UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
Form 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): March 15, 2018
Zumiez Inc
(Exact Name of Registrant as Specified in Charter)
| Washington | 000-51300 | 91-1040022 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 4001 204th Street SW, Lynnwood, WA 98036 |
| (Address of Principal Executive Offices) (Zip Code) |
(425) 551-1500
(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: | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On March 15, 2018, Zumiez Inc. issued a press release (the "Press Release") reporting its financial results for the fourth quarter ended February 3, 2018, 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.
Exhibit 99.1. Press release dated March 15, 2018
SIGNATURE
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.
| Zumiez Inc | ||
| Date: March 15, 2018 | By: | /s/ Richard M. Brooks |
| Richard M. Brooks | ||
| Chief Executive Officer | ||
EXHIBIT INDEX
| Exhibit Number | Description | |
| 99.1 | Press Release dated March 15, 2018 |
EXHIBIT 99.1
Zumiez Inc. Announces Fiscal 2017 Fourth Quarter Results
February 2018 Comparable Sales Increased 9.2%
LYNNWOOD, Wash., March 15, 2018 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ:ZUMZ) today reported results for the fourth quarter and year ended February 3, 2018.
Total net sales for the fourth quarter ended February 3, 2018 (14 weeks) increased 16.9% to $308.2 million from $263.6 million in the quarter ended January 28, 2017 (13 weeks). Comparable sales for the 14-week period ended February 3, 2018 increased 7.5% compared to the same fourteen-week period ended February 4, 2017. Net income for the fourth quarter of fiscal 2017 was $19.9 million, or $0.80 per diluted share, compared to net income of $18.2 million, or $0.74 per diluted share in the fourth quarter of the prior fiscal year. Fourth-quarter fiscal 2017 results include $3.8 million in net sales related to the recognition of deferred revenue due to changes in our STASH loyalty program estimated redemption rate and $3.4 million of charges in our provision for income taxes due to a valuation allowance against certain deferred tax assets in Europe, partially offset by a $0.5 million benefit related to U.S. federal tax legislation. The combined impact of these items reduced net income and earnings per share by $0.5 million and $0.02 respectively.
Total net sales for fiscal 2017 (53 weeks) increased 10.9% to $927.4 million from $836.3 million in fiscal 2016 (52 weeks). Comparable sales for the fifty-three-week period ended February 3, 2018 increased 5.9% compared to the same fifty-three-week period ended February 4, 2017. Net income in fiscal 2017 increased to $26.8 million, or $1.08 per diluted share, compared to net income in the prior fiscal year of $25.9 million, or $1.04 per diluted share. Fiscal 2017 was also impacted by the deferred revenue and tax items referred to above in our fourth quarter results. The combined impact of these items reduced net income and earnings per share by $0.5 million and $0.02 respectively for fiscal 2017. At February 3, 2018, the Company had cash and current marketable securities of $121.9 million, an increase of 54.7% compared to cash and current marketable securities of $78.8 million at January 28, 2017. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We concluded 2017 with strong fourth quarter comparable sales performance which came on top of a successful holiday selling period in the prior year fourth quarter. The top-line momentum exhibited by our business underscores the benefits of our differentiated merchandising strategies, integrated sales channels, and best in class customer service. While we are pleased with our recent top-line results, we believe the company is positioned to deliver accelerated earnings growth in 2018 through a combination of positive comparable sales, margin enhancement programs, improved expense leverage, and lower taxes. I am optimistic about Zumiez future prospects and I’m confident that our approach to expanding market share will lead to increased value for our shareholders over the long-term.”
February 2018 Sales
Total net sales for the four-week period ended March 3, 2018 increased 23.2% to $63.4 million, compared to $51.5 million for the four-week period ended February 25, 2017. The Company's comparable sales increased 9.2% for the four-week period ended March 3, 2018 compared to a comparable sales decrease of 3.1% for the four-week period ended February 25, 2017.
Fiscal 2018 First Quarter Outlook
The Company is introducing guidance for the three months ending May 5, 2018. Net sales are projected to be in the range of $198 million to $202 million including anticipated comparable sales growth of between 4.0% and 6.0%. Consolidated operating margins are expected to be between negative 2.6% and negative 1.7% resulting in a net loss per share of approximately $0.18 to $0.13. The Company currently intends to open approximately 13 new stores in fiscal 2018, including up to 6 stores in the United States, 5 stores in Europe and 2 stores in Australia.
