UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 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): August 21, 2008
ZUMIEZ INC. |
(Exact Name of Registrant as Specified in Its Charter) |
Washington |
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(State or Other Jurisdiction of Incorporation)
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000-51300 |
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91-1040022 |
(Commission File Number)
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(IRS Employer Identification No.)
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6300 Merrill Creek Parkway, Suite B, Everett, Washington |
98203 |
(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 (see General Instruction A.2. below):
⃞ 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))
Item 2.02. |
Results of Operations and Financial Condition. |
On August 21, 2008, Zumiez Inc. issued a press release (the “Press Release”) reporting its financial results for the second quarter ended August 2, 2008, 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. |
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(d) |
Exhibits |
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99.1. |
Press Release of Zumiez Inc., dated August 21, 2008. |
SIGNATURES
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. |
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(Registrant) |
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Date: | August 21, 2008 | By: |
/s/ Richard M. Brooks |
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Richard M. Brooks |
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President and Chief Executive Officer |
Exhibit 99.1
Zumiez Inc. Announces Fiscal 2008 Second Quarter Results
2nd Quarter 2008 Net Sales Increased 12.5% to $92.3 Million
Comparable Store Sales Decreased 1.7% in Second Quarter
2nd Quarter 2008 Diluted Earnings Per Share was $0.09
EVERETT, Wash.--(BUSINESS WIRE)--Aug. 21, 2008--Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the second quarter ended August 2, 2008.
Total net sales for the second quarter (13 weeks) ended August 2, 2008 increased by 12.5% to $92.3 million from $82.0 million reported in the second quarter ended August 4, 2007 (13 weeks). The company posted net income for the quarter of $2.7 million or $0.09 per diluted share versus $3.1 million or $0.11 per diluted share in the second quarter of the prior fiscal year. Comparable store sales decreased 1.7% for the second quarter of fiscal 2008 compared to an 11.6% increase in the second quarter of fiscal 2007.
Total net sales for the first six months (26 week period) of fiscal 2008 increased by 13.4% to $171.0 million from $150.8 million reported in the first six months of the prior year. The company posted net income of $4.1 million or $0.14 per diluted share in the first six months of 2008 versus $4.7 million or $0.16 per diluted share in the prior year. Comparable store sales decreased 1.3% for the first six months of fiscal 2008 compared to an increase of 11.4% for the first six months of fiscal 2007.
Net cash provided by operating activities in the first half of fiscal 2008 was $15.7 million compared to net cash used in operating activities of $6.7 million in the first half of fiscal 2007, driven largely by favorable changes in working capital.
Rick Brooks, President and Chief Executive Officer of Zumiez Inc., stated: “We continue to make positive strides in our ongoing efforts to give our customers a unique specialty retail experience, while controlling costs and effectively managing inventories during this very difficult operating environment. Due to this focus, we exceeded our earnings projection for the first six months of this year. We have opened 39 stores this year and continue to make the investments necessary to build the Zumiez chain to our goal of 800 stores.”
2008 Outlook
Mr. Brooks continued “That said, the macro environment remains challenging and retailers are becoming increasingly promotional. Therefore, we believe it is prudent to adopt a more conservative outlook for the back half of the year.” The company now expects diluted earnings per share of approximately $0.80 to $0.82 for fiscal 2008, compared to its previous expectation for diluted earnings per share of approximately $0.90 to $0.93. This guidance is based on anticipated square footage growth of approximately 20% and on a mid single digit to low single digit comparable store sales decline for the second half of fiscal 2008. Weighted average diluted shares for the fiscal year are expected to be approximately 29,600,000.
This guidance is based on our current expectations and includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although the Company believes there to be a reasonable basis for these forward-looking statements, it can give no assurance that its expectations will prove to be correct. The company reminds investors of the difficulty of accurately assessing future growth given the unpredictability of fashion trends and consumer preferences, boardsports’ popularity and participation rates, general economic conditions, weather, and other business variables and risks.
A conference call will be held today to discuss second quarter results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (866) 770-7120 or (617) 213-8065 (international) followed by the conference identification code of 87898431. Telephonic participants can reduce pre-call hold time by registering for the conference in advance via the following link:
www.theconferencingservice.com/prereg/key.process?key=PC6HJDCWW
About Zumiez Inc.
