Nutraceutical Reports Fiscal 2009 Q3 Results and Expands Share Repurchase Program
PARK CITY, Utah, July 30 /PRNewswire-FirstCall/ -- Nutraceutical International Corporation (Nasdaq: NUTR) today reported results for the fiscal 2009 third quarter ended June 30, 2009. Net sales for the fiscal 2009 third quarter were $39.4 million compared to $40.5 million for the same quarter of fiscal 2008. For the third quarter of fiscal 2009, net income was $3.0 million, or $0.27 diluted earnings per share, compared to net income of $2.9 million, or $0.26 diluted earnings per share, for the same quarter of fiscal 2008.
Net sales for the nine months ended June 30, 2009 were $121.0 million compared to $126.0 million for the same period in fiscal 2008. During the second quarter of fiscal 2009, the Company recorded a non-cash goodwill impairment charge of $37.5 million ($27.3 million after tax, or $2.51 per diluted share for the nine months ended June 30, 2009) resulting in a net loss of $(17.2) million, or $(1.58) per diluted share, for the nine months ended June 30, 2009, compared to net income of $10.4 million, or $0.93 per diluted share, for the same period of fiscal 2008. Excluding the non-cash impairment charge, net income for the nine months ended June 30, 2009 would have been $10.1 million, or $0.92 per diluted share.
Operating cash flow for the nine months ended June 30, 2009 was $17.2 million compared to $14.4 million for the same period of fiscal 2008. This operating cash flow was primarily used to invest $7.4 million in purchases of property and equipment and repay $9.5 million in net borrowings on the Company's revolving credit facility.
Bill Gay, chairman and chief executive officer, commented, "Domestic and international sales improved in the third quarter despite the current economic environment and we are hopeful that this trend will continue. Net income remained solid and cash flows increased as a result of inventory and accounts receivable reductions. Gross margins declined slightly due to increased raw material prices and manufacturing overhead costs related to inventory reductions. Selling, general and administrative expense reductions offset our lower gross margins. Our core health food store customers are regaining confidence in their businesses and we look forward to helping them grow. Ongoing sales promotions appear to be benefiting stores, consumers and our Company. We expect acquisitions to contribute to profitability and cash flow within this calendar year. It is encouraging that the market has responded favorably to the Company's recent addition to the Russell 2000 stock index and we believe our financial strength and position as a value based stock will bring awareness to many new investors."
Mr. Gay continued, "I am also pleased to announce that on July 28, 2009, our Board of Directors agreed to add an additional one million shares to our previously approved share purchase program which means the Company is authorized to buy up to 1.56 million total additional shares of our outstanding common stock." Under this approved share purchase program, the Company may purchase common stock from time to time on the open market and in individually negotiated transactions. The amount and timing of any purchases will be dependent upon a number of factors, including the price and availability of the Company's shares and general market conditions. The Company currently has approximately 10.9 million shares of its common stock outstanding. Since October 1, 2003, the Company has purchased approximately 1.3 million shares of its common stock at an average price of $13.61 per share for an aggregate purchase price of approximately $17.5 million.
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), Sunny Green(R), Action Labs(R), Natural Balance(R), NaturalMax(R), bioAllers(R), Herbs for Kids((TM)), Natra-Bio(R), NaturalCare(R), Zand(R), Health from the Sun(R), Life-flo(R), Larenim(R), Living Flower Essences(R), Pioneer(R), Thompson(R), Natural Sport(R), Supplement Training Systems(R), Premier One(R), Montana Big Sky(TM), ActiPet(R), FunFresh Foods(TM), Dowd & Rogers(TM), CompliMed(R), AllVia(TM), Oakmont Labs(R), Healthway(R), Body Gold(R), Sayge(TM), Monarch Nutraceuticals(TM) and Great Basin Botanicals(TM). Under the name Woodland Publishing(TM), we publish, print and market a line of books and booklets to, among others, book distributors, national retail bookstores and health and natural food stores. We also distribute branded products of certain third parties.
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) June 30, September 30, --------- -------------- 2009 2008 Assets Current assets, net $49,719 $55,577 Property, plant and equipment, net 55,232 52,356 Goodwill 332 37,632 Other non-current assets, net 25,503 16,099 ------ ------ $130,786 $161,664 -------- -------- Liabilities and Stockholders' Equity Current liabilities $14,425 $19,239 Long-term liabilities 19,929 28,965 Stockholders' equity 96,432 113,460 ------ ------- $130,786 $161,664 -------- -------- NUTRACEUTICAL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited; dollars in thousands, except per share data) Three months ended Nine months ended June 30, June 30, ------------------ ----------------- 2009 2008 2009 2008 Net sales $39,406 $40,454 $120,992 $125,986 Cost of sales 19,250 18,489 56,964 57,192 ------ ------ ------ ------ Gross profit 20,156 21,965 64,028 68,794 Operating expenses Selling, general and administrative 15,099 16,933 46,585 50,539 Amortization of intangible assets 163 185 480 522 Impairment of goodwill - - 37,519 - --- --- ------ --- Income (loss) from operations 4,894 4,847 (20,556) 17,733 Interest and other (income) expense, net 177 223 951 1,008 --- --- --- ----- Income (loss) before provision (benefit) for income taxes 4,717 4,624 (21,507) 16,725 Provision (benefit) for income taxes 1,698 1,771 (4,279) 6,309 ----- ----- ------ ----- Net income (loss) $3,019 $2,853 $(17,228) $10,416 ------ ------ -------- ------- Net income (loss) per common share Basic $0.28 $0.26 $(1.58) $0.94 Diluted 0.27 0.26 (1.58) 0.93 Weighted average common shares outstanding Basic 10,903,394 10,964,696 10,874,382 11,043,026 Diluted 10,982,174 11,097,500 10,874,382 11,181,609 NUTRACEUTICAL INTERNATIONAL CORPORATION ADJUSTED EBITDA SCHEDULE (unaudited; dollars in thousands) Three months ended Nine months ended June 30, June 30, ------------------ ----------------- 2009 2008 2009 2008 Net income (loss) $3,019 $2,853 $(17,228) $10,416 Provision (benefit) for income taxes 1,698 1,771 (4,279) 6,309 Interest and other (income) expense, net (1) 177 223 951 1,008 Depreciation and amortization 1,683 1,514 4,959 4,256 Impairment of goodwill (2) - - 37,519 - --- --- ------ --- Adjusted EBITDA $6,577 $6,361 $21,922 $21,989 ------ ------ ------- ------- (1) Includes amortization of deferred financing fees. (2) For the nine months ended June 30, 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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