FORT WASHINGTON, Pa.,
July 29, 2014 /PRNewswire/
-- Nutrisystem, Inc. (NASDAQ: NTRI), a leading provider of
weight management products and services, today reported financial
results for the quarter ended June 30,
2014. The following are key financial highlights for the
period and reconciliations of certain GAAP to non-GAAP measures are
provided later in this press release.
Second Quarter 2014
- Revenue for the quarter was $111.1
million, an increase of 14% as compared to $97.5 million in the second quarter of 2013;
- Gross profit increased 14% versus prior year to $56.9 million;
- Adjusted EBITDA was $17.0
million, an increase of 25% from adjusted EBITDA of
$13.5 million in the second quarter
of 2013;
- GAAP earnings per share increased 36% to $0.30 from $0.22
the prior year; and
- Cash, cash equivalents, and short term investments increased
$10.0 million during the quarter to
$39.5 million at June 30, 2014 from $29.5
million at March 31, 2014. The
Company had no outstanding bank debt at quarter-end under its
existing bank facility.
Dawn Zier, President and Chief
Executive Officer, said, "We are pleased with our strong
performance in the second quarter of fiscal 2014, as we exceeded
our earnings per share and adjusted EBITDA expectations. Our
continued efforts around our four-point plan have enabled us to
deliver our third consecutive quarter of year-over-year
double-digit revenue increases fueled by our growing direct and
retail channels."
Ms. Zier added, "We continue to enhance our brand with leading
product and program innovations that add to the customer
experience. In addition to a double-digit increase in new customer
growth, we are making progress on our e-commerce, pricing and
retail initiatives. Looking ahead, we remain focused on the
successful execution of our strategic initiatives and expanding the
breadth of our brand."
Mike Monahan, Chief Financial
Officer, commented, "We are committed to enhancing stockholder
value through increased revenue and cash flow. Based on
improved customer growth and profitability, we are increasing both
our adjusted EBITDA and earnings per share guidance ranges for the
year."
The Company announced that the Board of Directors has declared a
quarterly dividend of $0.175 per
share, payable August 18, 2014 to
stockholders of record as of August 8,
2014.
Third Quarter and Updated Full Year 2014 Guidance
For the third quarter of 2014, the Company expects revenue to be
in the range of $85.0 million to $90.0
million. The Company expects third quarter adjusted EBITDA
to be in the range of $8.75 million to
$10.75 million. The Company also expects third quarter 2014
GAAP earnings per share to be in the range of $0.12 to $0.17.
For the full year of 2014, the Company is updating its revenue
guidance from a previous range of $392.0
million to $407.0 million to now be in the range of
$397.0 million to $407.0 million. The
Company is increasing its annual adjusted EBITDA from a previous
range of $40.0 million to $44.0
million to be in the range of $41.0
million to $44.2 million. In addition, the Company is
raising its GAAP earnings per share guidance from a previous range
of $0.57 to $0.67 to now be in the
range of $0.60 to $0.68 for the full
year of 2014.
Conference Call and Webcast
Management will host a webcast to discuss second quarter 2014
financial results today at 5:00 PM Eastern
time. The webcast will include remarks from President and
Chief Executive Officer Dawn Zier,
Chief Financial Officer Mike
Monahan, and Chief Marketing Officer Keira Krausz. A webcast of the conference call
will be available live on the Investor Relations section of the
Nutrisystem website (www.nutrisystem.com) and a replay will be
available for 30 days. Interested parties unable to access the
conference call via the webcast may dial 877-407-3982, and
reference conference ID 13584869.
Non-GAAP Financial Measures
Within this announcement, the Company makes reference to certain
adjusted financial measures, which have directly comparable GAAP
financial measures as identified in this press release. These
adjusted measures are provided so that investors have the same
financial data that management uses with the belief that it will
assist the investment community in properly assessing the
performance of the Company for the periods being reported and
future periods. The presentation of this additional information is
not meant to be considered a substitute for measures prepared in
accordance with GAAP.
In this release, EBITDA is defined as net income excluding
interest, income taxes and depreciation and amortization. Adjusted
EBITDA is defined as EBITDA excluding non-cash employee
compensation and severance and related charges.
