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 08, 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 September 8, 2016, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the second quarter ended July 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: September 08, 2016 |
ZUMIEZ INC.
By: /s/ Richard M. Brooks |
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| Exhibit No. | Description |
| 99.1 | Press Release of Zumiez Inc. dated September 08, 2016 |
LYNNWOOD, WA -- (Marketwired - September 08, 2016) - Zumiez Inc. (NASDAQ: ZUMZ), a leading lifestyle retailer of apparel, footwear, equipment and accessories, today reported results for the second quarter ended July 30, 2016.
Total net sales for the second quarter ended July 30, 2016 (13 weeks) decreased 0.9% to $178.3 million from $179.8 million in the quarter ended August 1, 2015 (13 weeks). Comparable sales for the thirteen weeks ended July 30, 2016 decreased 4.9% compared to a comparable sales decrease of 4.5% for the thirteen weeks ended August 1, 2015. Net loss for the second quarter of fiscal 2016 was $0.8 million, or $0.03 per diluted share, compared to net income of $3.2 million, or $0.11 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.
Total net sales for the six months (26 weeks) ended July 30, 2016 decreased 1.7% to $351.2 million from $357.4 million reported for the six months (26 weeks) ended August 1, 2015. Comparable sales decreased 6.2% for the twenty-six weeks ended July 30, 2016 compared to a comparable sales decrease of 0.9% for the twenty-six weeks ended August 1, 2015. Net loss for the first six months of fiscal 2016 was $3.0 million, or $0.12 per diluted share, compared to net income for the first six months of the prior fiscal year of $6.0 million, or $0.21 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.
At July 30, 2016, the Company had cash and current marketable securities of $52.3 million compared to cash and current marketable securities of $80.8 million at August 1, 2015. 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 continue to navigate through the current retail environment with a balanced approach to executing our strategic growth objectives and protecting near-term profitability in the face of challenging consumer demand. While our monthly comparable sales improved as the quarter progressed led by solid gains in our men's category, our overall business continues to underperform versus our long-term expectations. Therefore, we continue to manage our expense structure to better align with current trends, which is what allowed us to exceed our bottom line guidance for the quarter. We are confident that we are making the right decisions that will allow us to best serve our customers and expand our global market share while delivering sustained growth and increased shareholder value well into the future."
Zumiez is also pleased to announce that on August 31, 2016, we acquired 100% of the outstanding stock of Fast Times Skateboarding ("Fast Times") for $6.9 million consisting of $5.5 million in cash and $1.4 million in shares of common stock subject to certain pre-closing and post-closing adjustments. Founded in 2008, Fast Times is an Australian specialty retailer of skateboards, hardware, apparel and footwear and currently operates 5 stores and a website at www.fasttimes.com.au. Rick Brooks, Chief Executive Officer of Zumiez, added, "Fast Times is an important component of the Zumiez global retail network and joins our existing operations in the United States, Canada, and Europe. Our intent is to help the Fast Times team grow their operations across Australia leveraging our proven skills in profitably scaling culture and brand. We are all excited about the opportunity and about having a proven local Australian team to lead the way." Andrew Tebb, one of the co-founders and the General Manager of Fast Times, stated, "We are very excited to be partnering with Zumiez and believe that we have found the right team to help us grow in the Australian marketplace and beyond." Fast Times will continue to operate under the Fast Times name and be headquartered in Melbourne, Australia.
August 2016 Sales
Total net sales for the four-week period ended August 27, 2016 increased 2.6% to $89.5 million, compared to $87.3 million for the four-week period ended August 29, 2015. The Company's comparable sales decreased 1.1% for the four-week period ended August 27, 2016 compared to a comparable sales decrease of 10.7% for the four-week period ended August 29, 2015.
Fiscal 2016 Third Quarter Outlook
The Company is introducing guidance for the three months ending October 29, 2016. Net sales are projected to be in the range of $209 to $213 million resulting in net income per diluted share of approximately $0.21 to $0.26. This guidance is based upon an anticipated comparable sales range of negative 2% to 0% for the third quarter of fiscal 2016. The Company currently intends to open approximately 29 new stores in fiscal 2016, including up to 6 stores in Canada and 7 stores in Europe.
A conference call will be held today to discuss second quarter fiscal 2016 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (574) 990-9934 followed by the conference identification code of 66794557.
