Attached files
| file | filename |
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| 8-K - LIVE FILING - NUTRI SYSTEM INC /DE/ | htm_52221.htm |
Exhibit 99.1
Contact:
John Mills, Partner
ICR, Inc.
646-277-1254
ir@nutrisystem.com
John.Mills@Icrinc.com
NUTRISYSTEM’S SECOND QUARTER 2015 FINANCIAL RESULTS EXCEED EXPECTATIONS
Company Reports Double-Digit Revenue Growth of 17% Year-Over-Year
Company Raises Full Year Revenue, Adjusted EBITDA, and Earnings Per Share Guidance
Fort Washington, PA—July 29, 2015—Nutrisystem, Inc. (NASDAQ: NTRI), a leading provider of weight management products and services, today reported that the Company exceeded its previously provided revenue, adjusted EBITDA, and earnings per share guidance for the second quarter 2015 and is raising its previously provided guidance for the full year.
Dawn Zier, President and Chief Executive Officer, stated, “Continued momentum and new initiatives resulted in top-line growth of 17% and our eighth consecutive quarter of year-over-year revenue improvement. Our team’s commitment to operational excellence, effective marketing, innovative product development, and customer engagement across multiple platforms drove our strong financial performance in the second quarter.”
Second Quarter 2015 Compared to Second Quarter 2014
| • | Revenue increased 17% to $130.3 million compared to $111.1 million |
| • | Gross profit margin improved 80 basis points to 52.0% and gross profit increased 19% to $67.7 million compared to $56.9 million |
| • | Adjusted EBITDA grew 33% to $22.5 million compared to $17.0 million |
| • | Net income increased 39% to $12.1 million compared to $8.7 million |
| • | Diluted earnings per share increased 37% to $0.41 compared to $0.30 |
Ms. Zier added, “We are optimizing multiple levers across our business and are pleased that we are able to raise our 2015 full year guidance. Perhaps even more important, we feel well positioned for 2016 diet season and continued future growth.”
Mike Monahan, Chief Financial Officer, commented, “Revenue growth in the second quarter came from both our direct and retail channels, which were up year-over-year 15% and 43%, respectively. We remain confident in our business opportunities and ability to return value to our stockholders long-term.”
Third Quarter and Updated Full Year 2015 Guidance
Nutrisystem’s third quarter and updated full year 2015 guidance are as follows. Reconciliations of certain GAAP to non-GAAP measures are provided later in this press release.
| • | Third quarter revenue expected to be in the range of $102 to $107 million, adjusted EBITDA between $13.2 and $15.2 million, and earnings per share between $0.21 and $0.26 |
| • | Full year revenue expected to be in the range of $456 to $466 million, adjusted EBITDA between $54.1 and $58.1 million, and earnings per share between $0.87 and $0.97 |
The Board of Directors has declared a quarterly dividend of $0.175 per share, payable August 20, 2015 to stockholders of record as of August 10, 2015.
Conference Call and Webcast
Management will host a conference call to discuss second quarter 2015 financial results today at 5:00 PM Eastern time. The conference call will include remarks from President and Chief Executive Officer Dawn Zier, Chief Financial Officer Mike Monahan, and Chief Marketing Officer Keira Krausz. A webcast of the conference call will be available live on the Investor Relations section of Nutrisystem’s website at www.nutrisystem.com. Interested parties unable to access the conference call via the webcast may dial 877-407-3982. A replay of the conference call will be available on the Company website for 30 days following the event and can be accessed at 877-870-5176 using replay pin number 13612868.
Non-GAAP Financial Measures
Within this announcement, the Company makes reference to certain adjusted financial measures, which have directly comparable GAAP financial measures as identified in this press release. These adjusted measures are provided so that investors have the same financial data that management uses with the belief that it will assist the investment community in properly assessing the performance of the Company for the periods being reported and future periods. The presentation of this additional information is not meant to be considered a substitute for measures prepared in accordance with GAAP.
In this release, EBITDA is defined as net income excluding interest, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding non-cash employee compensation.
Forward-Looking Statements
Information provided and statements contained in this press release that are not purely historical, such as third quarter and full year 2015 guidance, and the Company’s financial and operational outlook, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of this press release and the Company assumes no obligation to update the information included in this press release. Statements made in this press release that are forward-looking in nature may involve risks and uncertainties. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees and are subject to certain risks, uncertainties and assumptions that are difficult to predict, including, without limitation, risks relating to cybersecurity breaches, risks that consumer spending may decline or that U.S. and global macroeconomic conditions may worsen resulting in reduced demand for the Company’s products, risks relating to changes in consumer preferences away from the Company’s food offerings including its pre-packaged foods, risks relating to the effectiveness and efficiency of the Company’s marketing expenditures which may not result in increased revenue or generate sufficient levels of brand name and program awareness, risks if the Company is unable to obtain sufficient quantities, quality and variety of food products in a timely and low-cost manner from its food vendors, risks of exposure to product liability claims if the use of the Company’s products results in illness or injury, risks if the Company becomes subject to health or advertising related claims from its customers, competitors or governmental and regulatory bodies, and risks relating to increased competition from other weight management providers. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made in this press release.
