Attached files
file | filename |
---|---|
8-K - Vitacost.com, Inc. | v174933_8k.htm |
Investor
Contact:
Vitacost.com
Kathleen
Reed
Director
of Investor Relations
561-982-4180
or
ICR,
Inc.
John
Mills
Senior
Managing Director
310-954-1105
VITACOST.COM,
INC. ANNOUNCES FOURTH QUARTER AND YEAR-END 2009 RESULTS
Fourth
Quarter Net Sales Increased 32% y/y to $50.3 Million
Company
Generated Adjusted EBITDA of $5.4 Million for the Fourth Quarter, an Increase of
approximately 180% y/y
Adjusted
EBITDA Margin increased 570 basis points y/y to 10.7%
Fourth
Quarter Net Income Grew to $2.6 Million or $0.09 Per Diluted Share
Company
Provides Full Year 2010 Revenues Guidance of $245-$255 Million
Company
Expects Full Year 2010 fully diluted EPS in the range of $0.56 -
$0.63
BOCA
RATON, Fla., February 18, 2009 – Vitacost.com, Inc. (NASDAQ: VITC), a leading
online retailer and direct marketer of health and wellness products, today
reported financial results for the fourth quarter and full year ended December
31, 2009.
Fourth
Quarter of 2009 Operating Highlights Include:
–
|
Net
Sales increased 32% y/y to $50.3 million, compared to $38.2 million for
the fourth quarter of 2008.
|
–
|
Gross
Profit Margin increased 450 basis points to 31.9% from the prior year
period.
|
–
|
Sales
and Marketing expenses as a percent of sales decreased 110 basis points
year over year to 8.5% for the fourth quarter of 2009 compared to 9.6% in
the comparable year period.
|
–
|
Adjusted
EBITDA improved to $5.4 million, an increase of approximately 180% from
the prior year period.
|
–
|
Adjusted
EBITDA margin increased 570 basis points to 10.7% from the prior year
period.
|
–
|
The
Number of New Customers in the fourth quarter of 2009 increased 38% y/y to
184,293
|
–
|
The
Number of Orders in the fourth quarter of 2009 increased 26% y/y to
655,575
|
Fourth
Quarter 2009 Results
For the
fourth quarter of 2009, net sales increased 32% to $50.3 million from net sales
of $38.2 million for the fourth quarter of the prior year. Both of
the Company’s primary sales categories, propriety and third party products,
contributed to this strong year-over-year increase by generating record fourth
quarter results.
Gross
profit for the fourth quarter of 2009 increased 53% to $16.0 million, compared
to $10.5 million in the fourth quarter of the prior year. The Company's gross
profit margin increased 450 basis points to 31.9% in the fourth quarter versus
27.4% in the fourth quarter of 2008. Overall, the gross profit margin
improvement was primarily due to transitioning manufacturing of proprietary
capsules and tablets from third-party manufacturers in-house, and increased
purchasing power with third-party distributors and raw material suppliers due to
higher sales volumes.
Operating
income for the fourth quarter of 2009 was $3.7 million compared to $0.5 million
in the same period a year ago. The Company’s operating margin expanded to 7.3%
from 1.4% for the same period last year. This improvement was due to strong net
sales growth, leverage of sales and marketing expense, and the strength of the
Company’s proven business model.
Adjusted
EBITDA (earnings before interest, taxes, depreciation, amortization and related
non-cash compensation expense) for the fourth quarter of 2009 increased
approximately 180% y/y to $5.4 million, compared to $1.9 million in the previous
year. The Company's EBITDA margin increased 570 basis points to 10.7%
in the fourth quarter versus 5.0% in the fourth quarter of 2008.
Net
income for the fourth quarter of 2009 was $2.6 million, or $0.09 per diluted
share calculated on a weighted average fully diluted share count of 28.5 million
shares, versus a net loss of $0.6 million or ($0.02) per share for the
comparable period last year. The Company had approximately 22.8 million shares
outstanding pre IPO and issued approximately 4.4 million new shares for the IPO
during the last week of September.
“We
achieved record sales for the fourth quarter and full year of 2009 and are on
track to deliver strong results in 2010. Fourth quarter net sales
increased in our two primary net sales sources — third party products and
propriety products — underscoring our expanding product offering as well as
customer growth,” said Ira Kerker, Vitacost’s Chief Executive Officer. “The
improved gross and operating margins during 2009 illustrate the leverage in our
business model and with the planned expansion of our distribution and
manufacturing facilities in 2010; we believe we are well positioned for
increased sales, margin improvement and earnings growth for many years to
come.”
