Total net sales for the first quarter ended May 2, 2015 (13 weeks) increased 9.0% to $177.6 million from $162.9 million in the first quarter ended May 3, 2014 (13 weeks). Comparable sales for the thirteen weeks ended May 2, 2015 increased 3.0% compared to a comparable sales increase of 1.8% in the first quarter of 2014. Net income in the first quarter of fiscal 2015 was $2.8 million, or $0.09 per diluted share, compared to net income of $2.5 million, or $0.09 per diluted share, in the first quarter of the prior fiscal year. The results for the first quarter of 2015 include costs of approximately $1.1 million, or $0.03 per diluted share, for charges associated with the acquisition of Blue Tomato, and the results for the first quarter of 2014 include approximately $0.6 million, or $0.01 per diluted share, for charges associated with the acquisition of Blue Tomato.
At May 2, 2015, the Company's cash and current marketable securities increased 40.0% to $150.9 million compared to cash and current marketable securities of $107.8 million at May 3, 2014. The increase in cash and current marketable securities is a result of cash generated through operations, partially offset by capital expenditures.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We delivered first quarter results that were in-line with our expectations. While the pace of our domestic business slowed more than anticipated in April, this was offset by strong sales gains in Europe where growth momentum continues. Overall, we remain confident that our omnichannel strategy, authentic lifestyle positioning, and commitment to customer service provide us with strong competitive advantages that will deliver increased profitability and greater shareholder value over the long-term."
May 2015 Sales
Total net sales for the four-week period ended May 30, 2015 increased 4.1% to $51.5 million, compared to $49.5 million for the four-week period ended May 31, 2014. The Company's comparable sales decreased 2.2% for the four-week period ended May 30, 2015 compared to a comparable sales increase of 3.6% for the four-week period ended May 31, 2014.
Fiscal 2015 Second Quarter Outlook
The Company is introducing guidance for the three months ending August 1, 2015. Net sales are projected to be in the range of $179 to $183 million resulting in net income per diluted share of approximately $0.12 to $0.15, which includes an estimated $0.4 million, or approximately $0.01 per diluted share, for charges associated with the acquisition of Blue Tomato. This guidance is based on an anticipated comparable sales decrease in the (5%) to (3%) range for the second quarter of fiscal 2015. The Company currently intends to open approximately 57 new stores in fiscal 2015, including up to 7 stores in Canada and 6 stores in Europe.
A conference call will be held today to discuss first quarter fiscal 2015 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617) 399-5135 followed by the conference identification code of 40996399.
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 May 30, 2015 we operated 627 stores, including 567 in the United States, 38 in Canada, and 22 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 annual report on Form 10-K for the year ended February 1, 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 OPERATIONS | |||||||||||||
| (In thousands, except per share amounts) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended | |||||||||||||
| May 2, 2015 | % of Sales | May 3, 2014 | % of Sales | ||||||||||
| Net sales | $ | 177,610 | 100.0 | % | $ | 162,932 | 100.0 | % | |||||
| Cost of goods sold | 121,075 | 68.2 | % | 112,399 | 69.0 | % | |||||||
| Gross profit | 56,535 | 31.8 | % | 50,533 | 31.0 | % | |||||||
| Selling, general and administrative expenses | 52,409 | 29.5 | % | 46,820 | 28.7 | % | |||||||
| Operating profit | 4,126 | 2.3 | % | 3,713 | 2.3 | % | |||||||
| Interest income, net | 205 | 0.1 | % | 182 | 0.1 | % | |||||||
| Other income, net | 115 | 0.1 | % | 86 | 0.0 | % | |||||||
| Earnings before income taxes | 4,446 | 2.5 | % | 3,981 | 2.4 | % | |||||||
| Provision for income taxes | 1,676 | 0.9 | % | 1,485 | 0.9 | % | |||||||
| Net income | $ | 2,770 | 1.6 | % | $ | 2,496 | 1.5 | % | |||||
| Basic earnings per share | $ | 0.10 | $ | 0.09 | |||||||||
| Diluted earnings per share | $ | 0.09 | $ | 0.09 | |||||||||
| Weighted average shares used in computation of earnings per share: | |||||||||||||
| Basic | 29,141 | 28,861 | |||||||||||
| Diluted | 29,486 | 29,213 | |||||||||||
| ZUMIEZ INC. | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (In thousands) | ||||||||||||
| May 2, | January 31, | May 3, | ||||||||||
| 2015 | 2015 | 2014 | ||||||||||
| Assets | (Unaudited) | (Unaudited) | ||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 11,806 | $ | 20,862 | $ | 21,079 | ||||||
