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Vitamin Shoppe, Inc. Announces Fiscal First Quarter 2010 Results
- Net sales increased 11.0% for the fiscal first quarter of 2010 vs. last year; comparable store sales grew 6.2% - Income from operations increased 42.3% - Diluted earnings per share increased to $0.31 per share from $0.12 per share - Opened 16 stores dur
PRNewswire-FirstCall
NORTH BERGEN, N.J.

Vitamin Shoppe, Inc. (NYSE: VSI), a leading specialty retailer and direct marketer of nutritional products, today announced its preliminary results for its fiscal first quarter ended March 27, 2010.

"We had a very strong first quarter," said Rick Markee, Chairman and Chief Executive Officer of Vitamin Shoppe, Inc. "Comparable store sales for the first quarter of 2010 increased 6.2%, making this our 18th consecutive quarter of comparable same-store sales growth. Additionally, the results reflect a solid 7.8% growth in our direct business. Income from operations increased by 42.3% and net income almost doubled."

Fiscal First Quarter 2010 Results

Net sales increased $19.1 million, or 11.0%, to $191.6 million for the three months ended March 27, 2010, compared with $172.6 million for the three months ended March 28, 2009. The increase was the result of the increase in comparable store sales, a strong performance from new stores and a 7.8% increase in direct sales driven by growth in Vitamin Shoppe's online business.

The Company operated 453 stores as of March 27, 2010 compared with 418 stores as of March 28, 2009. Overall store sales for the three months ended March 27, 2010 rose due to an increase in non-comparable store sales of $8.1 million and an increase in comparable store sales of $9.3 million, or 6.2%.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $11.1 million, or 9.6%, to $126.6 million for the three months ended March 27, 2010 compared with $115.5 million for the three months ended March 28, 2009.

Gross profit increased $8.0 million, or 14.0%, to $65.0 million for the three months ended March 27, 2010, compared with $57.0 million for the three months ended March 28, 2009. Gross profit as a percentage of sales was 33.9% for the quarter ended March 27, 2010, compared with 33.0% for the comparable prior year period. The strong improvement reflects a decrease in the level of promotional activity.

Selling, general and administrative expenses, including operating payroll and related benefits, advertising and promotion expense, depreciation and amortization, and other selling, general and administrative expenses, increased $3.0 million, or 6.8%, to $46.9 million for the three months ended March 27, 2010, compared with $43.9 million for the three months ended March 28, 2009. Selling, general and administrative expenses as a percentage of net sales showed improvement by decreasing to 24.5% for the quarter, compared with 25.5% for the comparable prior year period reflecting the maturation of the store base, leverage on corporate expenses and ongoing attention to financial disciplines.

Income from operations increased $5.4 million, or 42.3%, to $18.1 million for the three months ended March 27, 2010, compared with $12.7 million for the three months ended March 28, 2009. Income from operations as a percentage of net sales increased to 9.4% for the 2010 quarter, compared with 7.4% for the comparable prior year period.

Net income increased to $8.7 million for the three months ended March 27, 2010, compared with $4.6 million for the three months ended March 28, 2009. Diluted earnings per share increased to $0.31 for the three months ended March 27, 2010, compared with $0.12 for the three months ended March 28, 2009. Net income for the current quarter includes a pretax loss on extinguishment of debt of $0.6 million (or approximately $.01 per share), related to the previously announced redemption of $20 million of Vitamin Shoppe's senior notes.

The company also today announced it has expanded its senior credit facility to $70 million (from $50 million) and plans to redeem an additional $25 million of outstanding floating rate notes. This is expected to save in excess of $1 million of interest expense annually.

  2010 Outlook

  The Company reiterated its outlook for 2010.  Vitamin Shoppe expects:
  --  to spend approximately $22 million in total capital expenditures while
      opening approximately 42 new stores
  --  continued comparable store sales growth in line with industry growth
      in the mid-single digits
  --  an effective tax rate of approximately 40%
  --  diluted weighted average shares outstanding of 27.8 million
  --  inventory growth at a rate less than total sales growth
  --  continued reduction of debt and to fund store growth with excess cash
      flow
  --  to improve its operating margin largely reflecting leverage on
      selling, general and administrative expenses (including corporate and
      depreciation and amortization expense)


  Conference Call

The Company will hold a conference call at 10:00 am Eastern Time today to discuss its fiscal first quarter 2010 results. The call can be accessed live over the phone by dialing 1-888-680-0892, or for international callers, 1-617-213-4858, passcode number 91555200. 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 52725246. The replay will be available until April 28, 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.

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, BodyTech, MD Select, and VS Basics proprietary brands. The Vitamin Shoppe conducts business through more than 450 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.

Source: Vitamin Shoppe, Inc.

