Company Reports Double-Digit Revenue Growth
of 17% Year-Over-Year
Company Raises Full Year Revenue, Adjusted
EBITDA, and Earnings Per Share Guidance
Nutrisystem, Inc. (NASDAQ: NTRI), a leading provider of weight
management products and services, today reported that the Company
exceeded its previously provided revenue, adjusted EBITDA, and
earnings per share guidance for the second quarter 2015 and is
raising its previously provided guidance for the full year.
Dawn Zier, President and Chief Executive Officer, stated,
“Continued momentum and new initiatives resulted in top-line growth
of 17% and our eighth consecutive quarter of year-over-year revenue
improvement. Our team’s commitment to operational excellence,
effective marketing, innovative product development, and customer
engagement across multiple platforms drove our strong financial
performance in the second quarter.”
Second Quarter 2015 Compared to Second Quarter 2014
- Revenue increased 17% to $130.3 million
compared to $111.1 million
- Gross profit margin improved 80 basis
points to 52.0% and gross profit increased 19% to $67.7 million
compared to $56.9 million
- Adjusted EBITDA grew 33% to $22.5
million compared to $17.0 million
- Net income increased 39% to $12.1
million compared to $8.7 million
- Diluted earnings per share increased
37% to $0.41 compared to $0.30
Ms. Zier added, “We are optimizing multiple levers across our
business and are pleased that we are able to raise our 2015 full
year guidance. Perhaps even more important, we feel well positioned
for 2016 diet season and continued future growth.”
Mike Monahan, Chief Financial Officer, commented, “Revenue
growth in the second quarter came from both our direct and retail
channels, which were up year-over-year 15% and 43%, respectively.
We remain confident in our business opportunities and ability to
return value to our stockholders long-term.”
Third Quarter and Updated Full Year 2015 Guidance
Nutrisystem’s third quarter and updated full year 2015 guidance
are as follows. Reconciliations of certain GAAP to non-GAAP
measures are provided later in this press release.
- Third quarter revenue expected to be in
the range of $102 to $107 million, adjusted EBITDA between $13.2
and $15.2 million, and earnings per share between $0.21 and
$0.26
- Full year revenue expected to be in the
range of $456 to $466 million, adjusted EBITDA between $54.1 and
$58.1 million, and earnings per share between $0.87 and $0.97
The Board of Directors has declared a quarterly dividend of
$0.175 per share, payable August 20, 2015 to stockholders of record
as of August 10, 2015.
Conference Call and Webcast
Management will host a conference call to discuss second quarter
2015 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 Nutrisystem's website at 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
13612868.
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.
Forward-Looking Statements
Information provided and statements contained in this press
release that are not purely historical, such as third quarter and
full year 2015 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, risks relating to cybersecurity
breaches, risks that consumer spending may decline or that U.S. and
global macroeconomic conditions may worsen resulting in reduced
demand for the Company’s products, risks relating to changes in
consumer preferences away from the Company’s food offerings
including its pre-packaged foods, risks relating to the
effectiveness and efficiency of the Company’s marketing
expenditures which may not result in increased revenue or generate
sufficient levels of brand name and program awareness, risks if the
Company is unable to obtain sufficient quantities, quality and
variety of food products in a timely and low-cost manner from its
food vendors, risks of exposure to product liability claims if the
use of the Company’s products results in illness or injury, risks
if the Company becomes subject to health or advertising related
claims from its customers, competitors or governmental and
regulatory bodies, and risks relating to increased competition from
other weight management providers. 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 leader in the weight loss
industry, having helped millions of people lose weight over the
course of more than 40 years. The Company's weight loss solutions
include Nutrisystem® My Way®, a 28-day structured food delivery
program including a digital platform, NuMi by Nutrisystem®,
multi-day kits and individual products available at select retail
outlets. The Company's current product line offers customers
the most meal choices, including more than 100 foods containing no
artificial preservatives or artificial flavors. Nutrisystem® plans
are consistent with national guidelines for dietary intake meeting
targets for fat, sodium, sugar, cholesterol, fiber and physical
activity and include comprehensive counseling options from trained
weight-loss coaches, registered dietitians and certified diabetes
educators. Plans can be customized to specific dietary needs and
