News Releases

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
PR Newswire
NORTH BERGEN, N.J.

"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,

 

December 26,

 
 

2010

 

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

 
         
       

 

SOURCE Vitamin Shoppe, Inc.


print email rss