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 01, 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 December 1, 2016, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the third quarter ended October 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: December 01, 2016 |
ZUMIEZ INC.
By: /s/ Richard M. Brooks |
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| Exhibit No. | Description |
| 99.1 | Press Release of Zumiez Inc. dated December 01, 2016 |
Third Quarter Earnings Per Share Increase to $0.43; November Comparable Sales Increase 5.7%
LYNNWOOD, WA -- (Marketwired - December 01, 2016) - Zumiez Inc. (NASDAQ: ZUMZ), a leading lifestyle retailer of apparel, footwear, equipment and accessories, today reported results for the third quarter ended October 29, 2016.
Total net sales for the third quarter ended October 29, 2016 (13 weeks) increased 8.4% to $221.4 million from $204.3 million in the quarter ended October 31, 2015 (13 weeks). Comparable sales for the thirteen weeks ended October 29, 2016 increased 4.0% compared to a comparable sales decrease of 7.3% for the thirteen weeks ended October 31, 2015. Net income for the third quarter of fiscal 2016 increased to $10.7 million, or $0.43 per diluted share, compared to net income of $9.7 million, or $0.36 per diluted share in the third quarter of the prior fiscal year.
Total net sales for the nine months (39 weeks) ended October 29, 2016 increased 1.9% to $572.6 million from $561.7 million reported for the nine months (39 weeks) ended October 31, 2015. Comparable sales decreased 2.5% for the thirty-nine weeks ended October 29, 2016 compared to a comparable sales decrease of 3.4% for the thirty-nine weeks ended October 31, 2015. Net income for the first nine months of fiscal 2016 was $7.7 million, or $0.31 per diluted share, compared to net income for the first nine months of the prior fiscal year of $15.6 million, or $0.55 per diluted share. Results for the first nine 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 October 29, 2016, the Company had cash and current marketable securities of $49.2 million compared to cash and current marketable securities of $51.1 million at October 31, 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, "Our monthly comparable sales trend turned positive in September driven by a solid back-to-school selling season and continued to accelerate as the third quarter progressed. We are pleased with the increase in our top-line which included positive growth in our men's, accessories, and junior's categories. Looking ahead, we believe that our current merchandise offering has us positioned to continue with strong results during the important holiday season. That said, we are proceeding prudently and managing expenses tightly in light of the headwinds currently facing the retail industry. Our primary focus remains on executing our strategic multi-year growth objectives and delivering increased shareholder value over the long-term."
November 2016 Sales
Total net sales for the four-week period ended November 26, 2016 increased 10.3% to $69.3 million, compared to $62.8 million for the four-week period ended November 28, 2015. The Company's comparable sales increased 5.7% for the four-week period ended November 26, 2016 compared with a comparable sales decrease of 13.8% for the four-week period ended November 28, 2015.
Fiscal 2016 Fourth Quarter Outlook
The Company is introducing guidance for the three months ending January 28, 2017. Net sales are projected to be in the range of $258 to $263 million resulting in net income per diluted share of approximately $0.60 to $0.66. This guidance is based upon an anticipated comparable sales range of 3% to 5% for the fourth quarter of fiscal 2016.
A conference call will be held today to discuss third 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 21687742.
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 November 26, 2016 we operated 689 stores, including 608 in the United States, 48 in Canada, and 28 in Europe and 5 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at www.zumiez.com, www.blue-tomato.com and www.fasttimes.com.au.
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 July 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
------------------------------------------------
October 29, % of October 31, % of
2016 Sales 2015 Sales
------------ --------- ------------ ---------
Net sales $ 221,391 100.0% $ 204,320 100.0%
Cost of goods sold 145,213 65.6% 134,261 65.7%
------------ --------- ------------ ---------
Gross profit 76,178 34.4% 70,059 34.3%
Selling, general and
administrative expenses 59,265 26.8% 54,835 26.8%
------------ --------- ------------ ---------
Operating profit 16,913 7.6% 15,224 7.5%
Interest (expense) income,
net (37) 0.0% 84 0.0%
Other income (expense),
net 11 0.0% (71) 0.0%
------------ --------- ------------ ---------
Earnings before income
taxes 16,887 7.6% 15,237 7.5%
Provision for income taxes 6,192 2.8% 5,584 2.7%
------------ --------- ------------ ---------
Net income $ 10,695 4.8% $ 9,653 4.8%
============ ========= ============ =========
Basic earnings per share $ 0.44 $ 0.36
============ ============
Diluted earnings per share $ 0.43 $ 0.36
============ ============
Weighted average shares
used in computation of
earnings per share:
Basic 24,485 26,467
Diluted 24,622 26,602
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended
-----------------------------------------------
October 29, % of October 31, % of
2016 Sales 2015 Sales
------------ --------- ------------ ---------