preferences including the Nutrisystem® D® program for people with
Type 2 diabetes or pre-diabetes. For more information, go to
NutrisystemNews.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,
2015
2014
2015
2014
REVENUE
$ 130,261 $
111,052 $ 267,486
$ 233,280 COSTS AND EXPENSES: Cost
of revenue 62,570 54,141 128,439 116,562 Marketing 30,651 25,990
78,314 67,734 General and administrative 16,363 15,768 33,308
31,686 Depreciation and amortization
2,233
1,913 4,457
3,671 Total costs and expenses
111,817 97,812
244,518 219,653 Operating income
18,444 13,240 22,968 13,627 INTEREST EXPENSE, net
30 47 79
92 Income before income tax expense 18,414
13,193 22,889 13,535
INCOME TAX EXPENSE
6,329 4,490
7,861 4,608 Net income
$ 12,085 $
8,703 $ 15,028
$ 8,927 BASIC INCOME PER COMMON
SHARE
$ 0.42 $
0.30 $ 0.52 $
0.31 DILUTED INCOME PER COMMON SHARE
$
0.41 $ 0.30 $
0.51 $ 0.31 WEIGHTED
AVERAGE SHARES OUTSTANDING: Basic 28,627 28,208 28,510 28,226
Diluted 29,072 28,600 29,003 28,634 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 30,2015
December 31,2014
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 32,895 $ 12,620
Short term investments 11,690 16,627 Receivables 14,047 12,206
Inventories 21,827 26,899 Deferred income taxes 1,824 1,051 Other
current assets
6,259
7,095 Total current assets 88,542 76,498 FIXED
ASSETS, net 26,513 26,851 DEFERRED INCOME TAXES 4,648 5,461 OTHER
ASSETS
1,088 1,082
Total assets
$ 120,791
$ 109,892
LIABILITIES AND
STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES: Accounts payable $ 32,908 $ 34,261
Accrued payroll and related benefits 5,428 6,550 Income taxes
payable 2,840 301 Deferred revenue 7,244 4,424 Other accrued
expenses and current liabilities
5,853
6,131 Total current liabilities 54,273
51,667 NON-CURRENT LIABILITIES
2,354
2,710 Total liabilities
56,627 54,377
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; sharesissued – 29,439 at June 30, 2015
and 28,990 at December 31, 2014) 29 29 Additional paid-in capital
36,183 29,992 Treasury stock, at cost, 379 shares at June 30, 2015
and 249 shares at December 31, 2014 (5,433 ) (3,062 ) Retained
earnings 33,372 28,552 Accumulated other comprehensive income
13 4 Total
stockholders’ equity
64,164
55,515 Total liabilities and stockholders’
equity
$ 120,791 $
109,892 NUTRISYSTEM, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Six Months Ended June 30,
2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $
15,028 $ 8,927 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
4,457 3,671 Loss on disposal of fixed assets 14 5 Share–based
compensation expense 3,046 2,910 Deferred income tax expense
(benefit) 34 (1,272 ) Other non-cash charges 3 13 Changes in
operating assets and liabilities: Receivables (1,841 ) (3,379 )
Inventories 5,072 6,340 Other assets 830 1,632 Accounts payable
(1,091 ) 3,049 Accrued payroll and related benefits (1,122 ) (1,947
) Deferred revenue 2,820 1,351 Income taxes 2,443 5,549 Other
accrued expenses and liabilities
(943
) 10 Net cash provided by
operating activities
28,750
26,859 CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short term investments (2,303 ) (4,402 ) Proceeds from
sales of short term investments 7,251 4,464 Capital additions
(4,086 )
(3,194 ) Net cash provided by (used in)
investing activities
862
(3,132 ) CASH FLOWS FROM FINANCING
ACTIVITIES: Exercise of stock options 1,390 248 Taxes related to
equity compensation awards, net (519 ) (581 ) Payment of dividends
(10,208 )
(10,187 ) Net cash used in financing
activities
(9,337 )
(10,520 ) NET INCREASE IN CASH AND CASH
EQUIVALENTS 20,275 13,207 CASH AND CASH EQUIVALENTS, beginning of
period
12,620 9,772
CASH AND CASH EQUIVALENTS, end of period
$
32,895 $ 22,979
NUTRISYSTEM, INC. AND
SUBSIDIARIES ADJUSTED EBITDA RECONCILIATION TO GAAP
RESULTS
(Unaudited, in thousands)
Three Months Ended Six Months Ended June 30, June 30, 2015
2014 2015 2014 Net income $ 12,085 $ 8,703 $
15,028 $ 8,927 Interest expense, net 30 47 79 92 Income tax expense
6,329 4,490 7,861 4,608 Depreciation and amortization 2,233
1,913 4,457 3,671 EBITDA 20,677 15,153 27,425
17,298
Non-cash employee compensation expense
1,838 1,817 3,046 2,910 Adjusted EBITDA
$ 22,515 $ 16,970 $ 30,471 $ 20,208
NUTRISYSTEM, INC. AND SUBSIDIARIES ADJUSTED EBITDA
GUIDANCE RECONCILIATION TO GAAP MEASURES
(Unaudited, in thousands)
Three Months Ending Year Ending September 30, 2015 December
31, 2015 Low High Low High Net income $ 6,252
$ 7,564 $ 25,748 $ 28,372 Interest expense, net 50 50 175 175
Income tax expense 3,278 3,966 13,502 14,878
Depreciation and amortization
2,340 2,340 9,100 9,100 EBITDA 11,920
13,920 48,525 52,525
Non-cash employee compensation expense
1,280 1,280 5,575 5,575 Adjusted EBITDA
$ 13,200 $ 15,200 $ 54,100 $ 58,100
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.
Statement Regarding Non-GAAP Financial Measures
We believe EBITDA, adjusted EBITDA and adjusted EBITDA guidance
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150729006121/en/
ICR, Inc.John Mills,
Partner646-277-1254ir@nutrisystem.comJohn.Mills@Icrinc.com
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