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
                                                  ------------------
                                            March 27,         March 28,
                                                  2010              2009
                                                  ----              ----



  Net sales                                   $191,613          $172,555
  Cost of goods sold                           126,599           115,543
                                               -------           -------
  Gross profit                                  65,014            57,012
  Selling, general and administrative
   expenses                                     46,942            43,941
  Related party expenses                             -               370
                                                   ---               ---
  Income from operations                        18,072            12,701
  Loss on extinguishment of debt                   552                 -
  Interest income                                   (3)               (1)
  Interest expense                               2,930             5,008
                                                 -----             -----
  Income before provision for income
   taxes                                        14,593             7,694
  Provision for income taxes                     5,867             3,132
                                                 -----             -----
  Net income                                     8,726             4,562

  Preferred stock dividends in arrears               -             2,577
  Net income (loss) available to common
   stockholders                                 $8,726            $1,985
                                                ======            ======

  Weighted average shares outstanding
     Basic                                  26,692,983        14,175,906
     Diluted                                27,708,463        15,969,484
  Net income per share
     Basic                                       $0.33             $0.14
     Diluted                                     $0.31             $0.12






                                             Three Months Ended
                                             ------------------
                                        March 27,       March 28,
                                              2010            2009
                                              ----            ----

  Key Performance Indicators
   and Statistics (in
   thousands, except store
   data):
        Net sales                         $191,613        $172,555
        Increase in comparable store
         net sales                             6.2%            5.1%
        Gross profit as a percent of
         net sales                            33.9%           33.0%
        Income from operations             $18,072         $12,701
        Depreciation and Amortization        5,414           5,078
        Amortization of deferred
         financing fees                        285             292






                                        Three Months Ended
                                        ------------------
                                   March 27,       March 28,
                                         2010            2009
                                         ----            ----
  Store Data:
    Stores open at beginning of
     period                               438             401
        Stores opened                      16              17
        Stores closed                      (1)              -
    Stores open at end of period          453             418
                                          ===             ===




                                       Three Months Ended
                                       ------------------
                                  March 27,       March 28,
                                        2010            2009
                                        ----            ----
  Results of Operations by
   Sales Channel (in
   thousands):
  Sales:
    Retail                          $169,063        $151,642
    Direct                            22,550          20,913
                                      ------          ------
  Net sales                          191,613         172,555

  Income from operations:
    Retail                            31,356          24,675
    Direct                             4,491           4,366
    Corporate costs                  (17,775)        (16,340)
                                     -------         -------
  Income from operations             $18,072         $12,701
                                     =======         =======






                       VITAMIN SHOPPE, INC. AND SUBSIDIARY

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
                                   (Unaudited)

                                                               December
                                                   March 27,      26,
                                                         2010       2009
                                                         ----       ----
                       ASSETS

  Current assets:
    Cash and cash equivalents                         $12,162     $8,797
    Inventories                                       112,457    106,091
    Prepaid expenses and other current assets          13,446     13,401
    Deferred income taxes                               3,086      5,145
                                                        -----      -----
       Total current assets                           141,151    133,434
  Property and equipment, net                          83,455     83,960
  Goodwill                                            177,248    177,248
  Other intangibles, net                               70,165     70,356
  Other assets:
    Deferred financing fees, net of accumulated
     amortization of $2,678 and $2,856 in 2010 and
     2009, respectively                                 1,796      2,384
    Other long-term assets                              1,872      1,875
                                                        -----      -----
       Total other assets                               3,668      4,259
                                                        -----      -----
  Total assets                                       $475,687   $469,257
                                                     ========   ========

        LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Current portion of long-term debt                      $-    $20,000
    Current portion of capital lease obligation         1,595      1,537
    Revolving credit facility                          20,000          -
    Accounts payable                                   28,693     25,075
    Deferred sales                                      5,504     14,386
    Accrued salaries and related expenses               4,328      7,551
    Other accrued expenses                             18,580     14,469
                                                       ------     ------
       Total current liabilities                       78,700     83,018
  Long-term debt                                      100,106    100,106
  Capital lease obligation, net of current portion      1,953      2,303
  Deferred income taxes                                19,057     19,945
  Other long-term liabilities                           4,987      4,766
  Deferred rent                                        25,648     24,768

  Commitments and contingencies
  Stockholders' equity:
  Common stock, $0.01 par value; 400,000,000
   shares authorized, 26,849,710 shares issued and
   outstanding at
      March 27, 2010, and 400,000,000 shares
       authorized, 26,750,423 shares issued and
       outstanding at December 26, 2009                   268        268
  Additional paid-in capital                          212,171    210,359
  Accumulated other comprehensive loss                   (535)      (882)
  Retained earnings                                    33,332     24,606
                                                       ------     ------
             Total stockholders' equity               245,236    234,351
                                                      -------    -------
  Total liabilities and stockholders' equity         $475,687   $469,257
                                                     ========   ========

First Call Analyst:
FCMN Contact: smclaughlin@vitaminshoppe.com

SOURCE: Vitamin Shoppe, Inc.

CONTACT: Investor Contacts: Michael Archbold, Chief Financial Officer,
+1-201-624-3611, ir@vitaminshoppe.com or Ian Lee, Solebury Communications
Group, +1-203-428-3215, ilee@soleburycomm.com; or Media Contacts: Susan
McLaughlin, Director Corporate Communications, +1-201-624-3134,
smclaughlin@vitaminshoppe.com or Allison & Partners, Jill Yaffe,
+1-646-428-0602, vitaminshoppe@allisonpr.com

Web Site: http://www.vitaminshoppe.com/


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