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Vitamin Shoppe, Inc. Announces Record Second Quarter 2012 Results
27th Consecutive Quarter of Positive Comparable Sales Growth
PR Newswire
NORTH BERGEN, N.J.

Second Quarter Highlights:

  • Comparable store sales grew 8.3%
  • E-commerce revenue increased 20.3%
  • Net sales increased 13.4%
  • Fully diluted EPS of $0.55, an increase of 37.5%

Vitamin Shoppe, Inc. (NYSE: VSI), a leading specialty retailer and direct marketer of nutritional products, today announced preliminary results for its fiscal second quarter ended June 30, 2012.  Net sales in fiscal second quarter 2012 advanced 13.4% while operating income rose 35.9%.  During the period, the company reported fully diluted earnings per share (EPS) of $0.55; up from $0.40 in fiscal second quarter 2011.

Tony Truesdale, Chief Executive Officer of the Company commented, "I am very pleased with our strong second quarter results.  Our top line growth was driven by continued strong retail performance with positive comparable store sales and solid e-commerce sales.  The strength of our sales performance is supported by disciplined merchandising, knowledgeable Health Enthusiasts and superior execution."

Mr. Truesdale further commented, "Looking ahead, we have many opportunities to continue to fuel our long-term growth.  These include; expanding our store base, introducing new products, international expansion and continuing to grow e-commerce.  We also have the operational and financial discipline to continue to manage our business to ensure we deliver profitable growth."

Fiscal Second Quarter 2012 Results

Net sales increased $29.0 million, or 13.4%, to $245.0 million for the three months ended June 30, 2012, compared with $215.9 million for the three months ended June 25, 2011.  This increase was the result of; 1) an 8.3% increase in comparable store sales, 2) growth from new stores, and 3) a 20.3% increase in e-commerce sales.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $17.0 million, or 11.9%, to $159.2 million for the three months ended June 30, 2012, compared with $142.2 million for the three months ended June 25, 2011.

Gross profit increased $12.0 million, or 16.3%, to $85.8 million for the fiscal 2012 second quarter, compared with $73.7 million for fiscal second quarter 2011.  Gross profit as a percentage of net sales was 35.0% for the quarter ended June 30, 2012, up from 34.1% in fiscal second quarter 2011.  The improvement in gross profit margin reflects leverage on occupancy and supply chain 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 $4.7 million, or 8.9%, to $58.1 million for the quarter ended June 30, 2012, compared with $53.3 million for the quarter ended June 25, 2011.  SG&A as a percentage of net sales was 23.7% for the quarter ended June 30, 2012, compared to 24.7% in fiscal second quarter 2011.

Income from operations increased $7.3 million, or 35.9%, to $27.7 million for the three months ended June 30, 2012, compared with $20.4 million for the three months ended June 25, 2011.  As a percentage of revenue, income from operations was 11.3% for the fiscal 2012 second quarter, compared with 9.4% for fiscal second quarter 2011.

Net income increased $4.6 million or 38.8%, to $16.6 million for the three months ended June 30, 2012, compared with $12.0 million for fiscal second quarter 2011.  This was primarily attributable to stronger sales and margin improvement.

Earnings per diluted share increased 37.5% to $0.55 in fiscal second quarter 2012 from $0.40 in second quarter 2011.

Balance Sheet and Cash Flow

Cash and equivalents at June 30, 2012 were $50.4 million.  Capital expenditures were $5.0 million in the quarter.  Capital expenditures were used primarily for the build-out of new stores and improvements to existing stores, as well as computer equipment related to those stores.

2012 Outlook

For the current year management expects:

  • To open 52 new stores
  • Comparable store sales growth in mid-single digits for the remainder of the year
  • Continued improvement in operating income  margin
  • Capital expenditures between $35 million and $40 million

Webcast

Management will host a conference call to discuss its fiscal second quarter 2012 results at 8:30 a.m. Eastern Time (ET) today.  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 also be available beginning at 11:30 a.m. ET and can be accessed by dialing 1-877-870-5176 or for international callers, 1-858-384-5517. The passcode for the replay is 9067140. The replay will be available until 11:59 p.m. ET on August 14, 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 True Athlete proprietary brands. The Vitamin Shoppe conducts business through more than 550 company-owned retail stores, national mail order catalogs, and website, www.VitaminShoppe.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 31, 2011 and in all filings with the Securities and 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 30,

 

June 25,

 

June 30,

 

June 25,

 

2012

 

2011

 

2012

 

2011

               

Net sales

$     244,981

 

$     215,942

 

$     493,032

 

$     432,794

Cost of goods sold

159,226

 

142,230

 

318,941

 

283,806

Gross profit

85,755

 

73,712

 

174,091

 

