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Vitamin Shoppe, Inc. Announces Record Fourth Quarter 2011 Results
Vitamin Shoppe Voted #1 Vitamin Store Three Years in a Row by ConsumerLab.com Survey
Fourth Quarter Highlights:
- Comparable store sales grew 6.5%
- Net sales increased 19.2%
- Operating income rose 46.3%
- Fully diluted EPS of $0.32, or $0.38 excluding non-operating items
- Opened 14 stores during the quarter
PR Newswire
NORTH BERGEN, N.J.

Commenting on the results, Tony Truesdale, Chief Executive Officer of the Company stated, "Again we are pleased with the consistent results we achieved this quarter.  We delivered our 25th consecutive quarter of positive comparable sales growth.  Revenue was robust, merchandise margins strong, operating margins expanded and earnings per share grew at a healthy double-digit pace.  Our in-store experience and our website are all resonating with our customers."  Added, Mr. Truesdale, "I want to thank all the Vitamin Shoppe team members for their contributions.  It is due to all their hard work that we were able to successfully execute our strategic initiatives and deliver another quarter and year of outstanding financial results."

Mr. Truesdale further commented, "Our growth plan is on track, and we are successfully executing on our business model.  We continue to invest in the marketing initiatives which are driving customers to our stores and to our website.  I am pleased that our results exceeded our expectations as we continue to strengthen the foundation that will enable us to deliver long-term consistent growth and shareholder value."

Fiscal Fourth Quarter 2011 Results

Net sales increased $34.6 million, or 19.2%, to $214.9 million for the three months ended December 31, 2011, compared with $180.3 million for the three months ended December 25, 2010.  After adjusting for the extra week in 2011, net sales increased $19.0 million, or 10.6%.  This increase was the result of the growth in comparable store sales predominantly driven by traffic, growth from new stores and a 9.3% increase in direct sales as the result of a 13.2% increase in e-commerce sales.

Overall store sales for the fiscal 2011 fourth quarter, excluding the extra week, grew as a result of an increase in non-comparable store sales of $6.9 million and an increase in comparable store sales of $10.2 million, or 6.5%.  The Company opened 14 stores in the quarter.  Total store count was 528 as of December 31, 2011, compared with 484 on December 25, 2010.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $19.7 million, or 16.3%, to $140.3 million for the three months ended December 31, 2011, compared with $120.6 million for the three months ended December 25, 2010.

Gross profit increased $14.9 million, or 24.9%, to $74.5 million for the fiscal 2011 fourth quarter, compared with $59.7 million for fiscal fourth quarter 2010.  Gross profit as a percentage of net sales was 34.7% for the quarter ended December 31, 2011, up from 33.1% in fiscal fourth quarter 2010.  The improvement reflects leverage on occupancy, driven by comparable sales growth and the benefit from the additional week in the quarter, as well as ongoing improvement in inventory management.

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 $9.2 million, or 19.4%, to $56.5 million for the 14 weeks ended December 31, 2011, compared with $47.4 million for the 13 weeks ended December 25, 2010.  SG&A as a percentage of net sales was 26.3% for both the fiscal 2011 and 2010 fourth quarters.  The fiscal fourth quarter 2011 included approximately $1.3 million or 0.6% of sales in non-cash store closing and impairment expenses.  SG&A as a percentage of sales, excluding the store closing and impairment expense, was 25.7% for the fiscal 2011 fourth quarter as compared to 26.3% in fiscal 2010 fourth quarter. The improvement reflects the 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 $5.7 million, or 46.3%, to $18.0 million for the three months ended December 31, 2011, compared with $12.3 million for the three months ended December 25, 2010.  Excluding the non-cash store closing and impairment expenses, income from operations would have been $19.3 million. Income from operations as a percentage of net sales increased to 8.4% for the fiscal 2011 fourth quarter, compared with 6.8% for fiscal fourth quarter 2010, or to 9.0% excluding the aforementioned charges.  Income from operations for the quarter ended December 31, 2011, included $3.5 million attributable to the extra week.

Net income increased $3.5 million to $9.4 million for the three months ended December 31, 2011, compared with $6.0 million for fiscal fourth quarter 2010.  This was primarily attributable to stronger sales and margin improvement as well as additional income from the extra week, partially offset by the store closing and impairment expenses and a higher tax rate.

Earnings per diluted share increased to $0.32 in fiscal fourth quarter 2011 from $0.21 per share in fiscal fourth quarter 2010.  Excluding the non-cash items and the tax adjustments, earnings per share in the quarter were $0.38, of which $0.07 per share was attributable to the extra week.

Balance Sheet and Cash Flow

During fiscal 2011, the Company paid down all of its bank debt totaling a net amount of $73 million.  Cash and equivalents at December 31, 2011 were $10.8 million.  Capital expenditures were $9.9 million in the quarter and $25.0 million for the fiscal year.  The majority of these funds were expended on new store openings.

Fiscal 2011 Highlights:
- Comparable store sales grew 7.4% on a 52-week basis
- Net sales increased 14.0%
- Operating income rose 28.8%
- Fully diluted EPS of $1.52 vs $1.03
- Opened 48 stores during the year

2012 Outlook

For the current year management expects:

  • To open approximately 52 new stores
  • Comparable store sales growth in mid-single digits
  • Continued improvement in operating income  margin
  • Capital expenditures of $32 million
 

Webcast

The Company's conference call will be webcast at 8:30 a.m. Eastern Time (ET) today to discuss its fiscal fourth 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 10:30 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 45857318. The replay will be available until March 6, 2012.