About Nutrisystem, Inc.
Nutrisystem, Inc. (NASDAQ: NTRI) is a leader in the weight loss industry, having helped
millions of people lose weight over the course of more than 40 years. The Company’s weight loss
solutions include Nutrisystem® My Way®, a 28-day structured food delivery program including
a digital platform, NuMi by Nutrisystem®, multi-day kits and individual products available
at select retail outlets. The Company’s current product line offers customers the most meal
choices, including more than 100 foods containing no artificial preservatives or artificial
flavors. Nutrisystem® plans are consistent with national guidelines for dietary intake meeting
targets for fat, sodium, sugar, cholesterol, fiber and physical activity and include comprehensive
counseling options from trained weight-loss coaches, registered dietitians and certified diabetes
educators. Plans can be customized to specific dietary needs and preferences including the
Nutrisystem® D® program for people with Type 2 diabetes or pre-diabetes. For more
information, go to NutrisystemNews.com.
NUTRISYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30, ______________________
_________________________
2015 2014 2015 2014
REVENUE $130,261 $111,052 $267,486 $233,280
---------------- --------------------- --------------------- ----------------
COSTS AND EXPENSES:
Cost of revenue 62,570 54,141 128,439 116,562
Marketing 30,651 25,990 78,314 67,734
General and administrative 16,363 15,768 33,308 31,686
Depreciation and amortization 2,233 1,913 4,457 3,671
---------------- --------------------- --------------------- ----------------
Total costs and expenses 111,817 97,812 244,518 219,653
---------------- --------------------- --------------------- ----------------
Operating income 18,444 13,240 22,968 13,627
INTEREST EXPENSE, net 30 47 79 92
---------------- --------------------- -- --
Income before income tax expense 18,414 13,193 22,889 13,535
INCOME TAX EXPENSE 6,329 4,490 7,861 4,608
---------------- --------------------- --------------------- ----------------
Net income $12,085 $8,703 $15,028 $8,927
================ ===================== ===================== ================
BASIC INCOME PER COMMON SHARE $0.42 $0.30 $0.52 $0.31
================ ===================== ===================== ================
DILUTED INCOME PER COMMON SHARE $0.41 $0.30 $0.51 $0.31
================ ===================== ===================== ================
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 28,627 28,208 28,510 28,226
Diluted 29,072 28,600 29,003 28,634
DIVIDENDS DECLARED PER COMMON SHARE $0.175 $0.175 $0.35 $0.35
================ ===================== ===================== ================
NUTRISYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except par value amounts)
| June 30, 2015 | December 31, 2014 | |||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | 32,895 | $ | 12,620 | ||||
Short term investments |
11,690 | 16,627 | ||||||
Receivables |
14,047 | 12,206 | ||||||
Inventories |
21,827 | 26,899 | ||||||
Deferred income taxes |
1,824 | 1,051 | ||||||
Other current assets |
6,259 | 7,095 | ||||||
Total current assets |
88,542 | 76,498 | ||||||
FIXED ASSETS, net |
26,513 | 26,851 | ||||||
DEFERRED INCOME TAXES |
4,648 | 5,461 | ||||||
OTHER ASSETS |
1,088 | 1,082 | ||||||
Total assets |
$ | 120,791 | $ | 109,892 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Accounts payable |
$ | 32,908 | $ | 34,261 | ||||
Accrued payroll and related benefits |
5,428 | 6,550 | ||||||
Income taxes payable |
2,840 | 301 | ||||||
Deferred revenue |
7,244 | 4,424 | ||||||
Other accrued expenses and current liabilities |
5,853 | 6,131 | ||||||
Total current liabilities |
54,273 | 51,667 | ||||||
NON-CURRENT LIABILITIES |
2,354 | 2,710 | ||||||
Total liabilities |
56,627 | 54,377 | ||||||
STOCKHOLDERS’ EQUITY: |
||||||||
Preferred stock, $.001 par value (5,000 shares authorized, no
shares issued and outstanding) |
0 | 0 | ||||||
Common stock, $.001 par value (100,000 shares authorized; shares
issued – 29,439 at June 30, 2015 and 28,990 at December 31, 2014) |
29 | 29 | ||||||
Additional paid-in capital |
36,183 | 29,992 | ||||||
Treasury stock, at cost, 379 shares at June 30, 2015 and 249
shares at December 31, 2014 |
(5,433 | ) | (3,062 | ) | ||||
Retained earnings |
33,372 | 28,552 | ||||||
Accumulated other comprehensive income |
