey (203) 682-8200