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: March 10, 2016
(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 March 10, 2016, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the fourth quarter and fiscal year ended January 30, 2016, 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: March 10, 2016 |
ZUMIEZ INC.
By: /s/ Richard M. Brooks |
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| Exhibit No. | Description |
| 99.1 | Press Release of Zumiez Inc. dated March 10, 2016 |
LYNNWOOD, WA -- (Marketwired - March 10, 2016) - Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the fourth quarter and fiscal year ended January 30, 2016.
Total net sales for the fourth quarter ended January 30, 2016 (13 weeks) decreased 6.2% to $242.4 million from $258.6 million in the quarter ended January 31, 2015 (13 weeks). Comparable sales for the 13-week period ended January 30, 2016 decreased 9.5% compared to an 8.3% increase for the 13-week period ended January 31, 2015. Net income in the fourth quarter of fiscal 2015 decreased 24.9% to $13.1 million, or $0.50 per diluted share, from net income of $17.5 million, or $0.60 per diluted share, in the fourth quarter of the prior fiscal year. The results for fiscal 2015 include charges of $1.2 million, or approximately $0.03 per diluted share for exit costs associated with the shutdown of the Company's fulfillment facility in Edwardsville, Kansas. The results for fiscal 2014 include Blue Tomato acquisition charges of $6.9 million, or approximately $0.20 per diluted share, including $6.4 million for the accrual of contingent earn-out payments and $0.5 million for the amortization of intangible assets.
Total net sales for fiscal 2015 (52 weeks) decreased 0.9% to $804.2 million from $811.6 million in fiscal 2014 (52 weeks). Comparable sales for the 52-week period ended January 30, 2016 decreased 5.3% compared to a 4.6% increase for the 52-week period ended January 31, 2015. Net income in fiscal 2015 decreased 33.4% to $28.8 million, or $1.04 per diluted share compared to net income in the prior fiscal year of $43.2 million, or $1.47 per diluted share. Results for the fiscal year 2015 include approximately $1.5 million, or $0.04 per diluted share, for charges associated with the acquisition of Blue Tomato, and $1.2 million, or approximately $0.03 per diluted share for exit costs associated with the shutdown of the Company's fulfillment facility in Edwardsville, Kansas. Results for the fiscal year 2014 include $6.4 million, or approximately $0.19 per diluted share, for the accrual of contingent earn-out payments associated with the acquisition of Blue Tomato, and $2.3 million, or approximately $0.06 per diluted share, for the amortization of intangible assets.
Cash and Current Marketable Securities
At January 30, 2016, the Company had cash and current marketable securities of $75.6 million, compared to cash and current marketable securities of $154.6 million at January 31, 2015. The decrease in cash and current marketable securities is primarily a result of stock repurchases of $92.2 million and capital expenditures of $34.8 million, partially offset by cash generated through operations of $48.6 million.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "The retail environment in North America over the past several months remained challenging. While we are pleased that our fourth quarter operating results came in ahead of our initial expectations, we are disappointed with our recent performance, particularly the decline in comparable store sales. In addition to our continued efforts to improve our merchandise assortments, we are taking actions to better position our Company for sustained, profitable growth, including implementing a new fully integrated point-of-sale system and optimizing our supply chain. We believe these changes will create a more seamless brand experience across all channels and help drive long-term market share gains. At the same time, we are investing in expanding our European business where sales momentum is strong and our footprint is underpenetrated."
February 2016 Sales
Total net sales for the four-week period ended February 27, 2016 decreased 3.9% to $51.9 million, compared to $54.0 million for the four-week period ended February 28, 2015. The Company's comparable sales decreased 8.6% for the four-week period ended February 27, 2016 compared with a comparable sales increase of 6.9% for the four-week period ended February 28, 2015.
Fiscal 2016 First Quarter Outlook
The Company is introducing guidance for the three months ending April 30, 2016. Net sales are projected to be in the range of $172 to $175 million resulting in a net loss per diluted share of approximately -$0.07 to -$0.11. This guidance is based upon anticipated comparable sales decrease in the -5% to -7% range for the first quarter of fiscal 2016. The Company currently intends to open approximately 34 new stores in fiscal 2016, including up to 7 stores in Canada and 7 stores in Europe.
A conference call will be held today to discuss fourth quarter and fiscal 2015 year-end results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617) 399-3483 followed by the conference identification code of 22609060.
About Zumiez Inc.
