Exhibit 99.1
Zumiez Inc. Announces Fiscal 2006 Third Quarter Results
Q3-06 Net Sales Increased 43% to $82.3 Million;
Comparable Store Sales Increased 10.7% in Third Quarter;
Q3-06 Diluted EPS Up 33.3% to $0.24;
Company Reiterates Fiscal 2006 EPS Guidance of $0.66 to $0.67
EVERETT, Wash.--(BUSINESS WIRE)--Nov. 15, 2006--Zumiez Inc.
(NASDAQ: ZUMZ) today reported results for the third quarter ended
October 28, 2006.
Total net sales for the third quarter (13 weeks) ended October 28,
2006 increased by 43% to $82.3 million from $57.4 million reported in
the third quarter (13 weeks) of the prior fiscal year. The company
posted net income for the quarter of $6.8 million or $0.24 per diluted
share versus $5.3 million or $0.18 per diluted share in the third
quarter of the prior fiscal year. Comparable store sales were 10.7%
for the third quarter of fiscal 2006 compared to 9.8% in the third
quarter of fiscal 2005.
Total net sales for the first nine months (39 week period) of
fiscal 2006 increased by 43% to $185.8 million from $130.2 million
reported in the first nine months of the prior year. The company
posted net income of $9.6 million or $0.33 per diluted share in the
first nine months of 2006 versus $6.1 million or $0.23 per diluted
share in the prior year. Comparable store sales increased 13.6% for
the first nine months of fiscal 2006 compared to 10.8% for the first
nine months of fiscal 2005.
Rick Brooks, President and Chief Executive Officer of Zumiez Inc.,
stated, "We are pleased with our third quarter results and the
earnings growth driven by our team year to date. During the quarter,
Zumiez opened 12 stores and remains on track to open 42 new stores in
fiscal 2006, in addition to the 19 Fast Forward stores acquired in the
second quarter."
Mr. Brooks concluded, "While we are proud of our accomplishments
so far this year, we believe we are still in the early stages of our
growth potential and we continue to strive to improve the store
experience for our customers. We had 233 stores at quarter end, and
believe we can eventually operate 800 stores in the U.S. In fiscal
2007, we plan to open 50 new stores, consistent with our long-term
goal of expanding square footage by 20-25% annually. We have a
terrific team in place to deliver on our goals as we expand in the
marketplace."
2006 Outlook
The company stated that it is maintaining guidance for fiscal 2006
to $0.66 to $0.67 in diluted earnings per share. Weighted average
diluted shares for the fiscal year are expected to be approximately
28,900,000.
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 and the impact of other business variables and risks.
A conference call will be held today to discuss third quarter
results and will be web cast at 5:00 p.m. ET on http://ir.zumiez.com.
Participants may also dial (800) 706-7741 followed by the conference
identification code of 89765355.
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 November 10, 2006 we
operate 233 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 July 29, 2006 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 STATEMENT OF INCOME
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------ ------------------------
October 28, October 29, October 28, October 29,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Net sales $82,258 $57,412 $185,799 $130,188
Cost of goods sold 51,994 35,999 121,494 86,153
----------- ----------- ----------- -----------
Gross profit 30,264 21,413 64,305 44,035
Selling, general
and administrative
expenses 19,343 13,198 49,919 34,530
----------- ----------- ----------- -----------
Operating profit 10,921 8,215 14,386 9,505
Interest income
(expense), net 230 221 813 269
Other income
(expense), net -- 1 (16) 2
----------- ----------- ----------- -----------
Earnings before
income taxes 11,151 8,437 15,183 9,776
Provision for
income taxes 4,324 3,158 5,605 3,689
----------- ----------- ----------- -----------
Net income $ 6,827 $ 5,279 $ 9,578 $ 6,087
=========== =========== =========== ===========
Basic net income
per share $ 0.25 $ 0.19 $ 0.35 $ 0.24
=========== =========== =========== ===========
Diluted net income
per share $ 0.24 $ 0.18 $ 0.33 $ 0.23
=========== =========== =========== ===========
Weighted average
shares
outstanding, Basic 27,600,574 27,089,364 27,454,193 25,424,554
Weighted average
shares
outstanding,
Diluted 28,861,871 28,601,778 28,756,468 26,923,744
ZUMIEZ INC.
