News Releases

Vitamin Shoppe, Inc. Announces Fiscal Third Quarter 2011 Results
- Comparable store sales grew 7.1%
- Net sales increased 11.5%
- Operating income rose 27.3%
- Fully diluted EPS of $0.40
- Opened 10 stores during the quarter
PR Newswire
NORTH BERGEN, N.J.

Commenting on the results, Tony Truesdale, Chief Executive Officer of the Company stated, "Our results once again demonstrate the unique strength of our retail store portfolio, our evolving multichannel growth model and The Vitamin Shoppe brand.  We realized improved gross profit margins, leveraged our fixed operating expenses and continued to make investments for the future while achieving significant growth in our EPS."

Added, Mr. Truesdale, "We believe that our strong multi-channel business model will allow us to continue to gain market share.  As always, we will continue to work to enhance our customers' overall shopping experience, and we remain committed to being our customers' first choice for their health and wellness needs."

Fiscal Third Quarter 2011 Results

Net sales increased $21.6 million, or 11.5%, to $208.9 million for the three months ended September 24, 2011, compared with $187.4 million for the three months ended September 25, 2010.  The increase was the result of the growth in comparable store sales predominantly driven by traffic, growth from new stores and a 7.7% increase in direct sales as the result of an approximate 12% increase in e-commerce sales.

Overall store sales for the fiscal 2011 third quarter grew as a result of an increase in non-comparable store sales of $8.3 million and an increase in comparable store sales of $11.7 million, or 7.1%.  The Company opened 10 stores in the quarter.  Total store count was 515 as of September 24, 2011, compared with 472 on September 25, 2010.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $13.3 million, or 10.5%, to $139.5 million for the three months ended September 24, 2011, compared with $126.2 million for the comparable period in the prior year.

Gross profit increased $8.3 million, or 13.5%, to $69.4 million for the fiscal 2011 third quarter, compared with $61.2 million for the same quarter in the prior year.  Gross profit as a percentage of net sales was 33.2% for the quarter ended September 24, 2011, up from 32.6% for the comparable prior year period.  The improvement reflects leverage on occupancy and distribution costs driven by the strong comparable sales performance as well as improved product margin.

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 $4.5 million, or 9.5%, to $51.8 million for the three months ended September 24, 2011, compared with $47.3 million for the three months ended September 25, 2010. SG&A as a percentage of net sales was 24.8% for the fiscal 2011 third quarter compared to 25.3% for the comparable prior year period.  The improvement was primarily attributable to expense discipline and leverage due to sales growth.

Income from operations increased $3.8 million, or 27.3%, to $17.6 million for the three months ended September 24, 2011, compared with $13.9 million for the three months ended September 25, 2010.  Income from operations as a percentage of net sales increased to 8.4% for the fiscal 2011 third quarter, compared with 7.4% for the comparable prior year period.

Net income increased $4.7 million to $11.9 million for the three months ended September 24, 2011, compared with $7.2 million for the comparable period in the prior year.  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 and a lower effective tax rate in the quarter.  The lower effective tax rate was primarily due to a reduction in reserves for tax positions established in prior years.

Earnings per diluted share increased to $0.40 in fiscal third quarter 2011 from $0.25 per share in the comparable period of the prior year.

Balance Sheet and Cash Flow

During the first nine months of fiscal year 2011, the company had a net reduction in debt of approximately $56 million.  Total debt, excluding capital lease obligations, at quarter's end was $18.8 million.  Cash and equivalents at September 24, 2011 were $24.8 million.  Capital expenditures were $5.3 million in the quarter.  Subsequent to quarter's end, on October 25, 2011, the company paid $18.8 million, representing the remaining principal balance and accrued interest on its term loan which was originally scheduled to mature on January 20, 2013.

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 48 new stores
  • Capital expenditures of approximately $23 million
  • Comparable store sales growth of approximately 7% for the full year
  • Continued improvement in EBIT margin
 

Preliminary 2012 Outlook

Looking forward to 2012 management expects:

  • To open approximately 52 new stores
  • Comparable store sales growth in mid-single digits
  • Continued improvement in EBIT margin
 

Webcast

The Company will webcast a conference call at 8:30 a.m. Eastern Time (ET) today to discuss its fiscal third 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 online replay will be available immediately following the call. A telephonic replay will be available beginning at 11:30 a.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 47998554. The replay will be available until November 2, 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 and BodyTech proprietary brands.  The Vitamin Shoppe conducts business through more than 500 company-owned retail stores, national mail order catalogs, website, www.VitaminShoppe.com and has a social community site at www.VSconnect.com.

Follow The Vitamin Shoppe on Facebook at http://www.facebook.com/THEVITAMINSHOPPE and on Twitter at http://twitter.com/VitaminShoppe.

