Attached files
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| 8-K - FORM 8-K - Vitamin Shoppe, Inc. | d8k.htm |
| EX-99.2 - VITAMIN SHOPPE INDUSTRIES, INC., NOTICE OF REDEMPTION - Vitamin Shoppe, Inc. | dex992.htm |
Exhibit 99.1
Vitamin Shoppe, Inc. Announces Fiscal Third Quarter 2010 Results
— Comparable store sales grew 7.1% for the fiscal third quarter of 2010; Net sales increased 11.3%
— Income from operations increased 62.9%; Net income more than tripled
— Opened 9 stores during the quarter
NORTH BERGEN, N.J., Oct. 27 /PRNewswire-FirstCall/ — Vitamin Shoppe, Inc. (NYSE: VSI), a leading specialty retailer and direct marketer of nutritional products, today announced its preliminary results for its fiscal third quarter ended September 25, 2010.
“The third quarter marked another strong period of growth, with all areas of the business contributing to the overall success. We had a very successful semi-annual private label promotion which helped drive traffic into our stores” said Rick Markee, Chairman and Chief Executive Officer of Vitamin Shoppe, Inc. “Comparable store sales for the quarter increased 7.1%, while we continued to drive operating leverage across our business. Income from operations increased 63% year-over-year. Net income more than tripled and diluted EPS was $0.25 per share including $0.02 per share from one-time charges.”
Fiscal Third Quarter 2010 Results
Net sales increased $19.0 million, or 11.3%, to $187.4 million for the three months ended September 25, 2010, compared with $168.4 million for the three months ended September 26, 2009. The increase was the result of the growth in comparable store sales predominantly driven by traffic, continued performance from new stores and a 7.7% increase in direct sales driven by further expansion in Vitamin Shoppe’s online business.
The Company operated 472 stores as of September 25, 2010, compared with 434 stores as of September 26, 2009. Overall store sales for the three months ended September 25, 2010 rose due to an increase in non-comparable store sales of $7.0 million and an increase in comparable store sales of $10.5 million, or 7.1%.
Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $10.2 million, or 8.8%, to $126.2 million for the three months ended September 25, 2010, compared with $116.0 million for the three months ended September 26, 2009.
Gross profit increased $8.8 million, or 16.8%, to $61.2 million for the three months ended September 25, 2010, compared with $52.4 million for the three months ended September 26, 2009. Gross profit as a percentage of sales was 32.6% for the quarter ended September 25, 2010, compared with 31.1% for the comparable prior year period. The improvement reflects a reduction in the level of promotional activity compared with the third quarter of 2009, and leverage on occupancy, distribution and transportation costs.
Selling, general and administrative expenses (“SG&A”), including operating payroll and related benefits, advertising and promotion expense, depreciation and amortization, and other SG&A, increased $3.9 million, or 8.9%, to $47.3 million for the three months ended September 25, 2010, compared with $43.4 million for the three months ended September 26, 2009. SG&A as a percentage of net sales decreased to 25.3% for the quarter, compared with 25.8% for the comparable prior year period. This reflects the ongoing maturation of the store base, leverage on depreciation and amortization and leverage on corporate expenses through ongoing attention to financial disciplines.
SG&A for the third quarter of 2010 reflects:
| • | A non-cash pretax impairment charge of $1.1 million associated with two stores |
| • | A pretax charge of $0.8 million associated with the settlement of a lawsuit in California |
| • | A $1.0 million one-time benefit associated with a credit card fee rebate |
Excluding these items, (which equate to approximately $0.02 per share), SG&A as a percentage of net sales would have been 24.8% for the quarter.
Income from operations increased $5.3 million, or 62.9%, to $13.9 million for the three months ended September 25, 2010, compared with $8.5 million for the three months ended September 26, 2009. Income from operations as a percentage of net sales increased to 7.4% for the 2010 quarter, compared with 5.1% for the comparable prior year period.
Net income increased 256.2% to $7.2 million for the three months ended September 25, 2010, compared with $2.0 million for the three months ended September 26, 2009. Earnings per diluted share increased to $0.25 for the three months ended September 25, 2010. Net income benefited from lower interest expense versus the same period in 2009. Excluding the store impairment charge, the credit card fee rebate and the labor settlement expense, earnings per diluted share for the quarter would have been $0.27.
Bond Redemption
With the strong cash flow from operations, the company also announced the planned repurchase of an additional $20 million of outstanding floating rate notes. This redemption is expected to be completed in the fourth quarter of 2010, utilizing cash available on the balance sheet.