A conference call will be held today to discuss fourth quarter fiscal 2017 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 7259038.
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 March 3, 2018 we operated 698 stores, including 607 in the United States, 50 in Canada, 34 in Europe and 7 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at zumiez.com, blue-tomato.com and 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 December 4, 2017 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 | ||||||||||||||
| February 3, | % of | January 28, | % of | |||||||||||
| 2018 | Sales | 2017 | Sales | |||||||||||
| (Unaudited) | ||||||||||||||
| Net sales | $ | 308,245 | 100.0 | % | $ | 263,635 | 100.0 | % | ||||||
| Cost of goods sold | 193,583 | 62.8 | % | 169,613 | 64.3 | % | ||||||||
| Gross profit | 114,662 | 37.2 | % | 94,022 | 35.7 | % | ||||||||
| Selling, general and administrative expenses | 77,714 | 25.2 | % | 66,115 | 25.0 | % | ||||||||
| Operating profit | 36,948 | 12.0 | % | 27,907 | 10.7 | % | ||||||||
| Interest income, net | 211 | 0.1 | % | 11 | 0.0 | % | ||||||||
| Other (expense) income, net | (53 | ) | 0.0 | % | 195 | 0.1 | % | |||||||
| Earnings before income taxes | 37,106 | 12.1 | % | 28,113 | 10.8 | % | ||||||||
| Provision for income taxes | 17,170 | 5.6 | % | 9,929 | 3.8 | % | ||||||||
| Net income | $ | 19,936 | 6.5 | % | $ | 18,184 | 7.0 | % | ||||||
| Basic earnings per share | $ | 0.81 | $ | 0.74 | ||||||||||
| Diluted earnings per share | $ | 0.80 | $ | 0.74 | ||||||||||
| Weighted average shares used in computation of earnings per share: | ||||||||||||||
| Basic | 24,729 | 24,506 | ||||||||||||
| Diluted | 24,953 | 24,691 | ||||||||||||
ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
| Fiscal Year Ended | ||||||||||||||
| February 3, | % of | January 28, | % of | |||||||||||
| 2018 | Sales | 2017 | Sales | |||||||||||
| (Unaudited) | ||||||||||||||
| Net sales | $ | 927,401 | 100.0 | % | $ | 836,268 | 100.0 | % | ||||||
| Cost of goods sold | 617,527 | 66.6 | % | 561,266 | 67.1 | % | ||||||||
| Gross profit | 309,874 | 33.4 | % | 275,002 | 32.9 | % | ||||||||
| Selling, general and administrative expenses | 261,114 | 28.2 | % | 235,259 | 28.1 | % | ||||||||
| Operating profit | 48,760 | 5.2 | % | 39,743 | 4.8 | % | ||||||||
| Interest income, net | 495 | 0.0 | % | 32 | 0.0 | % | ||||||||
| Other (expense) income, net | (852 | ) | 0.0 | % | 449 | 0.0 | % | |||||||
| Earnings before income taxes | 48,403 | 5.2 | % | 40,224 | 4.8 | % | ||||||||
| Provision for income taxes | 21,601 | 2.3 | % | 14,320 | 1.7 | % | ||||||||
| Net income | $ | 26,802 | 2.9 | % | $ | 25,904 | 3.1 | % | ||||||
| Basic earnings per share | $ | 1.09 | $ | 1.05 | ||||||||||
| Diluted earnings per share | $ | 1.08 | $ | 1.04 | ||||||||||
| Weighted average shares used in computation of earnings per share: | ||||||||||||||
| Basic | 24,679 | 24,727 | ||||||||||||
| Diluted | 24,878 | 24,908 | ||||||||||||
ZUMIEZ INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| February 3, 2018 | January 28, 2017 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 24,041 | $ | 20,247 | ||||
| Marketable securities | 97,864 | 58,579 | ||||||
| Receivables | 17,027 | 12,538 | ||||||
| Inventories | 125,826 | 106,924 | ||||||
| Prepaid expenses and other current assets | 14,405 | 13,075 | ||||||
| Total current assets | 279,163 | 211,363 | ||||||
| Fixed assets, net | 128,852 | 129,651 | ||||||
| Goodwill | 62,912 | 56,001 | ||||||
| Intangible assets, net | 16,696 | 14,610 | ||||||
| Deferred tax assets, net | 4,174 | 7,041 | ||||||
| Other long-term assets | 7,713 | 8,017 | ||||||
| Total long-term assets | 220,347 | 215,320 | ||||||
| Total assets | $ | 499,510 | $ | 426,683 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Trade accounts payable | $ | 37,861 | $ | 25,529 | ||||
