Nutraceutical Reports Fiscal 2014 Year End Results

PARK CITY, Utah, Nov. 20, 2014 /PRNewswire/ -- Nutraceutical International Corporation (NASDAQ:  NUTR) today reported results for the fiscal 2014 fourth quarter ended September 30, 2014.  Net sales for the fiscal 2014 fourth quarter were $52.4 million compared to $51.3 million for the same quarter of fiscal 2013.  For the fourth quarter of fiscal 2014, net income was $3.4 million, or $0.35 diluted earnings per share, compared to net income of $4.1 million, or $0.42 diluted earnings per share, for the same quarter of fiscal 2013.  Net income for the fourth quarter of fiscal 2014 included a non-cash intangible asset impairment charge related to a tradename of $0.2 million, net of tax, or $.02 per diluted share.  Net income for the fourth quarter of fiscal 2013 included non-cash intangible asset impairment charges related to certain tradenames of $0.1 million, net of tax, or $0.01 per diluted share. 

Net sales for the fiscal year ended September 30, 2014 were $214.5 million compared to $208.4 million for fiscal 2013.  For the fiscal year ended September 30, 2014, net income was $15.9 million, or $1.62 diluted earnings per share (including the intangible asset impairment charge), compared to net income of $17.0 million, or $1.73 diluted earnings per share (including the intangible asset impairment charges), for fiscal 2013. 

Operating cash flow for the fiscal year ended September 30, 2014 was $20.0 million compared to $26.8 million for fiscal 2013.  The operating cash flow for the fiscal year ended September 30, 2014, combined with net borrowings of $10.5 million and existing cash, was primarily used to invest $16.4 million in acquisitions of natural product businesses, $11.3 million in purchases of property, plant and equipment and $5.1 million in purchases of common stock for treasury.

Bill Gay, chairman and chief executive officer, commented, "Our fiscal 2014 net sales growth of 2.9% was comparable to our fiscal 2013 net sales growth of 4.0%. Fiscal 2014 growth came primarily from acquisitions completed during the last two fiscal years.  Our fundamental business strategy of acquiring and consolidating brands and products is critical to our long-term objective of profitable and sustainable growth. Fiscal 2014 net sales growth from certain acquisitions was less than expected primarily because of the integration complexity encountered in the internal reformulation of several hundred previously co-packed products in order to ensure predecessor label claims are met.  As a result, operational synergies and further anticipated net sales growth from these recent acquisitions are targeted for the later part of fiscal 2015.  Adjusted EBITDA for fiscal 2014 increased slightly despite the increased costs and internal time dedicated to our recent acquisitions.  The decrease in fiscal 2014 net income was primarily a result of increased amortization and depreciation expense relating to acquisitions and capital investments made to enhance future growth and reduce costs, including a substantial investment in new laboratory facilities and equipment.  These and similar investments we have made and continue to make in technology, acquisitions and expanding manufacturing capacity are important for future growth capacity and reduced operational costs."

Mr. Gay stated, "Management will continue its operational focus on improving inventory turnover as we integrate recent acquisitions. Reducing costs through the consolidation and sourcing of high quality raw materials and packaging components, while meeting our internal manufacturing and technical specifications, remains a daily effort.  Also, we are hopeful that increases in costs of shipping and energy over the last several years may slow this year."

Mr. Gay continued, "The prospects for this coming year seem promising as many of our key customers plan on opening new stores across the country.  Stores and chains that do not have critical scale within local and regional markets have experienced stiff competition from the larger chains entering their market.  Fortunately, we have seen a number of these stores aggressively compete with expanded product offerings that larger chains often do not provide. One key benefit our customers appreciate is the ability to purchase a diversity of brands and products directly from us.   Management appreciates the confidence of our customers, employees and stockholders as we continue to grow our business and make improvements."

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 businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements.  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 manufacture and sell nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, NaturalCare®, Health from the Sun®, Pioneer®, Nutra BioGenesis™, Life-flo®, Organix South®, Heritage Store® and Monarch Nutraceuticals™. 

We own neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™.  We also own health food stores, which operate under various trade names including Fresh Vitamins™, Granola's™ and Peachtree Natural Foods®.

We manufacture and/or distribute one of the broadest branded product lines in the industry with over 8,000 SKUs, including approximately 800 SKUs exclusively 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. These statements involve known and unknown risks, uncertainties and other factors that may cause industry trends or our actual results to be materially different from any future results expressed or implied by these statements.  Important factors that may cause our results to differ from these forward-looking statements include, but are not limited to: (i) changes in or new government regulations or increased enforcement of the same, (ii) unavailability of desirable acquisitions,  inability to complete them or inability to integrate them, (iii) increased costs, including from increased raw material or energy prices, (iv) changes in general worldwide economic or political conditions, (v) adverse publicity or negative consumer perception regarding nutritional supplements, (vi) issues with obtaining raw materials of adequate quality or quantity, (vii) litigation and claims, including product liability, intellectual property and other types,  (viii) disruptions from or following acquisitions including the loss of customers, (ix) increased competition, (x) slow or negative growth in the nutritional supplement industry or the healthy foods channel, (xi) the loss of key personnel or the inability to manage our operations efficiently, (xii) problems with information management systems, manufacturing efficiencies and operations, (xiii) insurance coverage issues, (xiv) the volatility of the stock market generally and of our stock specifically, (xv) increases in the cost of borrowings or unavailability of additional debt or equity capital, or both, or fluctuations in foreign currencies, and (xvi) interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest and other factors outside of our control.  Copies of our SEC reports are available upon request from our investor relations department or may be obtained at the SEC's website (www.sec.gov).

SOURCE Nutraceutical International Corporation