Published: May 03, 2010
Nutrisystem, Inc. Reports First Quarter 2010 Results; Announces Quarterly Dividend of $0.175 Per Share
HORSHAM, Pa. - (BUSINESS WIRE) - Nutrisystem, Inc. (NASDAQ: NTRI), a leading provider of weight
management products and services, today reported financial results for
the first quarter of 2010. Highlights for the first quarter ended March
31, 2010 include:
-
Revenues of $158.8 million as compared to $161.8 million for Q1 2009;
-
Operating income from continuing operations of $7.8 million as
compared to $15.5 million for Q1 2009;
-
Net income of $4.8 million as compared to $8.8 million for Q1 2009;
-
Adjusted EBITDA of $12.9 million, as compared to $20.0 million for Q1
2009. Adjusted EBITDA is defined as income from continuing operations
excluding non-cash employee compensation, other expense, equity loss,
interest, income taxes and depreciation and amortization;
-
Fully diluted earnings per share of $0.15, as compared to $0.29 in the
first quarter of 2009; and
-
Cash, cash equivalents and marketable securities of $89.6 million at
March 31, 2010 with no debt and $200 million available under its
credit agreement, as compared to $62.2 million in cash, cash
equivalents and marketable securities at December 31, 2009.
"We continue to achieve quarterly sequential improvement in key metrics
including revenue and gross margin, but most notably new customer starts
which grew both sequentially and year over year," stated Chairman and
CEO Joe Redling. "We expect new customer starts to continue to
strengthen in the second quarter and anticipate modest revenue growth
year over year for the balance of the year."
The Board of Directors declared a quarterly dividend of $0.175 per
share, payable May 24, 2010, to shareholders of record as of May 13,
2010. While the Company intends to continue to pay regular quarterly
dividends, the declaration and payment of future dividends are
discretionary and will be subject to determination by the Board of
Directors each quarter following its review of the Company's financial
performance.
"For the quarter, gross margin increased 130 basis points and G&A
expense as a percent of revenue was 120 basis points lower than prior
year. These benefits partially offset $8 million in marketing costs
attributed to media rate pressure and retail startup expenses," said
David Clark, Chief Financial Officer. "Based on the current customer and
revenue trends, we anticipate a modest year over year profitability
improvement for 2010."
Conference Call and Webcast
Management will host a webcast to discuss first quarter 2010 financial
results today at 4:30 PM Eastern time. The webcast will include remarks
from Chairman and Chief Executive Officer Joe Redling and Chief
Financial Officer David Clark.
The webcast will be available live under the Investor Relations section
of Nutrisystem's website, www.nutrisystem.com.
Please click on Investor Relations at the bottom of the home page and
then click on the microphone icon on the Investor Relations home page.
Interested parties unable to access the conference call via the webcast
may dial 1-866-831-9862 (outside US/Canada 706-758-5226), the conference
ID is 70604045. A replay of the conference call will be available on the
Company website following the event.
About Nutrisystem, Inc.
Nutrisystem, Inc. (NASDAQ: NTRI) is a leading provider of weight
management products and services. Nutrisystem is sold direct to the
consumer through nutrisystem.com, by phone, and at select retailers,
with convenient home delivery. The Company offers proven nutritionally
balanced weight loss programs designed for women, men, and seniors, as
well as the clinically tested Nutrisystem D plan, designed to help
people with type 2 diabetes who want to lose weight. The Nutrisystem
program is based on 35 years of nutrition research and the science of
the low glycemic index, and offers a variety of great tasting,
satisfying high-fiber, good carbohydrate meals that are heart healthy.
Nutrisystem was named the "Best Value" of the six most popular
commercial diet programs by SmartMoney magazine in January, 2010.
The program has no membership fees and provides 24/7 weight management
support by trained weight loss coaches and online weight management
tools free of charge. In 2009 Nutrisystem was selected as the #1 overall
online retailer in the Food and Drug category and #46 out of the top 500
online retailers overall by Internet Retailer Magazine. Nutrisystem
proudly supports the American Diabetes Association in its Movement to
Stop Diabetes and WomenHeart, The National Coalition For Women With
Heart Disease, in its mission to bring about a greater awareness of the
link between heart disease and obesity. For more information or to
become a customer visit http://www.nutrisystem.com
or call 1-800-435-4074.
Forward-Looking Statement Disclaimer
This press release may contain forward-looking statements that are made
pursuant to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. Statements regarding Nutrisystem's plans
and expectations for the second quarter of 2010 and the full year 2010,
continuing to pay regular quarterly dividends and other statements that
are not statements of historical fact constitute forward-looking
statements. These forward-looking statements involve a number of risks
and uncertainties, which are described in Nutrisystem, Inc.'s Annual
Report on Form 10-K and its other filings with the Securities and
Exchange Commission. The actual results may differ materially from any
forward-looking statements due to such risks and uncertainties.