| Marketable securities | 139,048 | 133,782 | 86,682 | |||||||||
| Receivables | 14,401 | 12,653 | 11,478 | |||||||||
| Inventories | 104,091 | 93,850 | 97,608 | |||||||||
| Prepaid expenses and other | 11,117 | 11,651 | 9,874 | |||||||||
| Deferred tax assets | 7,532 | 6,965 | 6,163 | |||||||||
| Total current assets | 287,995 | 279,763 | 232,884 | |||||||||
| Fixed assets, net | 140,320 | 135,642 | 131,577 | |||||||||
| Goodwill | 55,478 | 55,852 | 65,432 | |||||||||
| Intangible assets, net | 12,460 | 13,062 | 17,803 | |||||||||
| Long-term other assets | 9,294 | 9,386 | 6,759 | |||||||||
| Total long-term assets | 217,552 | 213,942 | 221,571 | |||||||||
| Total assets | $ | 505,547 | $ | 493,705 | $ | 454,455 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Current liabilities | ||||||||||||
| Trade accounts payable | $ | 39,525 | $ | 32,094 | $ | 42,989 | ||||||
| Accrued payroll and payroll taxes | 9,168 | 13,047 | 8,070 | |||||||||
| Income taxes payable | 732 | 4,651 | 2,324 | |||||||||
| Deferred rent and tenant allowances | 7,448 | 7,083 | 6,574 | |||||||||
| Other liabilities | 29,276 | 24,572 | 20,471 | |||||||||
| Total current liabilities | 86,149 | 81,447 | 80,428 | |||||||||
| Long-term deferred rent and tenant allowances | 44,761 | 42,553 | 41,995 | |||||||||
| Long-term deferred tax liabilities | 4,542 | 5,738 | 3,871 | |||||||||
| Long-term debt and other liabilities | 5,669 | 4,443 | 4,022 | |||||||||
| Total long-term liabilities | 54,972 | 52,734 | 49,888 | |||||||||
| Total liabilities | 141,121 | 134,181 | 130,316 | |||||||||
| 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; 29,535 shares issued and outstanding at May 2, 2015, and 29,418 shares issued and outstanding at January 31, 2015 | 131,715 | 129,094 | 116,111 | |||||||||
| Accumulated other comprehensive income | (11,767 | ) | (11,278 | ) | 7,011 | |||||||
| Retained earnings | 244,478 | 241,708 | 201,017 | |||||||||
| Total shareholders' equity | 364,426 | 359,524 | 324,139 | |||||||||
| Total liabilities and shareholders' equity | $ | 505,547 | $ | 493,705 | $ | 454,455 | ||||||
| ZUMIEZ INC. | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (In thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| May 2, 2015 | May 3, 2014 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 2,770 | $ | 2,496 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
| Depreciation, amortization and accretion | 7,797 | 7,009 | ||||||||
| Deferred taxes | (622 | ) | (1,869 | ) | ||||||
| Stock-based compensation expense | 1,572 | 948 | ||||||||
| Excess tax benefit from stock-based compensation | (689 | ) | 62 | |||||||
| Other | (76 | ) | (26 | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||||
| Receivables | (1,617 | ) | (1,115 | ) | ||||||
| Inventories | (10,187 | ) | (10,011 | ) | ||||||
| Prepaid expenses and other | 605 | (2,480 | ) | |||||||
| Trade accounts payable | 7,726 | 24,635 | ||||||||
| Accrued payroll and payroll taxes | (3,891 | ) | (2,543 | ) | ||||||
| Income taxes payable | (3,355 | ) | (2,448 | ) | ||||||
| Deferred rent and tenant allowances | 2,444 | 4,374 | ||||||||
| Other liabilities | (789 | ) | (2,462 | ) | ||||||
| Net cash provided by operating activities | 1,688 | 16,570 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Additions to fixed assets | (8,818 | ) | (6,781 | ) | ||||||
| Purchases of marketable securities and other investments | (35,037 | ) | (11,714 | ) | ||||||
| Sales and maturities of marketable securities and other investments | 29,074 | 22,100 | ||||||||
| Net cash (used in) provided by investing activities | (14,781 | ) | 3,605 | |||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from revolving credit facilities | 4,310 | 634 | ||||||||
| Payments on long-term debt and revolving credit facilities | (1,271 | ) | (81 | ) | ||||||
| Repurchase of common stock | - | (19,553 | ) | |||||||
| Proceeds from exercise of stock-based compensation, net of withholding tax payments | 367 | 242 | ||||||||
| Excess tax benefit (loss) from stock-based compensation | 689 | (62 | ) | |||||||
| Net cash provided by (used in) financing activities | 4,095 | (18,820 | ) | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (58 | ) | 90 | |||||||
| Net (decrease) increase in cash and cash equivalents | (9,056 | ) | 1,445 | |||||||
| Cash and cash equivalents, beginning of period | 20,862 | 19,634 | ||||||||
| Cash and cash equivalents, end of period | $ | 11,806 | $ | 21,079 | ||||||
| Supplemental disclosure on cash flow information: | ||||||||||
| Cash paid during the period for income taxes, net of refunds | $ | 5,667 | $ | 5,783 | ||||||
| Accrual for purchases of fixed assets | 4,489 | 4,480 | ||||||||
Investor Contact: ICR / Brendon Frey / (203) 682-8200/
Source: Zumiez through Marketwired by press release ©
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