Zumiez is a leading specialty retailer of apparel, footwear, accessories and hardgoods for young men and women who want to express their individuality through the fashion, music, art and culture of action sports, streetwear, and other unique lifestyles. As of February 27, 2016 we operated 657 stores, including 592 in the United States, 42 in Canada, and 23 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 October 31, 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.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
---------------------------------------------
January 30, % of January 31, % of
2016 Sales 2015 Sales
----------- -------- ----------- --------
Net sales $ 242,434 100.0% $ 258,569 100.0%
Cost of goods sold 158,177 65.2% 160,791 62.2%
----------- -------- ----------- --------
Gross profit 84,257 34.8% 97,778 37.8%
Selling, general and
administrative expenses 62,754 25.9% 66,500 25.7%
----------- -------- ----------- --------
Operating profit 21,503 8.9% 31,278 12.1%
Interest income, net 90 0.0% 162 0.1%
Other expense, net (606) (0.2%) (626) (0.3%)
----------- -------- ----------- --------
Earnings before income taxes 20,987 8.7% 30,814 11.9%
Provision for income taxes 7,838 3.2% 13,301 5.1%
----------- -------- ----------- --------
Net income $ 13,149 5.5% $ 17,513 6.8%
=========== ======== =========== ========
Basic earnings per share $ 0.50 $ 0.60
=========== ===========
Diluted earnings per share $ 0.50 $ 0.60
=========== ===========
Weighted average shares used
in computation of earnings
per share:
Basic 26,071 28,989
Diluted 26,200 29,295
ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Twelve Months Ended
---------------------------------------------
January 30, % of January 31, % of
2016 Sales 2015 Sales
----------- -------- ----------- --------
Net sales $ 804,183 100.0% $ 811,551 100.0%
Cost of goods sold 535,559 66.6% 524,468 64.6%
----------- -------- ----------- --------
Gross profit 268,624 33.4% 287,083 35.4%
Selling, general and
administrative expenses 222,459 27.7% 215,512 26.6%
----------- -------- ----------- --------
Operating profit 46,165 5.7% 71,571 8.8%
Interest income, net 529 0.1% 637 0.1%
Other expense, net (833) (0.1%) (557) (0.1%)
----------- -------- ----------- --------
Earnings before income taxes 45,861 5.7% 71,651 8.8%
Provision for income taxes 17,076 2.1% 28,459 3.5%
----------- -------- ----------- --------
Net income $ 28,785 3.6% $ 43,192 5.3%
=========== ======== =========== ========
Basic earnings per share $ 1.05 $ 1.50
=========== ===========
Diluted earnings per share $ 1.04 $ 1.47
=========== ===========
Weighted average shares used
in computation of earnings
per share:
Basic 27,497 28,871
Diluted 27,673 29,288
ZUMIEZ INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
January 30, January 31,
2016 2015
------------- -------------
Assets
Current assets
Cash and cash equivalents $ 43,163 $ 20,862
Marketable securities 32,391 133,782
Receivables 12,840 12,653
Inventories 98,299 93,850
Prepaid expenses and other 12,204 11,651
------------- -------------
Total current assets 198,897 272,798
Fixed assets, net 137,233 135,642
Goodwill 54,245 55,852
Intangible assets, net 11,766 13,062
Deferred tax asset 4,634 7,734
Other long-term assets 7,920 8,617
------------- -------------
Total long-term assets 215,798 220,907
Total assets $ 414,695 $ 493,705
============= =============
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 21,919 $ 32,094
Accrued payroll and payroll taxes 12,466 13,047
Income taxes payable 4,066 4,651
Deferred rent and tenant allowances 8,116 7,083
Other liabilities 22,575 24,572
------------- -------------
Total current liabilities 69,142 81,447
Long-term deferred rent and tenant allowances 43,779 42,553
Deferred tax liabilities - 5,738
Other long-term liabilities 4,817 4,443
------------- -------------
Total long-term liabilities 48,596 52,734
------------- -------------
Total liabilities 117,738 134,181
------------- -------------
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; 25,708 shares issued and
outstanding at January 30, 2016 and 29,418
shares issued and outstanding at January 31,
2015 135,013 129,094
Accumulated other comprehensive loss (15,247) (11,278)
Retained earnings 177,191 241,708
------------- -------------
Total shareholders' equity 296,957 359,524
------------- -------------
Total liabilities and shareholders' equity $ 414,695 $ 493,705
============= =============
ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Twelve Months Ended
----------------------------
January 30, January 31,
2016 2015
------------- -------------
Cash flows from operating activities:
Net income $ 28,785 $ 43,192
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and accretion 30,410 29,167
Deferred taxes (2,698) (610)
Stock-based compensation expense 4,996 7,520
Excess tax benefit from stock-based
compensation (714) (1,355)
Other 4,009 1,109
Changes in operating assets and liabilities:
Receivables (1,184) (2,990)
Inventories (5,953) (10,850)
Prepaid expenses and other (133) (4,702)
Trade accounts payable (9,103) 14,744
Accrued payroll and payroll taxes (483) 2,718
Income taxes payable 1 (23)
Deferred rent and tenant allowances 2,613 5,937
Other liabilities (1,939) 6,080
------------- -------------
Net cash provided by operating activities 48,607 89,937
------------- -------------
Cash flows from investing activities:
Additions to fixed assets (34,834) (35,758)
Purchases of marketable securities and other
investments (59,286) (125,971)
Sales and maturities of marketable securities
and other investments 158,850 87,856
------------- -------------
Net cash provided by (used in) investing
activities 64,730 (73,873)
------------- -------------
Cash flows from financing activities:
Proceeds from long-term debt and revolving
credit facilities 43,173 6,943
Payments on long-term debt and revolving
credit facilities (43,255) (9,009)
Repurchase of common stock (92,235) (19,557)
Proceeds from exercise of stock-based awards,
net of withholding tax 845 6,335
Excess tax benefit from stock-based
compensation 714 1,355
------------- -------------
Net cash used in financing activities (90,758) (13,933)
------------- -------------
Effect of exchange rate changes on cash and
cash equivalents (278) (903)
Net increase in cash and cash equivalents 22,301 1,228
Cash and cash equivalents, beginning of
period 20,862 19,634
------------- -------------
Cash and cash equivalents, end of period $ 43,163 $ 20,862
============= =============
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes $ 19,630 $ 28,770
Accrual for purchases of fixed assets 1,166 2,372
Accrual for repurchase of common stock 1,067 -
Company Contact: Darin White Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1337 Investor Contact: ICR Brendon Frey (203) 682-8200