Zumiez Inc. Announces Record Fiscal 2012 First Quarter Results

EVERETT, WA--(Marketwire - May 17, 2012) - 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 April 28, 2012.

Total net sales for the first quarter ended April 28, 2012 (13 weeks) increased 22.7% to $129.9 million from $105.9 million in the quarter ended April 30, 2011 (13 weeks). Comparable store sales for the first quarter of fiscal 2012 increased 12.9% on top of a comparable store sales increase of 12.6% in the first quarter of fiscal 2011. Net income in the first quarter of fiscal 2012 increased 140.0% to $4.5 million, or $0.14 per diluted share, from net income of $1.9 million, or $0.06 per diluted share, in the first quarter of the prior fiscal year, a diluted earnings per share increase of 133.3%. The results for fiscal 2012 include costs of approximately $0.3 million, or $0.01 per diluted share, associated with the relocation of the Company's ecommerce fulfillment center from Everett, Washington to Edwardsville, Kansas.

At April 28, 2012, the Company had cash and current marketable securities of $171.2 million, an increase of 31.0% compared to cash and current marketable securities of $130.7 million at April 30, 2011.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We are pleased to start the year off with such strong performance. While the first quarter represents only a small percentage of our annual sales and earnings, theses results are further validation that our strategies to profitably grow the business are working. Our teams are energized and focused on carrying our current momentum into summer and positioning the Company for a successful back half of the year."

Fiscal 2012 Second Quarter Outlook

The Company is introducing guidance for the three months ending July 28, 2012. Net sales are projected to be in the range of $128 to $130 million resulting in net income per diluted share of approximately $0.04 to $0.06. This guidance is based on an anticipated comparable store sales increase in the mid single digit range for the second quarter of fiscal 2012 and includes costs of approximately $1.8 million, or $0.03 per diluted share, associated with the relocation the Company's ecommerce fulfillment center to Edwardsville, Kansas and corporate offices to Lynnwood, Washington from Everett, Washington.

The Company currently intends to open approximately 50 new stores in fiscal 2012, including up to 10 stores in Canada, with an opening cadence similar to fiscal 2011.

A conference call will be held today to discuss first quarter fiscal 2012 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617)-213-8852 followed by the conference identification code of 42196127.

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 April 28, 2012 we operated 444 stores in the United States and 11 stores in Canada, 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 annual report on Form 10-K for the year ended January 28, 2012 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 OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
			Three Months Ended
			April 28, 2012			% of Sales			April 30, 2011			% of Sales
Net sales			$	129,899		100.0	%		$	105,851		100.0	%
Cost of goods sold				87,798		67.6	%			72,661		68.7	%
Gross profit				42,101		32.4	%			33,190		31.3	%
Selling, general and administrative expenses				34,839		26.8	%			30,638		28.9	%
Operating profit				7,262		5.6	%			2,552		2.4	%
Interest income, net				490		0.4	%			513		0.4	%
Other income, net				17		0.0	%			55		0.1	%
Earnings before income taxes				7,769		6.0	%			3,120		2.9	%
Provision for income taxes				3,242		2.5	%			1,234		1.1	%
Net income			$	4,527		3.5	%		$	1,886		1.8	%
Basic earnings per share			$	0.15					$	0.06
Diluted earnings per share			$	0.14					$	0.06
Weighted average shares used in computation of earnings per share:
	Basic			30,779						30,343
	Diluted			31,401						31,084

ZUMIEZ INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
			April 28,			January 28,			April 30,
			2012			2012			2011
Assets			(Unaudited)						(Unaudited)
Current assets
Cash and cash equivalents			$	7,962		$	14,779		$	13,290
Marketable securities				163,243			158,019			117,409
Receivables				8,700			6,284			8,277
Income taxes receivable				3,325			-			2,910
Inventories				70,435			65,037			63,148
Prepaid expenses and other				8,295			7,907			6,967
Deferred tax assets				1,837			1,477			1,720
	Total current assets			263,797			253,503			213,721
Fixed assets, net				96,275			89,478			79,051
Goodwill				13,154			13,154			13,154
Long-term deferred tax assets				2,808			3,109			4,880
Long-term investments				2,351			2,380			2,799
Long-term other assets				541			533			758
	Total long-term assets			115,129			108,654			100,642
	Total assets		$	378,926		$	362,157		$	314,363
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable			$	36,514		$	21,743		$	30,174
Accrued payroll and payroll taxes				7,086			9,062			6,232
Income taxes payable				-			5,835			-
Deferred rent and tenant allowances				4,350			4,230			3,852
Other liabilities				14,452			14,706			11,518
	Total current liabilities			62,402			55,576			51,776
Long-term deferred rent and tenant allowances				34,045			32,321			29,452
Long-term other liabilities				2,060			1,983			1,805
	Total long-term liabilities			36,105			34,304			31,257
	Total liabilities			98,507			89,880			83,033
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; 31,324 shares issued and outstanding at April 28, 2012, 31,170 shares issued and outstanding at January 28, 2012 and 31,007 shares issued and outstanding at April 30, 2011				102,971			99,412			93,986
Accumulated other comprehensive income				191			135			79
Retained earnings				177,257			172,730			137,265
	Total shareholders' equity			280,419			272,277			231,330
	Total liabilities and shareholders' equity		$	378,926		$	362,157		$	314,363

ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
				Three Months Ended
				April 28, 2012				April 30, 2011
Cash flows from operating activities:
Net income				$	4,527			$	1,886
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion					5,275				4,705
Deferred taxes					(35	)			1,488
Stock-based compensation expense					1,606				1,386
Excess tax benefit from stock-based compensation					(1,710	)			(1,054	)
Other					(74	)			(5	)
	Changes in operating assets and liabilities:
		Receivables			(2,172	)			(2,110	)
		Inventories			(5,355	)			(6,841	)
		Prepaid expenses and other			(411	)			245
		Trade accounts payable			14,297				13,470
		Accrued payroll and payroll taxes			(1,978	)			(1,348	)
		Income taxes payable			(7,443	)			(5,963	)
		Deferred rent and tenant allowances			1,821				1,949
		Other liabilities			(2,549	)			(4,167	)
Net cash provided by operating activities					5,799				3,641
Cash flows from investing activities:
Additions to fixed assets					(8,519	)			(2,540	)
Purchases of marketable securities and other investments					(43,375	)			(39,281	)
Sales and maturities of marketable securities and other investments					37,317				38,843
Net cash used in investing activities					(14,577	)			(2,978	)
Cash flows from financing activities:
Proceeds from exercise of stock-based compensation, net of withholding tax payments					243				173
Excess tax benefit from stock-based compensation					1,710				1,054
Net cash provided by financing activities					1,953				1,227
Effect of exchange rate changes on cash and cash equivalents					8				43
Net (decrease) increase in cash and cash equivalents					(6,817	)			1,933
	Cash and cash equivalents, beginning of period				14,779				11,357
	Cash and cash equivalents, end of period			$	7,962			$	13,290
	Supplemental disclosure on cash flow information:
	Cash paid during the period for income taxes				10,705				5,710
	Accrual for purchases of fixed assets				5,840				2,722