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| Zumiez© |
LYNNWOOD, WA -- 12/04/14 -- Zumiez Inc. (NASDAQ: ZUMZ), a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the third quarter ended November 1, 2014.
Total net sales for the third quarter ended November 1, 2014 (13 weeks) increased 11.6% to $213.3 million from $191.1 million in the quarter ended November 2, 2013 (13 weeks). Comparable sales for the thirteen weeks ended November 1, 2014 increased 3.7% on top of a comparable sales increase of 1.5% for the thirteen weeks ended November 2, 2013. Net income in the third quarter of fiscal 2014 increased 32.6% to $15.7 million, or $0.54 per diluted share, compared to net income of $11.9 million, or $0.39 per diluted share, in the third quarter of the prior fiscal year.
The results for fiscal 2014 include costs of approximately $0.6 million, or $0.02 per diluted share, for charges associated with the acquisition of Blue Tomato, and the results for fiscal 2013 include costs of $1.7 million for charges associated with the acquisition of Blue Tomato and $1.3 million for the conditional settlement of a previously disclosed California class action wage and hour lawsuit, or $0.07 per diluted share in total.
Total net sales for the nine months (39 weeks) ended November 1, 2014 increased 11.2% to $553.0 million from $497.5 million reported for the nine months (39 weeks) ended November 2, 2013. Comparable sales increased 3.0% for the thirty nine weeks ended November 1, 2014 on top of a comparable sales increase of 0.7% for the thirty nine weeks ended November 2, 2013.
Net income in the first nine months of fiscal 2014 increased 34.5% to $25.7 million, or $0.88 per diluted share, compared to net income for the first nine months of the prior fiscal year of $19.1 million, or $0.63 per diluted share. Results for the first nine months of fiscal 2014 include approximately $1.9 million, or $0.05 per diluted share, for charges associated with the acquisition of Blue Tomato. Results for the first nine months of fiscal 2013 include approximately $6.3 million, or $0.16 per diluted share, for charges associated with the acquisition of Blue Tomato and the conditional settlement of a California class action wage and hour lawsuit.
At November 1, 2014, the Company had cash and current marketable securities of $108.7 million compared to cash and current marketable securities of $94.2 million at November 2, 2013. The increase in cash and current marketable securities is a result of cash generated through operations, partially offset by capital expenditures and stock repurchases.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We delivered double digit earnings growth in the third quarter driven by higher than expected sales along with lower than planned operating expenses. The merchandising, selling and marketing strategies we've implemented across our global platform are resonating with consumers and strengthening our brand position as a leading lifestyle retailer. We are optimistic about our growth prospects this holiday season and more importantly over the long-term."
November 2014 Sales
Total net sales for the four-week period ended November 29, 2014 increased 12.6% to $70.3 million, compared to $62.4 million for the four-week period ended November 30, 2013. The Company's comparable sales increased 6.3% for the four-week period ended November 29, 2014 on top of a comparable sales increase of 1.7% for the four-week period ended November 30, 2013.
Fiscal 2014 Fourth Quarter Outlook
The Company is introducing guidance for the three months ending January 31, 2015. Net sales are projected to be in the range $249 to $251 million resulting in net income per diluted share of approximately $0.69 to $0.72, which includes an estimated $0.6 million, or approximately $0.02 per diluted share, for charges associated with the acquisition of Blue Tomato. This guidance is based on an anticipated comparable sales increase in the 3% to 4% range for the fourth quarter of fiscal 2014.
The Company currently intends to open 56 new stores in fiscal 2014, including 7 stores in Canada and 6 stores in Europe.
A conference call will be held today to discuss third quarter fiscal 2014 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (857) 244-7312 followed by the conference identification code of 49051764.
About Zumiez Inc.