Nutrisystem, Inc. undertakes no obligation to revise or update any
forward-looking statements in order to reflect events or circumstances
that may arise after the date of this release.
|
|
|
NUTRISYSTEM, INC. AND SUBSIDIARIES
|
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
(unaudited, in thousands, except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$
|
158,830
|
|
|
$
|
161,779
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
72,139
|
|
|
|
75,472
|
|
|
Marketing
|
|
|
56,605
|
|
|
|
46,844
|
|
|
General and administrative
|
|
|
19,255
|
|
|
|
21,553
|
|
|
Depreciation and amortization
|
|
|
2,991
|
|
|
|
2,451
|
|
|
Total costs and expenses
|
|
|
150,990
|
|
|
|
146,320
|
|
|
Operating income from continuing operations
|
|
|
7,840
|
|
|
|
15,459
|
|
|
OTHER EXPENSE
|
|
|
(35
|
)
|
|
|
(91
|
)
|
|
EQUITY LOSS
|
|
|
-
|
|
|
|
(390
|
)
|
|
INTEREST INCOME (EXPENSE), net
|
|
|
56
|
|
|
|
(49
|
)
|
|
Income from continuing operations before income taxes
|
|
|
7,861
|
|
|
|
14,929
|
|
|
INCOME TAXES
|
|
|
2,962
|
|
|
|
5,610
|
|
|
Income from continuing operations
|
|
|
4,899
|
|
|
|
9,319
|
|
|
DISCONTINUED OPERATIONS:
|
|
|
|
|
|
|
|
|
|
Loss on discontinued operations, net of income tax benefit
|
|
|
(98
|
)
|
|
|
(477
|
)
|
|
Net income
|
|
$
|
4,801
|
|
|
$
|
8,842
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC INCOME PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.16
|
|
|
$
|
0.31
|
|
|
Loss from discontinued operations
|
|
|
-
|
|
|
|
(0.02
|
)
|
|
Net income
|
|
$
|
0.16
|
|
|
$
|
0.29
|
|
|
DILUTED INCOME PER COMMON SHARE:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.16
|
|
|
$
|
0.30
|
|
|
Loss from discontinued operations
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
Net income
|
|
$
|
0.15
|
|
|
$
|
0.29
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
29,707
|
|
|
|
29,316
|
|
|
Diluted
|
|
|
30,035
|
|
|
|
29,530
|
|
|
|
|
NUTRISYSTEM, INC. AND SUBSIDIARIES
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
59,123
|
|
|
$
|
31,864
|
|
|
Marketable securities
|
|
|
30,480
|
|
|
|
30,324
|
|
|
Receivables
|
|
|
14,389
|
|
|
|
12,932
|
|
|
Inventories, net
|
|
|
40,550
|
|
|
|
52,012
|
|
|
Prepaid income taxes
|
|
|
-
|
|
|
|
2,420
|
|
|
Deferred income taxes
|
|
|
2,988
|
|
|
|
2,756
|
|
|
Other current assets
|
|
|
6,252
|
|
|
|
10,659
|
|
|
Current assets of discontinued operations
|
|
|
395
|
|
|
|
648
|
|
|
Total current assets
|
|
|
154,177
|
|
|
|
143,615
|
|
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS, net
|
|
|
25,076
|
|
|
|
20,984
|
|
|
OTHER ASSETS
|
|
|
6,080
|
|
|
|
5,752
|
|
|
NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS
|
|
|
447
|
|
|
|
436
|
|
|
|
|
$
|
185,780
|
|
|
$
|
170,787
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
39,043
|
|
|
$
|
32,246
|
|
|
Accrued payroll and related benefits
|
|
|
2,109
|
|
|
|
1,088
|
|
|
Deferred revenue
|
|
|
3,099
|
|
|
|
3,710
|
|
|
Income taxes payable
|
|
|
1,259
|
|
|
|
-
|
|
|
Other accrued expenses and current liabilities
|
|
|
5,577
|
|
|
|
2,653
|
|
|
Current liabilities of discontinued operations
|
|
|
450
|
|
|
|
577
|
|
|
Total current liabilities
|
|
|
51,537
|
|
|
|
40,274
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
5,130
|
|
|
|
1,550
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
56,667
|
|
|
|
41,824
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $.001 par value (5,000,000 shares authorized, no
shares issued and outstanding)
|
|
|
-
|
|
|
|
-
|
|
|
Common stock, $.001 par value (100,000,000 shares authorized;
shares issued - 31,386,323 at March 31, 2010 and 30,949,784 at
December 31, 2009)
|
|
|
29
|
|
|
|
29
|
|
|
Additional paid-in capital
|
|
|
7,258
|
|
|
|
6,515
|
|
|
Retained earnings
|
|
|
121,942
|
|
|
|
122,503
|
|
|
Accumulated other comprehensive loss
|
|
|
(116
|
)
|
|
|
(84
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
129,113
|
|
|
|
128,963
|
|
|
|
|
$