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

 

Nine Months Ended

 
 

September 24,

September 25,

 

September 24,

 

September 25,

 
 

2011

2010

 

2011

 

2010

 
               

Net sales

$                    208,936

$                  187,359

 

$                    641,730

 

$                   571,206

 

Cost of goods sold

139,493

126,190

 

423,299

 

381,330

 

Gross profit

69,443

61,169

 

218,431

 

189,876

 

Selling, general and administrative expenses

51,812

47,316

 

159,582

 

142,504

 

Income from operations

17,631

13,853

 

58,849

 

47,372

 

Loss on extinguishment of debt

-

-

 

552

 

1,120

 

Interest expense, net

419

2,181

 

2,076

 

7,670

 

Income before provision for income taxes

17,212

11,672

 

56,221

 

38,582

 

Provision for income taxes

5,301

4,423

 

20,769

 

15,298

 

Net income

$                      11,911

$                      7,249

 

$                      35,452

 

$                     23,284

 
               

Weighted average common shares outstanding

             

  Basic

28,916,734

27,710,913

 

28,741,227

 

27,178,235

 

  Diluted

29,693,651

28,597,381

 

29,508,761

 

28,155,098

 

Net income per common share

             

  Basic

$                          0.41

$                        0.26

 

$                          1.23

 

$                         0.86

 

  Diluted

$                          0.40

$                        0.25

 

$                          1.20

 

$                         0.83

 
             

 

SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO

($ in thousands)

unaudited

 
   
   

Three Months Ended

 

Nine Months Ended

 
   

September 24,

 

September 25,

 

September 24,

 

September 25,

 
   

2011

 

2010

 

2011

 

2010

 
                 

Sales:

               

Retail

$          187,108

 

$            167,086

 

$          574,424

 

$          508,017

 

Direct

21,828

 

20,273

 

67,306

 

63,189

 

Net sales

$          208,936

 

$            187,359

 

$          641,730

 

$          571,206

 
                 

Income from operations:

               

Retail

$            33,916

 

$              28,742

 

$          110,128

 

$            90,447

 

Direct

3,807

 

3,463

 

12,375

 

11,581

 

Corporate costs

(20,092)

 

(18,352)

 

(63,654)

 

(54,656)

 

Income from operations

$            17,631

 

$              13,853

 

$            58,849

 

$            47,372

 
                 

Increase in comparable store net sales

 

7.1%

 

7.1%

 

7.7%

 

7.3%

 

Depreciation and Amortization

 

$              5,057

 

$                5,300

 

$            14,905

 

$            16,125

 

Impairment charge on fixed assets

 

$                 360

 

$                1,102

 

$                 651

 

$              1,326

 

Amortization of deferred financing fees

 

$                   84

 

$                   138

 

$                 282

 

$                 612

 
                 

Capital Expenditures

 

$              5,259

 

$                4,219

 

$            15,170

 

$            14,232

 
                 

Gross profit as a percent of net sales

 

33.2%

 

32.6%

 

34.0%

 

33.2%

 

Income from operations as a percent of net sales

 

8.4%

 

7.4%

 

9.2%

 

8.3%

 
                 

Store Data:

               

Stores open at beginning of period

505

 

463

 

484

 

438

 

   Stores opened

10

 

9

 

34

 

35

 

   Stores closed

 

 

(3)

 

(1)

 

Stores open at end of period

515

 

472

 

515

 

472

 
                 

 

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

($ in thousands, except per share data)

(Unaudited)

 
         
         
 

September 24,

 

December 25,

 
 

2011

 

2010

 

ASSETS

       
         

Current assets:

       

 Cash and cash equivalents

$                    24,783

 

$                     25,968

 

 Inventories

110,317

 

111,305

 

 Prepaid expenses and other current assets

20,091

 

17,645

 

    Total current assets

155,191

 

154,918

 

Property and equipment, net

80,350

 

80,949

 

Goodwill

177,248

 

177,248

 

Other intangibles, net

69,264

 

69,718

 

Other assets:

       

 Deferred financing fees, net of accumulated amortization of $628 and $1,961 in 2011 and 2010, respectively

472

 

816

 

 Other long-term assets

2,505

 

2,068

 

    Total other assets

2,977

 

2,884

 

Total assets

$                  485,030

 

$                   485,717

 
         

LIABILITIES AND STOCKHOLDERS’ EQUITY

       

Current liabilities:

       

 Current portion of long-term debt

$                    12,500

 

$                               -

 

 Current portion of capital lease obligation

1,352

 

1,711

 

 Revolving credit facility

-

 

18,000

 

 Accounts payable

20,956

 

18,994

 

 Deferred sales

13,543

 

15,929

 

 Accrued salaries and related expenses

9,511

 

9,573

 

 Other accrued expenses

22,377

 

14,752

 

    Total current liabilities

80,239

 

78,959

 

Long-term debt, net of current portion

6,250

 

55,106

 

Capital lease obligation, net of current portion

20

 

977

 

Deferred income taxes

20,047

 

20,595

 

Deferred rent

28,626

 

27,080

 

Other long-term liabilities

4,745

 

5,304

 
         

Commitments and contingencies

       

Stockholders' equity:

       

Common stock, $0.01 par value; 400,000,000 shares authorized, 29,190,548 shares issued and outstanding at September 24, 2011, and 28,627,897 shares issued and outstanding at December 25, 2010

292

 

286

 

Additional paid-in capital

255,507

 

243,558

 

Retained earnings

89,304

 

53,852

 

          Total stockholders’ equity

345,103

 

297,696

 

Total liabilities and stockholders' equity

$                  485,030

 

$                   485,717

 
       

 

SOURCE Vitamin Shoppe, Inc.


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