FORT WASHINGTON, Pa.,
Nov. 3, 2014 /PRNewswire/ --
Nutrisystem, Inc. (NASDAQ: NTRI), a leading provider of weight
management products and services, today reported financial results
for the quarter ended September 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.
Third Quarter 2014
- Revenue was $90.6 million up from
$85.4 million in the third quarter of
2013;
- Adjusted gross profit margin improved 130 basis points to 51.4%
and adjusted gross profit increased 9% versus prior year to
$46.5 million;
- Adjusted EBITDA was $10.9
million, an increase of 14% from adjusted EBITDA of
$9.6 million in the third quarter of
2013;
- GAAP earnings per share increased to $0.17 from $0.01
the prior year; adjusted earnings per share increased to
$0.17 from $0.15; and
- Cash, cash equivalents, and short term investments were
$38.5 million at September 30, 2014.
Dawn Zier, President and Chief
Executive Officer, said, "We are pleased with the progress we have
made in delivering strong results for the first nine months of
2014. Our revenue growth in the third quarter represents the fifth
consecutive quarter of year-over-year top-line growth.
Additionally, we exceeded the top-end of our revenue and adjusted
EBITDA guidance reflecting the continued demand for our products
across all channels, the success of our marketing strategy, and the
disciplined management of costs while maintaining a focus on the
customer experience."
Ms. Zier added, "We are confident in our full year guidance. We
believe the momentum of our 2014 successes that drove new customer
growth at higher margins, coupled with our demonstrated ability to
innovate on both the product and marketing fronts, has us well
positioned for the 2015 diet season and continued revenue and
EBITDA growth."
Mike Monahan, Chief Financial
Officer, commented, "Our year-over-year revenue growth in the third
quarter was driven by new customer starts, improvement in
reactivation and increased retail sales. Additionally, due to
successfully implemented price increases in the first and second
quarters and effective changes to promotions, adjusted gross profit
margin increased to 51.4% reflecting a 130 basis point improvement
year-over-year."
The Company announced that the Board of Directors has declared a
quarterly dividend of $0.175 per
share, payable November 24, 2014 to
stockholders of record as of November 13,
2014.
Fourth Quarter and Updated Full Year 2014 Guidance
For the fourth quarter of 2014, the Company expects revenue to
be in the range of $78.1 million to $83.1
million. The Company expects fourth quarter adjusted EBITDA
to be in the range of $10.9 million to $13.1
million. The Company also expects fourth quarter 2014 GAAP
earnings per share to be in the range of $0.15 to $0.20.
For the full year of 2014, the Company is updating its revenue
guidance to now be in the range of $402.0
million to $407.0 million, its annual adjusted EBITDA to be
in the range of $42.0 million to $44.2
million, and its GAAP earnings per share guidance to be in
the range of $0.63 to $0.68 for the
full year of 2014.
Conference Call and Webcast
Management will host a conference call to discuss
third quarter 2014 financial results today at 5:00 PM Eastern time. The conference call 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).
Interested parties unable to access the conference call via the
webcast may dial 877-407-3982. A replay of the conference
call will be available on the Company website for 30 days following
the event and can be accessed at 877-870-5176 using replay pin
number 13593192.
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 one-time charges. Adjusted gross profit is defined
as gross profit as reported excluding one-time charges. Adjusted
net income is defined as net income as reported excluding one-time
charges.
