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8-K - 8-K - NUTRACEUTICAL INTERNATIONAL CORPa13-17189_18k.htm

Exhibit 99.1

 

FOR:

NUTRACEUTICAL INTERNATIONAL CORPORATION

 

 

CONTACT:

Cory McQueen

 

Vice President and

 

Chief Financial Officer

 

(435) 655-6106

 

NUTRACEUTICAL REPORTS FISCAL 2013 Q3 RESULTS

 

PARK CITY, Utah, July 25, 2013/PRNewswire/—Nutraceutical International Corporation (NASDAQ:  NUTR) today reported results for the fiscal 2013 third quarter ended June 30, 2013.  Net sales for the fiscal 2013 third quarter were $50.8 million compared to $49.6 million for the same quarter of fiscal 2012.  For the third quarter of fiscal 2013, net income was $3.8 million, or $0.39 diluted earnings per share, compared to net income of $3.4 million, or $0.34 diluted earnings per share, for the same quarter of fiscal 2012.  Net income for the third quarter of fiscal 2012 included a non-cash intangible asset impairment charge of $0.6 million, net of tax, or $0.06 per diluted share, related to the consolidation of certain brands.

 

Net sales for the nine months ended June 30, 2013 were $157.1 million compared to $150.1 million for the same period of fiscal 2012.  For the nine months ended June 30, 2013, net income was $12.9 million, or $1.31 diluted earnings per share, compared to net income of $11.6 million, or $1.16 diluted earnings per share (including the intangible asset impairment charge), for the same period of fiscal 2012.

 

Operating cash flow for the nine months ended June 30, 2013 was $19.2 million compared to $23.4 million for the same period of fiscal 2012.  The operating cash flow for the nine months ended June 30, 2013 was primarily used to pay a special cash dividend to stockholders on December 28, 2012 of $9.8 million and to invest $6.2 million in purchases of property, plant and equipment and $2.9 million in purchases of common stock for treasury.

 

Bill Gay, chairman and chief executive officer, commented, “Our fiscal 2013 third quarter net sales, net income and adjusted EBITDA remained strong.  During the quarter, management initiated strategic improvements in our manufacturing processes to lay the groundwork for long-term cost savings in materials, labor and overhead.  These manufacturing changes should be fully implemented by the end of our fiscal fourth quarter.  Management believes these internal operational enhancements are important to implement at the present time in order to achieve long-term cost savings.  Management’s objective is to offset other less

 



 

controllable expenses, which continue to rise, and to enhance inventory management and product fulfillment.”

 

Mr. Gay stated, “Acquisitions of small to medium size companies remain a primary focus for our continued growth and to provide our customers with the best selection of unique products.  Our key retail customers have continued to grow and consolidate the fragmented marketplace despite the overall sluggish economy.  We continue to integrate and reposition our brands and products into targeted collections to enhance their marketing position.  We believe that our business should continue to prosper as a result of the ongoing support from our customers, stockholders, management and employees.”

 

ABOUT NUTRACEUTICAL

 

We are an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores.  Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers.  Our core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements.  We believe that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

 

We manufacture and sell nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature’s Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids®, NaturalCare®, Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™.

 

We own neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom’s Natural Foods™ and Cornucopia Community Market™.  We also own health food stores, which operate under various trade names including Fresh Vitamins™, Granola’s™, Nature’s Discount® and Warehouse Vitamins™.

 

We manufacture and/or distribute one of the broadest branded product lines in the industry with over 7,000 SKUs, including approximately 900 SKUs sold internationally.  We believe that as a result of our emphasis on innovation, quality, loyalty, education and customer service, our brands are widely recognized in health and natural food stores and among their customers.

 



 

This Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business. These forward-looking statements can be identified by the use of terms such as “believe,” “expects,” “plan,” “intend,” “may,” “will,” “should,” “can,” or “anticipates,” or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy. These statements involve known and unknown risks, uncertainties and other factors that may cause industry trends or our actual results to be materially different from any future results expressed or implied by these statements.  Important factors that may cause our results to differ from these forward-looking statements include, but are not limited to: (i) changes in or new government regulations or increased enforcement of the same, (ii) unavailability of desirable acquisitions or inability to complete them, (iii) increased costs, including from increased raw material or energy prices, (iv) changes in general worldwide economic or political conditions, (v) adverse publicity or negative consumer perception regarding nutritional supplements, (vi) issues with obtaining raw materials of adequate quality or quantity, (vii) litigation and claims, including product liability, intellectual property and other types,  (viii) disruptions from or following acquisitions including the loss of customers, (ix) increased competition, (x) slow or negative growth in the nutritional supplement industry or the healthy foods channel, (xi) the loss of key personnel or the inability to manage our operations efficiently, (xii) problems with information management systems, manufacturing efficiencies and operations, (xiii) insurance coverage issues, (xiv) the volatility of the stock market generally and of our stock specifically, (xv) increases in the cost of borrowings or unavailability of additional debt or equity capital, or both, or fluctuations in foreign currencies, and (xvi) interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest and other factors outside of our control.  Copies of our SEC reports are available upon request from our investor relations department or may be obtained at the SEC’s website (www.sec.gov).

