UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 28, 2011
Vitamin Shoppe, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 11-3664322 | |
(State or Other Jurisdiction of Incorporation or Organization) |
(IRS Employer Identification No.) |
001-34507
(Commission File Number)
2101 91st Street
North Bergen, New Jersey 07047
(Addresses of Principal Executive Offices, including Zip Code)
(800) 223-1216
(Registrants Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
On July 28, 2011, Vitamin Shoppe, Inc. issued a press release containing its preliminary unaudited financial results for its second fiscal quarter ending June 25, 2011. A copy of the press release is attached as Exhibit 99.1.
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(d) | Exhibits. |
99.1 | Earning release issued by Vitamin Shoppe, Inc., dated July 28, 2011. |
This Form 8-K and the attached Exhibit are furnished to comply with Item 2.02, and Item 9.01 of Form 8-K. Neither this Form 8-K nor the attached Exhibits are to be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall this Form 8-K nor the attached Exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933 (except as shall be expressly set forth by specific reference in such filing).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Vitamin Shoppe, Inc.
Date: July 28, 2011 | By: | /s/ Brenda Galgano | ||||||
Name: | Brenda Galgano | |||||||
Title: | Chief Financial Officer |
Exhibit 99.1
VITAMIN SHOPPE, INC. | ||||||
2101 91st Street North Bergen, NJ 07047 (201) 624-3000 |
NEWS | |||||
www.vitaminshoppe.com | RELEASE |
Vitamin Shoppe, Inc. Announces Fiscal Second Quarter and First Half 2011 Results
Second Quarter Highlights:
| Comparable store sales grew 8.0% |
| Net sales increased 12.3% |
| Operating income rose 32.0% |
| Fully diluted EPS of $0.40 |
| Opened 9 stores during the quarter |
NORTH BERGEN, N.J., July 28, 2011 Vitamin Shoppe, Inc. (NYSE: VSI), a leading specialty retailer and direct marketer of nutritional products, today announced preliminary results for its fiscal second quarter ended June 25, 2011. During the period, the company reported fully diluted earnings per share (EPS) of $0.40, up from $0.26 in the comparable period of the prior year. Comparable store sales increased 8.0%, revenue advanced 12.3% while operating income and net income rose 32.0% and 63.5%, respectively. For the six month period, fully diluted EPS was $0.80, up from $0.57 in the comparable period of the prior year, driven by an 8.0% increase in comparable sales, margin improvement and a reduction in interest expense.
Commenting on the strong results, Tony Truesdale, Chief Executive Officer of the Company stated, I am pleased with our second quarter results. We have been able to consistently deliver a strong performance in terms of comparable sale growth, margin improvement, earnings growth, cash flow generation and overall financial strength. We feel good about the momentum we are seeing in the business.
Added, Mr. Truesdale, We are making investments in the business, particularly online, to support our growth. Both in retail and online we continue to work to build a business that exceeds our customers expectations and strengthens our brand our most valuable asset. We have a strong balance sheet that can support our growth.
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Fiscal Second Quarter 2011 Results
Net sales increased $23.7 million, or 12.3%, to $215.9 million for the three months ended June 25, 2011, compared with $192.2 million for the three months ended June 26, 2010. The increase was the result of the growth in comparable store sales predominantly driven by traffic, continued strong performance from new stores and a 4.4% increase in direct sales driven by further expansion in Vitamin Shoppes online business.
Overall store sales for the three months ended June 25, 2011 grew as a result of an increase in non-comparable store sales of $9.2 million and an increase in comparable store sales of $13.6 million, or 8.0%. The Company opened 9 stores in the quarter. Total store count was 505 as of June 25, 2011, compared with 463 on June 26, 2010.
Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $13.7 million, or 10.6%, to $142.2 million for the three months ended June 25, 2011, compared with $128.5 million for the three months ended June 26, 2010.
Gross profit increased $10.0 million, or 15.7%, to $73.7 million for the three months ended June 25, 2011, compared with $63.7 million for the three months ended June 26, 2010. Gross profit as a percentage of sales was 34.1% for the quarter ended June 25, 2011, up from 33.1% for the comparable prior year period. The improvement reflects more effective promotional spending, a mix shift to higher margin items and leverage on occupancy driven by the strong comparable sales performance.
Selling, general and administrative expenses (SG&A), including operating payroll and related benefits, advertising and promotion expense, depreciation and amortization, and other SG&A, increased $5.1 million, or 10.5%, to $53.3 million for the three months ended June 25, 2011, compared with $48.2 million for the three months ended June 26, 2010. SG&A as a percentage of net sales decreased to 24.7% for the quarter compared to 25.1% for the comparable prior year period. The improvement represents maturation of the store base, strong comparable store sales, as well as the companys ability to leverage costs over a larger store base and expense discipline.
Income from operations increased $4.9 million, or 32.0%, to $20.4 million for the three months ended June 25, 2011, compared with $15.4 million for the three months ended June 26, 2010. Income from operations as a percentage of net sales increased to 9.4% for the 2011 quarter, compared with 8.0% for the comparable prior year period.
