UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 12, 2006
ZUMIEZ INC.
(Exact Name of Registrant as Specified in Its Charter)
Washington
(State or Other Jurisdiction of Incorporation)
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000-51300 |
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91-1040022 |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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6300 Merrill Creek Parkway, Suite B, Everett, Washington |
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98203 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
(425) 551-1500
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01. Regulation FD Disclosure.
Copies of slide presentations which will be presented by us at the Eighth Annual ICR XChange conference on January 12, 2006, and generally to members of the financial and investment community from time to time (the “Investor Presentation”), are attached to this report as Exhibit 99.1 and are also available on the Zumiez website at http://ir.zumiez.com.
In accordance with General Instruction B.2. of Form 8-K, the information contained in this report (including the Investor Presentation) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. This report will not be deemed a determination or an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
99.1. Investor Presentation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ZUMIEZ INC. |
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(Registrant) |
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Date: January 12, 2006 |
By: |
/s/ Richard M. Brooks |
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Richard M. Brooks |
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President and Chief Executive Officer |
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Searchable text section of graphics shown above
Zumiez Inc.
Safe Harbor Statement
Under the Private Securities Litigation Reform Act of 1995
Our presentation includes, and our response to various questions may include, forward-looking statements about the Company’s revenues and earnings and about our future plans and objectives. Any such statements are subject to risks and uncertainties that could cause the actual results and the implementation of the Company’s plans and operations to vary materially. These risks are discussed in the Company’s filings with the S.E.C., including, without limitation, the final prospectus filed on November 9, 2005 and as subsequently amended.
[LOGO]
1
Zumiez: An Attractive and Unique Lifestyle Retailer
[GRAPHIC]
• Specialty retailer of action sports apparel, footwear, equipment and accessories
• Cater to young men and women between the ages of 12 and 24
• Focus on action sports lifestyles including skateboarding, surfing, snowboarding, BMX and motocross
• Offer a broad and relevant selection of popular brands and styles
• Unique culture and integrated marketing based on a passion for the action sports lifestyle
• 174 stores in 19 states, primarily mall-based
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Delivering on IPO Goals
[GRAPHIC]
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Strategic Goals |
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Actions Since IPO |
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Open New Stores: |
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On track to open 42 stores in 2006 |
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Drive Comp. Store Sales: |
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Q2 2005 |
+ |
11.3 |
% |
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Q3 2005 |
+ |
9.8 |
% |
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November |
+ |
18.8 |
% |
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December |
+ |
20.9 |
% |
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Year-to-Date |
+ |
13.7 |
% |
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Expanded presence in Southern California, New York, Texas and New Jersey |
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Successful 2005 Couch Tour |
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Deliver to Bottom Line: |
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EPS growth exceeding 30% |
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Distinctive Store Experience
[GRAPHIC]
• Bringing the independent specialty store to the mall
• Interactive store environment
• Industrial look with concrete floors and open ceilings
• Store design reflects an “organized chaos”
• Action sports imagery and relevant music
• Store associates identify with the action sports lifestyle and offer superior customer service
• Located near popular teen gathering spots
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Differentiated Merchandising Strategy
• Extensive selection of current and relevant action sports brands
• Mix of softgoods and hardgoods affirms credibility with customers
• Identify evolving fashion trends and quickly respond with a relevant merchandise assortment
• Strategic use of private label merchandise
• Merchandise mix trends through 3Q 2005 are consistent
Fiscal 2004
Merchandise Mix
[CHART]
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High Impact, Integrated Marketing Approach
• Grassroots marketing efforts reach customers in their environment
• Local sporting and music event promotions
• Advertising in popular action sports magazines
• Interactive contests
• Events create strong identity with our brand and culture
• Zumiez Couch Tour
• Series of events including professional skateboarding demonstrations from top professionals, autograph sessions, competitions and live music
• 12 stops in 2005, events attracted an average of 5,000 attendees, with 12 planned stops in 2006
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Zumiez Culture: Developing Our Employees
[GRAPHIC]
• Deep-rooted passion for action sports lifestyle
• Attract and retain high quality employees who are enthusiastic and knowledgeable about the products we sell
• Zumiez University: Intense focus on employee and manager training
• Empower our store managers to make business decisions and reward success
• All of our district and regional managers began as store associates or store managers
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Learning, Competition, Recognition and Fun
• Emphasis on training and employee development (through Zumiez University) improves retention and store level execution
• Sales driven incentive structure creates competitive, yet fun, environment consistent with action sports lifestyle