2
Full
Year 2009 Results
For the
full year of 2009, net sales increased 33.6% to $191.8 million compared to
$143.6 million in the same period last year.
The
Company’s operating cash flow was $14.9 million for the full year of 2009
compared to a use of $0.6 million in 2008. Adjusted EBITDA was $24.4
million for the full year of 2009 compared to $5.3 million for the previous
year.
Excluding
the $10.9 million of one-time, non-cash stock option expense recorded in the
third quarter, full year 2009 net income was $12.9 million, or $0.52 per diluted
share, calculated on 24.7 million shares outstanding compared to breakeven net
income or $0.00 per diluted share, for full year 2008. The Company's
GAAP net income, which includes the $10.9 million of one-time,
non-cash stock-based compensation expense in connection with the recent initial
public offering, was $5.9 million or $0.24 per fully diluted share for the full
year of 2009 compared with breakeven net income $0.00 per fully diluted share
for the full year of 2008.
Balance
Sheet
The
Company ended the fourth quarter of 2009 with cash, cash equivalents, and
short-term investments, of $44.4 million as of December 31, 2009.
Richard
Smith, Chief Financial Officer, commented, “Our strong operating cash flow of
$14.9 million for the full year of 2009 combined with our recent initial public
offering has us well positioned to complete our distribution and manufacturing
facility expansion as well as sufficient capital to increase our
competitive advantage. For instance, we have utilized our
infrastructure to increase the number of SKU’s that we offer our customers to
over 30,000 from 23,000 we had previously reported and we plan to end 2010 with
approximately 60,000 SKU’s.”
Outlook
For the
first quarter of 2010, the Company expects revenue to be in the range of $58 to
$60 million. Earnings per diluted share for the first quarter are expected to be
in the range of $0.14 to $0.15 per diluted share calculated with fully diluted
shares outstanding of 28.9 million.
For the
full year ending December 31, 2010 the Company expects revenue to be in the
range of $245 to $255 million. The Company expects its net income to
be in the range of $16.5 to $18.5 million which equates to an increase of 28% -
43% y/y, compared to the full year 2009 net income of $12.9M which excludes the
one-time, non-cash stock compensation expense. The Company expects
earnings per diluted share to be in the range of $0.56 to $0.63 calculated with
fully diluted shares outstanding of 29.5 million.
3
The
Company expects its EBITDA for the full year of 2010 to be in the range of $32.5
to $34 million with approximately $4.0 million of depreciation and amortization
for the full year.
E-Commerce
Metrics
A copy of
historical e-commerce metrics is available on the Company’s website at www.vitacost.com/earnings.
Conference
Call Information
The
Company will also host a conference call to discuss these results with
additional comments and details. Participating on the call will be Ira Kerker,
Chief Executive Officer, and Richard Smith, Chief Financial and Accounting
Officer.
The
conference call is scheduled to begin at 5:00 p.m. EST on February 18, 2010. The
call will be broadcast live over the Internet hosted at the Investor Relations
section of Vitacost.com’s website at www.vitacost.com, and
will be archived online through March 4, 2010. In addition, you may
dial 877-407-0784 to listen to the live broadcast.
A
telephonic playback will be available from 8:00 p.m. EST, February 18, 2010,
through March 4, 2010. Participants can dial 877-660-6853 to hear the playback.
The account number is 3055 and the passcode is 343860.
About
Vitacost.com, Inc.
Vitacost.com,
Inc. (Symbol: VITC) is a leading online retailer and direct marketer of health
and wellness products, including dietary supplements such as vitamins, minerals,
herbs or other botanicals, amino acids and metabolites, as well as cosmetics,
organic body and personal care products, sports nutrition and health
foods. Vitacost.com, Inc. sells these products directly to consumers
through its website, www.vitacost.com, as well as through its
catalogs. Vitacost.com, Inc. strives to offer its customers the
broadest product selection supported by current scientific and medical research
at the best value, while providing superior customer service and timely and
accurate delivery.