| Accrued payroll and payroll taxes | 20,650 | 14,914 | ||||||
| Income taxes payable | 5,796 | 1,866 | ||||||
| Deferred rent and tenant allowances | 8,073 | 8,344 | ||||||
| Other liabilities | 26,867 | 22,944 | ||||||
| Total current liabilities | 99,247 | 73,597 | ||||||
| Long-term deferred rent and tenant allowances | 39,275 | 41,066 | ||||||
| Other long-term liabilities | 5,073 | 4,969 | ||||||
| Total long-term liabilities | 44,348 | 46,035 | ||||||
| Total liabilities | 143,595 | 119,632 | ||||||
| Shareholders’ equity | ||||||||
| Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding | — | — | ||||||
| Common stock, no par value, 50,000 shares authorized; 25,249 shares issued and outstanding at February 3, 2018 and 24,945 shares issued and outstanding at January 28, 2017 | 146,523 | 140,984 | ||||||
| Accumulated other comprehensive income (loss) | 35 | (16,488 | ) | |||||
| Retained earnings | 209,357 | 182,555 | ||||||
| Total shareholders’ equity | 355,915 | 307,051 | ||||||
| Total liabilities and shareholders’ equity | $ | 499,510 | $ | 426,683 | ||||
ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Fiscal Year Ended | |||||||||
| February 3, 2018 | January 28, 2017 | ||||||||
| (Unaudited) | |||||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 26,802 | $ | 25,904 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation, amortization and accretion | 27,288 | 27,916 | |||||||
| Deferred taxes | 3,282 | (2,555 | ) | ||||||
| Stock-based compensation expense | 5,032 | 4,578 | |||||||
| Other | 2,344 | 1,564 | |||||||
| Changes in operating assets and liabilities: | |||||||||
| Receivables | (3,216 | ) | 413 | ||||||
| Inventories | (14,848 | ) | (7,984 | ) | |||||
| Prepaid expenses and other current assets | (960 | ) | (1,793 | ) | |||||
| Trade accounts payable | 11,584 | 3,261 | |||||||
| Accrued payroll and payroll taxes | 5,359 | 2,313 | |||||||
| Income taxes payable | 3,575 | (3,713 | ) | ||||||
| Deferred rent and tenant allowances | (2,494 | ) | (2,673 | ) | |||||
| Other liabilities | 1,766 | 1,227 | |||||||
| Net cash provided by operating activities | 65,514 | 48,458 | |||||||
| Cash flows from investing activities: | |||||||||
| Additions to fixed assets | (24,062 | ) | (20,400 | ) | |||||
| Acquisitions, net of cash acquired | — | (5,395 | ) | ||||||
| Purchases of marketable securities and other investments | (129,036 | ) | (86,826 | ) | |||||
| Sales and maturities of marketable securities and other investments | 89,128 | 61,106 | |||||||
| Net cash used in investing activities | (63,970 | ) | (51,515 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Proceeds from revolving credit facilities | 21,466 | 23,079 | |||||||
| Payments on revolving credit facilities | (20,700 | ) | (22,429 | ) | |||||
| Repurchase of common stock | — | (21,607 | ) | ||||||
| Proceeds from issuance and exercise of stock-based awards | 698 | 1,014 | |||||||
| Payments for tax withholdings on equity awards | (191 | ) | (134 | ) | |||||
| Net cash provided by (used in) financing activities | 1,273 | (20,077 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 977 | 218 | |||||||
| Net increase (decrease) in cash and cash equivalents | 3,794 | (22,916 | ) | ||||||
| Cash and cash equivalents, beginning of period | 20,247 | 43,163 | |||||||
| Cash and cash equivalents, end of period | $ | 24,041 | $ | 20,247 | |||||
| Supplemental disclosure on cash flow information: | |||||||||
| Cash paid during the period for income taxes | $ | 14,851 | $ | 20,462 | |||||
| Accrual for purchases of fixed assets | 1,300 | 1,191 | |||||||
| Accrual for repurchase of common stock | — | — | |||||||
Company Contact:
Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337
Investor Contact:
ICR
Brendon Frey
(203) 682-8200