Zumiez Inc. Announces Fiscal 2014 Fourth Quarter and Full Year Results
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LYNNWOOD, WA -- (Marketwired) -- 03/12/15 -- Zumiez Inc. (NASDAQ: ZUMZ) a leading multi-channel specialty retailer of action sports related apparel, footwear, hardgoods and accessories, today reported results for the fourth quarter and fiscal year ended January 31, 2015.
Fourth Quarter Results Total net sales for the fourth quarter ended January 31, 2015 (13 weeks) increased 14.0% to $258.6 million from $226.8 million in the quarter ended February 1, 2014 (13 weeks). Comparable sales for the 13-week period ended January 31, 2015 increased 8.3% compared to a 2.2% decrease for the 13-week period ended February 1, 2014. Net income in the fourth quarter of fiscal 2014 decreased 34.8% to $17.5 million, or $0.60 per diluted share, from net income of $26.9 million, or $0.89 per diluted share, in the fourth quarter of the prior fiscal year. The results for fiscal 2014 include Blue Tomato acquisition charges of $6.9 million, or approximately $0.20 per diluted share, including $6.4 million for the accrual of contingent earn-out payments and $0.5 million for the amortization of intangible assets. The results for fiscal 2013 include a $5.8 million benefit, or approximately $0.16 per diluted share, for the reversal of contingent earn-out accruals associated with the acquisition of Blue Tomato, a $3.3 million benefit, or approximately $0.07 per diluted share, for the correction of an error related to the accounting for rent expenses, and a $0.6 million expense, or approximately $0.02 per diluted share, for the amortization of intangible assets associated with the Blue Tomato acquisition. Also included in the fiscal 2013 fourth quarter results is a benefit to the provision for income taxes of $0.8 million, or approximately $0.03 per diluted share, for the release of a valuation allowance of net operating losses in foreign subsidiaries.
Full Year Results Total net sales for fiscal 2014 (52 weeks) increased 12.0% to $811.6 million from $724.3 million in fiscal 2013 (52 weeks). Comparable sales for the 52-week period ended January 31, 2015 increased 4.6% compared to a 0.3% decrease for the 52-week period ended February 1, 2014. Net income in fiscal 2014 decreased 6.0% to $43.2 million, or $1.47 per diluted share compared to net income in the prior fiscal year of $45.9 million, or $1.52 per diluted share. Results for the fiscal year 2014 include $6.4 million, or approximately $0.19 per diluted share, for the accrual of contingent earn-out payments associated with the acquisition of Blue Tomato, and $2.3 million, or approximately $0.06 per diluted share, for the amortization of intangible assets. Results for the fiscal year 2013 include a benefit of $2.6 million, or approximately $0.08 per diluted share, for the reversal of contingent earn-out accruals associated with the acquisition of Blue Tomato, a $2.7 million benefit, or approximately $0.06 per diluted share, for the correction of an error related to the accounting for rent expenses, a $2.3 million expense, or approximately $0.06 per diluted share, for the amortization of intangible assets associated with the Blue Tomato acquisition, and $1.3 million, or approximately $0.03 per diluted share, for costs associated with the conditional settlement of a California class action wage and hour lawsuit. Also included in the fiscal 2013 results is a benefit to the provision for income taxes of $0.4 million, or approximately $0.01 per diluted share, for the release of a valuation allowance to net operating losses in foreign subsidiaries.
Cash and Current Marketable Securities At January 31, 2015, the Company had cash and current marketable securities of $154.6 million, compared to cash and current marketable securities of $117.2 million at February 1, 2014. 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, "Our strong fourth quarter operating performance was an extremely gratifying way to finish fiscal 2014. The investments we've made in developing world class omnichannel capabilities, expanding our international presence and providing our people with the tools necessary to best meet the needs of our customers, helped fuel our results and fortify our leading lifestyle position. We are confident that our strategies will yield consistent earnings growth and deliver solid returns for our shareholders over the long-term."
Fiscal 2015 First Quarter Outlook The Company is introducing guidance for the three months ending May 2, 2015. Net sales are projected to be in the range of $176 to $178 million resulting in net income per diluted share of approximately $0.08 to $0.10, which includes an estimated $1.1 million, or approximately $0.03 per diluted share, for charges associated with the acquisition of Blue Tomato. This guidance is based on an anticipated comparable sales increase in the range of 3% to 4% for the first 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 fourth quarter and fiscal 2014 year-end results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617)-213-8052 followed by the conference identification code of 44529050.