Forward-Looking
Statements
Except
for historical information contained herein, the statements in this release are
forward-looking and made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements made
herein, which include management’s expected results of operations for the first
quarter of 2010, and the full year of 2010, involve known and unknown risks and
uncertainties, which may cause Vitacost’s actual results in current or future
periods to differ materially from forecasted results. Those risks and
uncertainties include, among other things, the current global economic downturn
or recession; difficulty expanding its manufacturing and distribution
facilities; significant competition in its industry; unfavorable publicity or
consumer perception of its products on the Internet; the incurrence of material
product liability and product recall costs; Inability to defend intellectual
property claims; costs of compliance and its failure to comply with government
regulations; its failure to keep pace with the demands of our customers for new
products; disruptions in its manufacturing system, including
information technology systems, or losses of manufacturing certifications; and
the lack of long-term experience with human consumption of some of its products
with innovative ingredients. Those and other risks are more fully
described in Vitacost’s filings with the Securities and Exchange Commission,
including the Registration Statement on Form S-1, as amended, filed in
connection with the Company’s initial public offering as well as the Company’s
form 10-Q filed for the third quarter of 2009.
4
Vitacost.com,
Inc
|
Balance
Sheets
|
December
31, 2009 and 2008 (unaudited)
|
2009
|
2008
|
||||||||
Assets
|
|||||||||
Current
Assets
|
|||||||||
Cash
and cash equivalents
|
$ | 8,658,157 | $ | 61,326 | |||||
Securities
available for sale
|
35,787,227 | - | |||||||
Accounts
receivable
|
735,355 | 842,523 | |||||||
Other
receivables
|
1,055,372 | 645,451 | |||||||
Related
party receivables
|
- | 215,241 | |||||||
Inventory,
net
|
28,096,884 | 21,662,746 | |||||||
Prepaid
expenses
|
876,788 | 656,975 | |||||||
Deferred
tax asset
|
1,336,852 | 1,179,288 | |||||||
Total
current assets
|
76,546,635 | 25,263,550 | |||||||
Property
and Equipment, net
|
21,961,903 | 19,305,832 | |||||||
Goodwill
|
2,200,000 | 2,200,000 | |||||||
Intangible
Assets, net
|
9,446 | 13,947 | |||||||
Deposits
|
4,656,128 | 85,207 | |||||||
Deferred
Tax Asset
|
4,176,717 | - | |||||||
11,042,291 | 2,299,154 | ||||||||
Total
assets
|
$ | 109,550,829 | $ | 46,868,536 | |||||
Liability
and Stockholders' Equity
|
|||||||||
Current
Liabilities
|
|||||||||
Line
of credit
|
$ | 2,705,000 | $ | 9,412,630 | |||||
Current
maturities of note payable
|
1,090,969 | 983,032 | |||||||
Current
maturities of capital lease obligation
|
35,452 | 58,343 | |||||||
Accounts
payable
|
17,693,928 | 15,769,909 | |||||||
Deferred
revenue
|
1,919,352 | 2,379,298 | |||||||
Accrued
expenses
|
3,282,476 | 2,620,760 | |||||||
Income
taxes payable
|
51,221 | 29,252 | |||||||
Total
current liabilities
|
26,778,398 | 31,253,224 | |||||||
Notes
Payable, less current maturities
|
4,820,042 | 5,740,436 | |||||||
Notes
Payable, related party
|
- | 2,000,000 | |||||||
Capital
Lease Obligation, less current maturities
|
- | 37,698 | |||||||
Deferred
Tax Liability
|
2,984,028 | 167,368 | |||||||
Interest
Rate Swap Liability
|
468,719 | 704,840 | |||||||
Total
liabilities
|
$ | 35,051,187 | $ | 39,903,566 | |||||
Commitments
and Contingencies
|
|||||||||
Stockholders'
Equity
|
|||||||||
Preferred
stock, par value $.00001 per share; authorized 25,000,000; no shares
issued and outstanding at December 31, 2009 and 2008
|
$ | - | $ | - | |||||
Common
stock, par value $.00001 per share; authorized 100,000,000; 27,488,353 and
23,188,380 shares issued and outstanding at December 31, 2009 and 2008,
respectively
|
275 | 232 | |||||||
Additional
paid-in capital
|
71,932,256 | 11,457,241 | |||||||
Note
receivable from exercise of options
|
- | (1,165,625 | ) | ||||||
Retained
earnings (deficit)
|
2,567,111 | (3,326,878 | ) | ||||||
Total
stockholders' equity
|
74,499,642 | 6,964,970 | |||||||
Total
liabilities and stockholders' equity
|
$ | 109,550,829 | $ | 46,868,536 | |||||
Source: Vitacost.com
|
5
Condensed
Consolidated Statements of Operations
For
the Three Months and Full Year Ended December 31, 2009 and 2008
Vitacost.com,
Inc.