148,988

Selling, general and administrative expenses

58,051

 

53,319

 

115,958

 

107,770

Income from operations

27,704

 

20,393

 

58,133

 

41,218

Loss on extinguishment of debt

-

 

-

 

-

 

552

Interest expense, net

187

 

527

 

374

 

1,657

Income before provision for income taxes

27,517

 

19,866

 

57,759

 

39,009

Provision for income taxes

10,922

 

7,914

 

22,903

 

15,468

Net income

$       16,595

 

$       11,952

 

$       34,856

 

$       23,541

               

Weighted average common shares outstanding

             

   Basic

29,309,667

 

28,750,355

 

29,177,598

 

28,653,474

   Diluted

29,918,219

 

29,538,485

 

29,868,078

 

29,416,315

Net income per common share

             

   Basic

$          0.57

 

$          0.42

 

$          1.19

 

$          0.82

   Diluted

$          0.55

 

$          0.40

 

$          1.17

 

$          0.80

               
               

 

 

SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO

 

($ in thousands)

 

unaudited

         
   

Three Months Ended

 

Six Months Ended

   

June 30,

 

June 25,

 

June 30,

 

June 25,

   

2012

 

2011

 

2012

 

2011

                 

Sales:

             
 

Retail

$         220,175

 

$        194,674

 

$         441,150

 

$        387,316

 

Direct

24,806

 

21,268

 

51,882

 

45,478

Net sales

$         244,981

 

$        215,942

 

$          493,032

 

$         432,794

                 

Income from operations:

             
 

Retail

$           45,706

 

$           37,385

 

$            93,676

 

$           76,212

 

Direct

4,758

 

3,990

 

10,368

 

8,568

 

Corporate costs

(22,760)

 

(20,982)

 

(45,911)

 

(43,562)

Income from operations

$           27,704

 

$           20,393

 

$            58,133

 

$           41,218

                 

Increase in comparable store net sales

8.3%

 

8.0%

 

9.0%

 

8.0%

Depreciation and amortization

$             5,326

 

$             5,000

 

$            10,855

 

$             9,848

Impairment charge on fixed assets

$                     -

 

$                291

 

$                 528

 

$                291

Amortization of deferred financing fees

$                  83

 

$                  84

 

$                 165

 

$                198

                 

Capital Expenditures

$             4,996

 

$             5,412

 

$            10,883

 

$             9,911

                 

Gross profit as a percent of net sales

35.0%

 

34.1%

 

35.3%

 

34.4%

Income from operations as a percent of net sales

11.3%

 

9.4%

 

11.8%

 

9.5%

                 

Store Data:

             
 

Stores open at beginning of period

543

 

497

 

528

 

484

 

    Stores opened

9

 

9

 

24

 

24

 

    Stores closed

(1)

 

(1)

 

(1)

 

(3)

 

Stores open at end of period

551

 

505

 

551

 

505

                 


 

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in thousands, except per share data)

(Unaudited)

       
 

June 30,

 

December 31,

 

2012

 

2011

ASSETS

     

Current assets:

     

  Cash and cash equivalents

$               50,436

 

$                10,754

  Inventories

120,024

 

121,494

  Prepaid expenses and other current assets

22,247

 

20,768

     Total current assets

192,707

 

153,016

Property and equipment, net of accumulated depreciation and amortization of $171,329

     

  and $163,247 in 2012 and 2011, respectively

86,532

 

88,677

Goodwill

177,248

 

177,248

Other intangibles, net

68,789

 

68,852

Other assets

3,101

 

2,812

Total assets

$             528,377

 

$              490,605

LIABILITIES AND STOCKHOLDERS' EQUITY 

     

Current liabilities:

     

  Current portion of capital lease obligations

$                    343

 

$                     956

  Accounts payable

20,549

 

22,279

  Accrued expenses and other current liabilities

48,525

 

60,438

     Total current liabilities

69,417

 

83,673

Capital lease obligations, net of current portion

125

 

-

Deferred income taxes

14,741

 

13,725

Deferred rent

29,468

 

28,738

Other long-term liabilities

9,173

 

8,666

       

Commitments and contingencies

     
       

Stockholders' equity:

     

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

   

   June 30, 2012 and December 31, 2011

-

 

-

  Common stock, $0.01 par value; 400,000,000 shares authorized, 29,721,187 shares issued and

     

   outstanding at June 30, 2012, and 29,216,888 shares issued and outstanding at December 31, 2011

297

 

292

  Additional paid-in capital

271,584

 

256,795

  Retained earnings

133,572

 

98,716

           Total stockholders' equity

405,453

 

355,803

Total liabilities and stockholders' equity

$             528,377

 

$              490,605

       
       

 

 

SOURCE Vitamin Shoppe, Inc.


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