Forward-Looking Statements
Information provided and statements contained in this press
release that are not purely historical, such as third quarter and
full year 2014 guidance, and the Company's financial and
operational outlook, are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, Section 21E
of the Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements only
speak as of the date of this press release and the Company assumes
no obligation to update the information included in this press
release. Statements made in this press release that are
forward-looking in nature may involve risks and uncertainties.
Accordingly, readers are cautioned that any such forward-looking
statements are not guarantees and are subject to certain risks,
uncertainties and assumptions that are difficult to predict,
including, without limitation, specific factors discussed herein
and in other press releases and public filings made by the Company
(including filings by the Company with the Securities and Exchange
Commission). Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable as of
the date made, expectations may prove to have been materially
different from the results expressed or implied by such
forward-looking statements. Unless otherwise required by law, the
Company also disclaims any obligation to update its view of any
such risks or uncertainties or to announce publicly the result of
any revisions to the forward-looking statements made in this press
release.
About Nutrisystem, Inc.
Nutrisystem, Inc. (NASDAQ: NTRI) is a leading provider of weight
loss solutions and weight-related products and services including
its structured food delivery program Nutrisystem® My Way® and its
new digital platform NuMi™ by Nutrisystem. Nutrisystem has helped
consumers lose weight for more than 40 years by providing quality
foods and a nutritionally balanced meal program. Nutrisystem® meal
plans feature more than 150 menu options, along with counseling
options from trained weight-loss coaches, registered dietitians and
certified diabetes educators. Customers are provided further
support from the online community, tools, trackers, mobile apps and
more. Nutrisystem® plans are consistent with national guidelines
for dietary intake meeting targets for fat, sodium, sugar,
cholesterol, fiber and physical activity. Additionally, plans can
be customized to specific dietary needs and preferences including
the Nutrisystem® D® program for people with diabetes or those at
risk for type 2 diabetes. Healthcare professionals may learn more
about the programs by visiting www.nutrisystem.com/hcp.
Nutrisystem® weight loss plans are available directly to consumers
through www.nutrisystem.com, by phone (1-800-435-4074) and at
select retailers. The NuMi multi-platform system and downloadable
App can be found at http://www.numi.com.
NUTRISYSTEM, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited, in
thousands, except per share amounts)
|
|
|
Three Months
Ended
June 30,
|
Six Months Ended
June 30,
|
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
REVENUE
|
$ 111,052
|
$ 97,469
|
$ 233,280
|
$ 202,853
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
Cost of
revenue
|
54,141
|
47,716
|
116,562
|
100,069
|
Marketing
|
25,990
|
24,250
|
67,734
|
60,566
|
General and
administrative
|
15,768
|
13,350
|
31,686
|
28,601
|
Depreciation and
amortization
|
1,913
|
2,342
|
3,671
|
4,891
|
Total costs and
expenses
|
97,812
|
87,658
|
219,653
|
194,127
|
Operating
income
|
13,240
|
9,811
|
13,627
|
8,726
|
INTEREST EXPENSE,
net
|
47
|
29
|
92
|
82
|
Income before income
taxes
|