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Net income increased $4.6 million, or 63.5% to $12.0 million for the three months ended June 25, 2011, compared with $7.3 million for the three months ended June 26, 2010. This was primarily attributable to stronger sales and margin improvement. Net income also benefitted from significantly lower interest expense versus the same period in 2010 due to reduced outstanding debt and lower interest rates.
Earnings per diluted share increased to $0.40 in fiscal second quarter 2011 from $0.26 per share in the comparable period of the prior year.
Balance Sheet and Cash Flow
During the fiscal second quarter 2011, the Company paid down the revolving credit facility which had $22 million drawn at the end of fiscal first quarter 2011. Additionally, during the first half of fiscal year 2011, the company had a net reduction in debt of approximately $51 million. Total debt, excluding capital lease obligations, at quarters end was $21.9 million. Cash and equivalents at June 25, 2011 were $6.9 million.
2011 Outlook
The current fiscal year is a 53-week year. The outlook provided below is based on a 52-week year comparable with the prior fiscal year. Management expects:
| To open approximately 48 new stores |
| Capital expenditures of approximately $23 million |
| Comparable store sales of approximately 7.0% for the full year |
| Continued improvement in EBIT margin reflecting continuing maturation of the store base, leverage on depreciation and amortization |
| SG&A for the remainder of the year is expected to include approximately $1.0 million of additional investments to support long-term growth, primarily for the e-commerce business |
| Reduced interest expense compared with the prior year reflecting lower debt levels from strong cash flow and lower interest rates under the new term loan |
Webcast
The Company will webcast a conference call at 4:30 p.m. Eastern Time (ET) today to discuss its fiscal second quarter 2011 results. Interested investors and other parties may listen to the simultaneous webcast of the conference call by logging onto the Investor Relations section of the Companys website at www.vitaminshoppe.com. The on-line replay will be available immediately following the call. A telephonic replay will be available beginning at 6:30 p.m. ET and can be accessed by dialing 1-888-286-8010 or for international callers, 1-617-801-6888. The passcode for the replay is 54857613. The replay will be available until August 4, 2011.
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About Vitamin Shoppe, Inc. (NYSE: VSI)
Vitamin Shoppe is a leading specialty retailer and direct marketer of nutritional products based in North Bergen, New Jersey. The Company sells vitamins, minerals, nutritional supplements, herbs, sports nutrition formulas, homeopathic remedies, green living products, and health and beauty aids to customers located primarily in the United States. The Company carries national brand products as well as exclusive products under the Vitamin Shoppe, MD Select, and VS Basics proprietary brands. The Vitamin Shoppe conducts business through more than 500 Company-owned retail stores, websites and national mail order catalogs, primarily www.VitaminShoppe.com and www.EcoShoppe.com, and has a social community site at www.VSconnect.com.
Forward Looking Statement
Certain statements in this press release are forward-looking statements. Such forward-looking statements reflect the Companys current expectations or beliefs concerning future events and actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including the strength of the economy, changes in the overall level of consumer spending, the performance of the Companys products within the prevailing retail environment, trade restrictions, availability of suitable store locations at appropriate terms and other factors which are described in the Companys Annual Report on Form 10-K for the fiscal year ended December 25, 2010 and in all filings with the Securities Exchange Commission made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.
CONTACTS:
Investors:
Kathleen Heaney
646-912-3844
ir@vitaminshoppe.com
Media:
Susan McLaughlin
Director Corporate Communications
201-624-3134
smclaughlin@vitaminshoppe.com
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VITAMIN SHOPPE, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except share and per share data)
(unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||
June 25, 2011 |
June 26, 2010 |
June 25, 2011 |
June 26, 2010 |
|||||||||||||
Net sales |
$ | 215,942 | $ | 192,234 | $ | 432,794 | $ | 383,847 | ||||||||
Cost of goods sold |
142,230 | 128,541 | 283,806 | 255,140 | ||||||||||||
Gross profit |
73,712 | 63,693 | 148,988 | 128,707 | ||||||||||||
