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 10, 2015
(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)
|
Item 2.02. Results of Operations and Financial Condition On September 10, 2015, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the second quarter ended August 1, 2015, 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.
|
|
Dated: September 10, 2015 |
ZUMIEZ INC.
By: /s/ Richard M. Brooks |
|
|
|
| Exhibit No. | Description |
| 99.1 | Press Release of Zumiez Inc. dated September 10, 2015 |
LYNNWOOD, WA -- (Marketwired - September 10, 2015) - Zumiez Inc. (NASDAQ: ZUMZ) a leading lifestyle retailer of apparel, footwear, equipment and accessories, today reported results for the second quarter ended August 1, 2015.
Total net sales for the second quarter ended August 1, 2015 (13 weeks) increased 1.8% to $179.8 million from $176.7 million in the quarter ended August 2, 2014 (13 weeks). This comparison includes the negative impact of foreign currency translation in the quarter of approximately $4.4 million. Comparable sales for the thirteen weeks ended August 1, 2015 decreased 4.5% compared to a comparable sales increase of 3.4% for the thirteen weeks ended August 2, 2014. Net income in the second quarter of fiscal 2015 decreased 56.9% to $3.2 million, or $0.11 per diluted share, compared to net income of $7.5 million, or $0.26 per diluted share, in the second quarter of the prior fiscal year. The results for fiscal 2015 include costs of approximately $0.4 million, or $0.01 per diluted share, for charges associated with the acquisition of Blue Tomato, and the results for fiscal 2014 include approximately $0.6 million, or $0.01 per diluted share, of Blue Tomato acquisition related costs.
Total net sales for the six months (26 weeks) ended August 1, 2015 increased 5.2% to $357.4 million from $339.6 million reported for the six months (26 weeks) ended August 2, 2014. This comparison includes the negative impact of foreign currency translation for the 26 week period of approximately $9.5 million. Comparable sales decreased 0.9% for the twenty six weeks ended August 1, 2015 compared to a comparable sales increase of 2.6% for the twenty six weeks ended August 2, 2014.
Net income in the first six months of fiscal 2015 decreased 39.9% to $6.0 million, or $0.21 per diluted share, compared to net income for the first six months of the prior fiscal year of $10.0 million, or $0.34 per diluted share. Results for the first six months of fiscal 2015 include approximately $1.5 million, or $0.04 per diluted share, for charges associated with the acquisition of Blue Tomato. Results for the first six months of fiscal 2014 include approximately $1.3 million, or $0.03 per diluted share, of Blue Tomato acquisition related costs.
At August 1, 2015, the Company had cash and current marketable securities of $80.8 million compared to cash and current marketable securities of $113.4 million at August 2, 2014. The decrease in cash and current marketable securities is a result of stock repurchases and capital expenditures, partially offset by cash generated through operations.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We remain confident that our strategic course continues to provide us with compelling opportunities to grow our business and return greater value to our shareholders over the long-term. That said we are disappointed in our recent performance which reflects a slowdown in domestic sales. The response to our merchandise offering fell short of expectations, requiring us to become more promotional than planned to clear slow moving inventory ahead of the back-to-school selling season. We are working hard to quickly address the lack of trend right fashion in our U.S. channels. On a more positive note, the momentum in our European business continues to be strong, reinforcing our confidence in the long-term prospects of this market."
August 2015 Sales
Total net sales for the four-week period ended August 29, 2015 decreased 7.2% to $87.3 million, compared to $94.0 million for the four-week period ended August 30, 2014. The Company's comparable sales decreased 10.7% for the four-week period ended August 29, 2015 compared to a comparable sales increase of 2.0% for the four-week period ended August 30, 2014.
Fiscal 2015 Third Quarter Outlook
The Company is introducing guidance for the three months ending October 31, 2015. Net sales are projected to be in the range of $202 to $206 million resulting in net income per diluted share of approximately $0.27 to $0.31. This guidance is based on an anticipated comparable sales decrease in the 7% to 9% range for the third quarter of fiscal 2015. The Company currently intends to open approximately 57 new stores in fiscal 2015, including up to 7 stores in Canada and 6 stores in Europe.
A conference call will be held today to discuss second quarter fiscal 2015 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (857) 244-7309 followed by the conference identification code of 75724382.
About Zumiez Inc.