13 | 4 | ||||||
Total stockholders’ equity |
64,164 | 55,515 | ||||||
Total liabilities and stockholders’ equity |
$ | 120,791 | $ | 109,892 | ||||
NUTRISYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
| Six Months Ended June 30, | ||||||||||||
| 2015 | 2014 | |||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||||||
Net income |
$ | 15,028 | $ | 8,927 | ||||||||
| Adjustments to reconcile net income to net cash provided by |
||||||||||||
operating activities: |
||||||||||||
| Depreciation and amortization |
4,457 | 3,671 | ||||||||||
| Loss on disposal of fixed assets |
14 | 5 | ||||||||||
| Share–based compensation expense |
3,046 | 2,910 | ||||||||||
| Deferred income tax expense (benefit) |
34 | (1,272 | ) | |||||||||
Other non-cash charges |
3 | 13 | ||||||||||
| Changes in operating assets and liabilities: |
||||||||||||
Receivables |
(1,841 | ) | (3,379 | ) | ||||||||
Inventories |
5,072 | 6,340 | ||||||||||
Other assets |
830 | 1,632 | ||||||||||
Accounts payable |
(1,091 | ) | 3,049 | |||||||||
| Accrued payroll and related benefits |
(1,122 | ) | (1,947 | ) | ||||||||
Deferred revenue |
2,820 | 1,351 | ||||||||||
Income taxes |
2,443 | 5,549 | ||||||||||
| Other accrued expenses and liabilities |
(943 | ) | 10 | |||||||||
| Net cash provided by operating activities |
28,750 | 26,859 | ||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||||||
| Purchases of short term investments |
(2,303 | ) | (4,402 | ) | ||||||||
| Proceeds from sales of short term investments |
7,251 | 4,464 | ||||||||||
Capital additions |
(4,086 | ) | (3,194 | ) | ||||||||
| Net cash provided by (used in) investing activities |
862 | (3,132 | ) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||||||
Exercise of stock options |
1,390 | 248 | ||||||||||
| Taxes related to equity compensation awards, net |
(519 | ) | (581 | ) | ||||||||
Payment of dividends |
(10,208 | ) | (10,187 | ) | ||||||||
| Net cash used in financing activities |
(9,337 | ) | (10,520 | ) | ||||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
20,275 | 13,207 | ||||||||||
| CASH AND CASH EQUIVALENTS, beginning of period |
12,620 | 9,772 | ||||||||||
| CASH AND CASH EQUIVALENTS, end of period |
$ | 32,895 | $ | 22,979 | ||||||||
NUTRISYSTEM, INC. AND SUBSIDIARIES
ADJUSTED EBITDA RECONCILIATION TO GAAP RESULTS
(Unaudited, in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
Net income |
$ | 12,085 | $ | 8,703 | $ | 15,028 | $ | 8,927 | ||||||||||||||||
Interest expense, net |
30 | 47 | 79 | 92 | ||||||||||||||||||||
Income tax expense |
6,329 | 4,490 | 7,861 | 4,608 | ||||||||||||||||||||
Depreciation and amortization |
2,233 | 1,913 | 4,457 | 3,671 | ||||||||||||||||||||
EBITDA |
20,677 | 15,153 | 27,425 | 17,298 | ||||||||||||||||||||
Non-cash employee
compensation expense |
1,838 | 1,817 | 3,046 | 2,910 | ||||||||||||||||||||
Adjusted EBITDA |
$ | 22,515 | $ | 16,970 | $ | 30,471 | $ | 20,208 | ||||||||||||||||
NUTRISYSTEM, INC. AND SUBSIDIARIES
ADJUSTED EBITDA GUIDANCE RECONCILIATION TO GAAP MEASURES
(Unaudited, in thousands)
| Three Months Ending | Year Ending | |||||||||||||||||||
| September 30, 2015 | December 31, 2015 | |||||||||||||||||||
| Low | High | Low | High | |||||||||||||||||
Net income |
$ | 6,252 | $ | 7,564 | $ | 25,748 | $ | 28,372 | ||||||||||||
Interest expense, net |
50 | 50 | 175 | 175 | ||||||||||||||||
Income tax expense |
3,278 | 3,966 | 13,502 | 14,878 | ||||||||||||||||
Depreciation and amortization |
2,340 | 2,340 | 9,100 | 9,100 | ||||||||||||||||
EBITDA |
11,920 | 13,920 | 48,525 | 52,525 | ||||||||||||||||
Non-cash employee
compensation expense |
1,280 | 1,280 | 5,575 | 5,575 | ||||||||||||||||
Adjusted EBITDA |
$ | 13,200 | $ | 15,200 | $ | 54,100 | $ | 58,100 | ||||||||||||
EBITDA is defined as net income excluding interest, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding non-cash employee compensation.
Statement Regarding Non-GAAP Financial Measures
We believe EBITDA, adjusted EBITDA and adjusted EBITDA guidance are useful performance metrics for management and investors because they are indicative of the ongoing operations of the Company. These non-GAAP measures exclude certain non-cash and non-operating items to facilitate comparisons and provide a meaningful measurement that is focused on the performance of the ongoing operations of the Company.