Exhibit 99.1
Zumiez Inc. Announces Record Fiscal 2007 Fourth Quarter Results
Q4-07 Net Sales Increased 12.7% to $126.6 Million;
Comparable Store Sales Increased 4.0% in Fourth Quarter;
Q4-07 Diluted EPS Increased to $0.42;
Company Introduces Fiscal 2008 EPS Guidance of Approximately $0.90 to $0.93
EVERETT, Wash.--(BUSINESS WIRE)--Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the fourth quarter ended February 2, 2008.
Total net sales for the fourth quarter (13 weeks) ended February 2, 2008 increased by 12.7% to $126.6 million from $112.4 million reported in the fourth quarter ended February 3, 2007 (14 weeks). The company posted net income for the quarter of $12.4 million or $0.42 per diluted share versus $11.3 million or $0.39 per diluted share in the fourth quarter of the prior fiscal year. Comparable store sales increased 4.0% for the fourth quarter of fiscal 2007 compared to a 12.0% increase in the fourth quarter of fiscal 2006.
Total net sales for fiscal 2007 (52 week period) increased by 27.9% to $381.4 million from $298.2 million reported in fiscal 2006 (53 week period). The company posted net income of $25.3 million or $0.86 per diluted share in fiscal 2007 versus $20.9 million or $0.73 per diluted share in the prior year. Comparable store sales increased 9.2% in fiscal 2007 compared to 13.0% in fiscal 2006.
Rick Brooks, President and Chief Executive Officer of Zumiez Inc., stated, “While we experienced some softness in sales late in the year, Zumiez still posted record sales and earnings results for both fiscal 2007 and the fourth quarter, and we opened 50 new stores bringing our total store count to 285 at the end of the year. Although there may be some near-term challenges in fiscal 2008, we remain upbeat regarding the long term prospects for Zumiez. We believe we are making the right investments and decisions to prudently manage through 2008, while keeping long-term profitable growth as our highest priority.”
2008 Outlook
The company is introducing guidance for fiscal 2008 of approximately $0.90 to $0.93 in diluted earnings per share. This guidance is based on anticipated square footage growth of approximately 20% and on a flat to low-single digit increase in comparable store sales. We anticipate opening about 57 stores in 2008, in-line with our targeted square footage growth of 20% per year. Weighted average diluted shares for the fiscal year are expected to be approximately 29,700,000.
In putting forth this outlook, the company reminds investors of the complexity of accurately assessing future growth given the difficulty in predicting fashion trends and consumer preferences, boardsports popularity and participation rates, general economic conditions, weather and the impact of other business variables and risks. Our business outlook 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 the comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
A conference call will be held today to discuss fourth quarter results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (888) 680-0894 or (617) 213-4860 (international) followed by the conference identification code of 19781243. Telephonic participants can reduce pre-call hold time by registering for the conference in advance via the following link:
https://www.theconferencingservice.com/ prereg/key.process?key=P67T3VK8U
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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 February 2, 2008 we operate 285 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 November 3, 2007 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 STATEMENT OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
| | | |
| Three Months Ended | | Twelve Months Ended |
| February 2, | | February 3, | | February 2, | | February 3, |
| 2008 | | 2007 | | 2008 | | 2007 |
| Net sales | $126,606 | | $112,378 | | $381,416 | | $298,177 |
| Cost of goods sold | 78,039 | | 68,265 | | 244,429 | | 189,959 |
Gross profit | 48,567 | | 44,113 | | 136,987 | | 108,218 |
| | | | | | | |
| Selling, general and administrative expenses | 29,229 | | 26,055 | | 98,042 | | 75,774 |
| Operating profit | 19,338 | | 18,058 | | 38,945 | | 32,444 |
| | | | | | | |
| Interest income, net | 551 | | 365 | | 1,722 | | 1,178 |
| Other income (expense) | - | | - | | | 3 | | (16) |
| Earnings before income taxes | 19,889 | | 18,423 | | 40,670 | | 33,606 |
| | | | | | | |
| Provision for income taxes | 7,447 | | 7,145 | | 15,344 | | 12,750 |
| | | | | | | |
| Net income | $12,442 | | $11,278 | | $25,326 | | $20,856 |
| | | | | | | |
| Basic net income per share | $0.43 | | $0.41 | | $0.89 | | $0.76 |
| | | | | | | |
| Diluted net income per share | $0.42 | | $0.39 | | $0.86 | | $0.73 |
| | | | | | | |
Weighted average shares used in computation of earnings per share: | |
| Basic | 29,002,852 | | 27,789,980 | | 28,608,818 | | 27,542,891 |
| | | | | | | |
| Diluted | 29,321,680 | | 28,973,631 | | 29,322,337 | | 28,703,037 |
ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(Unaudited)
| February 3, | | February 2, |
| 2007 | | 2008 |
| | | |
| Assets | | | |
| Current assets | | | |
| Cash and cash equivalents | $8,161 | | $11,945 |
| Marketable securities | 43,816 | | 64,587 |
| Receivables | 5,223 | | 4,775 |
| Inventory | 42,157 | | 48,721 |
| Prepaid expenses and other | 3,593 | | 4,440 |
| Deferred tax assets | 1,551 | | 1,089 |
| Total current assets | 104,501 | | 135,557 |
| | | |
| Leasehold improvements and equipment, net | 49,889 | | 65,937 |
| Goodwill | 12,904 | | 13,154 |
| Deferred tax assets | - | | 1,447 |
| Total long-term assets | 62,793 | | 80,538 |
| | | |
| Total assets | $167,294 | | $216,095 |
| | | |
| Liabilities and Shareholders’ Equity | | | |
| Current liabilities | | | |
| Trade accounts payable | $24,164 | | $19,672 |
| Book overdraft | 6,083 | | 7,384 |
| Accrued payroll and payroll taxes | 4,784 | | 5,097 |
| Income taxes payable | 6,598 | | 47 |
| Current portion of deferred rent and tenant allowances | 1,377 | | 2,136 |
| Other accrued liabilities | 6,566 | | 9,060 |
| Total current liabilities | 49,572 | | 43,396 |
| | | |
| Long-term deferred rent and tenant allowances, less current portion | 12,069 | | 18,097 |
| Deferred tax liabilities | 841 | | - |
| Total long-term liabilities | 12,910 | | 18,097 |
| Total liabilities | 62,482 | | 61,493 |
| Commitments and contingencies (Note 8) | — | | — |
| | | |
| 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; 27,880,512 shares issued and outstanding at February 3, 2007, 29,002,852 shares issued and outstanding at February 2, 2008 | 45,311 | | 69,297 |
| Accumulated other comprehensive income (loss) | (14) | | 464 |
| Retained earnings | 59,515 | | 84,841 |
| Total shareholders’ equity | 104,812 | | 154,602 |
| | | |
| Total liabilities and shareholders’ equity | $167,294 | | $216,095 |
CONTACT:
Company:
Zumiez Inc.
Trevor Lang, 425-551-1500 ext. 1564
Chief Financial Officer
or
Investor:
Integrated Corporate Relations
David Griffith/Chad Jacobs
203-682-8200
