Zumiez Inc. Announces Fiscal 2013 First Quarter Results

Marketwired

LYNNWOOD, WA--(Marketwired - May 23, 2013) -  Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the first quarter ended May 4, 2013.

Total net sales for the first quarter ended May 4, 2013 (13 weeks) increased 14.3% to $148.5 million from $129.9 million in the first quarter ended April 28, 2012 (13 weeks). Comparable store sales for the thirteen weeks ended May 4, 2013 decreased (0.7%) compared to a comparable store sales increase of 12.9% for the thirteen weeks ended April 28, 2012. Net income in the first quarter of fiscal 2013 was $2.5 million, or $0.08 per diluted share, compared to net income of $4.5 million, or $0.14 per diluted share, in the first quarter of the prior fiscal year. The results for fiscal 2013 include costs of approximately $1.7 million, or $0.05 per diluted share, for charges associated with the acquisition of Blue Tomato, and the results for fiscal 2012 include approximately $0.4 million, or $0.01 per diluted share, of Blue Tomato acquisition charges.

At May 4, 2013, the Company had cash and current marketable securities of $97.6 million compared to cash and current marketable securities of $171.2 million at April 28, 2012. The decrease in cash and current marketable securities is a result of the acquisition of Blue Tomato, which was funded by the Company's cash and current marketable securities balance, as well as capital expenditures and stock repurchases, offset by cash generated through operations.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "Our business improved throughout the first quarter driven by strong full price selling during the combined March/April period. These results, which were delivered in a more challenging operating environment than a year ago, reflect the success of our continued execution on long-term growth strategies and the strength of our highly differentiated and diverse merchandise offering. We remain confident that our current course can continue to yield increased top and bottom line long-term gains."

Fiscal 2013 Second Quarter Outlook
The Company is introducing guidance for the three months ending August 3, 2013. Net sales are projected to be in the range of $155 to $158 million resulting in net income per diluted share of approximately $0.12 to $0.14, which includes an estimated $1.6 million, or approximately $0.04 per diluted share, for charges associated with the acquisition of Blue Tomato. This guidance is based on anticipated comparable store sales in the range of flat to an increase of 2% for the second quarter of fiscal 2013. 

The Company currently intends to open 58 new stores in fiscal 2013, including 9 stores in Canada and 6 stores in Europe.

A conference call will be held today to discuss first quarter fiscal 2013 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617)-597-5311 followed by the conference identification code of 51349190. 

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 4, 2013 we operated 503 stores, 475 in the United States, 22 in Canada, and 6 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 2, 2013 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 4, 2013     % of Sales     April 28, 2012   % of Sales  
Net sales   $ 148,496     100.0 %   $ 129,899   100.0 %
Cost of goods sold     100,524     67.7 %     87,798   67.6 %
Gross profit     47,972     32.3 %     42,101   32.4 %
                           
Selling, general and administrative expenses     43,943     29.6 %     34,839   26.8 %
Operating profit     4,029     2.7 %     7,262   5.6 %
                           
Interest income, net     215     0.1 %     490   0.4 %
Other (expense) income, net     (146 )   0.0 %     17   0.0 %
Earnings before income taxes     4,098     2.8 %     7,769   6.0 %
                           
Provision for income taxes     1,600     1.1 %     3,242   2.5 %
                           
Net income   $ 2,498     1.7 %   $ 4,527   3.5 %
                           
Basic earnings per share   $ 0.08           $ 0.15      
                           
Diluted earnings per share   $ 0.08           $ 0.14      
                           
Weighted average shares used in computation of earnings per share:                          
  Basic     29,714             30,779      
                           
  Diluted     30,183             31,401      
                           
                           
                           
ZUMIEZ INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
    May 4,   February 2,   April 28,
2013   2013   2012
Assets   (Unaudited)       (Unaudited)
Current assets                  
Cash and cash equivalents   $ 14,661   $ 17,579   $ 7,962
Marketable securities     82,986     85,593     163,243
Receivables     10,466     9,467     8,700
Income taxes receivable     -     -     3,325
Inventories     90,870     77,598     70,435
Prepaid expenses and other     9,456     9,192     8,295
Deferred tax assets     4,104     3,885     1,837
  Total current assets     212,543     203,314     263,797
                   
