EX-99.1 2 a5355510ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Zumiez Inc. Announces Record Fiscal 2006 Fourth Quarter Results Q4-06 Net Sales Increased 49.0% to $112.4 Million; Comparable Store Sales Increased 12.0% in Fourth Quarter; Q4-06 Diluted EPS Up 69.6% to $0.39; Company Introduces Fiscal 2007 EPS Guidance of $0.94 to $0.96 EVERETT, Wash.--(BUSINESS WIRE)--March 14, 2007--Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the fourth quarter ended February 3, 2007. Total net sales for the fourth quarter (14 weeks) ended February 3, 2007 increased by 49.0% to $112.4 million from $75.4 million reported in the fourth quarter (13 weeks) of the prior fiscal year. The company posted net income for the quarter of $11.3 million or $0.39 per diluted share versus $6.8 million or $0.23 per diluted share in the fourth quarter of the prior fiscal year. Comparable store sales increased 12.0% for the fourth quarter of fiscal 2006 compared to a 20.7% increase in the fourth quarter of fiscal 2005. Total net sales for fiscal 2006 (53 week period) increased by 45.0% to $298.2 million from $205.6 million reported in fiscal 2005 (52 week period). The company posted net income of $20.9 million or $0.73 per diluted share in fiscal 2006 versus $12.9 million or $0.47 per diluted share in the prior year. Comparable store sales increased 13.0% in fiscal 2006 compared to 14.2% in fiscal 2005. Rick Brooks, President and Chief Executive Officer of Zumiez Inc., stated, "We are pleased to have completed another terrific year at Zumiez, the 27th of the past 28 years with a comparable store sales increase. We also successfully completed the integration of the acquisition of Fast Forward and opened an additional 42 new stores during the year." Mr. Brooks concluded, "The continued success of the highly differentiated Zumiez concept is a testament to the great team we've assembled. We remain on track to open 50 new stores in fiscal 2007, and are excited about our growth prospects for the coming year and beyond." 2007 Outlook The company's long-term financial targets include comparable store sales growth in the mid single digit range, net square footage expansion of approximately 20%, and diluted EPS growth in excess of 30%. In line with its long-term growth goals, the company introduced guidance for fiscal 2007 of $0.94 to $0.96 in diluted earnings per share. Weighted average diluted shares for the fiscal year are expected to be approximately 29,500,000. 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 (866) 543-6403 followed by the conference identification code of 51374373. 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 March 3, 2007 we operate 238 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 October 28, 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 Year Ended ----------------------- ----------------------- February 3, January 28, February 3, January 28, 2007 2006 2007 2006 ----------- ----------- ----------- ----------- Net sales $112,378 $75,401 $298,177 $205,589 Cost of goods sold 68,115 46,657 189,609 132,811 ----------- ----------- ----------- ----------- Gross profit 44,263 28,744 108,568 72,778 Selling, general and administrative expenses 26,205 18,200 76,124 52,730 ----------- ----------- ----------- ----------- Operating profit 18,058 10,544 32,444 20,048 Interest income (expense), net 365 393 1,178 648 Other income (expense), net -- (18) (16) (1) ----------- ----------- ----------- ----------- Earnings before income taxes 18,423 10,919 33,606 20,695 Provision for income taxes 7,145 4,155 12,750 7,844 ----------- ----------- ----------- ----------- Net income $ 11,278 $ 6,764 $ 20,856 $ 12,851 =========== =========== =========== =========== Basic net income per share $ 0.41 $ 0.25 $ 0.76 $ 0.50 =========== =========== =========== =========== Diluted net income per share $ 0.39 $ 0.23 $ 0.73 $ 0.47 =========== =========== =========== =========== Weighted average shares outstanding, Basic 27,789,980 27,245,038 27,542,891 25,879,675 