2011 Outlook
Looking forward to 2011, management expects:
| • | 10% new-store growth (approximately 48 new stores) |
| • | Approximately $23 million in capital expenditures |
| • | A 4% to 5% increase in comparable store sales |
| • | Continued improvement in EBIT margin as a percent of sales reflecting continuing maturation of our store base, leverage on depreciation and amortization and corporate expenses |
| • | Lower interest expense reflecting the continuing reduction in outstanding debt through strong cash flows |
| • | Net income growth projected at 25% |
| • | Diluted share count of 29.5 million shares |
“This has been a year of tremendous improvement following our initial public offering at the end of October, 2009. We are well on our way toward our long-term objectives of 10% EBIT margin and 900 stores in the United States,” said Rick Markee.
Conference Call
The Company will hold a conference call at 10:00 am Eastern Time today to discuss its fiscal third quarter 2010 results. The call can be accessed live over the phone by dialing 1-888-679-8037, or for international callers, 1-617-213-4849, passcode number 86057252. A replay will be available one hour after the call and can be accessed by dialing 1-888-286-8010 or for international callers, 1-617-801-6888. The passcode for the replay is 54857613. The replay will be available until November 3, 2010.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of the Company’s website at www.vitaminshoppe.com. The on-line replay will be available beginning immediately following the call.
About Vitamin Shoppe, Inc. (NYSE: VSI)
Vitamin Shoppe is a leading specialty retailer and direct marketer of nutritional products based in North Bergen, New Jersey. The Company sells vitamins, minerals, nutritional supplements, herbs, sports nutrition formulas, homeopathic remedies, green living products, and health and beauty aids to customers located primarily in the United States. The Company carries national brand products as well as exclusive products under the Vitamin Shoppe, MD Select, and VS Basics proprietary brands. The Vitamin Shoppe conducts business through more than 470 Company-owned retail stores, national mail order catalogs, and websites, www.VitaminShoppe.com and www.EcoShoppe.com, and has a social community site at www.VSconnect.com.
Certain statements herein are “forward-looking statements”. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events and actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including the strength of the economy, changes in the overall level of consumer spending, the performance of the Company’s products within the prevailing retail environment, trade restrictions, availability of suitable store locations at appropriate terms and other factors which are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2009 and in all filings with the Securities Exchange Commission made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
VITAMIN SHOPPE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 25, | September 26, | September 25, | September 26, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net sales. |
$ | 187,359 | $ | 168,400 | $ | 571,206 | $ | 512,098 | ||||||||
| Cost of goods sold |
126,190 | 116,011 | 381,330 | 346,935 | ||||||||||||
| Gross profit |
61,169 | 52,389 | 189,876 | 165,163 | ||||||||||||
| Selling, general and administrative expenses |
47,316 | 43,439 | 142,504 | 130,552 | ||||||||||||
| Related party expenses |
— | 444 | — | 1,260 | ||||||||||||
| Income from operations |
13,853 | 8,506 | 47,372 | 33,351 | ||||||||||||
| Loss on extinguishment of debt |
— | 263 | 1,120 | 263 | ||||||||||||
| Interest expense, net |
2,181 | 4,666 | 7,670 | 14,505 | ||||||||||||
| Income before provision for income taxes |
11,672 | 3,577 | 38,582 | 18,583 | ||||||||||||
| Provision for income taxes |
4,423 | 1,542 | 15,298 | 7,780 | ||||||||||||
| Net income |
7,249 | 2,035 | 23,284 | 10,803 | ||||||||||||
| Preferred stock dividends in arrears |
— | 1,593 | — | 6,799 | ||||||||||||
| Net income available to common stockholders |
$ | 7,249 | $ | 442 | $ | 23,284 | $ | 4,004 | ||||||||
| Weighted average shares outstanding |
||||||||||||||||
| Basic |
27,710,913 | 14,175,906 | 27,178,235 | 14,175,906 | ||||||||||||
| Diluted |
28,597,381 | 15,789,680 | 28,155,098 | 15,809,899 | ||||||||||||
| Net income per share |
||||||||||||||||
| Basic |
$ | 0.26 | $ | 0.03 | $ | 0.86 | $ | 0.28 | ||||||||
| Diluted |
$ | 0.25 | $ | 0.03 | $ | 0.83 | $ | 0.25 | ||||||||
| Key Performance Indicators
|