Forward-Looking Statements
Information provided and statements contained in this press
release that are not purely historical, such as fourth 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
September
30,
__________________
|
Nine Months
Ended
September 30,
______________________
|
|
|
|
|
|
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
|
REVENUE
|
$ 90,570
|
$ 85,360
|
$ 323,850
|
$ 288,213
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
Cost of
revenue
|
44,043
|
47,627
|
160,605
|
147,696
|
|
Marketing
|
22,388
|
19,983
|
90,122
|
80,549
|
|
General and
administrative
|
14,769
|
14,336
|
46,455
|
42,937
|
|
Depreciation and
amortization
|
2,076
|
1,912
|
5,747
|
6,803
|
|
Total costs and
expenses
|
83,276
|
83,858
|
302,929
|
277,985
|
|
Operating
income
|
7,294
|
1,502
|
20,921
|
10,228
|
|
INTEREST EXPENSE,
net
|
41
|
41
|
133
|
123
|
|
Income before income
taxes
|
7,253
|
1,461
|
20,788
|
10,105
|
|
INCOME TAX
EXPENSE
|
2,177
|
1,105
|
6,785
|
4,030
|
|
Net income
|
$
5,076
|
$
356
|
$
14,003
|
$
6,075
|
|
|
|
|
|
|
BASIC INCOME PER
COMMON SHARE
|
$
0.18
|
$
0.01
|
$
0.49
|
$
0.21
|
|
DILUTED INCOME PER
COMMON SHARE
|
$
0.17
|
$
0.01
|
$
0.48
|
$
0.21
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING:
|
|
|
|
|
|
Basic
|
28,274
|
27,983
|
28,287
|
27,974
|
|
Diluted
|
28,681
|
28,261
|
28,694
|
28,160
|
|
|
|
|
|
|
DIVIDENDS DECLARED
PER COMMON SHARE
|
$
0.175
|
$
0.175
|
$
0.525
|
$
0.525
|
|
|
|
|
|
|
|
|
|
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Unaudited, in
thousands, except par value amounts)
|
|
|
|
|
September
30,
|
December
31,
|
|
2014
|
2013
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$ 21,942
|
$ 9,772
|
|
Short term
investments
|
16,588
|
16,551
|
|
Receivables
|
6,400
|
7,738
|
|
Inventories
|
17,490
|
26,088
|
|
Prepaid income
taxes
|
154
|
2,167
|
|
Deferred income
taxes
|
1,035
|
931
|
|
Other current
assets
|
5,980
|
6,034
|
|
Total current assets
|
69,589
|
69,281
|
|
FIXED ASSETS,
net
|
25,892
|
26,029
|
|
DEFERRED INCOME
TAXES
|
7,459
|
5,924
|
|
OTHER
ASSETS
|
1,107
|
1,211
|
|
Total assets
|
$
104,047
|
$
102,445
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts
payable
|
$ 28,534
|
$ 29,117
|
|
Accrued payroll and
related benefits
|
7,022
|
6,723
|
|
Deferred
revenue
|
5,056
|
4,228
|
|
Other accrued expenses
and current liabilities
|
5,974
|
7,441
|
|
Total current
liabilities
|
46,586
|
47,509
|
|
NON-CURRENT
LIABILITIES
|
2,678
|
2,779
|
|
Total liabilities
|
49,264
|
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 – 29,009 at September 30, 2014 and 28,866 at
December 31, 2013)
|
29
|
29
|
|
Additional paid-in
capital
|
29,177
|
24,095
|
|
Treasury stock, at
cost, 233 shares at September 30, 2014 and 158 shares at
December 31, 2013
|
(2,771)
|
(1,586)
|
|
Retained
earnings
|
28,344
|
29,611
|
|
Accumulated other
comprehensive income
|
4
|
8
|
|
Total stockholders' equity
|
54,783
|
52,157
|
|
Total liabilities and stockholders' equity
|
$
104,047
|
$
102,445
|
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2014
|
2013
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income
|
$ 14,003
|
$ 6,075
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
5,747
|
6,803
|
|
Loss on disposal of
fixed assets
|
7
|
110
|
|
Share–based
compensation expense
|
4,443
|
4,031
|
|
Deferred income tax
benefit
|
(1,391)
|
(642)
|
|
Other non-cash
charges
|
17
|
43
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
1,338
|
(794)
|
|
Inventories
|
8,598
|
7,781
|
|
Other
assets
|
158
|
2,952
|
|
Accounts
payable
|
(932)
|
1,402
|
|
Accrued payroll and
related benefits
|
299
|
4,172
|
|
Deferred
revenue
|
828
|
1,831
|
|
Income
taxes
|
1,678
|
4,264
|
|
Accrued
settlement
|
0
|
5,000
|
|
Other accrued expenses
and liabilities
|
(1,576)
|
517
|
|
Net cash provided by operating activities
|
33,217
|
43,545
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of short
term investments
|
(6,729)
|
(23,536)
|
|
Proceeds from sales of
short term investments
|
6,669
|
3,952
|
|
Capital
additions
|