13,193
|
9,782
|
13,535
|
8,644
|
INCOME TAX
EXPENSE
|
4,490
|
3,423
|
4,608
|
2,925
|
Net income
|
$ 8,703
|
$ 6,359
|
$ 8,927
|
$ 5,719
|
|
|
|
|
|
BASIC INCOME PER
COMMON SHARE
|
$ 0.30
|
$ 0.22
|
$ 0.31
|
$ 0.20
|
DILUTED INCOME PER
COMMON SHARE
|
$ 0.30
|
$ 0.22
|
$ 0.31
|
$ 0.20
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING:
|
|
|
|
|
Basic
|
28,208
|
27,895
|
28,226
|
27,905
|
Diluted
|
28,600
|
28,001
|
28,634
|
28,046
|
|
|
|
|
|
DIVIDENDS DECLARED
PER COMMON SHARE
|
$ 0.175
|
$ 0.175
|
$ 0.35
|
$ 0.35
|
|
|
|
|
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited, in
thousands, except par value amounts)
|
|
|
June 30,
|
December
31,
|
|
2014
|
2013
|
ASSETS
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
Cash and cash
equivalents
|
$ 22,979
|
$ 9,772
|
Short term
investments
|
16,501
|
16,551
|
Receivables
|
11,117
|
7,738
|
Inventories
|
19,748
|
26,088
|
Prepaid income
taxes
|
0
|
2,167
|
Deferred income
taxes
|
1,342
|
931
|
Other current
assets
|
4,462
|
6,034
|
Total current assets
|
76,149
|
69,281
|
FIXED ASSETS,
net
|
26,102
|
26,029
|
DEFERRED INCOME
TAXES
|
7,032
|
5,924
|
OTHER
ASSETS
|
1,151
|
1,211
|
Total assets
|
$
110,434
|
$
102,445
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
Accounts
payable
|
$ 32,705
|
$ 29,117
|
Accrued payroll and
related benefits
|
4,776
|
6,723
|
Income taxes
payable
|
3,724
|
0
|
Deferred
revenue
|
5,579
|
4,228
|
Other accrued expenses
and current liabilities
|
7,530
|
7,441
|
Total current
liabilities
|
54,314
|
47,509
|
NON-CURRENT
LIABILITIES
|
2,716
|
2,779
|
Total liabilities
|
57,030
|
50,288
|
STOCKHOLDERS'
EQUITY:
|
|
|
Preferred stock, $.001
par value (5,000 shares authorized, no shares issued and
outstanding)
|
0
|
0
|
Common stock, $.001
par value (100,000 shares authorized; shares
issued – 29,010 at June 30, 2014 and 28,866 at December 31,
2013)
|
29
|
29
|
Additional paid-in
capital
|
27,575
|
24,095
|
Treasury stock, at
cost, 222 shares at June 30, 2014 and 158 shares at December 31,
2013
|
(2,575)
|
(1,586)
|
Retained
earnings
|
28,351
|
29,611
|
Accumulated other
comprehensive income
|
24
|
8
|
Total stockholders' equity
|
53,404
|
52,157
|
Total liabilities and stockholders' equity
|
$
110,434
|
$
102,445
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited, in
thousands)
|
|
|
Six Months Ended June
30,
|
|
2014
|
2013
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
Net income
|
$ 8,927
|
$ 5,719
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
3,671
|
4,891
|
Loss on disposal of
fixed assets
|
5
|
48
|
Share–based
compensation expense
|
2,910
|
2,890
|
Deferred income tax
benefit
|
(1,272)
|
(788)
|
Other non-cash
charges
|
13
|
30
|
Changes in operating
assets and liabilities:
|
|
|
Receivables
|
(3,379)
|
867
|
Inventories
|
6,340
|
826
|
Other
assets
|
1,632
|
2,153
|
Accounts
payable
|
3,049
|
6,642
|
Accrued payroll and
related benefits
|
(1,947)
|
2,027
|
Deferred
revenue
|
1,351
|
67
|
Income
taxes
|
5,549
|
3,658
|
Other accrued expenses
and liabilities
|
10
|
1,006
|
Net cash provided by
operating activities
|
26,859
|
30,036
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
Purchases of short
term investments
|
(4,402)
|
(18,458)
|
Proceeds from sales of
short term investments
|
4,464
|
3,594
|
Capital
additions
|
(3,194)
|
(3,984)
|
Proceeds from the sale
of fixed assets
|
0
|
28
|
Net cash used in
investing activities
|
(3,132)
|
(18,820)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
Exercise of stock
options
|
248
|
0
|
Taxes related to
equity compensation awards, net
|
(581)
|
(449)
|
Payment of