Selling, general and administrative expenses |
53,319 | 48,246 | 107,770 | 95,188 | ||||||||||||
Income from operations |
20,393 | 15,447 | 41,218 | 33,519 | ||||||||||||
Loss on extinguishment of debt |
| 568 | 552 | 1,120 | ||||||||||||
Interest expense |
527 | 2,562 | 1,657 | 5,489 | ||||||||||||
Income before provision for income taxes |
19,866 | 12,317 | 39,009 | 26,910 | ||||||||||||
Provision for income taxes |
7,914 | 5,008 | 15,468 | 10,875 | ||||||||||||
Net income |
$ | 11,952 | $ | 7,309 | $ | 23,541 | $ | 16,035 | ||||||||
Earnings per share: |
||||||||||||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
28,750,355 | 27,130,809 | 28,653,474 | 26,911,896 | ||||||||||||
Diluted |
29,538,485 | 28,159,448 | 29,416,315 | 27,933,956 | ||||||||||||
Net income per share |
||||||||||||||||
Basic |
$ | 0.42 | $ | 0.27 | $ | 0.82 | $ | 0.60 | ||||||||
Diluted |
$ | 0.40 | $ | 0.26 | $ | 0.80 | $ | 0.57 |
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SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO
($ in thousands)
unaudited
Three Months Ended | Six Months Ended | |||||||||||||||
June 25, 2011 |
June 26, 2010 |
June 25, 2011 |
June 26, 2010 |
|||||||||||||
Sales: |
||||||||||||||||
Retail |
$ | 194,674 | $ | 171,868 | $ | 387,316 | $ | 340,931 | ||||||||
Direct |
21,268 | 20,366 | 45,478 | 42,916 | ||||||||||||
Net sales |
$ | 215,942 | $ | 192,234 | $ | 432,794 | $ | 383,847 | ||||||||
Income from operations: |
||||||||||||||||
Retail |
$ | 37,385 | $ | 30,349 | $ | 76,212 | $ | 61,705 | ||||||||
Direct |
3,990 | 3,627 | 8,568 | 8,118 | ||||||||||||
Corporate costs |
(20,982 | ) | (18,529 | ) | (43,562 | ) | (36,304 | ) | ||||||||
Income from operations |
$ | 20,393 | $ | 15,447 | $ | 41,218 | $ | 33,519 | ||||||||
Increase in comparable store net sales |
8.0 | % | 8.6 | % | 8.0 | % | 7.4 | % | ||||||||
Depreciation and Amortization |
$ | 5,000 | $ | 5,411 | $ | 9,848 | $ | 10,825 | ||||||||
Impairment charge on fixed assets |
$ | 291 | $ | 224 | $ | 291 | $ | 224 | ||||||||
Amortization of deferred financing fees |
$ | 84 | $ | 189 | $ | 198 | $ | 474 | ||||||||
Capital Expenditures |
$ | 5,412 | $ | 4,605 | $ | 9,911 | $ | 10,013 | ||||||||
Gross profit as a percent of net sales |
34.1 | % | 33.1 | % | 34.4 | % | 33.5 | % | ||||||||
Income from operations as a percent of net sales |
9.4 | % | 8.0 | % | 9.5 | % | 8.7 | % | ||||||||
Store Data: |
||||||||||||||||
Stores open at beginning of period |
497 | 453 | 484 | 438 | ||||||||||||
Stores opened |
9 | 10 | 24 | 26 | ||||||||||||
Stores closed |
(1 | ) | | (3 | ) | (1 | ) | |||||||||
Stores open at end of period |
505 | 463 | 505 | 463 | ||||||||||||
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VITAMIN SHOPPE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share data)
(Unaudited)
June 25, 2011 |
December 25, 2010 |
|||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 6,881 | $ | 25,968 | ||||
Inventories |
111,828 | 111,305 | ||||||
Prepaid expenses and other current assets |
13,986 | 13,612 | ||||||
Deferred income taxes |
4,033 | 4,033 | ||||||
Total current assets |
136,728 | 154,918 | ||||||
Property and equipment, net |
79,912 | 80,949 | ||||||
Goodwill |
177,248 | 177,248 | ||||||
Other intangibles, net |
69,415 | 69,718 | ||||||
Other assets: |
||||||||
Deferred financing fees, net of accumulated amortization of $544 and $1,961 respectively |
556 | 816 | ||||||
Other |
2,540 | 2,068 | ||||||
Total other assets |
3,096 | 2,884 | ||||||
Total assets |
$ | 466,399 | $ | 485,717 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ | 12,500 | $ | | ||||
Current portion of capital lease obligations |
1,536 | 1,711 | ||||||
Revolving credit facility |
| 18,000 | ||||||
Accounts payable |
16,636 | 18,994 | ||||||
Deferred sales |
9,130 | 15,929 | ||||||
Accrued salaries and related expenses |
7,485 | 9,573 | ||||||
Other accrued expenses |
22,429 | 14,752 | ||||||
Total current liabilities |
69,716 | 78,959 | ||||||
Long-term debt |
9,375 | 55,106 | ||||||
Capital lease obligations, net of current portion |
261 | 977 | ||||||
Deferred income taxes |
21,391 | 20,595 | ||||||
Deferred rent |
28,108 | 27,080 | ||||||
Other long-term liabilities |
5,731 | 5,304 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity: |
||||||||
Common stock, $0.01 par value; 400,000,000 shares authorized, 29,120,536 shares issued and outstanding at June 25, 2011, and 28,627,897 shares issued and outstanding at December 25, 2010 |
291 | 286 | ||||||
Additional paid-in capital |
254,133 | 243,558 | ||||||
Retained earnings |
77,393 | 53,852 | ||||||
Total stockholders equity |
331,817 | 297,696 | ||||||
Total liabilities and stockholders equity |
$ | 466,399 | $ | 485,717 | ||||
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