(5,260)
|
(6,351)
|
|
Proceeds from the sale
of fixed assets
|
0
|
28
|
|
Net cash used in investing activities
|
(5,320)
|
(25,907)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Exercise of stock
options
|
248
|
0
|
|
Taxes related to
equity compensation awards, net
|
(705)
|
(548)
|
|
Payment of
dividends
|
(15,270)
|
(14,923)
|
|
Net cash used in
financing activities
|
(15,727)
|
(15,471)
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
12,170
|
2,167
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
9,772
|
16,186
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
21,942
|
$
18,353
|
|
|
|
|
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
ADJUSTED EBITDA
RECONCILIATION TO GAAP RESULTS
(Unaudited, in
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 5,076
|
|
$ 356
|
|
$ 14,003
|
|
$ 6,075
|
|
Interest expense, net
|
41
|
|
41
|
|
133
|
|
123
|
|
Income tax expense
|
2,177
|
|
1,105
|
|
6,785
|
|
4,030
|
|
Depreciation and amortization
|
2,076
|
|
1,912
|
|
5,747
|
|
6,803
|
|
EBITDA
|
9,370
|
|
3,414
|
|
26,668
|
|
17,031
|
|
Non-cash employee compensation
|
|
|
|
|
|
|
|
|
expense
|
1,533
|
|
1,141
|
|
4,443
|
|
3,510
|
|
One-time charges
|
|
|
|
|
|
|
|
|
Settlement with supplier
|
0
|
|
5,000
|
|
0
|
|
5,000
|
|
Severance and related charges
|
0
|
|
0
|
|
0
|
|
1,441
|
|
Total
one-time charges
|
0
|
|
5,000
|
|
0
|
|
6,441
|
|
Adjusted
EBITDA
|
$ 10,903
|
|
$ 9,555
|
|
$ 31,111
|
|
$ 26,982
|
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
ADJUSTED EBITDA GUIDANCE RECONCILIATION TO GAAP
MEASURES
(Unaudited, in
thousands)
|
|
|
|
|
|
Three Months
Ending
|
|
Twelve Months
Ending
|
|
December 31,
2014
|
|
December 31,
2014
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 4,517
|
|
$ 5,980
|
|
$ 18,520
|
|
$ 19,983
|
|
Interest
expense, net
|
67
|
|
67
|
|
200
|
|
200
|
|
Income
tax expense
|
2,545
|
|
3,282
|
|
9,330
|
|
10,067
|
|
Depreciation and amortization
|
2,453
|
|
2,453
|
|
8,200
|
|
8,200
|
|
EBITDA
|
9,582
|
|
11,782
|
|
36,250
|
|
38,450
|
|
Non-cash
employee
compensation expense
|
1,307
|
|
1,307
|
|
5,750
|
|
5,750
|
|
Adjusted
EBITDA
|
$
10,889
|
|
$ 13,089
|
|
$ 42,000
|
|
$ 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 one-time
charges.
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
ADJUSTED GROSS
PROFIT RECONCILIATION TO GAAP RESULTS
(Unaudited, in
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Revenue as
reported
|
$ 90,570
|
|
$ 85,360
|
|
$ 323,850
|
|
$ 288,213
|
|
Cost of revenue as reported
|
44,043
|
|
47,627
|
|
160,605
|
|
147,696
|
|
Gross profit as
reported
|
46,527
|
|
37,733
|
|
163,245
|
|
140,517
|
|
Adjustment for settlement with supplier
|
0
|
|
5,000
|
|
0
|
|
5,000
|
|
Adjusted gross
profit
|
$ 46,527
|
|
$ 42,733
|
|
$ 163,245
|
|
$ 145,517
|
|
NUTRISYSTEM, INC.
AND SUBSIDIARIES
ADJUSTED NET
INCOME RECONCILIATION TO GAAP RESULTS
(Unaudited, in
thousands, except per share amounts)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Net income as
reported
|
$ 5,076
|
|
$ 356
|
|
$ 14,003
|
|
$ 6,075
|
|
Income tax expense as reported
|
2,177
|
|
1,105
|
|
6,785
|
|
4,030
|
|
Income before income
tax expense
|
7,253
|
|
1,461
|
|
20,788
|
|
10,105
|
|
Adjustment for one-time charges
|
0
|
|
5,000
|
|
0
|
|
6,441
|
|
Adjusted income
before income tax expense
|
7,253
|
|
6,461
|
|
20,788
|
|
16,546
|
|
Adjusted
income tax expense
|
2,177
|
|
2,132
|
|
6,785
|
|
5,460
|
|
Adjusted net
income
|
$ 5,076
|
|
$ 4,329
|
|
$ 14,003
|
|
$ 11,086
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
income per common share
|
$ 0.17
|
|
$ 0.15
|
|
$ 0.48
|
|
$ 0.38
|
|
Adjusted diluted
weighted average shares
|
|
|
|
|
|
|
|
|
outstanding
|
28,681
|
|
28,261
|
|
28,694
|
|
28,160
|
Adjusted income tax expense for the three and nine months ended
September 30, 2013 has been
calculated using a tax rate of 33%.
Statement Regarding Non-GAAP Financial Measures
We believe EBITDA, adjusted EBITDA, adjusted EBITDA guidance,
adjusted gross profit 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.