Zumiez is a leading specialty retailer of action sports related apparel, footwear, equipment and accessories. Our stores cater to young men and women between ages 12-24, focusing on skateboarding, surfing, snowboarding, motocross and BMX. As of August 2, 2008 we operate 324 stores, which are primarily located in shopping malls and our web site address is www.zumiez.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 3, 2008 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 OPERATIONS (in thousands, except share and per share amounts) (Unaudited) |
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Three Months Ended | ||||||||||||
August 2, | August 4, | |||||||||||
2008 | % of Sales | 2007 | % of Sales | |||||||||
Net sales | $ | 92,258 | 100.0 | % | $ | 81,974 | 100.0 | % | ||||
Cost of goods sold | 62,155 | 67.4 | % | 53,783 | 65.6 | % | ||||||
Gross profit | 30,103 | 32.6 | % | 28,191 | 34.4 | % | ||||||
Selling, general and administrative expenses | 26,191 | 28.4 | % | 23,489 | 28.7 | % | ||||||
Operating profit | 3,912 | 4.2 | % | 4,702 | 5.7 | % | ||||||
Interest income, net | 495 | 0.6 | % | 327 | 0.4 | % | ||||||
Earnings before income taxes | 4,407 | 4.8 | % | 5,029 | 6.1 | % | ||||||
Provision for income taxes | 1,680 | 1.8 | % | 1,911 | 2.3 | % | ||||||
Net income | $ | 2,727 | 3.0 | % | $ | 3,118 | 3.8 | % | ||||
Basic net income per share | $ | 0.09 | $ | 0.11 | ||||||||
Diluted net income per share | $ | 0.09 | $ | 0.11 | ||||||||
Weighted average shares used in computation of earnings per share: | ||||||||||||
Basic | 29,072,536 | 28,540,326 | ||||||||||
Diluted | 29,378,589 | 29,186,270 |
ZUMIEZ INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (Unaudited) |
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Six Months Ended | ||||||||||||
August 2, | August 4, | |||||||||||
2008 | % of Sales | 2007 | % of Sales | |||||||||
Net sales | $ | 170,960 | 100.0 | % | $ | 150,765 | 100.0 | % | ||||
Cost of goods sold | 116,297 | 68.0 | % | 100,853 | 66.9 | % | ||||||
Gross profit | 54,663 | 32.0 | % | 49,912 | 33.1 | % | ||||||
Selling, general and administrative expenses | 49,125 | 28.7 | % | 43,027 | 28.5 | % | ||||||
Operating profit | 5,538 | 3.3 | % | 6,885 | 4.6 | % | ||||||
Interest income, net | 1,084 | 0.6 | % | 753 | 0.5 | % | ||||||
Other expense | - | - | (1 | ) | - | |||||||
Earnings before income taxes | 6,622 | 3.9 | % | 7,637 | 5.1 | % | ||||||
Provision for income taxes | 2,533 | 1.5 | % | 2,902 | 2.0 | % | ||||||
Net income | $ | 4,089 | 2.4 | % | $ | 4,735 | 3.1 | % | ||||
Basic net income per share | $ | 0.14 | $ | 0.17 | ||||||||
Diluted net income per share | $ | 0.14 | $ | 0.16 | ||||||||
Weighted average shares used in computation of earnings per share: | ||||||||||||
Basic | 29,042,861 | 28,478,125 | ||||||||||
Diluted | 29,374,015 | 29,094,234 |
ZUMIEZ INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) |
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August 2, | February 2, | August 4, | ||||||||
2008 | 2008 | 2007 | ||||||||
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(Unaudited) | (Audited) | (Unaudited) | |||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 8,075 | $ | 11,945 | $ | 6,139 | ||||
Marketable securities | 58,516 | 64,587 | 27,283 | |||||||
Receivables | 8,276 | 4,775 | 5,906 | |||||||
Income tax receivable | - | - | 7,478 | |||||||
Inventory | 72,080 | 48,721 | 61,803 | |||||||
Prepaid expenses and other | 5,655 | 4,440 | 4,457 | |||||||
Deferred tax assets | 3,267 | 1,089 | 1,900 | |||||||
Total current assets | 155,869 | 135,557 | 114,966 | |||||||
Leasehold improvements and equipment, net | 75,994 | 65,937 | 62,255 | |||||||
Goodwill | 13,154 | 13,154 | 13,154 | |||||||
Marketable securities - long-term | 1,847 | - | - | |||||||
Deferred tax assets | 1,655 | 1,447 | 433 | |||||||
Total long-term assets | 92,650 | 80,538 | 75,842 | |||||||
Total assets | $ | 248,519 | $ | 216,095 | $ | 190,808 | ||||
Liabilities and Shareholders’ Equity | ||||||||||
Current liabilities | ||||||||||
Trade accounts payable | $ | 44,594 | $ | 19,672 | $ | 38,405 | ||||
Book overdraft | 2,201 | 7,384 | - | |||||||
Accrued payroll and payroll taxes | 3,495 | 5,097 | 3,318 | |||||||
Income taxes payable | 2,730 | 47 | - | |||||||
Current portion of deferred rent and tenant allowances | 2,631 | 2,136 | 1,817 | |||||||
Other accrued liabilities | 8,673 | 9,060 | 6,575 | |||||||
Total current liabilities | 64,324 | 43,396 | 50,115 | |||||||
Long-term deferred rent and tenant allowances, less current portion | 22,657 | 18,097 | 15,470 | |||||||
Deferred tax liabilities | - | - | - | |||||||
Total long-term liabilities | 22,657 | 18,097 | 15,470 | |||||||
Total liabilities | 86,981 | 61,493 | 65,585 | |||||||
Commitments and contingencies | ||||||||||
Shareholders’ equity | ||||||||||
Preferred stock, no par value, 40,000,000 shares authorized; none issued and outstanding | - | - | - | |||||||
Common stock, no par value, 100,000,000 shares authorized; 29,399,608 shares issued and outstanding at August 2, 2008, 29,002,852 shares issued and outstanding at February 2, 2008 and 28,688,861 shares issued and outstanding at August 4, 2007. | 72,544 | 69,297 | 60,983 | |||||||
Accumulated other comprehensive income (loss) | 64 | 464 | (10 | ) | ||||||
Retained earnings | 88,930 | 84,841 | 64,250 | |||||||
Total shareholders’ equity | 161,538 | 154,602 | 125,223 | |||||||
Total liabilities and shareholders’ equity | $ | 248,519 | $ | 216,095 | $ | 190,808 |
CONTACT:
Zumiez Inc.
Trevor Lang, 425-551-1500 ext. 1564
Chief
Financial Officer
or
Integrated Corporate Relations
Chad Jacobs
/ Brendon Frey, 203-682-8200