Vitamin Shoppe, Inc. Announces Third Quarter 2013 Results 3Q13 Highlights:

- Total revenue increased 14.0%

- Comparable store sales grew 2.6%

- E-commerce revenues increased 17.7%

- Fully diluted EPS of $0.53

- Opened 10 new stores in the U.S.

NORTH BERGEN, N.J., Nov. 5, 2013 /PRNewswire/ -- Vitamin Shoppe, Inc. (NYSE: VSI), a leading multi-channel specialty retailer of nutritional products, today announced preliminary results for the third quarter ended September 28, 2013.  Total net sales in the quarter increased 14.0% to $272.5 million compared to $239.0 million in the same period of the prior year.  Net income per diluted share for third quarter 2013 was $0.53 compared to $0.54 per share in the same quarter of the prior year.

Tony Truesdale, Chief Executive Officer of the Company commented, "We delivered our 32nd consecutive quarter of positive comparable retail store sales growth and experienced improving traffic trends throughout the quarter.  We opened a new 311,000 square foot distribution center in Ashland, VA and continued to successfully integrate Super Supplements, the largest acquisition in the company's history."

Mr. Truesdale further commented, "Super Supplements and the new distribution center are key components to support expansion of the business.  We are also making investments in omni-channel, private label development and international markets to position ourselves to meet the evolving and growing demand in the health and wellness industry."

Third Quarter 2013 Results

Total net sales in third quarter 2013 increased 14.0% to $272.5 million compared to $239.0 million in the same period of the prior year.  Sales growth in the quarter was driven by: 1) a 2.6% increase in comparable retail store sales, 2) the contribution from Super Supplements retail stores of $17.0 million, 3) growth from non-comp stores, and 4) a 17.7% increase in e-commerce sales, including a 6.0% contribution from Super Supplements online sales. 

The Company opened 10 stores in the quarter and 33 year-to-date.  The majority of the third quarter store openings occurred late in the quarter.  Total store count was 640 as of September 28, 2013, compared with 564 on September 29, 2012. 

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $22.9 million, or 14.6%, to $179.4 million for the three months ended September 28, 2013, compared with $156.5 million for the three months ended September 29, 2012.  

Gross profit increased $10.6 million, or 12.8%, to $93.1 million for 2013 third quarter, compared with $82.5 million for third quarter 2012.  Gross profit as a percentage of net sales was 34.2% for the quarter ended September 28, 2013, compared to 34.5% in third quarter 2012.  The decrease was primarily attributable to shifts in product category sales mix and higher penetration of e-commerce sales.

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 16.0%, to $67.0 million for the quarter ended September 28, 2013, compared with $57.7 million for the quarter ended September 29, 2012.  SG&A as a percentage of net sales was 24.6% for third quarter 2013 compared with 24.2% in third quarter 2012.  SG&A includes integration related expenses for the Super Supplements acquisition of approximately $0.9 million

Income from operations in third quarter 2013 was $26.1 million, an increase of 5.4% from the same period in the prior year.  As a percentage of net sales, income from operations was 9.6% for third quarter 2013 compared with 10.4% for third quarter 2012. 

Net income was $16.3 million for third quarter 2013, flat with third quarter 2012.  Reported earnings per diluted share (EPS) were $0.53 in third quarter 2013 compared with $0.54 in third quarter 2012 and includes $0.02 per share of integration costs related to the Super Supplements acquisition.  In addition, EPS benefitted from a lower effective tax rate in both 3Q13 and 3Q12, of $0.02 and $0.05 per share, respectively, which primarily reflects the reversal of charges previously recorded related to uncertain tax positions due to the expiration of applicable statutes of limitation.

Balance Sheet and Cash Flow

Cash and equivalents at September 28, 2013 were $54.2 million.  Capital expenditures were $8.5 million in the quarter and $32.4 million year-to-date.  Capital expenditures were used primarily for the new distribution center, build-out of new stores and improvements to existing stores.

2013 Outlook

For the current year management expects:

  • To open approximately 50 new stores
  • Low to mid single digit comparable store sales growth for the year
  • Capital expenditures of approximately $45 - $50 million, which includes capital for the new distribution center
  • Depreciation & amortization of approximately $28 million, which includes the additional depreciation from the Super Supplements acquisition
  • Super Supplements acquisition is expected to be slightly dilutive to earnings per share, which includes transaction and integration costs
  • Fully diluted shares outstanding of 30.6 million

2014 Outlook

For the upcoming year management expects:

  • Mid single digit comparable store sales growth
  • To open approximately 60 new stores
  • Depreciation & amortization of approximately $31 million
  • Slight EBIT margin improvement
  • Capital expenditures of approximately $35-40 million

Webcast

Management will host a conference call to discuss the third quarter 2013 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.  A telephonic replay will be available beginning at 11:30 a.m. ET on November 5, 2013 and can be accessed by dialing 1-877-870-5176 or 1-858-384-5517 for international callers. The passcode for the replay is 6370052. The replay will be available until 11:59 p.m. ET on November 12, 2013.  The webcast will also be archived on the company's website at www.vitaminshoppe.com in the investor relations section.