Zumiez is a leading multi-channel specialty retailer of action sports related apparel, footwear, equipment and accessories, focusing on skateboarding, snowboarding, surfing, motocross and BMX for young men and women. As of November 29, 2014 we operated 604 stores, included 552 in the United States, 35 in Canada, and 17 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 August 2, 2014 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 | |||||||||||||||
| November 1, 2014 | % of Sales | November 2, 2013 | % of Sales | ||||||||||||
| Net sales | $ | 213,341 | 100.0 | % | $ | 191,145 | 100.0 | % | |||||||
| Cost of goods sold | 135,481 | 63.5 | % | 120,356 | 63.0 | % | |||||||||
| Gross profit | 77,860 | 36.5 | % | 70,789 | 37.0 | % | |||||||||
| Selling, general and administrative expenses | 52,885 | 24.8 | % | 50,111 | 26.2 | % | |||||||||
| Operating profit | 24,975 | 11.7 | % | 20,678 | 10.8 | % | |||||||||
| Interest income, net | 147 | 0.1 | % | 171 | 0.1 | % | |||||||||
| Other income (expense), net | (220 | ) | (0.1 | %) | (587 | ) | (0.3 | %) | |||||||
| Earnings before income taxes | 24,902 | 11.7 | % | 20,262 | 10.6 | % | |||||||||
| Provision for income taxes | 9,175 | 4.3 | % | 8,402 | 4.4 | % | |||||||||
| Net income | $ | 15,727 | 7.4 | % | $ | 11,860 | 6.2 | % | |||||||
| Basic earnings per share | $ | 0.54 | $ | 0.40 | |||||||||||
| Diluted earnings per share | $ | 0.54 | $ | 0.39 | |||||||||||
| Weighted average shares used in computation of earnings per share: | |||||||||||||||
| Basic | 28,857 | 29,895 | |||||||||||||
| Diluted | 29,147 | 30,257 | |||||||||||||
| ZUMIEZ INC. | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Nine Months Ended | ||||||||||||||
| November 1, 2014 | % of Sales | November 2, 2013 | % of Sales | |||||||||||
| Net sales | $ | 552,982 | 100.0 | % | $ | 497,499 | 100.0 | % | ||||||
| Cost of goods sold | 363,677 | 65.8 | % | 323,618 | 65.0 | % | ||||||||
| Gross profit | 189,305 | 34.2 | % | 173,881 | 35.0 | % | ||||||||
| Selling, general and administrative expenses | 149,012 | 26.9 | % | 141,339 | 28.5 | % | ||||||||
| Operating profit | 40,293 | 7.3 | % | 32,542 | 6.5 | % | ||||||||
| Interest income, net | 475 | 0.0 | % | 544 | 0.1 | % | ||||||||
| Other income (expense), net | 69 | 0.0 | % | (907 | ) | (0.1 | %) | |||||||
| Earnings before income taxes | 40,837 | 7.3 | % | 32,179 | 6.5 | % | ||||||||
| Provision for income taxes | 15,158 | 2.7 | % | 13,082 | 2.7 | % | ||||||||
| Net income | $ | 25,679 | 4.6 | % | $ | 19,097 | 3.8 | % | ||||||
| Basic earnings per share | $ | 0.89 | $ | 0.64 | ||||||||||
| Diluted earnings per share | $ | 0.88 | $ | 0.63 | ||||||||||
| Weighted average shares used in computation of earnings per share: | ||||||||||||||
| Basic | 28,832 | 29,806 | ||||||||||||
| Diluted | 29,177 | 30,240 | ||||||||||||
| ZUMIEZ INC. | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (In thousands) | |||||||||||
| November 1, | February 1, | November 2, | |||||||||
| 2014 | 2014 | 2013 | |||||||||
| Assets | (Unaudited) | (Unaudited) | |||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 13,785 | $ | 19,634 | $ | 5,315 | |||||
| Marketable securities | 94,902 | 97,521 | 88,861 | ||||||||
| Receivables | 14,638 | 10,294 | 12,844 | ||||||||
| Inventories | 133,411 | 87,182 | 126,687 | ||||||||
| Prepaid expenses and other | 12,451 | 10,021 | 10,857 | ||||||||
| Deferred tax assets | 6,828 | 5,194 | 5,464 | ||||||||
| Total current assets | 276,015 | 229,846 | 250,028 | ||||||||
| Fixed assets, net | 140,364 | 127,343 | 129,285 | ||||||||
| Goodwill | 60,551 | 64,195 | 64,191 | ||||||||
| Intangible assets, net | 15,047 | 17,970 | 18,558 | ||||||||
| Long-term other assets | 7,595 | 4,049 | 3,715 | ||||||||
| Total long-term assets | 223,557 | 213,557 | 215,749 | ||||||||
| Total assets | $ | 499,572 | $ | 443,403 | $ | 465,777 | |||||
| Liabilities and Shareholders' Equity | |||||||||||
| Current liabilities | |||||||||||
| Trade accounts payable | $ | 61,394 | $ | 18,343 | $ | 49,081 | |||||
| Accrued payroll and payroll taxes | 10,131 | 10,581 | 8,198 | ||||||||