 

© 2013 Nutraceutical Corporation.  All rights reserved.

 

# # #

 



 

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited; dollars in thousands)

 

 

 

June 30,

 

September 30,

 

 

 

2013

 

2012

 

Assets

 

 

 

 

 

Current assets, net

 

$

70,492

 

$

68,268

 

Property, plant and equipment, net

 

76,035

 

75,454

 

Goodwill

 

15,046

 

14,752

 

Other non-current assets, net

 

25,367

 

27,444

 

 

 

$

186,940

 

$

185,918

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities

 

$

20,635

 

$

20,670

 

Long-term liabilities

 

32,617

 

34,192

 

Stockholders’ equity

 

133,688

 

131,056

 

 

 

$

186,940

 

$

185,918

 

 



 

NUTRACEUTICAL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; dollars in thousands, except per share data)

 

 

 

Three months ended June 30,

 

Nine months ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net sales

 

$

50,814

 

$

49,607

 

$

157,141

 

$

150,106

 

Cost of sales

 

25,935

 

24,878

 

79,971

 

75,131

 

Gross profit

 

24,879

 

24,729

 

77,170

 

74,975

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

17,896

 

17,987

 

54,324

 

53,783

 

Amortization of intangible assets

 

556

 

493

 

1,701

 

1,438

 

Impairment of intangible asset

 

 

850

 

 

850

 

Income from operations

 

6,427

 

5,399

 

21,145

 

18,904

 

Interest and other expense, net

 

336

 

388

 

1,024

 

1,124

 

Income before provision for income taxes

 

6,091

 

5,011

 

20,121

 

17,780

 

Provision for income taxes

 

2,249

 

1,659

 

7,249

 

6,187

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,842

 

$

3,352

 

$

12,872

 

$

11,593

 

 

 

 

 

 

 

 

 

 

 

Net income per common share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.39

 

$

0.34

 

$

1.32

 

$

1.17

 

Diluted

 

0.39

 

0.34

 

1.31

 

1.16

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

9,765,639

 

9,849,674

 

9,766,442

 

9,944,865

 

Diluted

 

9,793,045

 

9,872,078

 

9,794,851

 

9,960,100

 

 



 

NUTRACEUTICAL INTERNATIONAL CORPORATION

ADJUSTED EBITDA SCHEDULE

(unaudited; dollars in thousands)

 

 

 

Three months ended June 30,

 

Nine months ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,842

 

$

3,352

 

$

12,872

 

$

11,593

 

Provision for income taxes

 

2,249

 

1,659

 

7,249

 

6,187

 

Interest and other expense, net (1)

 

336

 

388

 

1,024

 

1,124

 

Depreciation and amortization

 

2,486

 

2,203

 

7,325

 

6,411

 

Impairment of intangible asset (2)

 

 

850

 

 

850

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

8,913

 

$

8,452

 

$

28,470

 

$

26,165

 

 


(1)   Includes amortization of deferred financing fees.

 

(2)        A non-cash intangible asset impairment charge of $850 related to the consolidation of certain brands was recorded for the three months and nine months ended June 30, 2012.

 

Non-GAAP Financial Measures

 

Adjusted EBITDA (a non-GAAP measure) is defined in our debt covenants and performance measures as earnings before net interest and other expense, taxes, depreciation, amortization and intangible asset impairment.  We believe that Adjusted EBITDA provides useful additional information to analysts, creditors, investment bankers and management regarding operating performance and debt covenant compliance.  Adjusted EBITDA has some inherent limitations in measuring operating performance due to the exclusion of certain financial elements such as depreciation and amortization and is not necessarily comparable to other similarly-titled captions of other companies due to potential inconsistencies in the method of calculation.  Furthermore, Adjusted EBITDA is not intended to be an alternative to net income in determining our operating performance in accordance with generally accepted accounting principles.