Net sales $ 572,634 100.0% $ 561,749 100.0%
Cost of goods sold 391,653 68.4% 377,382 67.2%
------------ --------- ------------ ---------
Gross profit 180,981 31.6% 184,367 32.8%
Selling, general and
administrative expenses 169,144 29.5% 159,706 28.4%
------------ --------- ------------ ---------
Operating profit 11,837 2.1% 24,661 4.4%
Interest income, net 22 0.0% 440 0.1%
Other income (expense), net 253 0.0% (227) 0.0%
------------ --------- ------------ ---------
Earnings before income
taxes 12,112 2.1% 24,874 4.5%
Provision for income taxes 4,392 0.8% 9,238 1.6%
------------ --------- ------------ ---------
Net income $ 7,720 1.3% $ 15,636 2.9%
============ ========= ============ =========
Basic earnings per share $ 0.31 $ 0.56
============ ============
Diluted earnings per share $ 0.31 $ 0.55
============ ============
Weighted average shares
used in computation of
earnings per share:
Basic 24,798 27,973
Diluted 24,982 28,178
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 29, January 30, October 31,
2016 2016 2015
------------ ------------ ------------
Assets (Unaudited) (Unaudited)
Current assets
Cash and cash equivalents $ 18,001 $ 43,163 $ 4,784
Marketable securities 31,169 32,391 46,342
Receivables 14,265 12,840 15,316
Inventories 150,623 98,299 133,565
Prepaid expenses and other current
assets 14,199 12,204 12,987
------------ ------------ ------------
Total current assets 228,257 198,897 212,994
Fixed assets, net 135,325 137,233 143,856
Goodwill 56,920 54,245 54,649
Intangible assets, net 14,900 11,766 11,881
Deferred tax assets, net 9,533 4,634 7,219
Other long-term assets 8,093 7,920 8,178
------------ ------------ ------------
Total long-term assets 224,771 215,798 225,783
Total assets $ 453,028 $ 414,695 $ 438,777
============ ============ ============
Liabilities and Shareholders'
Equity
Current liabilities
Trade accounts payable $ 58,088 $ 21,919 $ 47,230
Accrued payroll and payroll taxes 12,000 12,466 9,765
Income taxes payable 4,310 4,066 3,235
Deferred rent and tenant
allowances 8,276 8,116 8,040
Short-term borrowings 11,787 - 1,186
Other liabilities 21,582 22,575 19,710
------------ ------------ ------------
Total current liabilities 116,043 69,142 89,166
Long-term deferred rent and tenant
allowances 42,715 43,779 45,383
Other long-term liabilities 4,839 4,817 4,698
------------ ------------ ------------
Total long-term liabilities 47,554 48,596 50,081
------------ ------------ ------------
Total liabilities 163,597 117,738 139,247
------------ ------------ ------------
Shareholders' equity
Preferred stock, no par value,
20,000 shares authorized; none
issued and outstanding - - -
Common stock, no par value, 50,000
shares authorized; 24,899 shares
issued and outstanding at October
29, 2016, 25,708 shares issued
and outstanding at January 30,
2016, and 26,683 shares issued
and outstanding at October 31,
2015 139,758 135,013 133,803
Accumulated other comprehensive
loss (14,698) (15,247) (13,920)
Retained earnings 164,371 177,191 179,647
------------ ------------ ------------
Total shareholders' equity 289,431 296,957 299,530
------------ ------------ ------------
Total liabilities and
shareholders' equity $ 453,028 $ 414,695 $ 438,777
============ ============ ============
ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
--------------------------
October 29, October 31,
2016 2015
------------ ------------
Cash flows from operating activities:
Net income $ 7,720 $ 15,636
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion 21,178 23,158
Deferred taxes (4,983) (5,223)
Stock-based compensation expense 3,399 3,843
Excess tax benefit from stock-based compensation - (714)
Other 221 1,222
Changes in operating assets and liabilities:
Receivables (1,361) (3,211)
Inventories (51,047) (40,571)
Prepaid expenses and other current assets (3,183) (1,127)
Trade accounts payable 35,873 15,951
Accrued payroll and payroll taxes (631) (3,231)
Income taxes payable (708) (964)
Deferred rent and tenant allowances (1,035) 3,924
Other liabilities (1,459) (8,217)
------------ ------------
Net cash provided by operating activities 3,984 476
------------ ------------
Cash flows from investing activities:
Additions to fixed assets (16,829) (27,115)
Acquisition, net of cash acquired (5,395) -
Purchases of marketable securities and other
investments (48,232) (58,641)
Sales and maturities of marketable securities
and other investments 49,986 144,446
------------ ------------
Net cash (used in) provided by investing
activities (20,470) 58,690
------------ ------------
Cash flows from financing activities:
Proceeds from revolving credit facilities 17,849 33,504
Payments on revolving credit facilities (5,813) (32,393)
Repurchase of common stock (21,607) (77,697)
Proceeds from exercise of stock-based awards,
net of withholding tax 756 678
Excess tax benefit from stock-based compensation - 714
------------ ------------
Net cash used in financing activities (8,815) (75,194)
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents 139 (50)
Net decrease in cash and cash equivalents (25,162) (16,078)
Cash and cash equivalents, beginning of period 43,163 20,862
------------ ------------
Cash and cash equivalents, end of period $ 18,001 $ 4,784
============ ============
Supplemental disclosure on cash flow
information:
Cash paid during the period for income taxes $ 10,042 $ 15,348
Accrual for purchases of fixed assets 2,236 5,487
Company Contact: Darin White Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1337 Investor Contact: ICR Brendon Frey (203) 682-8200