News Releases

Vitamin Shoppe, Inc. Announces Fiscal Second Quarter and First Half 2011 Results
- Comparable store sales grew 8.0%
- Net sales increased 12.3%
- Operating income rose 32.0%
- Fully diluted EPS of $0.40
- Opened 9 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 second quarter results.  We have been able to consistently deliver a strong performance in terms of comparable sale growth, margin improvement, earnings growth, cash flow generation and overall financial strength.  We feel good about the momentum we are seeing in the business."

Added, Mr. Truesdale, "We are making investments in the business, particularly online, to support our growth.  Both in retail and online we continue to work to build a business that exceeds our customers' expectations and strengthens our brand – our most valuable asset.  We have a strong balance sheet that can support our growth."

Fiscal Second Quarter 2011 Results

Net sales increased $23.7 million, or 12.3%, to $215.9 million for the three months ended June 25, 2011, compared with $192.2 million for the three months ended June 26, 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 4.4% increase in direct sales driven by further expansion in Vitamin Shoppe's online business.

Overall store sales for the three months ended June 25, 2011 grew as a result of an increase in non-comparable store sales of $9.2 million and an increase in comparable store sales of $13.6 million, or 8.0%.  The Company opened 9 stores in the quarter.  Total store count was 505 as of June 25, 2011, compared with 463 on June 26, 2010.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $13.7 million, or 10.6%, to $142.2 million for the three months ended June 25, 2011, compared with $128.5 million for the three months ended June 26, 2010.

Gross profit increased $10.0 million, or 15.7%, to $73.7 million for the three months ended June 25, 2011, compared with $63.7 million for the three months ended June 26, 2010.  Gross profit as a percentage of sales was 34.1% for the quarter ended June 25, 2011, up from 33.1% for the comparable prior year period.  The improvement reflects more effective promotional spending, a mix shift to higher margin items 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 $5.1 million, or 10.5%, to $53.3 million for the three months ended June 25, 2011, compared with $48.2 million for the three months ended June 26, 2010.  SG&A as a percentage of net sales decreased to 24.7% for the quarter compared to 25.1% for the comparable prior year period.  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 $4.9 million, or 32.0%, to $20.4 million for the three months ended June 25, 2011, compared with $15.4 million for the three months ended June 26, 2010.  Income from operations as a percentage of net sales increased to 9.4% for the 2011 quarter, compared with 8.0% for the comparable prior year period.

Net income increased $4.6 million, or 63.5% to $12.0 million for the three months ended June 25, 2011, compared with $7.3 million for the three months ended June 26, 2010.  This was primarily attributable to stronger sales and margin improvement.  Net income also benefitted from significantly lower interest expense versus the same period in 2010 due to reduced outstanding debt and lower interest rates.

Earnings per diluted share increased to $0.40 in fiscal second quarter 2011 from $0.26 per share in the comparable period of the prior year.

Balance Sheet and Cash Flow

During the fiscal second quarter 2011, the Company paid down the revolving credit facility which had $22 million drawn at the end of fiscal first quarter 2011.  Additionally, during the first half of fiscal year 2011, the company had a net reduction in debt of approximately $51 million.  Total debt, excluding capital lease obligations, at quarter's end was $21.9 million.  Cash and equivalents at June 25, 2011 were $6.9 million.

2011 Outlook

The current fiscal year is a 53-week year.  The outlook provided below is based on a 52-week year comparable with the prior fiscal year.  Management expects:

  • To open approximately 48 new stores
  • Capital expenditures of approximately $23 million
  • Comparable store sales of approximately 7.0% for the full year
  • Continued improvement in EBIT margin reflecting continuing maturation of the store base, leverage on depreciation and amortization
  • SG&A for the remainder of the year is expected to include approximately $1.0 million of additional investments to support long-term growth, primarily for the e-commerce business
  • 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 4:30 p.m. Eastern Time (ET) today to discuss its fiscal second 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 6:30 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 54857613.  The replay will be available until August 4, 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, websites and national mail order catalogs, primarily 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

 

Six Months Ended

 
 

June 25,

 

June 26,

 

June 25,

 

June 26,

 
 

2011

 

2010

 

2011

 

2010

 
                 
                 

Net sales

$       215,942

 

$       192,234

 

$   432,794

 

$   383,847

 

Cost of goods sold

142,230

 

128,541

 

283,806

 

255,140

 

Gross profit

73,712

 

63,693

 

148,988

 

128,707

 

Selling, general and administrative expenses

53,319

 

48,246

 

107,770

 

95,188

 

Income from operations

20,393

 

15,447

 

41,218

 

33,519

 

Loss on extinguishment of debt

-

 

568

 

552

 

1,120

 

Interest expense

527

 

2,562

 

1,657

 

5,489

 

Income before provision for income taxes

19,866

 

12,317

 

39,009

 

26,910

 