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, BodyTech and other 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

 

Fiscal Year Ended

 
 

December 31,

December 25,

 

December 31,

December 25,

 
 

2011

2010

 

2011

2010

 
             
             
             

Net sales

$       214,856

$     180,276

 

$      856,586

$      751,482

 

Cost of goods sold

140,328

120,618

 

563,627

501,948

 

Gross profit

74,528

59,658

 

292,959

249,534

 

Selling, general and administrative expenses

56,543

47,368

 

216,125

189,872

 

Income from operations

17,985

12,290

 

76,834

59,662

 

Loss on extinguishment of debt

83

229

 

635

1,349

 

Interest expense, net

249

1,847

 

2,325

9,517

 

Income before provision for income taxes

17,653

10,214

 

73,874

48,796

 

Provision for income taxes

8,241

4,252

 

29,010

19,550

 

Net income

$          9,412

$        5,962

 

$        44,864

$        29,246

 
             

Weighted average common shares outstanding

       

  Basic

28,984,731

28,026,972

 

28,802,103

27,390,419

 

  Diluted

29,697,814

28,889,861

 

29,556,024

28,338,788

 

Net income per common share

           

  Basic

$            0.32

$          0.21

 

$            1.56

$           1.07

 

  Diluted

$            0.32

$          0.21

 

$            1.52

$           1.03

 
   
           

 

SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO

($ in thousands)

unaudited

 
   
   

Three Months Ended

 

Fiscal Year Ended

   
   

December 31,

 

December 25,

 

December 31,

 

December 25,

 
   

2011

 

2010

 

2011

 

2010

 
                   

Sales:

               
 

Retail

$          191,501

 

$         159,991

 

$          765,925

 

$         668,008

 
 

Direct

23,355

 

20,285

 

90,661

 

83,474

 

Net sales

$          214,856

 

$         180,276

 

$          856,586

 

$         751,482

 
                   

Income from operations:

               
 

Retail

$            36,895

 

$           27,872

 

$          147,023

 

$         118,319

 
 

Direct

4,330

 

3,282

 

16,705

 

14,863

 
 

Corporate costs

(23,240)

 

(18,864)

 

(86,894)

 

(73,520)

 

Income from operations

$            17,985

 

$           12,290

 

$            76,834

 

$           59,662

 
                   

Increase in comparable store net sales (a)

6.5%

 

6.5%

 

7.4%

 

7.1%

 

Depreciation and Amortization

$              5,395

 

$             4,987

 

$            20,300

 

$           21,112

 

Impairment charge on fixed assets

$                 236

 

$                     -

 

$                 887

 

$             1,326

 

Impairment charge on intangible assets

$                 325

 

$                     -

 

$                 325

 

$                     -

 

Amortization of deferred financing fees

$                   90

 

$                128

 

$                 372

 

$                740

 
                   

Capital Expenditures

$              9,876

 

$             4,124

 

$            25,046

 

$           18,356

 
                   

Gross profit as a percent of net sales

34.7%

 

33.1%

 

34.2%

 

33.2%

 

Income from operations as a percent of net sales

8.4%

 

6.8%

 

9.0%

 

7.9%

 
                   

Store Data:

               
 

Stores open at beginning of period

515

 

472

 

484

 

438

 
 

   Stores opened

14

 

12

 

48

 

47

 
 

   Stores closed

(1)

 

 

(4)

 

(1)

 
 

Stores open at end of period

528

 

484

 

528

 

484

 
                   
                   
 

(a)  Comparable store net sales are based on a 13-week quarter and a 52-week year.

       
   
                 

 

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

($ in thousands, except per share data)

(Unaudited)

 
   
 

December 31,

 

December 25,

   
 

2011

 

2010

   

ASSETS

         

Current assets:

         

 Cash and cash equivalents

$             10,754

 

$              25,968

   

 Inventories

121,494

 

111,305

   

 Prepaid expenses and other current assets

17,905

 

13,612

   

 Deferred income taxes

2,863

 

4,033

   

          Total current assets

153,016

 

154,918

   

Property and equipment, net

88,677

 

80,949

   

Goodwill

177,248

 

177,248

   

Other intangibles, net

68,852

 

69,718

   

Other assets:

         

  Deferred financing fees, net of accumulated amortization of $672 and $1,961 in 2011 and 2010, respectively

349

 

816

   

  Other long-term assets

2,463

 

2,068

   

    Total other assets

2,812

 

2,884

   

Total assets

$           490,605

 

$            485,717

   

LIABILITIES AND STOCKHOLDERS' EQUITY

         

Current liabilities:

         

 Current portion of capital lease obligations

$                  956

 

$                1,711

   

 Revolving credit facility

-

 

18,000

   

 Accounts payable

22,279

 

18,994

   

 Deferred sales

18,859

 

15,929

   

 Accrued expenses and other current liabilities

41,579

 

24,325

   

        Total current liabilities

83,673

 

78,959

   

Long-term debt

-

 

55,106

   

Capital lease obligations, net of current portion

-

 

977

   

Deferred income taxes

13,725

 

20,595

   

Deferred rent

28,738

 

27,080

   

Other long-term liabilities

8,666

 

5,304

   
           

Commitments and contingencies

         

Stockholders' equity:

         

 Preferred stock, $0.01 par value; 250,000,000 shares authorized and no shares issued and outstanding at

   

   at December 31, 2011 and  December 25, 2010

-

 

-

   

 Common stock, $0.01 par value; 400,000,000 shares authorized, 29,216,888 shares issued and outstanding at

   

   December 31, 2011, and 28,627,897 shares issued and outstanding at December 25, 2010

292

 

286

   

 Additional paid-in capital

256,795

 

243,558

   

 Retained earnings

98,716

 

53,852

   

      Total stockholders' equity

355,803

 

297,696

   

Total liabilities and stockholders' equity

$           490,605

 

$            485,717

   
   
         

 

SOURCE Vitamin Shoppe, Inc.


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