|
185,780
|
|
|
$
|
170,787
|
|
|
|
|
NUTRISYSTEM, INC. AND SUBSIDIARIES
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
(unaudited, in thousands)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
4,801
|
|
|
$
|
8,842
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
Loss on discontinued operations
|
|
|
98
|
|
|
|
477
|
|
|
Depreciation and amortization
|
|
|
2,991
|
|
|
|
2,451
|
|
|
Loss on disposal of fixed assets
|
|
|
65
|
|
|
|
-
|
|
|
Share–based expense
|
|
|
2,143
|
|
|
|
2,041
|
|
|
Deferred income tax benefit
|
|
|
(611
|
)
|
|
|
(685
|
)
|
|
Equity loss
|
|
|
-
|
|
|
|
390
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(1,455
|
)
|
|
|
1,458
|
|
|
Inventories, net
|
|
|
11,462
|
|
|
|
15,698
|
|
|
Other assets
|
|
|
4,468
|
|
|
|
223
|
|
|
Accounts payable
|
|
|
6,764
|
|
|
|
9,632
|
|
|
Accrued payroll and related benefits
|
|
|
1,021
|
|
|
|
(819
|
)
|
|
Deferred revenue
|
|
|
(611
|
)
|
|
|
(744
|
)
|
|
Income taxes
|
|
|
3,701
|
|
|
|
5,793
|
|
|
Other accrued expenses and liabilities
|
|
|
2,211
|
|
|
|
1,212
|
|
|
Net cash provided by operating activities of continuing operations
|
|
|
37,048
|
|
|
|
45,969
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities of discontinued operations
|
|
|
(133
|
)
|
|
|
(281
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
36,915
|
|
|
|
45,688
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Purchases of marketable securities
|
|
|
(186
|
)
|
|
|
-
|
|
|
Capital additions
|
|
|
(2,964
|
)
|
|
|
(2,315
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities of continuing operations
|
|
|
(3,150
|
)
|
|
|
(2,315
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities of discontinued operations
|
|
|
(52
|
)
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(3,202
|
)
|
|
|
(2,346
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
|
101
|
|
|
|
38
|
|
|
Equity compensation awards, net
|
|
|
(1,408
|
)
|
|
|
(662
|
)
|
|
Payment of dividends
|
|
|
(5,362
|
)
|
|
|
(5,331
|
)
|
|
Repurchase and retirement of common stock
|
|
|
-
|
|
|
|
(1,939
|
)
|
|
Net cash used in financing activities
|
|
|
(6,669
|
)
|
|
|
(7,894
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
19
|
|
|
|
(58
|
)
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
|
27,063
|
|
|
|
35,390
|
|
|
CASH AND CASH EQUIVALENTS, beginning of period
|
|
|
32,364
|
|
|
|
38,631
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of period
|
|
|
59,427
|
|
|
|
74,021
|
|
|
LESS CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS, end of
period
|
|
|
304
|
|
|
|
1,377
|
|
|
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS, end of period
|
|
$
|
59,123
|
|
|
$
|
72,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUTRISYSTEM, INC. AND SUBSIDIARIES
|
|
|
|
ADJUSTED EBITDA RECONCILIATION TO GAAP RESULTS
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
12,932
|
|
|
$
|
19,951
|
|
|
Non-cash employee compensation expense
|
|
|
(2,101
|
)
|
|
|
(2,041
|
)
|
|
Other expense
|
|
|
(35
|
)
|
|
|
(91
|
)
|
|
Equity loss
|
|
|
-
|
|
|
|
(390
|
)
|
|
Interest income (expense), net
|
|
|
56
|
|
|
|
(49
|
)
|
|
Income taxes
|
|
|
(2,962
|
)
|
|
|
(5,610
|
)
|
|
Depreciation and amortization
|
|
|
(2,991
|
)
|
|
|
(2,451
|
)
|
|
Income from continuing operations
|
|
$
|
4,899
|
|
|
$
|
9,319
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA is defined as income from continuing operations
excluding non-cash employee compensation, other expense, equity loss,
interest, income taxes and depreciation and amortization. We believe
Adjusted EBITDA is a useful performance metric for management and
investors because it is more indicative of the ongoing operations of the
Company.
Adjusted EBITDA excludes 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.
Nutrisystem, Inc.
Cindy Warner
Investor
Relations
Tel: 215-346-8136
Email: IR@nutrisystem.com
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