Weighted average shares outstanding, Diluted 28,973,631 28,799,710 28,703,037 27,376,684 ZUMIEZ INC. CONDENSED BALANCE SHEETS (in thousands, except share amounts) (Unaudited) February 3, January 28, 2007 2006 ----------- ----------- Assets Current assets Cash and cash equivalents $ 8,161 $ 4,737 Marketable Securities 43,816 38,264 Receivables 5,223 3,746 Inventory 42,157 30,559 Prepaid expenses and other 3,593 711 Deferred tax assets 1,551 938 ----------- ----------- Total current assets 104,501 78,955 Leasehold improvements and equipment, net 49,889 35,456 Goodwill 12,904 -- ----------- ----------- Total long-term assets 62,793 35,456 Total assets $167,294 $114,411 =========== =========== Liabilities and Shareholders' Equity Current liabilities Trade accounts payable $ 24,164 $ 18,623 Book overdraft 6,083 -- Accrued payroll and payroll taxes 4,784 4,388 Income taxes payable 6,598 3,309 Current portion of deferred rent and tenant allowances 1,377 900 Other accrued liabilities 6,566 4,378 ----------- ----------- Total current liabilities 49,572 31,598 - Long-term deferred rent and tenant allowances, less current portion 12,069 7,595 Deferred tax liabilities 841 1,534 ----------- ----------- Total long-term liabilities 12,910 9,129 - Commitments and contingencies 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 and 27,259,297 shares issued and outstanding at January 28, 2006. 45,312 35,031 Accumulated other comprehensive income (14) (5) Retained earnings 59,514 38,658 ----------- ----------- Total shareholders' equity 104,812 73,684 Total liabilities and shareholders' equity $167,294 $114,411 =========== =========== ZUMIEZ INC. CONDENSED CASH FLOWS (in thousands) (Unaudited) Year Ended --------------------------------- February 3, 2007 January 28, 2006 ---------------- ---------------- Cash flows from operating activities Net income $20,856 $12,851 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 10,499 7,534 Deferred tax expense (1,305) (56) Stock compensation expense 2,053 165 Loss on disposal of assets 132 33 Loss on sale of marketable securities 17 -- Excess tax benefit from stock options (6,822) (4,458) Changes in operating assets and liabilities Receivables (1,309) (1,835) Inventory (198) (6,307) Prepaid expenses (2,713) 455 Trade accounts payable (3,371) 6,361 Accrued payroll and payroll taxes 330 1,827 Income taxes payable 10,111 5,156 Other accrued liabilities 1,506 (1,024) Deferred rent 145 383 ---------------- ---------------- Net cash provided by operating activities 29,931 21,085 ---------------- ---------------- Cash flows from investing activities Additions to leasehold improvements and equipment (17,896) (13,386) Acquisitions, net of cash acquired (16,542) -- Purchases of marketable securities (157,433) (66,496) Sales and maturities of marketable securities 151,785 28,210 ---------------- ---------------- Net cash used in investing activities (40,086) (51,672) ---------------- ---------------- Cash flows from financing activities Change in book overdraft 6,083 (429) Borrowings on revolving credit facility -- 19,750 Payments on revolving credit facility (732) (19,750) Proceeds from exercise 1,406 1,077 Proceeds from sale of stock -- 29,192 Excess tax benefit from stock options 6,822 4,458 ---------------- ---------------- Net cash provided by financing activities 13,579 34,298 ---------------- ---------------- Net increase in cash and cash equivalents 3,424 3,711 Cash and cash equivalents, Beginning of period 4,737 1,026 ---------------- ---------------- Cash and cash equivalents, End of period $ 8,161 $ 4,737 ================ ================ Supplemental disclosure of cash flow information Cash paid during the period for interest $ -- $ 61 Cash paid during the period for income taxes 4,027 2,746 ----------------------------------------------------- ---------------- CONTACT: Zumiez Inc. Brenda Morris Chief Financial Officer 425-551-1564 or Investor: Integrated Corporate Relations Chad Jacobs/David Griffith 203-682-8200