|
||||||||||||||||||
Quarterly
Income Statement ($ in 000s)
|
||||||||||||||||||
(Unaudited)
|
||||||||||||||||||
Three
Months Ended
|
||||||||||||||||||
December
31, 2009
|
December
31, 2008
|
|||||||||||||||||
As
|
Excluding
|
As
|
Excluding
|
|||||||||||||||
Reported
|
Adjustments
|
Adjustments
|
Reported
|
Adjustments
|
Adjustments
|
|||||||||||||
Net
Sales
|
$ | 50,290.8 | $ | 50,290.8 | $ | 38,165.7 | $ | 38,165.7 | ||||||||||
Cost
of Goods Sold
|
34,252.3 | 34,252.3 | 27,697.0 | 27,697.0 | ||||||||||||||
Gross
Profit
|
16,038.5 | 16,038.5 | 10,468.7 | 10,468.7 | ||||||||||||||
Fulfillment
|
2,926.4 | 2,926.4 | 2,693.8 | 2,693.8 | ||||||||||||||
Sales
& Marketing
|
4,291.2 | 4,291.2 | 3,665.0 | 3,665.0 | ||||||||||||||
General
& Administrative
|
4,018.2 | 4,018.2 | 2,778.9 | 2,778.9 | ||||||||||||||
Depreciation
& Amortization
|
1,134.5 | 1,134.5 | 801.1 | 801.1 | ||||||||||||||
Total
Operating Expenses
|
12,370.3 | 12,370.3 | 9,938.8 | 9,938.8 | ||||||||||||||
Operating
Income
|
3,668.2 | 3,668.2 | 529.9 | 529.9 | ||||||||||||||
Interest
Income
|
33.5 | 33.5 | 22.5 | 22.5 | ||||||||||||||
Interest
Expense
|
(40.0 | ) | (40.0 | ) | (690.1 | ) | (690.1 | ) | ||||||||||
Other
Income (Expense)
|
223.4 | 223.4 | (26.5 | ) | (26.5 | ) | ||||||||||||
Income
(loss) before taxes
|
3,885.1 | 3,885.1 | (164.2 | ) | (164.2 | ) | ||||||||||||
Income
Tax (expense) benefit
|
(1,330.9 | ) | (1,330.9 | ) | (389.0 | ) | (389.0 | ) | ||||||||||
Net
Income (loss)
|
$ | 2,554.3 | $ | 2,554.3 | $ | (553.2 | ) | $ | (553.2 | ) | ||||||||
EPS
|
||||||||||||||||||
Basic
|
$ | 0.09 | $ | 0.09 | $ | (0.02 | ) | $ | (0.02 | ) | ||||||||
Fully
Diluted
|
$ | 0.09 | $ | 0.09 | $ | (0.02 | ) | $ | (0.02 | ) | ||||||||
Basic
Shares Outstanding
|
27,488.4 | 27,488.4 | 23,188.4 | 23,188.4 | ||||||||||||||
Fully
Diluted Shares Outstanding
|
28,513.1 | 28,513.1 | 23,188.4 | 23,188.4 | ||||||||||||||
Source: Vitacost.com
|
6
Vitacost.com,
Inc.
|
|||||||||||||||||||||
Income
Statement ($ in 000s)
|
|||||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||||
Fiscal
Year Ended
|
|||||||||||||||||||||
December
31, 2009
|
December
31, 2008
|
||||||||||||||||||||
As
|
Excluding
|
As
|
Excluding
|
||||||||||||||||||
Reported
|
Adjustments
|
Adjustments
|
Reported
|
Adjustments
|
Adjustments
|
||||||||||||||||
Net
Sales
|
$ | 191,807.0 | $ | 191,807.0 | $ | 143,602.3 | $ | 143,602.3 | |||||||||||||
Cost
of Goods Sold
|
130,605.5 | 130,605.5 | 105,529.3 | 105,529.3 | |||||||||||||||||
Gross
Profit
|
61,201.5 | 61,201.5 | 38,073.0 | 38,073.0 | |||||||||||||||||
Fulfillment
|
8,953.6 | 8,953.6 | 8,392.6 | 8,392.6 | |||||||||||||||||
Sales
& Marketing
|
14,283.7 | 14,283.7 | 13,146.6 | 13,146.6 | |||||||||||||||||
General
& Administrative
|
25,432.5 | 10,896.9 | 14,535.6 | 12,007.3 | 12,007.3 | ||||||||||||||||
Depreciation
& Amortization
|
3,650.1 | 3,650.1 | 2,864.3 | 2,864.3 | |||||||||||||||||
Total
Operating Expenses
|
52,319.9 | 41,423.0 | 36,410.9 | 36,410.9 | |||||||||||||||||
Operating
Income
|
8,881.6 | 19,778.5 | 1,662.2 | 1,662.2 | |||||||||||||||||
Interest
Income
|
96.5 | 96.5 | 85.9 | 85.9 | |||||||||||||||||
Interest
Expense
|
(497.9 | ) | (497.9 | ) | (1,236.3 | ) | (1,236.3 | ) | |||||||||||||
Other
Income (Expense)
|
249.8 | 249.8 | (12.7 | ) | (12.7 | ) | |||||||||||||||
Income
(loss) before taxes
|
8,730.1 | 19,626.9 | 499.0 | 499.0 | |||||||||||||||||