• Annual 100K Event:
• Training and reward for top sales associates and all managers
• Allow employees from all locations to interact with each other and exchange ideas to better operate stores
• Manager training sessions aimed at developing skills to improve productivity at all levels
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Disciplined Operating Philosophy
• Managing growth
• People
• Logistics
• Technology
• Disciplined merchandising and purchasing strategy
• Analyze sales trends, gather customer feedback, shop key markets and solicit vendor input
• Rigorous new store selection process
• Centralized focus on store-level execution
• Stores are customized to individual market
• Frequent communication between store managers and corporate management
• Focused incentive structure to drive profitability
• Experienced management team with decades of relevant experience
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Demonstrated Track Record
[GRAPHIC]
• Consistent execution of growth strategy demonstrated through rapid growth in store count and sales
• 26 of 27 years with positive comp store sales
Store Growth
[CHART]
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Comp Store Sales |
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8.5 |
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18.5 |
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20.2 |
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(1.1 |
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4.3 |
% |
9.6 |
% |
13.7 |
% |
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Exceptional Store Expansion Opportunities
• Zumiez is in the early phase of store expansion with the potential to grow to over 800 stores
In the Sweet Spot of Growth Cycle
American Eagle
(868)
PacSun
(798)
Aeropostale
(659)
Hot Topic
(661)
Abercrombie
(466)
Zumiez
(174)
Urban
Out.
(84)
# of Stores
As of latest 10-Q
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Growth Strategy: How We Get There
• Opened 35 stores in fiscal 2005, 42 planned for fiscal 2006
• Increase average store size over time from 2,700 square feet today
• Accommodate expanded merchandise mix
• Maintain unique in-store experience and culture
• Drive store-level productivity
• Leverage existing infrastructure and increase operating efficiencies
• Expand brand awareness through geographic expansion and continued marketing
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Profitable Operating History
[GRAPHIC]
Summary Income Statement
($ in thousands, except per share data)
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Fiscal Year Ended |
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Nine Months Ended |
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January 31, |
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January 29, |
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October 30, |
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October 29, |
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2004 |
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2005 |
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2004 |
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2005 |
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Net sales |
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$ |
117,857 |
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$ |
153,583 |
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$ |
100,582 |
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$ |
130,188 |
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Gross margin |
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36,537 |
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50,431 |
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31,417 |
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44,035 |
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Operating profit |
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7,461 |
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12,009 |
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5,169 |
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9,505 |
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Earnings before income taxes |
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7,176 |
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11,767 |
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4,956 |
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9,776 |
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Net income |
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$ |
4,475 |
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7,267 |
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$ |
3,020 |
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$ |
6,087 |
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EPS |
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$ |
0.35 |
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$ |
0.56 |
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$ |
0.23 |
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$ |
0.45 |
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Gross Margin |
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31.0 |
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32.8 |
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31.2 |
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33.8 |
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EBIT Margin |
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6.3 |
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7.8 |
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5.1 |
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7.3 |
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Net Income Margin |
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3.8 |
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4.7 |
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3.0 |
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4.7 |
% |
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Investment Highlights
• Focus On The Large And Growing Action Sports Segment
• Highly Differentiated Retail Concept – Bringing The Independent Store To The Mall
• Deep Rooted Culture That Drives Performance
• High Impact, Integrated Marketing Approach
• Substantial Growth Opportunities
• Disciplined Operating Philosophy and Proven Management Team
• Strong Financial Track Record
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