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Vitamin Shoppe, Inc. Announces Record Third Quarter 2012 Results
28th Consecutive Quarter of Positive Comparable Sales Growth
PR Newswire
NORTH BERGEN, N.J.

Third Quarter Highlights:
- Comparable store sales grew 9.6%
- E-commerce revenue increased 16.9%
- Net sales increased 14.4%
- Fully diluted EPS of $0.54, up from $0.40

 

Vitamin Shoppe, Inc. (NYSE: VSI), a leading specialty retailer and direct marketer of nutritional products, today announced preliminary results for its fiscal third quarter ended September 29, 2012.  Net sales in fiscal third quarter 2012 advanced 14.4% while operating income rose 40.5%.  During the period, the company reported fully diluted earnings per share (EPS) of $0.54; up from $0.40 in fiscal third quarter 2011. For the nine-month period, fully diluted EPS was $1.71, up from $1.20 in the comparable period of the prior year.

Tony Truesdale, Chief Executive Officer of the Company commented, "We reported another quarter of strong growth while also investing for the future.  We are pleased with our business, our positioning and our consistent and predictable results.  The third quarter represented our 28th consecutive quarter of positive comparable store sales."

Fiscal Third Quarter 2012 Results

Net sales increased $30.1 million, or 14.4%, to $239.0 million for the three months ended September 29, 2012, compared with $208.9 million for the three months ended September 24, 2011.  This increase was the result of; 1) a 9.6% increase in comparable store sales, 2) growth from new stores, and 3) a 16.9% increase in e-commerce sales.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $17.0 million, or 12.2%, to $156.5 million for the three months ended September 29, 2012, compared with $139.5 million for the three months ended September 24, 2011.

Gross profit increased $13.1 million, or 18.8%, to $82.5 million for the fiscal 2012 third quarter, compared with $69.4 million for fiscal third quarter 2011.  Gross profit as a percentage of net sales was 34.5% for the quarter ended September 29, 2012, up from 33.2% in fiscal third quarter 2011.  The improvement in gross profit margin reflects leverage on occupancy and product margin improvement.

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 $5.9 million, or 11.4%, to $57.7 million for the quarter ended September 29, 2012, compared with $51.8 million for the quarter ended September 24, 2011.  SG&A as a percentage of net sales were 24.2% for the quarter ended September 29, 2012, down from 24.8% in fiscal third quarter 2011.  This improvement was due to sales leverage.

Income from operations increased $7.1 million, or 40.5%, to $24.8 million for the three months ended September 29, 2012, compared with $17.6 million for the three months ended September 24, 2011.  As a percentage of net sales , income from operations was 10.4% for the fiscal 2012 third quarter, compared with 8.4% for fiscal third quarter 2011.

Net income increased $4.4 million or 36.8%, to $16.3 million for the three months ended September 29, 2012, compared with $11.9 million for fiscal third quarter 2011.  This was primarily attributable to stronger sales and margin improvement. Net income also benefitted from a lower effective tax rate in both this year's and last year's third quarters, which primarily reflects the reversal of charges previously recorded related to uncertain tax positions due to the expiration of applicable statutes of limitation.  The net benefit to the provision for income taxes was $1.6 million and $1.0 million for the fiscal third quarters of 2012 and 2011, respectively.

Earnings per diluted share were $0.54 in fiscal third quarter 2012 up from $0.40 in third quarter 2011.

Balance Sheet and Cash Flow

Cash and equivalents at September 29, 2012 were $76.1 million.  Capital expenditures were $7.7 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 approximately 52 new stores
  • Comparable store sales growth for the full year of approximately 8%
  • Continued improvement in operating income margin
  • Capital expenditures between $35 million and $40 million
  • Fourth quarter 2012 fully diluted shares outstanding of 30.5 million

 

Preliminary 2013 Outlook

For the upcoming year management expects:

  • To open approximately 57 new stores
  • Comparable store sales growth in mid-single digits for the year
  • Continued improvement in operating income margin
  • Capital expenditures of approximately $45 million, which includes capital for the new distribution center
  • Depreciation of approximately $26 million
  • Fully diluted shares outstanding of 30.7 million

Webcast

Management will host a conference call to discuss its fiscal third 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 7104137. The replay will be available until 11:59 p.m. ET on November 13, 2012.