dividends
|
(10,187)
|
(9,868)
|
Net cash used in
financing activities
|
(10,520)
|
(10,317)
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
13,207
|
899
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
9,772
|
16,186
|
CASH AND CASH
EQUIVALENTS, end of period
|
$ 22,979
|
$ 17,085
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
|
ADJUSTED EBITDA
RECONCILIATION TO GAAP RESULTS
|
(Unaudited, in
thousands)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
|
|
June 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Net income
|
$ 8,703
|
|
$ 6,359
|
|
$ 8,927
|
|
$ 5,719
|
Interest expense, net
|
47
|
|
29
|
|
92
|
|
82
|
Income tax expense
|
4,490
|
|
3,423
|
|
4,608
|
|
2,925
|
Depreciation and amortization
|
1,913
|
|
2,342
|
|
3,671
|
|
4,891
|
EBITDA
|
15,153
|
|
12,153
|
|
17,298
|
|
13,617
|
Non-cash employee compensation
|
|
|
|
|
|
|
|
expense
|
1,817
|
|
1,388
|
|
2,910
|
|
2,369
|
Severance and related charges
|
0
|
|
0
|
|
0
|
|
1,441
|
Adjusted
EBITDA
|
$ 16,970
|
|
$ 13,541
|
|
$ 20,208
|
|
$ 17,427
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
|
|
ADJUSTED EBITDA
GUIDANCE RECONCILIATION TO GAAP MEASURES
|
|
(Unaudited, in
thousands)
|
|
|
|
|
Three Months
Ending
|
|
Twelve Months
Ending
|
|
|
September 30,
2014
|
|
December 31,
2014
|
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
3,502
|
|
$ 4,862
|
|
$ 17,750
|
|
$ 19,846
|
|
Interest
expense, net
|
100
|
|
100
|
|
200
|
|
200
|
|
Income
tax expense
|
1,648
|
|
2,288
|
|
9,350
|
|
10,454
|
|
Depreciation and amortization
|
2,200
|
|
2,200
|
|
8,200
|
|
8,200
|
|
EBITDA
|
7,450
|
|
9,450
|
|
35,500
|
|
38,700
|
|
Non-cash
employee
compensation expense
|
1,300
|
|
1,300
|
|
5,500
|
|
5,500
|
|
Adjusted
EBITDA
|
$ 8,750
|
|
$ 10,750
|
|
$ 41,000
|
|
$ 44,200
|
|
|
|
|
|
|
|
|
|
|
EBITDA is defined as net income excluding interest, income taxes
and depreciation and amortization. Adjusted EBITDA is defined as
EBITDA excluding non-cash employee compensation and severance and
related charges.
NUTRISYSTEM, INC.
AND SUBSIDIARIES
|
ADJUSTED NET
INCOME RECONCILIATION TO GAAP RESULTS
|
(Unaudited, in
thousands, except per share amounts)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
|
|
June 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Net income as
reported
|
$ 8,703
|
|
$ 6,359
|
|
$ 8,927
|
|
$ 5,719
|
Income tax expense as reported
|
4,490
|
|
3,423
|
|
4,608
|
|
2,925
|
Income before income
tax expense
|
13,193
|
|
9,782
|
|
13,535
|
|
8,644
|
Adjustment for one-time charges
|
0
|
|
0
|
|
0
|
|
1,441
|
Adjusted income
before income tax expense
|
13,193
|
|
9,782
|
|
13,535
|
|
10,085
|
Adjusted
income tax expense
|
4,490
|
|
3,423
|
|
4,608
|
|
3,530
|
Adjusted net
income
|
$ 8,703
|
|
$ 6,359
|
|
$ 8,927
|
|
$ 6,555
|
|
|
|
|
|
|
|
|
Adjusted diluted
income per common share
|
$ 0.30
|
|
$ 0.22
|
|
$ 0.31
|
|
$ 0.23
|
Adjusted diluted
weighted average shares
|
|
|
|
|
|
|
|
outstanding
|
28,600
|
|
28,001
|
|
28,634
|
|
28,046
|
Adjusted income tax expense for the six months ended
June 30, 2013 has been calculated
using a tax rate of 35%.
Statement Regarding Non-GAAP Financial Measures
We believe EBITDA, adjusted EBITDA, adjusted EBITDA guidance and
adjusted net income are useful performance metrics for management
and investors because they are indicative of the ongoing operations
of the Company. These non-GAAP measures exclude certain non-cash
and non-operating items to facilitate comparisons and provide a
meaningful measurement that is focused on the performance of the
ongoing operations of the Company.
SOURCE Nutrisystem, Inc.