News Releases

Vitamin Shoppe, Inc. Announces Fiscal First Quarter 2011 Results
- Comparable store sales grew 8.1%
- Net sales increased 13.2%
- GAAP diluted EPS was $0.40 and diluted EPS, after adjusting for one-time charge, was $0.47
- Opened 15 stores during the quarter
PR Newswire
NORTH BERGEN, N.J.

Commenting on the strong results, Tony Truesdale, Chief Executive Officer of the Company stated, "I am pleased with our first quarter operational results.  We achieved strong comparable store sales combined with solid results in the direct channel.  This represents our 22nd consecutive quarter of positive comparable store sales.  We believe these results reflect the strong momentum of our businesses."

Added Mr. Truesdale, "As we look forward to the remainder of the year, we will continue to capitalize on those initiatives that have driven Vitamin Shoppe's strong performance, including our strong value proposition, a cohesive merchandise strategy, as well as superior customer service.  We believe we are well positioned to continue to open new stores, drive comparable-store sales growth while improving operating margins.  We have a business model with a track record of successful execution that has generated consistent growth in sales and profits.  We also have a healthy balance sheet which will allow us to make the appropriate investments to grow the business."

Fiscal First Quarter 2011 Results

Net sales increased $25.2 million, or 13.2%, to $216.9 million for the three months ended March 26, 2011, compared with $191.6 million for the three months ended March 27, 2010.  The increase was the result of the growth in comparable store sales predominantly driven by traffic, continued strong performance from new stores and a 7.4% increase in direct sales driven by further expansion in Vitamin Shoppe's online business.

Overall store sales for the three months ended March 26, 2011 grew as a result of an increase in non-comparable store sales of $10.0 million and an increase in comparable store sales of $13.5 million, or 8.1%.  The Company opened 15 stores in the quarter.  Total store count was 497 as of March 26, 2011, compared with 453 on March 27, 2010.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $15.0 million, or 11.8%, to $141.6 million for the three months ended March 26, 2011, compared with $126.6 million for the three months ended March 27, 2010.

Gross profit increased $10.3 million, or 15.8%, to $75.3 million for the three months ended March 26, 2011, compared with $65.0 million for the three months ended March 27, 2010.  Gross profit as a percentage of sales was 34.7% for the quarter ended March 26, 2011, up from 33.9% for the comparable prior year period.  The improvement reflects improved purchasing, effective inventory management and leverage on occupancy driven by the strong comparable sales performance.

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 $7.5 million, or 16.0%, to $54.5 million for the three months ended March 26, 2011, compared with $46.9 million for the three months ended March 27, 2010.  SG&A as a percentage of net sales increased to 25.1% for the quarter compared to 24.5% for the comparable prior year period.  The first quarter of 2011 includes a cumulative $3.7 million charge to adjust reserves for certain non-income-based taxes.  Excluding this charge, SG&A as a percentage of net sales would have been 23.4%. The improvement represents maturation of the store base, strong comparable store sales, as well as the company's ability to leverage costs over a larger store base and expense discipline.

Income from operations increased $2.8 million, or 15.2%, to $20.8 million for the three months ended March 26, 2011, compared with $18.1 million for the three months ended March 27, 2010.  Excluding the one-time charge for non-income-based taxes, income from operations would have increased 35.8%.  Income from operations as a percentage of net sales increased to 9.6% for the 2011 quarter, compared with 9.4% for the comparable prior year period.  Excluding the one-time charge, income from operations as a percentage of net sales would have been 11.3%.

Net income increased $2.9 million to $11.6 million for the three months ended March 26, 2011, compared with $8.7 million for the three months ended March 27, 2010.  Net income adjusted for the one-time non income tax item increased 59.1% to $13.9 million.  Net income benefited from significantly lower interest expense versus the same period in 2010.  Both fiscal first quarter 2011 and 2010 results include $0.6 million of debt extinguishment expenses incurred in connection with the redemption of debt.

Earnings per diluted share increased to $0.40 in fiscal first quarter 2011 from $0.31 per share in the comparable period of the prior year.  Excluding the charge for non-income-based taxes, earnings per diluted share for the quarter would have been $0.47.

Balance Sheet and Cash Flow

During the first quarter 2011, the Company redeemed the remaining $55.1 million of its Second Priority Senior Secured Floating Rate Notes due 2012 and entered into a new term loan for $25 million.  Total debt, excluding capital lease obligations, at quarter's end was $47.0 million. Cash and equivalents at March 26, 2011 were $7.9 million.

2011 Outlook

For the current fiscal year, management expects:

  • To open approximately 48 new stores
  • Capital expenditures of approximately $23 million
  • Comparable store sales between 5% - 6% for the full year
  • Continued improvement in EBIT margin reflecting continuing maturation of the store base, leverage on depreciation and amortization and corporate expenses
  • SG&A trends for the remainder of the year is expected to include approximately $2.0 million of additional compensation expense due to organizational changes
  • Reduced interest expense compared with the prior year reflecting lower debt levels from strong cash flow and lower interest rates under the new term loan
 

Webcast

The Company will webcast a conference call at 5:00 p.m. Eastern Time (ET) today to discuss its fiscal first quarter 2011 results. Interested investors and other parties may listen to the 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 immediately following the call.  A telephonic replay will be available beginning at 8:00 p.m. ET and can be accessed by dialing 1-888-286-8010 or for international callers, 1-617-801-6888. The passcode for the replay is 13327621. The replay will be available until May 3, 2011.

