Zumiez Inc. Announces Record Fiscal 2011 Fourth Quarter and Full Year Results

EVERETT, WA--(Marketwire - Mar 8, 2012) - Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported record results for the fourth quarter and fiscal year ended January 28, 2012.

Total net sales for the fourth quarter ended January 28, 2012 (13 weeks) increased 17.7% to $183.9 million from $156.2 million in the quarter ended January 29, 2011 (13 weeks). Comparable store sales for the fourth quarter of fiscal 2011 increased 9.7% on top of a comparable store sales increase of 13.0% in the fourth quarter of fiscal 2010. Net income in the fourth quarter of fiscal 2011 increased 24.9% to $18.7 million, or $0.60 per diluted share from net income of $15.0 million, or $0.49 per diluted share in the fourth quarter of the prior fiscal year.

Total net sales for fiscal 2011 (52 weeks) increased 16.1% to $555.9 million from $478.8 million in fiscal 2010 (52 weeks). Comparable store sales increased 8.7% in fiscal 2011 on top of a comparable store sales increase of 11.9% in fiscal 2010. Net income in fiscal 2011 increased 54.3% to $37.4 million, or $1.20 per diluted share compared to net income in the prior fiscal year of $24.2 million, or $0.79 per diluted share. Results for fiscal 2010 include costs of $2.4 million, or approximately $0.05 per diluted share, associated with the relocation of the Company's distribution center, and $2.1 million, or approximately $0.04 per diluted share, for the settlement of a previously disclosed lawsuit.

At January 28, 2012, the Company had cash and current marketable securities of $172.8 million, an increase of 34.2% compared to cash and current marketable securities of $128.8 million at January 29, 2011.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We are extremely pleased with our fiscal fourth quarter and full year results. This quarter's performance demonstrated a continuation of the strength we have seen throughout the year driven by consistently well executed merchandising, passionate employees providing a unique in-store experience, new store openings, and ecommerce strategies. Our recent performance also highlights the power of our business model as a high single digit comp and the addition of 45 productive new stores over the past year fueled a 300 basis point improvement in operating margin and generated more than $68 million in operating cash flow. With a highly differentiated mall-based concept that has significant unit expansion opportunities, a fast growing ecommerce business, and the ability to leverage our infrastructure, we believe the Company is well positioned to deliver sustainable sales and earnings growth over the near and long-term."

Fiscal 2012 First Quarter Outlook

The Company is introducing guidance for the three months ending April 28, 2012. Net sales are projected to be in the range of $123 to $125 million and resulting in net income per diluted share of approximately $0.06 to $0.08, which includes an estimated $0.4 million, or approximately $0.01 per diluted share, for charges associated with the relocation of ecommerce fulfillment operations to Edwardsville, KS. This guidance is based on an anticipated comparable store sales increase in the high single digit range for the first quarter of fiscal 2012.

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 fourth quarter and fiscal 2011 year-end results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (617)-597-5307 followed by the conference identification code of 22378309.

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 25, 2012 we operated 434 stores in the United States and 10 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-Q for the quarter ended October 29, 2011 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
			January 28, 2012				% of Sales			January 29, 2011				% of Sales
Net sales			$	183,859			100.0	%		$	156,192			100.0	%
Cost of goods sold				112,356			61.1	%			96,299			61.7	%
Gross profit				71,503			38.9	%			59,893			38.3	%
Selling, general and administrative expenses				40,190			21.9	%			35,879			22.9	%
Operating profit				31,313			17.0	%			24,014			15.4	%
Interest income, net				449			0.2	%			409			0.3	%
Other expense, net				(308	)		(0.1	%)			(111	)		(0.1	%)
Earnings before income taxes				31,454			17.1	%			24,312			15.6	%
Provision for income taxes				12,717			6.9	%			9,307			6.0	%
Net income			$	18,737			10.2	%		$	15,005			9.6	%
Basic earnings per share			$	0.61						$	0.50
Diluted earnings per share			$	0.60						$	0.49
Weighted average shares used in computation of earnings per share:
	Basic			30,646							30,160
	Diluted			31,211							30,927

ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
			Twelve Months Ended
			January 28, 2012				% of Sales			January 29, 2011				% of Sales
			(unaudited)
Net sales			$	555,874			100.0	%		$	478,849			100.0	%
Cost of goods sold				354,198			63.7	%			311,028			65.0	%
Gross profit				201,676			36.3	%			167,821			35.0	%
Selling, general and administrative expenses				141,444			25.5	%			130,454			27.2	%
Operating profit				60,232			10.8	%			37,367			7.8	%
Interest income, net				1,836			0.4	%			1,496			0.3	%
Other expense, net				(379	)		(0.1	%)			(8	)		0.0	%
Earnings before income taxes				61,689			11.1	%			38,855			8.1	%
Provision for income taxes				24,338			4.4	%			14,652			3.0	%
Net income			$	37,351			6.7	%		$	24,203			5.1	%
Basic earnings per share			$	1.22						$	0.81
Diluted earnings per share			$	1.20						$	0.79
Weighted average shares used in computation of earnings per share:
	Basic			30,527							29,971
	Diluted			31,119							30,794

ZUMIEZ INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
			January 28,			January 29,
			2012			2011
Assets			(unaudited)
Current assets
Cash and cash equivalents			$	14,779		$	11,357
Marketable securities				158,019			117,444
Receivables				6,284			6,129
Inventories				65,037			56,303
Prepaid expenses and other				7,907			7,210
Deferred tax assets				1,477			2,418
	Total current assets			253,503			200,861
Fixed assets, net				89,478			78,248
Goodwill and other intangibles				13,154			13,154
Long-term deferred tax assets				3,109			5,703
Long-term investments				2,380			2,766
Long-term other assets				533			899
	Total long-term assets			108,654			100,770
	Total assets		$	362,157		$	301,631
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable			$	21,743		$	16,371
Accrued payroll and payroll taxes				9,062			7,580
Income taxes payable				5,835			4,108
Deferred rent and tenant allowances				4,230			3,719
Other liabilities				14,706			13,683
	Total current liabilities			55,576			45,461
Long-term deferred rent and tenant allowances				32,321			27,629
Long-term other liabilities				1,983			1,806
	Total long-term liabilities			34,304			29,435
	Total liabilities			89,880			74,896
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; 31,170 shares issued and outstanding at January 28, 2012 and 30,835 shares issued and outstanding at January 29, 2011				99,412			91,373
Accumulated other comprehensive income (loss)				135			(17	)
Retained earnings				172,730			135,379
	Total shareholders' equity			272,277			226,735
	Total liabilities and shareholders' equity		$	362,157		$	301,631

ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
			Fiscal Year Ended
			January 28, 2012				January 29, 2011
			(unaudited)
Cash flows from operating activities:
Net income			$	37,351			$	24,203
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion				19,744				17,923
Deferred taxes				3,441				537
Stock-based compensation expense				5,303				4,866
Excess tax benefit from stock-based compensation				(1,826	)			(3,248	)
Impairment of long-lived assets				130				105
Other				478				353
Changes in operating assets and liabilities:
	Receivables			(671	)			(998	)
	Inventories			(8,833	)			(5,387	)
	Prepaid expenses and other			(607	)			(1,137	)
	Trade accounts payable			4,295				(52	)
	Accrued payroll and payroll taxes			1,485				987
	Income taxes payable			2,868				3,350
	Deferred rent and tenant allowances			5,334				1,838
	Other liabilities			(427	)			5,115
Net cash provided by operating activities				68,065				48,455
Cash flows from investing activities:
Additions to fixed assets				(25,508	)			(29,124	)
Purchases of marketable securities and other investments				(194,531	)			(179,611	)
Sales and maturities of marketable securities and other investments				151,965				164,961
Net cash used in investing activities				(68,074	)			(43,774	)
Cash flows from financing activities:
Proceeds from exercise of stock-based compensation, net of withholding tax payments				1,589				1,860
Excess tax benefit from stock-based compensation				1,826				3,248
Net cash provided by financing activities				3,415				5,108
Effect of exchange rate changes on cash and cash equivalents				16				-
Net increase in cash and cash equivalents				3,422				9,789
Cash and cash equivalents, beginning of period				11,357				1,568
Cash and cash equivalents, end of period			$	14,779			$	11,357
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes			$	18,014			$	10,789
Accrual for purchases of fixed assets				3,083				469
Non-cash investing activity - refundable use tax in fixed assets				(110	)			(359	)
Non-cash investing activity - asset retirement obligations in fixed assets				224				129