About the Vitamin Shoppe, Inc. (NYSE: VSI)

Vitamin Shoppe is a leading multi-channel specialty retailer of nutritional products based in North Bergen, New Jersey.  In its stores and on its website, the company carries one of the most comprehensive retail assortments in the industry, including vitamins, minerals, specialty supplements, herbs, sports nutrition, homeopathic remedies, green living products, and beauty aids.  In addition to offering 600 national brand products, the Vitamin Shoppe also exclusively carries products under The Vitamin Shoppe, BodyTech, True Athlete and MyTrition brands.  The Vitamin Shoppe conducts business through more than 640 company-operated retail stores under The Vitamin Shoppe, Super Supplements and Vitapath retail banners, and through its website, www.VitaminShoppe.com and www.supersup.com.  Follow The Vitamin Shoppe on Facebook at http://www.facebook.com/THEVITAMINSHOPPE and on Twitter at http://twitter.com/VitaminShoppe.

Forward Looking Statements

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 risk that the operations of Super Supplements will not be integrated successfully, 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 further described in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2012 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 to do so by law.


TABLE 1
VITAMIN SHOPPE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except share and per share data)
(Unaudited)















Three Months Ended


Nine Months Ended



September 28,


September 29,


September 28,


September 29,



2013


2012


2013


2012




























Net sales


$         272,472


$         238,994


$         831,042


$         732,026

Cost of goods sold


179,419


156,494


539,090


475,435

Gross profit


93,053


82,500


291,952


256,591

Selling, general and administrative expenses


66,951


57,732


200,585


173,690

Income from operations


26,102


24,768


91,367


82,901

Interest expense, net


164


161


375


535

Income before provision for income taxes


25,938


24,607


90,992


82,366

Provision for income taxes


9,670


8,316


35,665


31,219

Net income 


$           16,268


$          16,291


$           55,327


$          51,147










Weighted average common shares outstanding









   Basic


30,011,914


29,646,287


29,967,212


29,333,828

   Diluted


30,535,129


30,244,053


30,504,210


29,993,403

Net income per common share









   Basic


$              0.54


$              0.55


$              1.85


$              1.74

   Diluted


$              0.53


$              0.54


$              1.81


$              1.71

 


TABLE 2
VITAMIN SHOPPE, INC. AND SUBSIDIARY
SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO
($ in thousands)
(Unaudited)







Three Months Ended


Nine Months Ended



September 28,


September 29,


September 28,


September 29,



2013


2012


2013


2012

Net sales:









Retail 

$          243,909


$         214,083


$          743,188


$         655,233


Direct

28,563


24,911


87,854


76,793

Net sales

$          272,472


$         238,994


$          831,042


$         732,026










Income from operations:









Retail 

$            47,386


$           42,548


$          153,615


$         136,224


Direct

5,425


4,990


16,537


15,358


Corporate costs

(26,709)


(22,770)


(78,785)


(68,681)

Income from operations

$            26,102


$           24,768


$            91,367


$           82,901










Increase in comparable store net sales

2.6%


9.6%


3.1%


9.2%










Gross profit as a percent of net sales

34.2%


34.5%


35.1%


35.1%

Income from operations as a percent of net sales

9.6%


10.4%


11.0%


11.3%










Capital Expenditures

$              8,516


$             7,742


$            32,353


$           18,625

Depreciation and Amortization 

6,948


5,684


20,012


16,539

Impairment charge on fixed assets

-


202


-


730










Acquisition and integration costs

$                 868


$                   -


$              3,859


$                   -

Insurance recoveries from Super Storm Sandy

$                    -


$                   -


$              1,079


$                   -










Store Data:









Stores open at beginning of period 

630


551


579


528


    Stores opened 

10


15


33


39


    Stores acquired



31



    Stores closed 


(2)


(3)


(3)


Stores open at end of period

640


564


640


564

 

TABLE 3
VITAMIN SHOPPE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share data)
(Unaudited)


















September 28,


December 29,


2013


2012

ASSETS








Current assets:




  Cash and cash equivalents

$                54,201


$                 81,168

  Inventories

168,836


137,693

  Prepaid expenses and other current assets

35,590


22,476

     Total current assets

258,627


241,337

Property and equipment, net of accumulated depreciation and amortization of $200,342 and $182,173




  in 2013 and 2012, respectively

116,013


95,401

Goodwill

210,633


177,248

Other intangibles, net

71,257


69,116

Other assets

4,166


3,183

Total assets

$              660,696


$               586,285





LIABILITIES AND STOCKHOLDERS' EQUITY 




Current liabilities:




  Accounts payable

$                32,370


$                 22,445

  Accrued expenses and other current liabilities

58,422


65,439

     Total current liabilities

90,792


87,884

Deferred income taxes

19,180


13,011

Deferred rent

35,167


30,150

Other long-term liabilities 

3,148


7,822





Commitments and contingencies








Stockholders' equity:




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




   September 28, 2013 and December 29, 2012

-


-

  Common stock, $0.01 par value; 400,000,000 shares authorized, 30,411,137 shares issued and 30,404,821 shares



   outstanding at September 28, 2013, and 30,170,627 shares issued and outstanding at December 29, 2012

304


302

  Additional paid-in capital

297,564


287,574

  Treasury stock, at cost; 6,316 shares at September 28, 2013 and no shares at December 29, 2012

(280)


-

  Accumulated other comprehensive (loss) income

(47)


1

  Retained earnings 

214,868


159,541

           Total stockholders' equity 

512,409


447,418

Total liabilities and stockholders' equity

$              660,696


$               586,285





 

SOURCE Vitamin Shoppe, Inc.



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