Company Reports Ninth Consecutive Quarter of
Year-Over-Year Revenue Growth, Up 16%
Earnings Per Share Increase 47%
Year-Over-Year to $0.25
Nutrisystem, Inc. (NASDAQ: NTRI), a leading provider of weight
management products and services, today reported financial results
for the quarter ended September 30, 2015. 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.
Dawn Zier, President and Chief Executive Officer, stated, “We
continue to execute successfully against our strategic initiatives
as demonstrated by our strong financial performance in the third
quarter. We are seeing continued momentum in both our
direct-to-consumer and retail channels and remain confident in our
ability to achieve our second consecutive year of double-digit
revenue growth.”
Third Quarter 2015 Compared to Third Quarter 2014
- Revenue increased 16% to $104.9 million
compared to $90.6 million
- Adjusted EBITDA grew 33% to $14.5
million compared to $10.9 million
- Net income increased 44% to $7.3
million compared to $5.1 million
- Diluted earnings per share increased
47% to $0.25 compared to $0.17
Ms. Zier added, “Our business model is foundationally strong.
Our value proposition is differentiated from the competition and
serves as the basis for our product innovation. We are well
positioned to continue growing as we head into Diet Season 2016 and
beyond.”
Mike Monahan, Chief Financial Officer, commented, “Revenue
growth in the third quarter came from both our direct and retail
channels, which were up year-over-year 16% and 35%, respectively.
Capital expenditures are now expected to increase to approximately
$12 million for the full year due to increased investment spend to
support our future growth and enhance long-term value for our
stockholders.”
Fourth Quarter and Updated Full Year 2015 Guidance
Nutrisystem’s fourth 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.
- Fourth quarter revenue expected to be
in the range of $86.6 to $91.6 million, adjusted EBITDA between
$10.6 and $12.6 million, and earnings per share between $0.15 and
$0.20
- Full year revenue expected to be in the
range of $459.0 to $464.0 million, adjusted EBITDA between $55.6
and $57.6 million, and earnings per share between $0.91 and
$0.96
The Board of Directors has declared a quarterly dividend of
$0.175 per share, payable November 19, 2015 to stockholders of
record as of November 9, 2015.
Conference Call and Webcast
Management will host a conference call to discuss third 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’s website for 30 days following the event
and can be accessed at 877-870-5176 using replay pin number
13621877.
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 fourth 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 EndedSeptember 30,
Nine Months EndedSeptember 30,
2015
2014
2015
2014
REVENUE
$ 104,877 $
90,570 $ 372,363
$ 323,850 COSTS AND EXPENSES: Cost
of revenue 51,749 44,043 180,188 160,605 Marketing 25,566 22,388
103,880 90,122 General and administrative 14,228 14,769 47,536
46,455 Depreciation and amortization
2,304
2,076 6,761
5,747 Total costs and expenses
93,847 83,276
338,365 302,929 Operating income
11,030 7,294 33,998 20,921 INTEREST EXPENSE, net
61 41 140
133 Income before income tax expense 10,969
7,253 33,858 20,788
INCOME TAX EXPENSE
3,660 2,177
11,521 6,785 Net income
$ 7,309 $ 5,076
$ 22,337 $
14,003 BASIC INCOME PER COMMON SHARE
$ 0.25 $ 0.18
$ 0.77 $ 0.49
DILUTED INCOME PER COMMON SHARE
$ 0.25
$ 0.17 $ 0.76
$ 0.48 WEIGHTED AVERAGE SHARES
OUTSTANDING: Basic 28,831 28,274 28,618 28,287 Diluted 29,273
28,681 29,094 28,694 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 30,2015
December 31,2014
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 28,049 $ 12,620
Short term investments 19,211 16,627 Receivables 10,393 12,206