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 February 28, 2015 we operated 604 stores, including 550 in the United States, 35 in Canada, and 19 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 November 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.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
-------------------------------------------
January 31, % of February 1, % of
2015 Sales 2014 Sales
------------ ------ ------------ ------
Net sales $ 258,569 100.0% $ 226,838 100.0%
Cost of goods sold 160,791 62.2% 138,959 61.3%
------------ ------ ------------ ------
Gross profit 97,778 37.8% 87,879 38.7%
Selling, general and
administrative expenses 66,500 25.7% 47,579 20.9%
------------ ------ ------------ ------
Operating profit 31,278 12.1% 40,300 17.8%
Interest income, net 162 0.1% 167 0.1%
Other expense, net (626) (0.3%) (682) (0.4%)
------------ ------ ------------ ------
Earnings before income taxes 30,814 11.9% 39,785 17.5%
Provision for income taxes 13,301 5.1% 12,934 5.7%
------------ ------ ------------ ------
Net income $ 17,513 6.8% $ 26,851 11.8%
============ ====== ============ ======
Basic earnings per share $ 0.60 $ 0.90
============ ============
Diluted earnings per share $ 0.60 $ 0.89
============ ============
Weighted average shares used
in computation of earnings
per share:
Basic 28,989 29,790
Diluted 29,295 30,139
ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Twelve Months Ended
-------------------------------------------
January 31, % of February 1, % of
2015 Sales 2014 Sales
------------ ------ ------------ ------
(unaudited)
Net sales $ 811,551 100.0% $ 724,337 100.0%
Cost of goods sold 524,468 64.6% 462,577 63.9%
------------ ------ ------------ ------
Gross profit 287,083 35.4% 261,760 36.1%
Selling, general and
administrative expenses 215,512 26.6% 188,918 26.0%
------------ ------ ------------ ------
Operating profit 71,571 8.8% 72,842 10.1%
Interest income, net 637 0.1% 711 0.0%
Other (expense) income, net (557) (0.1%) (1,589) (0.2%)
------------ ------ ------------ ------
Earnings before income taxes 71,651 8.8% 71,964 9.9%
Provision for income taxes 28,459 3.5% 26,016 3.6%
------------ ------ ------------ ------
Net income $ 43,192 5.3% $ 45,948 6.3%
============ ====== ============ ======
Basic earnings per share $ 1.50 $ 1.54
============ ============
Diluted earnings per share $ 1.47 $ 1.52
============ ============
Weighted average shares used
in computation of earnings
per share:
Basic 28,871 29,810
Diluted 29,288 30,206
ZUMIEZ INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
January 31, February 1,
2015 2014
----------- -----------
Assets
Current assets
Cash and cash equivalents $ 20,862 $ 19,634
Marketable securities 133,782 97,521
Receivables 12,653 10,294
Inventories 93,850 87,182
Prepaid expenses and other 11,651 10,021
Deferred tax assets 6,965 5,194
----------- -----------
Total current assets 279,763 229,846
Fixed assets, net 135,642 127,343
Goodwill 55,852 64,195
Intangible assets, nets 13,062 17,970
Long-term other assets 9,386 4,049
----------- -----------
Total long-term assets 213,942 213,557
Total assets $ 493,705 $ 443,403
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable $ 32,094 $ 18,343
Accrued payroll and payroll taxes 13,047 10,581
Income taxes payable 4,651 4,696
Deferred rent and tenant allowances 7,083 6,478
Other liabilities 24,572 21,276
----------- -----------
Total current liabilities 81,447 61,374
Long-term deferred rent and tenant allowances 42,553 37,658
Long-term deferred tax liabilities 5,738 4,649
Long-term debt and other liabilities 4,443 4,068
----------- -----------
Total long-term liabilities 52,734 46,375
----------- -----------
Total liabilities 134,181 107,749
----------- -----------
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; 29,418 shares issued and outstanding
at January 31, 2015 and 29,619 shares issued and
outstanding at February 1, 2014 129,094 114,983
Accumulated other comprehensive income (11,278) 4,710
Retained earnings 241,708 215,961
----------- -----------
Total shareholders' equity 359,524 335,654
----------- -----------
Total liabilities and shareholders' equity $ 493,705 $ 443,403
=========== ===========
ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Fiscal Year Ended
------------------------
January 31, February 1,
2015 2014
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 43,192 $ 45,948
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and accretion 29,167 26,596
Deferred taxes (610) (978)
Stock-based compensation expense 7,520 4,094
Excess tax benefit from stock-based compensation (1,355) (1,232)
Lease termination costs (55) 405
Other 1,164 1,842
Changes in operating assets and liabilities:
Receivables (2,990) (739)
Inventories (10,850) (9,968)
Prepaid expenses and other (4,702) (1,789)
Trade accounts payable 14,744 1,714
Accrued payroll and payroll taxes 2,718 (426)
Income taxes payable (23) (1,484)
Deferred rent and tenant allowances 5,937 2,367
Other liabilities 6,080 544
----------- -----------
Net cash provided by operating activities 89,937 66,894
----------- -----------
Cash flows from investing activities:
Additions to fixed assets (35,758) (35,969)
Acquisitions, net of cash acquired - -
Purchases of marketable securities and other
investments (125,971) (124,129)
Sales and maturities of marketable securities and
other investments 87,856 110,479
----------- -----------
Net cash used in investing activities (73,873) (49,619)
----------- -----------
Cash flows from financing activities:
Proceeds from revolving credit facilities 6,943 4,182
Payments on long-term debt, revolving credit
facilities and other liabilities (9,009) (4,488)
Repurchase of common stock (19,557) (17,556)
Proceeds from exercise of stock-based
compensation, net of withholding tax payments 6,335 1,397
Excess tax benefit from stock-based compensation 1,355 1,232
----------- -----------
Net cash used in financing activities (13,933) (15,233)
----------- -----------
Effect of exchange rate changes on cash and cash
equivalents (903) 13
Net increase in cash and cash equivalents 1,228 2,055
Cash and cash equivalents, beginning of period 19,634 17,579
----------- -----------
Cash and cash equivalents, end of period $ 20,862 $ 19,634
=========== ===========
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes, net
of refunds $ 28,770 $ 28,105
Accrual for purchases of fixed assets 2,372 1,491
Accrual for repurchase of common stock - 2,112
Company Contact: Brian Leith Director of Finance & Investor Relations Zumiez Inc. (425) 551-1500, ext. 1610 Investor Contact: ICR Brendon Frey (203) 682-8200
Source: Zumiez
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