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): October 25, 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 & FINANCIAL CONDITIONS |
On October 26, 2011, Vitamin Shoppe, Inc. issued a press release containing its preliminary unaudited financial results for its third fiscal quarter ended September 24, 2011, and announced that it had repaid and terminated all of its outstanding term loan commitments. A copy of the press release is attached hereto as Exhibit 99.1.
ITEM 8.01 | OTHER EVENTS |
On October 25, 2011 (the Repayment Date), Vitamin Shoppe, Inc. (the Company) and its subsidiaries, Vitamin Shoppe Industries Inc. and VS Direct, Inc. (collectively, the Borrowers), repaid and terminated all outstanding term loan commitments under the Amended and Restated Loan and Security Agreement, dated as of September 25, 2009, as amended January 20, 2011 by and among the Borrowers, the Company, the Lenders and Issuing Bank from time to time party thereto, and JPMorgan Chase Bank, N.A. as Administrative Agent. The repayment amount totaled $18.8 million, including accrued and unpaid interest to the Repayment Date, and was funded with available cash.
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(d) | Exhibits. |
Exhibit |
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99.1 | Earnings release issued by Vitamin Shoppe, Inc., dated October 26, 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).
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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: October 26, 2011 | By: | /s/ Brenda Galgano | ||||
Name: | Brenda Galgano | |||||
Title: | Chief Financial Officer |
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Exhibit 99.1
VITAMIN SHOPPE, INC. 2101 91st Street North Bergen, NJ07047 (201) 624-3000 www.vitaminshoppe.com |
NEWS RELEASE |
Vitamin Shoppe, Inc. Announces Fiscal Third Quarter 2011 Results
Third Quarter Highlights:
| Comparable store sales grew 7.1% |
| Net sales increased 11.5% |
| Operating income rose 27.3% |
| Fully diluted EPS of $0.40 |
| Opened 10 stores during the quarter |
NORTH BERGEN, N.J., October 26, 2011 Vitamin Shoppe, Inc. (NYSE: VSI), a leading specialty retailer and direct marketer of nutritional products, today announced preliminary results for its fiscal third quarter ended September 24, 2011. Comparable store sales increased 7.1%, net sales advanced 11.5% while operating income rose 27.3%. During the period, the company reported fully diluted earnings per share (EPS) of $0.40, an increase from $0.25 in the comparable period of the prior year. For the nine-month period, fully diluted EPS was $1.20, up from $0.83 in the comparable period of the prior year.
Commenting on the results, Tony Truesdale, Chief Executive Officer of the Company stated, Our results once again demonstrate the unique strength of our retail store portfolio, our evolving multichannel growth model and The Vitamin Shoppe brand. We realized improved gross profit margins, leveraged our fixed operating expenses and continued to make investments for the future while achieving significant growth in our EPS.
Added, Mr. Truesdale, We believe that our strong multi-channel business model will allow us to continue to gain market share. As always, we will continue to work to enhance our customers overall shopping experience, and we remain committed to being our customers first choice for their health and wellness needs.
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Fiscal Third Quarter 2011 Results
Net sales increased $21.6 million, or 11.5%, to $208.9 million for the three months ended September 24, 2011, compared with $187.4 million for the three months ended September 25, 2010. The increase was the result of the growth in comparable store sales predominantly driven by traffic, growth from new stores and a 7.7% increase in direct sales as the result of an approximate 12% increase in e-commerce sales.
Overall store sales for the fiscal 2011 third quarter grew as a result of an increase in non-comparable store sales of $8.3 million and an increase in comparable store sales of $11.7 million, or 7.1%. The Company opened 10 stores in the quarter. Total store count was 515 as of September 24, 2011, compared with 472 on September 25, 2010.
Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $13.3 million, or 10.5%, to $139.5 million for the three months ended September 24, 2011, compared with $126.2 million for the comparable period in the prior year.
Gross profit increased $8.3 million, or 13.5%, to $69.4 million for the fiscal 2011 third quarter, compared with $61.2 million for the same quarter in the prior year. Gross profit as a percentage of net sales was 33.2% for the quarter ended September 24, 2011, up from 32.6% for the comparable prior year period. The improvement reflects leverage on occupancy and distribution costs driven by the strong comparable sales performance as well as improved product margin.