Inventories 17,474 26,899 Prepaid income taxes 2,477 0 Deferred
income taxes 1,456 1,051 Other current assets
5,858 7,095 Total
current assets 84,918 76,498 FIXED ASSETS, net 26,619 26,851
DEFERRED INCOME TAXES 5,043 5,461 OTHER ASSETS
1,062 1,082 Total
assets
$ 117,642 $
109,892
LIABILITIES AND
STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES: Accounts payable $ 27,490 $ 34,261
Accrued payroll and related benefits 6,275 6,550 Income taxes
payable 0 301 Deferred revenue 5,869 4,424 Other accrued expenses
and current liabilities
5,970
6,131 Total current liabilities 45,604 51,667
NON-CURRENT LIABILITIES
2,319
2,710 Total liabilities
47,923 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 – 29,569 at September 30,
2015 and 28,990 at December 31, 2014) 29 29 Additional paid-in
capital 39,716 29,992 Treasury stock, at cost, 386 shares at
September 30, 2015 and 249 shares at December 31, 2014 (5,610 )
(3,062 ) Retained earnings 35,537 28,552 Accumulated other
comprehensive income
47
4 Total stockholders’ equity
69,719 55,515 Total
liabilities and stockholders’ equity
$
117,642 $ 109,892
NUTRISYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in
thousands)
Nine Months EndedSeptember 30,
2015 2014 CASH FLOWS FROM OPERATING ACTIVITIES: Net
income $ 22,337 $ 14,003 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 6,761 5,747 Loss on disposal of fixed assets 16 7
Share–based compensation expense 4,255 4,443 Deferred income tax
benefit 0 (1,391 ) Other non-cash charges 24 17 Changes in
operating assets and liabilities: Receivables 1,813 1,338
Inventories 9,425 8,598 Other assets 1,257 158 Accounts payable
(6,628 ) (932 ) Accrued payroll and related benefits (275 ) 299
Deferred revenue 1,445 828 Income taxes (2,884 ) 1,678 Other
accrued expenses and liabilities
(938
) (1,576 ) Net cash
provided by operating activities
36,608
33,217 CASH FLOWS FROM INVESTING
ACTIVITIES: Purchases of short term investments (12,117 ) (6,729 )
Proceeds from sales of short term investments 9,574 6,669 Capital
additions
(6,302 )
(5,260 ) Net cash used in investing
activities
(8,845 )
(5,320 ) CASH FLOWS FROM FINANCING
ACTIVITIES: Exercise of stock options 2,762 248 Taxes related to
equity compensation awards, net 256 (705 ) Payment of dividends
(15,352 )
(15,270 ) Net cash used in financing
activities
(12,334 )
(15,727 ) NET INCREASE IN CASH AND CASH
EQUIVALENTS 15,429 12,170 CASH AND CASH EQUIVALENTS, beginning of
period
12,620 9,772
CASH AND CASH EQUIVALENTS, end of period
$
28,049 $ 21,942
NUTRISYSTEM, INC. AND SUBSIDIARIES
ADJUSTED EBITDA RECONCILIATION TO GAAP RESULTS
(Unaudited, in thousands) Three Months Ended Nine
Months Ended September 30, September 30, 2015
2014 2015 2014 Net income $ 7,309 $
5,076 $ 22,337 $ 14,003 Interest expense, net 61 41 140 133 Income
tax expense 3,660 2,177 11,521 6,785 Depreciation and amortization
2,304 2,076 6,761 5,747 EBITDA 13,334
9,370 40,759 26,668 Non-cash employee
compensation expense
1,209 1,533 4,255 4,443 Adjusted EBITDA
$ 14,543 $ 10,903 $ 45,014 $ 31,111
NUTRISYSTEM,
INC. AND SUBSIDIARIES ADJUSTED EBITDA GUIDANCE
RECONCILIATION TO GAAP MEASURES (Unaudited, in
thousands) Three Months Ending Twelve Months Ending
December 31, 2015 December 31, 2015 Low High Low High
Net income $ 4,530 $ 5,848 $ 26,867 $ 28,185 Interest
expense, net 45 45 185 185 Income tax expense 2,382 3,064 13,903
14,585 Depreciation and amortization 2,409 2,409
9,170 9,170 EBITDA 9,366 11,366 50,125 52,125
Non-cash employee
compensation expense
1,220 1,220 5,475 5,475 Adjusted EBITDA
$ 10,586 $ 12,586 $ 55,600 $ 57,600
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/20151028006110/en/
ICR, Inc.John Mills,
Partner646-277-1254ir@nutrisystem.comJohn.Mills@Icrinc.com
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