Fixed assets, net     117,826     115,474     96,275
Goodwill     62,539     64,576     13,154
Intangible assets, net     19,097     20,480     -
Long-term other assets     4,979     5,254     5,700
  Total long-term assets     204,441     205,784     115,129
                   
  Total assets   $ 416,984   $ 409,098   $ 378,926
                   
Liabilities and Shareholders' Equity                  
Current liabilities                  
Trade accounts payable   $ 36,210   $ 16,052   $ 36,514
Accrued payroll and payroll taxes     6,745     11,057     7,086
Income taxes payable     971     6,957     -
Deferred rent and tenant allowances     5,252     4,901     4,350
Other liabilities     16,307     18,232     14,452
  Total current liabilities     65,485     57,199     62,402
                   
Long-term deferred rent and tenant allowances     38,863     36,928     34,045
Long-term deferred tax liabilities     5,074     5,544     -
Long-term debt and other liabilities     6,321     6,006     2,060
  Total long-term liabilities     50,258     48,478     36,105
                   
  Total liabilities     115,743     105,677     98,507
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; 30,163 shares issued and outstanding at May 4, 2013, 30,114 shares issued and outstanding at February 2, 2013 and 31,324 shares issued and oustanding at April 28, 2012     110,784     108,360     102,971
Accumulated other comprehensive income     2,588     6,010     191
Retained earnings     187,869     189,051     177,257
  Total shareholders' equity     301,241     303,421     280,419
                   
  Total liabilities and shareholders' equity   $ 416,984   $ 409,098   $ 378,926
                     
                     
                     
ZUMIEZ INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
    Three Months Ended  
    May 4, 2013     April 28, 2012  
Cash flows from operating activities:                
Net income   $ 2,498     $ 4,527  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation, amortization and accretion     6,331       5,275  
Deferred taxes     (260 )     (35 )
Stock-based compensation expense     1,513       1,606  
Excess tax benefit from stock-based compensation     (529 )     (1,710 )
Other     114       (74 )
Changes in operating assets and liabilities:                
  Receivables     (1,068 )     (2,172 )
  Inventories     (13,685 )     (5,355 )
  Prepaid expenses and other     (440 )     (411 )
  Trade accounts payable     19,848       14,297  
  Accrued payroll and payroll taxes     (4,272 )     (1,978 )
  Income taxes payable     (5,415 )     (7,443 )
  Deferred rent and tenant allowances     2,324       1,821  
  Other liabilities     (2,557 )     (2,549 )
Net cash provided by operating activities     4,402       5,799  
                 
Cash flows from investing activities:                
Additions to fixed assets     (6,374 )     (8,519 )
Purchases of marketable securities and other investments     (15,137 )     (43,375 )
Sales and maturities of marketable securities and other investments     17,315       37,317  
Net cash used in investing activities     (4,196 )     (14,577 )
                 
Cash flows from financing activities:                
Payments on long-term debt     (77 )     -  
Repurchase of common stock     (3,680 )     -  
Proceeds from exercise of stock-based compensation, net of withholding tax payments     382       243  
Excess tax benefit from stock-based compensation     529       1,710  
Net cash (used in) provided by financing activities     (2,846 )     1,953  
                 
Effect of exchange rate changes on cash and cash equivalents     (278 )     8  
                 
Net decrease in cash and cash equivalents     (2,918 )     (6,817 )
  Cash and cash equivalents, beginning of period     17,579       14,779  
  Cash and cash equivalents, end of period   $ 14,661     $ 7,962  
                   
  Supplemental disclosure on cash flow information:                
  Cash paid during the period for income taxes   $ 7,266     $ 10,705  
  Accrual for purchases of fixed assets     3,534       5,840  
Contact:
Company
Brian Leith
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1610

Investor
ICR
Brendon Frey
(203) 682-8200

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