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 $4.5 million, or 9.5%, to $51.8 million for the three months ended September 24, 2011, compared with $47.3 million for the three months ended September 25, 2010. SG&A as a percentage of net sales was 24.8% for the fiscal 2011 third quarter compared to 25.3% for the comparable prior year period. The improvement was primarily attributable to expense discipline and leverage due to sales growth.
Income from operations increased $3.8 million, or 27.3%, to $17.6 million for the three months ended September 24, 2011, compared with $13.9 million for the three months ended September 25, 2010. Income from operations as a percentage of net sales increased to 8.4% for the fiscal 2011 third quarter, compared with 7.4% for the comparable prior year period.
Net income increased $4.7 million to $11.9 million for the three months ended September 24, 2011, compared with $7.2 million for the comparable period in the prior year. This was primarily attributable to stronger sales and margin improvement. Net income also benefitted
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from significantly lower interest expense versus the same period in 2010 and a lower effective tax rate in the quarter. The lower effective tax rate was primarily due to a reduction in reserves for tax positions established in prior years.
Earnings per diluted share increased to $0.40 in fiscal third quarter 2011 from $0.25 per share in the comparable period of the prior year.
Balance Sheet and Cash Flow
During the first nine months of fiscal year 2011, the company had a net reduction in debt of approximately $56 million. Total debt, excluding capital lease obligations, at quarters end was $18.8 million. Cash and equivalents at September 24, 2011 were $24.8 million. Capital expenditures were $5.3 million in the quarter. Subsequent to quarters end, on October 25, 2011, the company paid $18.8 million, representing the remaining principal balance and accrued interest on its term loan which was originally scheduled to mature on January 20, 2013.
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 48 new stores |
| Capital expenditures of approximately $23 million |
| Comparable store sales growth of approximately 7% for the full year |
| Continued improvement in EBIT margin |
Preliminary 2012 Outlook
Looking forward to 2012 management expects:
| To open approximately 52 new stores |
| Comparable store sales growth in mid-single digits |
| Continued improvement in EBIT margin |
Webcast
The Company will webcast a conference call at 8:30 a.m. Eastern Time (ET) today to discuss its fiscal third 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 online replay will be available immediately following the call. A telephonic replay will be available beginning at 11:30 a.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 47998554. The replay will be available until November 2, 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 and BodyTech proprietary brands. The Vitamin Shoppe conducts business through more than 500 company-owned retail stores, national mail order catalogs, website, www.VitaminShoppe.com and has a social community site at www.VSconnect.com.
Follow The Vitamin Shoppe on Facebook at http://www.facebook.com/THEVITAMINSHOPPE and on Twitter at http://twitter.com/#!/VitaminShoppe.
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 | Nine Months Ended | |||||||||||||||
September 24, | September 25, | September 24, | September 25, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net sales |
$ | 208,936 | $ | 187,359 | $ | 641,730 | $ | 571,206 | ||||||||
Cost of goods sold |
139,493 | 126,190 | 423,299 | 381,330 | ||||||||||||
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Gross profit |
69,443 | 61,169 | 218,431 | 189,876 | ||||||||||||
Selling, general and administrative expenses |
51,812 | 47,316 | 159,582 | 142,504 | ||||||||||||
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Income from operations |
17,631 | 13,853 | 58,849 | 47,372 | ||||||||||||
Loss on extinguishment of debt |
| | 552 | 1,120 | ||||||||||||
Interest expense, net |
419 | 2,181 | 2,076 | 7,670 | ||||||||||||
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Income before provision for income taxes |
17,212 | 11,672 | 56,221 | 38,582 | ||||||||||||
Provision for income taxes |
5,301 | 4,423 | 20,769 | 15,298 | ||||||||||||
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Net income |
$ | 11,911 | $ | 7,249 | $ | 35,452 | $ | 23,284 | ||||||||
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Weighted average common shares outstanding |
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Basic |
28,916,734 | 27,710,913 | 28,741,227 | 27,178,235 | ||||||||||||
Diluted |
29,693,651 | 28,597,381 | 29,508,761 | 28,155,098 | ||||||||||||
Net income per common share |
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Basic |