Provision for income taxes

7,914

 

5,008

 

15,468

 

10,875

 

Net income

$         11,952

 

$           7,309

 

$     23,541

 

$     16,035

 
                 

Earnings per share:

               

Weighted average shares outstanding:

               

  Basic

28,750,355

 

27,130,809

 

28,653,474

 

26,911,896

 

  Diluted

29,538,485

 

28,159,448

 

29,416,315

 

27,933,956

 

Net income per share

               

  Basic

$             0.42

 

$             0.27

 

$        0.82

 

$         0.60

 

  Diluted

$             0.40

 

$             0.26

 

$        0.80

 

$         0.57

 
   
               

 
   

SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO

($ in thousands)

unaudited

 
   

Three Months Ended

 

Six Months Ended

 
   

June 25,

 

June 26,

 

June 25,

 

June 26,

 
   

2011

 

2010

 

2011

 

2010

 
                   

Sales:

               
 

Retail

$      194,674

 

$     171,868

 

$       387,316

 

$      340,931

 
 

Direct

21,268

 

20,366

 

45,478

 

42,916

 

Net sales

$      215,942

 

$     192,234

 

$       432,794

 

$      383,847

 
                   

Income from operations:

               
 

Retail

$        37,385

 

$       30,349

 

$         76,212

 

$         61,705

 
 

Direct

3,990

 

3,627

 

8,568

 

8,118

 
 

Corporate costs

(20,982)

 

(18,529)

 

(43,562)

 

(36,304)

 

Income from operations

$        20,393

 

$       15,447

 

$         41,218

 

$         33,519

 
                   

Increase in comparable store net sales

8.0%

 

8.6%

 

8.0%

 

7.4%

 

Depreciation and Amortization

$           5,000

 

$         5,411

 

$            9,848

 

$         10,825

 

Impairment charge on fixed assets

$              291

 

$            224

 

$               291

 

$              224

 

Amortization of deferred financing fees

$                84

 

$            189

 

$               198

 

$              474

 
                   

Capital Expenditures

$           5,412

 

$         4,605

 

$            9,911

 

$         10,013

 
                   

Gross profit as a percent of net sales

34.1%

 

33.1%

 

34.4%

 

33.5%

 

Income from operations as a percent of net sales

9.4%

 

8.0%

 

9.5%

 

8.7%

 
                   

Store Data:

               
 

Stores open at beginning of period

497

 

453

 

484

 

438

 
 

   Stores opened

9

 

10

 

24

 

26

 
 

   Stores closed

(1)

 

 

(3)

 

(1)

 
 

Stores open at end of period

505

 

463

 

505

 

463

 
                   
   
                 

 
   

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

($ in thousands, except per share data)

(Unaudited)

 
 

June 25,

 

December 25,

 
 

2011

 

2010

 

ASSETS

       

Current assets:

       

 Cash and cash equivalents

$                6,881

 

$               25,968

 

 Inventories

111,828

 

111,305

 

 Prepaid expenses and other current assets

13,986

 

13,612

 

 Deferred income taxes

4,033

 

4,033

 

          Total current assets

136,728

 

154,918

 

Property and equipment, net

79,912

 

80,949

 

Goodwill

177,248

 

177,248

 

Other intangibles, net

69,415

 

69,718

 

Other assets:

       

  Deferred financing fees, net of accumulated amortization of $544 and $1,961 respectively

556

 

816

 

 Other

2,540

 

2,068

 

    Total other assets

3,096

 

2,884

 

Total assets

$            466,399

 

$             485,717

 
         

LIABILITIES AND STOCKHOLDERS' EQUITY

       

Current liabilities:

       

 Current portion of long-term debt

$              12,500

 

$                     -

 

 Current portion of capital lease obligations

1,536

 

1,711

 

 Revolving credit facility

-

 

18,000

 

 Accounts payable

16,636

 

18,994

 

 Deferred sales

9,130

 

15,929

 

 Accrued salaries and related expenses

7,485

 

9,573

 

 Other accrued expenses

22,429

 

14,752

 

        Total current liabilities

69,716

 

78,959

 

Long-term debt

9,375

 

55,106

 

Capital lease obligations, net of current portion

261

 

977

 

Deferred income taxes

21,391

 

20,595

 

Deferred rent

28,108

 

27,080

 

Other long-term liabilities

5,731

 

5,304

 
         

Commitments and contingencies

       
         

Stockholders' equity:

       

Common stock, $0.01 par value; 400,000,000 shares authorized, 29,120,536 shares issued and

       

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

291

 

286

 

Additional paid-in capital

254,133

 

243,558

 

Retained earnings

77,393

 

53,852

 

      Total stockholders' equity

331,817

 

297,696

 

Total liabilities and stockholders' equity

$            466,399

 

$             485,717

 
         
         
   
       

 

SOURCE Vitamin Shoppe, Inc.


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