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 500 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.

Forward Looking Statement

Certain statements in this press release 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 described in the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 2010 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, unless required by law.

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except share and per share data)

(unaudited)

 
 

Three Months Ended

 
 

March 26,

 

March 27,

 
 

2011

 

2010

 
         
         

Net sales

$       216,852

 

$       191,613

 

Cost of goods sold

141,576

 

126,599

 

Gross profit

75,276

 

65,014

 

Selling, general and administrative expenses

54,451

 

46,942

 

Income from operations

20,825

 

18,072

 

Loss on extinguishment of debt

552

 

552

 

Interest expense

1,130

 

2,927

 

Income before provision for income taxes

19,143

 

14,593

 

Provision for income taxes

7,554

 

5,867

 

Net income

$         11,589

 

$           8,726

 
         

Earnings per share:

       

Weighted average shares outstanding:

       

  Basic

28,556,593

 

26,692,983

 

  Diluted

29,294,146

 

27,708,463

 

Net income per share

       

  Basic

$            0.41

 

$            0.33

 

  Diluted

$            0.40

 

$            0.31

 
   
       

 

SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO

 

($ in thousands)

 
         
 

(Unaudited)

 
 

Three Months Ended

 
 

March 26,

 

March 27,

 
 

2011

 

2010

 
         

Sales:

       

   Retail

$ 192,642

 

$ 169,063

 

   Direct

24,210

 

22,550

 

Net sales

$ 216,852

 

$ 191,613

 
         

Income from operations:

       

   Retail

$   38,827

 

$   31,356

 

   Direct

4,578

 

4,491

 

   Corporate costs

(22,580)

 

(17,775)

 

Income from operations

$   20,825

 

$   18,072

 
         

Increase in comparable store net sales

8.1%

 

6.2%

 

Depreciation and Amortization

$     4,848

 

$     5,414

 

Amortization of deferred financing fees

$ 114

 

$ 285

 
         

Capital Expenditures

$     4,499

 

$     5,408

 
         

Gross profit as a percent of net sales

34.7%

 

33.9%

 

Income from operations as a percent of net sales

9.6%

 

9.4%

 
         

Store Data:

       

Stores open at beginning of period

484

 

438

 

   Stores opened

15

 

16

 

   Stores closed

(2)

 

(1)

 

Stores open at end of period

497

 

453

 
       

 

VITAMIN SHOPPE, INC. AND SUBSIDIARY

 

CONSOLIDATED BALANCE SHEETS

 

($ in thousands, except per share data)

 

(Unaudited)

 
         
 

March 26,

 

December 25,

 
 

2011

 

2010

 
         

ASSETS

       

Current assets:

       

 Cash and cash equivalents

$     7,937

 

$   25,968

 

 Inventories

115,479

 

111,305

 

 Prepaid expenses and other current assets

15,359

 

13,612

 

 Deferred income taxes

4,033

 

4,033

 

     Total current assets

142,808

 

154,918

 

 Property and equipment, net 80,362 80,949

       

 Goodwill

177,248

 

177,248

 

 Other intangibles, net

69,566

 

69,718

 

 Other assets:

       

   Deferred financing fees, net of accumulated
      amortization of $460 and $1,961 respectively

635

 

816

 

   Other

2,164

 

2,068

 

     Total other assets

2,799

 

2,884

 

 Total assets

$ 472,783

 

$ 485,717

 
         

LIABILITIES AND STOCKHOLDERS’ EQUITY

       

Current liabilities:

       

 Current portion of long-term debt

$   12,500

 

$             -

 

 Current portion of capital lease obligations

1,618

 

1,711

 

 Revolving credit facility

22,000

 

18,000

 

 Accounts payable

21,000

 

18,994

 

 Deferred sales

5,702

 

15,929

 

 Accrued salaries and related expenses

5,096

 

9,573

 

 Other accrued expenses

24,873

 

14,752

 

     Total current liabilities

92,789

 

78,959

 

Long-term debt

12,500

 

55,106

 

Capital lease obligations, net of current portion

644

 

977

 

Deferred income taxes

20,752

 

20,595

 

Deferred rent

27,552

 

27,080

 

Other long-term liabilities

5,690

 

5,304

 
         

Commitments and contingencies

       
         

Stockholders' equity:

       

Common stock, $0.01 par value; 400,000,000 shares authorized, 28,750,549 shares issued and

       

outstanding at March 26, 2011, and 28,627,897 shares issued and outstanding at December 25, 2010

287

 

286

 

Additional paid-in capital

247,127

 

243,558

 

Retained earnings

65,442

 

53,852

 

     Total stockholders’ equity

312,856

 

297,696

 

Total liabilities and stockholders' equity

$ 472,783

 

$ 485,717

 
       

 

SOURCE Vitamin Shoppe, Inc.


print email rss