||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 25, | September 26, | September 25, | September 26, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net sales |
$ | 187,359 | $ | 168,400 | $ | 571,206 | $ | 512,098 | ||||||||
| Increase in comparable store net sales |
7.1 | % | 4.4 | % | 7.3 | % | 4.6 | % | ||||||||
| Gross profit as a percent of net sales |
32.6 | % | 31.1 | % | 33.2 | % | 32.3 | % | ||||||||
| Income from operations |
$ | 13,853 | $ | 8,506 | $ | 47,372 | $ | 33,351 | ||||||||
| Impairment charge on fixed assets |
$ | 1,126 | $ | — | $ | 1,326 | $ | — | ||||||||
| Depreciation and Amortization |
$ | 5,276 | $ | 5,310 | $ | 16,125 | $ | 15,603 | ||||||||
| Amortization of deferred financing fees |
$ | 138 | $ | 293 | $ | 612 | $ | 877 | ||||||||
| Store Count Data
|
||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 25, | September 26, | September 25, | September 26, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Store Data: |
||||||||||||||||
| Stores open at beginning of period |
463 | 425 | 438 | 401 | ||||||||||||
| Stores opened |
9 | 9 | 35 | 34 | ||||||||||||
| Stores closed |
— | — | (1 | ) | (1 | ) | ||||||||||
| Stores open at end of period |
472 | 434 | 472 | 434 | ||||||||||||
| Segment Data
|
||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 25, | September 26, | September 25, | September 26, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Sales: |
||||||||||||||||
| Retail |
$ | 167,086 | $ | 149,580 | $ | 508,017 | $ | 452,982 | ||||||||
| Direct |
20,273 | 18,820 | 63,189 | 59,116 | ||||||||||||
| Net sales |
187,359 | 168,400 | 571,206 | 512,098 | ||||||||||||
| Income from operations: |
||||||||||||||||
| Retail |
28,742 | 22,100 | 90,447 | 71,762 | ||||||||||||
| Direct |
3,463 | 3,223 | 11,581 | 11,309 | ||||||||||||
| Corporate costs |
(18,352 | ) | (16,817 | ) | (54,656 | ) | (49,720 | ) | ||||||||
| Income from operations |
$ | 13,853 | $ | 8,506 | $ | 47,372 | $ | 33,351 | ||||||||
VITAMIN SHOPPE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| September 25, 2010 |
December 26, 2009 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 36,635 | $ | 8,797 | ||||
| Inventories |
104,745 | 106,091 | ||||||
| Prepaid expenses and other current assets |
13,802 | 13,401 | ||||||
| Deferred income taxes |
3,897 | 5,145 | ||||||
| Total current assets |
159,079 | 133,434 | ||||||
| Property and equipment, net |
80,514 | 83,960 | ||||||
| Goodwill |
177,248 | 177,248 | ||||||
| Other intangibles, net |
69,841 | 70,356 | ||||||
| Other assets: |
||||||||
| Deferred financing fees, net of accumulated amortization of $2,391 and $2,856 in 2010 and 2009, respectively |
1,172 | 2,384 | ||||||
| Other long-term assets |
1,963 | 1,875 | ||||||
| Total other assets |
3,135 | 4,259 | ||||||
| Total assets |
$ | 489,817 | $ | 469,257 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Current portion of long-term debt |
$ | — | $ | 20,000 | ||||
| Current portion of capital lease obligation |
1,628 | 1,537 | ||||||
| Revolving credit facility |
28,000 | — | ||||||
| Accounts payable |
17,557 | 25,075 | ||||||
| Deferred sales |
12,542 | 14,386 | ||||||
| Accrued salaries and related expenses |
7,408 | 7,551 | ||||||
| Other accrued expenses |
18,149 | 14,469 | ||||||
| Total current liabilities |
85,284 | 83,018 | ||||||
| Long-term debt, net of current portion |
75,106 | 100,106 | ||||||
| Capital lease obligation, net of current portion |
1,249 | 2,303 | ||||||
| Deferred income taxes |
17,683 | 19,945 | ||||||
| Other long-term liabilities |
4,824 | 4,766 | ||||||
| Deferred rent |
26,493 | 24,768 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders’ equity: |
||||||||
| Common stock, $0.01 par value; 400,000,000 shares authorized, 27,900,940 shares issued and outstanding at September 25, 2010, and 400,000,000 shares authorized, 26,750,423 shares issued and outstanding at December 26, 2009 |
279 | 268 | ||||||
| Additional paid-in capital |
231,109 | 210,359 | ||||||
| Accumulated other comprehensive loss |
(100 | ) | (882 | ) | ||||
| Retained earnings |
47,890 | 24,606 | ||||||
| Total stockholders’ equity |
279,178 | 234,351 | ||||||
| Total liabilities and stockholders’ equity |
$ | 489,817 | $ | 469,257 | ||||
CONTACT: Investor Contacts: Michael Archbold Chief Financial Officer 201-624-3611 ir@vitaminshoppe.com, or Ian Lee, Solebury Communications Group, +1-203-428-3215, ilee@soleburycomm.com; Media Contacts: Susan McLaughlin, Director Corporate Communications, +1-201-624-3134, smclaughlin@vitaminshoppe.com, or Tiffani Carter, of Allison & Partners, +1-646-428-0613