| Income taxes payable | 3,762 | 4,696 | 3,768 | ||||||||
| Deferred rent and tenant allowances | 7,176 | 6,478 | 5,760 | ||||||||
| Other liabilities | 25,357 | 21,276 | 21,076 | ||||||||
| Total current liabilities | 107,820 | 61,374 | 87,883 | ||||||||
| Long-term deferred rent and tenant allowances | 43,264 | 37,658 | 41,809 | ||||||||
| Long-term deferred tax liabilities | 1,622 | 4,649 | 2,984 | ||||||||
| Long-term debt and other liabilities | 2,666 | 4,068 | 7,907 | ||||||||
| Total long-term liabilities | 47,552 | 46,375 | 52,700 | ||||||||
| Total liabilities | 155,372 | 107,749 | 140,583 | ||||||||
| 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; 29,225 shares issued and outstanding at November 1, 2014, 29,619 shares issued and outstanding at February 1, 2014, 30,282 shares issued and outstanding at November 2, 2013 | 121,703 | 114,983 | 115,595 | ||||||||
| Accumulated other comprehensive income | (1,698 | ) | 4,710 | 5,131 | |||||||
| Retained earnings | 224,195 | 215,961 | 204,468 | ||||||||
| Total shareholders' equity | 344,200 | 335,654 | 325,194 | ||||||||
| Total liabilities and shareholders' equity | $ | 499,572 | $ | 443,403 | $ | 465,777 | |||||
| ZUMIEZ INC. | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (In thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Nine Months Ended | ||||||||||
| November 1, 2014 | November 2, 2013 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 25,679 | $ | 19,097 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
| Depreciation, amortization and accretion | 21,556 | 19,517 | ||||||||
| Deferred taxes | (4,735 | ) | (2,365 | ) | ||||||
| Stock-based compensation expense | 3,258 | 4,773 | ||||||||
| Excess tax benefit from stock-based compensation | (558 | ) | (1,154 | ) | ||||||
| Other | 431 | 1,228 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Receivables | (4,259 | ) | (3,414 | ) | ||||||
| Inventories | (47,703 | ) | (49,206 | ) | ||||||
| Prepaid expenses and other | (5,990 | ) | (2,585 | ) | ||||||
| Trade accounts payable | 42,971 | 32,515 | ||||||||
| Accrued payroll and payroll taxes | (377 | ) | (2,831 | ) | ||||||
| Income taxes payable | (1,087 | ) | (2,015 | ) | ||||||
| Deferred rent and tenant allowances | 6,355 | 5,856 | ||||||||
| Other liabilities | (1,106 | ) | 2,247 | |||||||
| Net cash provided by operating activities | 34,435 | 21,663 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Additions to fixed assets | (28,972 | ) | (27,179 | ) | ||||||
| Purchases of marketable securities and other investments | (74,398 | ) | (78,175 | ) | ||||||
| Sales and maturities of marketable securities and other investments | 75,652 | 73,674 | ||||||||
| Net cash used in investing activities | (27,718 | ) | (31,680 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from revolving credit facilities | 6,056 | - | ||||||||
| Payments on long-term debt and revolving credit facilities | (2,874 | ) | (233 | ) | ||||||
| Repurchase of common stock | (19,557 | ) | (4,310 | ) | ||||||
| Proceeds from exercise of stock-based compensation, net of withholding tax payments | 3,411 | 1,308 | ||||||||
| Excess tax benefit from stock-based compensation | 558 | 1,154 | ||||||||
| Net cash used in financing activities | (12,406 | ) | (2,081 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (160 | ) | (166 | ) | ||||||
| Net increase in cash and cash equivalents | (5,849 | ) | (12,264 | ) | ||||||
| Cash and cash equivalents, beginning of period | 19,634 | 17,579 | ||||||||
| Cash and cash equivalents, end of period | $ | 13,785 | $ | 5,315 | ||||||
| Supplemental disclosure on cash flow information: | ||||||||||
| Cash paid during the period for income taxes | $ | 20,931 | $ | 17,368 | ||||||
| Accrual for purchases of fixed assets | 5,046 | 5,514 | ||||||||
Brian Leith / Director of Finance & Investor Relations / Zumiez Inc./(425) 551-1500, ext. 1610
Investor Contact:
ICR / Brendon Frey / (203) 682-8200
Source: Zumiez through Marketwired by press release ©
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