About the 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 560 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

 

Nine Months Ended

 

September 29,

 

September 24,

 

September 29,

 

September 24,

 

2012

 

2011

 

2012

 

2011

               

Net sales

$ 238,994

 

$ 208,936

 

$ 732,026

 

$ 641,730

Cost of goods sold

156,494

 

139,493

 

475,435

 

423,299

Gross profit

82,500

 

69,443

 

256,591

 

218,431

Selling, general and administrative expenses

57,732

 

51,812

 

173,690

 

159,582

Income from operations

24,768

 

17,631

 

82,901

 

58,849

Loss on extinguishment of debt

-

 

-

 

-

 

552

Interest expense, net

161

 

419

 

535

 

2,076

Income before provision for income taxes

24,607

 

17,212

 

82,366

 

56,221

Provision for income taxes

8,316

 

5,301

 

31,219

 

20,769

Net income

$ 16,291

 

$ 11,911

 

$ 51,147

 

$ 35,452

               

Weighted average common shares outstanding

             

Basic

29,646,287

 

28,916,734

 

29,333,828

 

28,741,227

Diluted

30,244,053

 

29,693,651

 

29,993,403

 

29,508,761

Net income per common share

             

Basic

$ 0.55

 

$ 0.41

 

$ 1.74

 

$ 1.23

Diluted

$ 0.54

 

$ 0.40

 

$ 1.71

 

$ 1.20

 

 


 

 

 

 

 

 

 

 

SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO

($ in thousands)

unaudited

 

         
   

Three Months Ended

 

Nine Months Ended

   

September 29,

 

September 24,

 

September 29,

 

September 24,

   

2012

 

2011

 

2012

 

2011

                 

Sales:

             
 

Retail

$          214,083

 

$         187,108

 

$          655,233

 

$         574,424

 

Direct

24,911

 

21,828

 

76,793

 

67,306

Net sales

$          238,994

 

$         208,936

 

$          732,026

 

$         641,730

                 

Income from operations:

             
 

Retail

$            42,548

 

$           33,916

 

$          136,224

 

$         110,128

 

Direct

4,990

 

3,807

 

15,358

 

12,375

 

Corporate costs

(22,770)

 

(20,092)

 

(68,681)

 

(63,654)

Income from operations

$            24,768

 

$           17,631

 

$            82,901

 

$           58,849

                 

Increase in comparable store net sales

9.6%

 

7.1%

 

9.2%

 

7.7%

Depreciation and amortization

$              5,684

 

$             5,057

 

$            16,539

 

$           14,905

Impairment charge on fixed assets

$                 202

 

$                360

 

$                 730

 

$                651

Amortization of deferred financing fees

$                   66

 

$                  84

 

$                 231

 

$                282

                 

Capital Expenditures

$              7,742

 

$             5,259

 

$            18,625

 

$           15,170

                 

Gross profit as a percent of net sales

34.5%

 

33.2%

 

35.1%

 

34.0%

Income from operations as a percent of net sales

10.4%

 

8.4%

 

11.3%

 

9.2%

                 

Store Data:

             
 

Stores open at beginning of period

551

 

505

 

528

 

484

 

    Stores opened

15

 

10

 

39

 

34

 

    Stores closed

(2)

 

 

(3)

 

(3)

 

Stores open at end of period

564

 

515

 

564

 

515

 

 

 

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

       
 

September 29,

 

December 31,

 

2012

 

2011

ASSETS

     
       

Current assets:

     

  Cash and cash equivalents

$                 76,054

 

$                10,754

  Inventories

130,821

 

121,494

  Prepaid expenses and other current assets

25,211

 

20,768

     Total current assets

232,086

 

153,016

Property and equipment, net of accumulated depreciation and amortization of $176,523 and $163,247 in 2012 and 2011, respectively

89,207

 

88,677

 

Goodwill

177,248

 

177,248

Other intangibles, net

68,758

 

68,852

Other assets

3,088

 

2,812

Total assets

$               570,387

 

$              490,605

       

LIABILITIES AND STOCKHOLDERS' EQUITY 

     

Current liabilities:

     

  Current portion of capital lease obligations

$                      104

 

$                     956

  Accounts payable

24,306

 

22,279

  Accrued expenses and other current liabilities

57,498

 

60,438

     Total current liabilities

81,908

 

83,673

Capital lease obligations, net of current portion

103

 

-

Deferred income taxes

16,213

 

13,725

Deferred rent

29,774

 

28,738

Other long-term liabilities

6,758

 

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 September 29, 2012 and December 31, 2011

 

-

 

 

-

 

  Common stock, $0.01 par value; 400,000,000 shares authorized, 30,165,955 shares issued and outstanding at September 29, 2012, and 29,216,888 shares issued and outstanding at December 31, 2011

302

 

292

 

  Additional paid-in capital

285,466

 

256,795

  Retained earnings

149,863

 

98,716

           Total stockholders' equity

435,631

 

355,803

Total liabilities and stockholders' equity

$               570,387

 

$              490,605

       

 

SOURCE Vitamin Shoppe, Inc.


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