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 August 27, 2016 we operated 674 stores, including 605 in the United States, 44 in Canada, and 25 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 April 30, 2016 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
-------------------------------------------------
July 30, August 1,
2016 % of Sales 2015 % of Sales
----------- ---------- ----------- ----------
Net sales $ 178,272 100.0% $ 179,819 100.0%
Cost of goods sold 123,428 69.2% 122,046 67.9%
----------- ---------- ----------- ----------
Gross profit 54,844 30.8% 57,773 32.1%
Selling, general and
administrative expenses 55,980 31.5% 52,461 29.2%
----------- ---------- ----------- ----------
Operating (loss) profit (1,136) (0.7%) 5,312 2.9%
Interest income, net 28 0.0% 150 0.1%
Other expense, net (256) (0.1%) (271) (0.2%)
----------- ---------- ----------- ----------
(Loss) earnings before
income taxes (1,364) (0.8%) 5,191 2.8%
(Benefit) provision for
income taxes (526) (0.3%) 1,978 1.1%
----------- ---------- ----------- ----------
Net (loss) income $ (838) (0.5%) $ 3,213 1.7%
=========== ========== =========== ==========
Basic (loss) earnings
per share $ (0.03) $ 0.11
=========== ===========
Diluted (loss) earnings
per share $ (0.03) $ 0.11
=========== ===========
Weighted average shares
used in computation of
(loss) earnings per
share:
Basic 24,712 28,311
Diluted 24,712 28,439
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Six Months Ended
-------------------------------------------------
July 30, August 1,
2016 % of Sales 2015 % of Sales
----------- ---------- ----------- ----------
Net sales $ 351,243 100.0% $ 357,429 100.0%
Cost of goods sold 246,440 70.2% 243,121 68.0%
----------- ---------- ----------- ----------
Gross profit 104,803 29.8% 114,308 32.0%
Selling, general and
administrative expenses 109,879 31.2% 104,870 29.3%
----------- ---------- ----------- ----------
Operating (loss) profit (5,076) (1.4%) 9,438 2.7%
Interest income, net 59 0.0% 355 0.1%
Other income (expense),
net 242 0.1% (156) 0.0%
----------- ---------- ----------- ----------
(Loss) earnings before
income taxes (4,775) (1.3%) 9,637 2.8%
(Benefit) provision for
income taxes (1,800) (0.5%) 3,654 1.0%
----------- ---------- ----------- ----------
Net (loss) income $ (2,975) (0.8%) $ 5,983 1.8%
=========== ========== =========== ==========
Basic (loss) earnings per
share $ (0.12) $ 0.21
=========== ===========
Diluted (loss) earnings
per share $ (0.12) $ 0.21
=========== ===========
Weighted average shares
used in computation of
(loss) earnings per
share:
Basic 24,957 28,726
Diluted 24,957 28,932
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 30, January 30, August 1,
2016 2016 2015
----------- ----------- -----------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 19,600 $ 43,163 $ 22,166
Marketable securities 32,740 32,391 58,624
Receivables 14,576 12,840 15,656
Inventories 131,823 98,299 122,140
Prepaid expenses and other current
assets 13,990 12,204 13,189
----------- ----------- -----------
Total current assets 212,729 198,897 231,775
Fixed assets, net 136,505 137,233 141,994
Goodwill 55,082 54,245 54,547
Intangible assets, net 12,005 11,766 11,863
Deferred tax assets, net 8,332 4,634 4,713
Other long-term assets 7,908 7,920 8,124
----------- ----------- -----------
Total long-term assets 219,832 215,798 221,241
Total assets $ 432,561 $ 414,695 $ 453,016
=========== =========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 60,044 $ 21,919 $ 46,715
Accrued payroll and payroll taxes 12,754 12,466 11,391
Income taxes payable 507 4,066 1,192
Deferred rent and tenant allowances 8,384 8,116 7,796
Other liabilities 22,089 22,575 31,577
----------- ----------- -----------
Total current liabilities 103,778 69,142 98,671
Long-term deferred rent and tenant
allowances 43,721 43,779 44,704
Other long-term liabilities 4,815 4,817 4,523
----------- ----------- -----------
Total long-term liabilities 48,536 48,596 49,227
----------- ----------- -----------
Total liabilities 152,314 117,738 147,898
----------- ----------- -----------
Shareholders' equity
Preferred stock, no par value, 20,000
shares authorized; none issued and
outstanding - - -
Common stock, no par value, 50,000
shares authorized; 24,931 shares
issued and outstanding at July 30,
2016, 25,708 shares issued and
outstanding at January 30, 2016 and
and 27,377 shares issued and
outstanding at August 1, 2015 137,102 135,013 132,379
Accumulated other comprehensive loss (12,802) (15,247) (14,002)
Retained earnings 155,947 177,191 186,741
----------- ----------- -----------
Total shareholders' equity 280,247 296,957 305,118
----------- ----------- -----------
Total liabilities and shareholders'
equity $ 432,561 $ 414,695 $ 453,016
=========== =========== ===========
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unadited)
Six Months Ended
------------------------
July 30, August 1,
2016 2015
----------- -----------
Cash flows from operating activities:
Net (loss) income $ (2,975) $ 5,983
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation, amortization and accretion 14,336 15,644
Deferred taxes (3,713) (2,703)
Stock-based compensation expense 2,221 2,710
Excess tax benefit from stock-based compensation - (713)
Other 95 626
Changes in operating assets and liabilities:
Receivables (842) (3,377)
Inventories (32,766) (28,990)
Prepaid expenses and other current assets (2,690) (1,306)
Trade accounts payable 38,181 15,684
Accrued payroll and payroll taxes 225 (1,613)
Income taxes payable (4,804) (2,996)
Deferred rent and tenant allowances (12) 2,976
Other liabilities (813) (948)
----------- -----------
Net cash provided by operating activities 6,443 977
----------- -----------
Cash flows from investing activities:
Additions to fixed assets (11,895) (20,021)
Purchases of marketable securities and other
investments (28,353) (38,238)
Sales and maturities of marketable securities and
other investments 28,658 112,093
----------- -----------
Net cash (used in) provided by investing
activities (11,590) 53,834
----------- -----------
Cash flows from financing activities:
Proceeds from revolving credit facilities - 20,223
Payments on revolving credit facilities - (15,617)
Repurchase of common stock (19,084) (58,969)
Proceeds from exercise of stock-based awards, net
of withholding tax 397 379
Excess tax benefit from stock-based compensation - 713
----------- -----------
Net cash used in financing activities (18,687) (53,271)
----------- -----------
Effect of exchange rate changes on cash and cash
equivalents 271 (236)
Net (decrease) increase in cash and cash
equivalents (23,563) 1,304
Cash and cash equivalents, beginning of period 43,163 20,862
----------- -----------
Cash and cash equivalents, end of period $ 19,600 $ 22,166
=========== ===========
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes $ 6,736 $ 14,581
Accrual for purchases of fixed assets 1,835 3,107
Accrual for repurchase of common stock 254 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