CONDENSED BALANCE SHEETS
(in thousands, except share amounts)
October 28, January 28, October 29,
2006 2006 2005
----------- ----------- -----------
(Unaudited) (Audited) (Unaudited)
Assets
Current assets
Cash and cash equivalents $ 2,111 $ 4,737 $ 24,015
Marketable Securities 17,835 38,264 6,086
Receivables 5,816 3,746 4,558
Inventory 56,694 30,559 43,597
Prepaid expenses and other 965 711 1,038
Deferred tax assets 1,618 938 1,177
----------- ----------- -----------
Total current assets 85,039 78,955 80,471
Leasehold improvements and
equipment, net 48,930 35,456 32,780
Goodwill 12,766 -- --
----------- ----------- -----------
Total long-term assets 61,696 35,456 32,780
Total assets $146,735 $114,411 $113,251
=========== =========== ===========
Liabilities and Shareholders'
Equity
Current liabilities
Trade accounts payable $ 32,002 $ 18,623 $ 30,280
Accrued payroll and payroll
taxes 2,296 4,388 2,678
Income taxes payable 2,974 3,309 --
Current portion of deferred rent
and tenant allowances 1,331 900 1,223
Other accrued liabilities 6,262 4,378 3,480
----------- ----------- -----------
Total current liabilities 44,865 31,598 37,661
----------- ------------ ------------
Long-term deferred rent and
tenant allowances, less current
portion 11,302 7,595 7,274
Deferred tax liabilities 602 1,534 1,452
----------- ----------- -----------
Total long-term liabilities 11,904 9,129 8,726
----------- ------------ ------------
Commitments and contingencies
(Note 4)
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;
27,640,664 shares issued and
outstanding at October 28,
2006, 27,259,297 shares issued
and outstanding at January 28,
2006, and 27,222,653 issued and
outstanding at October 29, 2005 41,734 35,031 34,971
Accumulated other comprehensive
income (4) (5) (2)
Retained earnings 48,236 38,658 31,895
----------- ----------- -----------
Total shareholders' equity 89,966 73,684 66,864
----------- ------------ ------------
Total liabilities and
shareholders' equity $146,735 $114,411 $113,251
=========== =========== ===========
ZUMIEZ INC.
CONDENSED CASH FLOWS
(in thousands)
(Unaudited)
For the Nine Months Ended
--------------------------
October 28, October 29,
------------ -------------
2006 2005
------------ ------------
Cash flows from operating activities
Net income $9,578 $ 6,087
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 7,478 5,361
Deferred tax expense (1,611) (377)
Stock compensation expense 1,394 123
Loss on disposal of assets 15 33
Loss on sale of marketable securities 17 --
Excess tax benefit from stock options (4,057) --
Changes in operating assets and
liabilities
Receivables (1,902) (2,647)
Inventory (17,824) (17,143)
Prepaid expenses (85) 127
Trade accounts payable 7,556 15,816
Accrued payroll and payroll taxes (2,158) 117
Income taxes payable 3,722 (2,611)
Other accrued liabilities 1,202 (1,920)
Deferred rent (18) 385
------------ ------------
Net cash provided by operating activities 3,307 3,351
------------ ------------
Cash flows from investing activities
Additions to leasehold improvements and
equipment (14,469) (8,554)
Acquisitions, net of cash acquired (16,404) --
Purchases of marketable securities (79,977) (6,086)
Sales and maturities of marketable
securities 100,340 --
------------ ------------
Net cash used in investing activities (10,510) (14,640)
------------ ------------
Cash flows from financing activities
Change in book overdraft -- (429)
Borrowings on revolving credit facility -- 16,450
Payments on revolving credit facility (732) (16,450)
Proceeds from exercise 1,252 1,007
Proceeds from sale of stock -- 33,700
Excess tax benefit from stock options 4,057 --
------------ ------------
Net cash provided by financing activities 4,577 34,278
------------ ------------
Net increase (decrease) in cash and cash
equivalents (2,626) 22,989
Cash and cash equivalents, Beginning of
period 4,737 1,026
------------ ------------
Cash and cash equivalents, End of period $2,111 $24,015
============ ============
Supplemental disclosure of cash flow
information
Cash paid during the period for interest $ -- $ 59
Cash paid during the period for income
taxes 3,577 2,746
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CONTACT: Zumiez Inc.
Brenda Morris, Chief Financial Officer, 425-551-1564
or
Integrated Corporate Relations
Investors:
Chad Jacobs/David Griffith, 203-682-8200