Nutraceutical Reports Fiscal 2009 Q2 Results
Primarily as a result of the ongoing U.S. and global economic recession and the related turmoil in the equity markets, there has been a significant and prolonged decrease in the Company's stock price and related market capitalization over the past six months. The ongoing economic recession also has negatively impacted the Company during this period, both domestically and internationally. Based on these factors, the Company determined that an interim goodwill impairment analysis was necessary and performed this goodwill impairment analysis on each of its reporting units during the second quarter of fiscal 2009 in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. Based on the results of this goodwill impairment analysis, a non-cash goodwill impairment charge of
This non-cash goodwill impairment charge resulted in a net loss of
Net sales for the six months ended
Operating cash flow for the six months ended
Mr. Gay continued, "The uncertainties of the current environment will continue to present ongoing challenges as we strive to serve our customers and grow our business. Our management group is focusing on expanding revenues through customer promotions and product innovation, material sourcing improvements and further reducing controllable costs. Our long term business strategy of selling primarily to the Healthy Foods Channel and growing through add-on acquisitions has served our stakeholders well over the last ten years as a public company and we continue to explore opportunities that will improve profitability and cash flow."
ABOUT NUTRACEUTICAL
We are an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. Our core business strategy is to acquire, integrate and operate, from beginning to end, the manufacturing, marketing and distribution of branded nutritional supplement businesses in the natural products industry. We believe that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.
We sell branded nutritional supplements and other natural products under the trademarks Solaray(R), VegLife(R), KAL(R), Nature's Life(R),
We own neighborhood natural food markets, which operate under the trade names The Real Food Company(TM), Thom's Natural Foods(TM) and Cornucopia Community Market(TM). We also own health food stores, which operate under the trade names Fresh Vitamins(TM) and Granola's(TM).
We manufacture and/or distribute one of the broadest branded product lines in the industry with over 4,000 SKUs, including over 700 SKUs sold internationally. We believe that as a result of our emphasis on innovation, quality, loyalty, education and customer service, our brands are widely recognized in health and natural food stores and among their customers.
This Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business. These forward-looking statements can be identified by the use of terms such as "believe," "expects," "plan," "intend," "may," "will," "should," "can," or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy. Although these statements are believed to be reasonable, they are inherently uncertain. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Press Release. Important factors that may cause our results to differ from these forward-looking statements include, but are not limited to: (i) slow or negative growth in the nutritional supplement industry or the healthy foods channel, (ii) interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism or civil unrest, (iii) adverse publicity or negative consumer perception regarding nutritional supplements, (iv) changes in government regulations, (v) product liability claims and litigation, (vi) insurance coverage issues, (vii) increased competition or costs, (viii) intellectual property rights of other parties, (ix) the loss of key personnel, (x) disruptions from acquisitions, (xi) issues with obtaining raw materials of adequate quality or quantity, (xii) problems with information management systems, manufacturing efficiencies and operations, (xiii) changes in general worldwide economic or political conditions, (xiv) the volatility of the stock market generally and of our stock specifically, (xv) litigation generally, and (xvi) other factors indicated from time to time in our SEC reports, copies of which are available upon request from our investor relations group or which may be obtained at the SEC's website (www.sec.gov).
(C) 2009 Nutraceutical Corporation. All rights reserved.
NUTRACEUTICAL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited; dollars in thousands)
March 31, September 30,
---------- --------------
2009 2008
Assets
Current assets,
net $51,054 $55,577
Property, plant
and equipment, net 55,790 52,356
Goodwill 332 37,632
Other non-current
assets, net 25,869 16,099
------ ------
$133,045 $161,664
-------- --------
Liabilities and
Stockholders' Equity
Current
liabilities $16,187 $19,239
Long-term
liabilities 23,776 28,965
Stockholders'
equity 93,082 113,460
------ -------
$133,045 $161,664
-------- --------
NUTRACEUTICAL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; dollars in thousands, except per share data)
Three months ended Six months ended
March 31, March 31,
------------------ ----------------
2009 2008 2009 2008
Net sales $41,957 $44,446 $81,586 $85,532
Cost of sales 19,517 19,930 37,714 38,703
------ ------ ------ ------
Gross profit 22,440 24,516 43,872 46,829
Operating expenses
Selling, general and
administrative 15,713 16,978 31,486 33,606
Amortization
of intangible assets 158 170 317 337
Impairment of goodwill 37,519 - 37,519 -
------ ---- ------ ----
Income/(loss) from
operations (30,950) 7,368 (25,450) 12,886
Interest and other
(income)/expense, net 264 405 774 785
--- --- --- ---
Income/(loss) before
provision/(benefit)
for income taxes (31,214) 6,963 (26,224) 12,101
Provision/(benefit)
for income taxes (7,855) 2,611 (5,977) 4,538
------ ----- ------ -----
Net income/(loss) $(23,359) $4,352 $(20,247) $7,563
-------- ------ -------- ------
Net income/(loss) per
common share
Basic $(2.15) $0.39 $(1.86) $0.68
Diluted (2.15) 0.39 (1.86) 0.67
Weighted average
common shares
outstanding
Basic 10,870,769 11,039,703 10,859,876 11,081,978
Diluted 10,870,769 11,176,351 10,859,876 11,223,450
NUTRACEUTICAL INTERNATIONAL CORPORATION
ADJUSTED EBITDA SCHEDULE
(unaudited; dollars in thousands)
Three months Six months
ended March 31, ended March 31,
--------------- ---------------
2009 2008 2009 2008
Net income/(loss) $(23,359) $4,352 $(20,247) $7,563
Provision/(benefit) for
income taxes (7,855) 2,611 (5,977) 4,538
Interest and other (income)/
expense, net (1) 264 405 774 785
Depreciation and amortization 1,642 1,430 3,276 2,742
Impairment of goodwill (2) 37,519 - 37,519 -
------ ---- ------ ----
Adjusted EBITDA $8,211 $8,798 $15,345 $15,628
------ ------ ------- -------
(1) Includes amortization of deferred financing fees
(2) For the three months and six months ended March 31, 2009, a non-cash
goodwill impairment charge of $37,519 was recorded related to our
branded and natural food markets reporting units.
SOURCE Nutraceutical International Corporation
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