Zumiez is a leading lifestyle retailer of apparel, footwear, equipment and accessories, focusing on skateboarding, snowboarding, surfing, motocross and BMX for young men and women. As of August 1, 2015 we operated 640 stores, included 578 in the United States, 40 in Canada, and 22 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 2, 2015 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 1, % of August 2, % of
2015 Sales 2014 Sales
----------- ------ ----------- ------
Net sales $ 179,819 100.0% $ 176,709 100.0%
Cost of goods sold 122,046 67.9% 115,797 65.5%
----------- ------ ----------- ------
Gross profit 57,773 32.1% 60,912 34.5%
Selling, general and
administrative expenses 52,461 29.2% 49,307 27.9%
----------- ------ ----------- ------
Operating profit 5,312 2.9% 11,605 6.6%
Interest income, net 150 0.1% 146 0.1%
Other income (expense), net (271) (0.2%) 203 0.1%
----------- ------ ----------- ------
Earnings before income taxes 5,191 2.8% 11,954 6.8%
Provision for income taxes 1,978 1.1% 4,498 2.6%
----------- ------ ----------- ------
Net income $ 3,213 1.7% $ 7,456 4.2%
=========== ====== =========== ======
Basic earnings per share $ 0.11 $ 0.26
=========== ===========
Diluted earnings per share $ 0.11 $ 0.26
=========== ===========
Weighted average shares used in
computation of earnings per
share:
Basic 28,311 28,776
Diluted 28,439 29,057
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Six Months Ended
---------------------------------------
August 1, % of August 2, % of
2015 Sales 2014 Sales
----------- ------ ----------- ------
Net sales $ 357,429 100.0% $ 339,641 100.0%
Cost of goods sold 243,121 68.0% 228,196 67.2%
----------- ------ ----------- ------
Gross profit 114,308 32.0% 111,445 32.8%
Selling, general and administrative
expenses 104,870 29.3% 96,127 28.3%
----------- ------ ----------- ------
Operating profit 9,438 2.7% 15,318 4.5%
Interest income, net 355 0.1% 328 0.1%
Other income (expense), net (156) 0.0% 289 0.1%
----------- ------ ----------- ------
Earnings before income taxes 9,637 2.8% 15,935 4.7%
Provision for income taxes 3,654 1.0% 5,983 1.8%
----------- ------ ----------- ------
Net income $ 5,983 1.8% $ 9,952 2.9%
=========== ====== =========== ======
Basic earnings per share $ 0.21 $ 0.35
=========== ===========
Diluted earnings per share $ 0.21 $ 0.34
=========== ===========
Weighted average shares used in
computation of earnings per share:
Basic 28,726 28,819
Diluted 28,932 29,182
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
August 1, January 31, August 2,
2015 2015 2014
----------- ----------- -----------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 22,166 $ 20,862 $ 22,037
Marketable securities 58,624 133,782 91,408
Receivables 15,656 12,653 16,611
Inventories 122,140 93,850 119,916
Prepaid expenses and other 13,189 11,651 12,365
Deferred tax assets 8,210 6,965 6,901
----------- ----------- -----------
Total current assets 239,985 279,763 269,238
Fixed assets, net 141,994 135,642 138,972
Goodwill 54,547 55,852 63,701
Intangible assets, net 11,863 13,062 16,630
Long-term other assets 8,966 9,386 7,515
----------- ----------- -----------
Total long-term assets 217,370 213,942 226,818
Total assets $ 457,355 $ 493,705 $ 496,056
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 46,715 $ 32,094 $ 66,636
Accrued payroll and payroll taxes 11,391 13,047 10,899
Income taxes payable 1,192 4,651 2,147
Deferred rent and tenant allowances 7,796 7,083 7,091
Other liabilities 31,577 24,572 26,247
----------- ----------- -----------
Total current liabilities 98,671 81,447 113,020
Long-term deferred rent and tenant
allowances 44,704 42,553 43,627
Long-term deferred tax liabilities 4,339 5,738 2,826
Long-term debt and other liabilities 4,523 4,443 3,977
----------- ----------- -----------
Total long-term liabilities 53,566 52,734 50,430
----------- ----------- -----------
Total liabilities 152,237 134,181 163,450
----------- ----------- -----------
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; 27,377 shares
issued and outstanding at August 1,
2015, 29,418 shares issued and
outstanding at January 31, 2015, and
29,204 shares issued and outstanding
at August 2, 2014 132,379 129,094 120,060
Accumulated other comprehensive income (14,002) (11,278) 4,078
Retained earnings 186,741 241,708 208,468
----------- ----------- -----------
Total shareholders' equity 305,118 359,524 332,606
----------- ----------- -----------
Total liabilities and shareholders'
equity $ 457,355 $ 493,705 $ 496,056
=========== =========== ===========
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
------------------------
August 1, August 2,
2015 2014
----------- -----------
Cash flows from operating activities:
Net income $ 5,983 $ 9,952
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion 15,644 14,099
Deferred taxes (2,703) (3,659)
Stock-based compensation expense 2,710 2,106
Excess tax benefit from stock-based compensation (713) (474)
Other 626 251
Changes in operating assets and liabilities:
Receivables (3,377) (5,641)
Inventories (28,990) (32,791)
Prepaid expenses and other (1,306) (5,685)
Trade accounts payable 15,684 47,953
Accrued payroll and payroll taxes (1,613) 320
Income taxes payable (2,996) (3,255)
Deferred rent and tenant allowances 2,976 6,523
Other liabilities (948) 816
----------- -----------
Net cash provided by operating activities 977 30,515
----------- -----------
Cash flows from investing activities:
Additions to fixed assets (20,021) (18,301)
Purchases of marketable securities and other
investments (38,238) (36,547)
Sales and maturities of marketable securities and
other investments 112,093 41,762
----------- -----------
Net cash provided by (used in) investing
activities 53,834 (13,086)
----------- -----------
Cash flows from financing activities:
Proceeds from revolving credit facilities 20,223 2,044
Payments on long-term debt and revolving credit
facilities (15,617) (1,040)
Repurchase of common stock (58,969) (19,557)
Proceeds from exercise of stock-based
compensation, net of withholding tax payments 379 2,997
Excess tax benefit from stock-based compensation 713 474
----------- -----------
Net cash used in financing activities (53,271) (15,082)
----------- -----------
Effect of exchange rate changes on cash and cash
equivalents (236) 56
Net increase in cash and cash equivalents 1,304 2,403
Cash and cash equivalents, beginning of period 20,862 19,634
----------- -----------
Cash and cash equivalents, end of period $ 22,166 $ 22,037
=========== ===========
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes,
net of refunds $ 14,581 $ 12,840
Accrual for purchases of fixed assets 3,107 6,929
Accrual for repurchase of common stock 1,981 -
Company Contact: Darin White Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1337 Investor Contact: ICR Brendon Frey (203) 682-8200