Income
tax (expense) benefit
|
(2,836.1 | ) | $ | 3,931.9 | (6,768.0 | ) | (481.6 | ) | (481.6 | ) | |||||||||||
Net
Income (loss)
|
$ | 5,894.0 | $ | 12,858.9 | $ | 17.4 | $ | 17.4 | |||||||||||||
EPS
|
|||||||||||||||||||||
Basic
|
$ | 0.24 | $ | 0.53 | $ | 0.00 | $ | 0.00 | |||||||||||||
Fully
Diluted
|
$ | 0.24 | $ | 0.52 | $ | 0.00 | $ | 0.00 | |||||||||||||
Basic
Shares Outstanding
|
24,216.9 | 24,216.9 | 23,188.4 | 23,188.4 | |||||||||||||||||
Fully
Diluted Shares Outstanding
|
24,674.2 | 24,674.2 | 23,975.1 | 23,975.1 | |||||||||||||||||
Source: Vitacost.com
|
7
VITACOST.COM,
INC.
Reconciliation
of GAAP Net (loss) Income to Pro Forma Net Income (Loss) Available to Common
Shareholders
This
earnings release includes information presented on a pro forma basis. These pro
forma financial measures are considered "non-GAAP" financial measures within the
meaning of SEC Regulation G. The Company believes that this presentation of pro
forma results provides useful information to both management and investors by
excluding specific expenses that the Company believes are not indicative of core
operating results. The presentation of this additional information
should not be considered in isolation or as a substitute for results prepared in
accordance with generally accepted accounting principles. The reconciliations
set forth below are provided in accordance with Regulation G and reconcile the
pro forma financial measures with the most directly comparable GAAP-based
financial measures.
VITACOST.COM,
INC.
Reconciliation
of GAAP Operating (loss) Income to Adjusted EBITDA
Fiscal
Period Ended
|
||||||||
December 31, 2009
|
December
31, 2008
|
|||||||
Operating
income
|
8,881.6 | 1,662.2 | ||||||
Stock
based compensation charge
|
10,896.9 | - | ||||||
FAS
123R - Stock Option Expense
|
934.5 | 794.9 | ||||||
Depreciation
and amortization
|
3,650.1 | 2,864.3 | ||||||
Adjusted
EBITDA
|
$ | 24,363.1 | $ | 5,321.4 | ||||
|
||||||||
Three
Months Ended
|
||||||||
December 31, 2009
|
December
31, 2008
|
|||||||
Operating
income
|
3,668.2 | 529.9 | ||||||
FAS
123R - Stock Option Expense
|
592.5 | 583.3 | ||||||
Depreciation
and amortization
|
1,134.5 | 801.1 | ||||||
Adjusted
EBITDA
|
$ | 5,395.2 | $ | 1,914.2 | ||||
Source: Vitacost.com
|
EBITDA
(earnings before interest, income taxes, depreciation, and amortization,
including goodwill and intangible asset impairment) is not a measure of
financial performance under generally accepted accounting principles, or GAAP,
but is used by some investors to determine the strength of a company's cash
flow. The presentation of this additional information should not be
considered in isolation or as a substitute for results prepared in accordance
with generally accepted accounting principles. The reconciliation set forth
above is provided in accordance with Regulation G and reconciles EBITDA, with
the most directly comparable GAAP-based financial measure. EBITDA is not
calculated in the same manner by all companies and accordingly is not
necessarily comparable to similarly entitled measures of other companies and may
not be an appropriate measure for performance relative to other companies.
EBITDA is not intended to represent and should not be considered more meaningful
than, or as an alternative to, measures of operating performance as determined
in accordance with GAAP.
8