$ | 0.41 | $ | 0.26 | $ | 1.23 | $ | 0.86 | ||||||||
Diluted |
$ | 0.40 | $ | 0.25 | $ | 1.20 | $ | 0.83 |
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SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO
($ in thousands)
(unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 24, | September 25, | September 24, | September 25, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Sales: |
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Retail |
$ | 187,108 | $ | 167,086 | $ | 574,424 | $ | 508,017 | ||||||||
Direct |
21,828 | 20,273 | 67,306 | 63,189 | ||||||||||||
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Net sales |
$ | 208,936 | $ | 187,359 | $ | 641,730 | $ | 571,206 | ||||||||
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Income from operations: |
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Retail |
$ | 33,916 | $ | 28,742 | $ | 110,128 | $ | 90,447 | ||||||||
Direct |
3,807 | 3,463 | 12,375 | 11,581 | ||||||||||||
Corporate costs |
(20,092 | ) | (18,352 | ) | (63,654 | ) | (54,656 | ) | ||||||||
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Income from operations |
$ | 17,631 | $ | 13,853 | $ | 58,849 | $ | 47,372 | ||||||||
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Increase in comparable store net sales |
7.1 | % | 7.1 | % | 7.7 | % | 7.3 | % | ||||||||
Depreciation and Amortization |
$ | 5,057 | $ | 5,300 | $ | 14,905 | $ | 16,125 | ||||||||
Impairment charge on fixed assets |
$ | 360 | $ | 1,102 | $ | 651 | $ | 1,326 | ||||||||
Amortization of deferred financing fees |
$ | 84 | $ | 138 | $ | 282 | $ | 612 | ||||||||
Capital Expenditures |
$ | 5,259 | $ | 4,219 | $ | 15,170 | $ | 14,232 | ||||||||
Gross profit as a percent of net sales |
33.2 | % | 32.6 | % | 34.0 | % | 33.2 | % | ||||||||
Income from operations as a percent of net sales |
8.4 | % | 7.4 | % | 9.2 | % | 8.3 | % | ||||||||
Store Data: |
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Stores open at beginning of period |
505 | 463 | 484 | 438 | ||||||||||||
Stores opened |
10 | 9 | 34 | 35 | ||||||||||||
Stores closed |
| | (3 | ) | (1 | ) | ||||||||||
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Stores open at end of period |
515 | 472 | 515 | 472 | ||||||||||||
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VITAMIN SHOPPE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share data)
(unaudited)
September 24, | December 25, | |||||||
2011 | 2010 | |||||||
ASSETS | ||||||||
Current assets: |
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Cash and cash equivalents |
$ | 24,783 | $ | 25,968 | ||||
Inventories |
110,317 | 111,305 | ||||||
Prepaid expenses and other current assets |
20,091 | 17,645 | ||||||
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Total current assets |
155,191 | 154,918 | ||||||
Property and equipment, net |
80,350 | 80,949 | ||||||
Goodwill |
177,248 | 177,248 | ||||||
Other intangibles, net |
69,264 | 69,718 | ||||||
Other assets: |
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Deferred financing fees, net of accumulated amortization of $628 and $1,961 in 2011 and 2010, respectively |
472 | 816 | ||||||
Other long-term assets |
2,505 | 2,068 | ||||||
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Total other assets |
2,977 | 2,884 | ||||||
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Total assets |
$ | 485,030 | $ | 485,717 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities: |
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Current portion of long-term debt |
$ | 12,500 | $ | | ||||
Current portion of capital lease obligation |
1,352 | 1,711 | ||||||
Revolving credit facility |
| 18,000 | ||||||
Accounts payable |
20,956 | 18,994 | ||||||
Deferred sales |
13,543 | 15,929 | ||||||
Accrued salaries and related expenses |
9,511 | 9,573 | ||||||
Other accrued expenses |
22,377 | 14,752 | ||||||
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Total current liabilities |
80,239 | 78,959 | ||||||
Long-term debt, net of current portion |
6,250 | 55,106 | ||||||
Capital lease obligation, net of current portion |
20 | 977 | ||||||
Deferred income taxes |
20,047 | 20,595 | ||||||
Deferred rent |
28,626 | 27,080 | ||||||
Other long-term liabilities |
4,745 | 5,304 | ||||||
Commitments and contingencies |
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Stockholders equity: |
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Common stock, $0.01 par value; 400,000,000 shares authorized, 29,190,548 shares issued and outstanding at September 24, 2011, and 28,627,897 shares issued and outstanding at December 25, 2010 |
292 | 286 | ||||||
Additional paid-in capital |
255,507 | 243,558 | ||||||
Retained earnings |
89,304 | 53,852 | ||||||
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Total stockholders equity |
345,103 | 297,696 | ||||||
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Total liabilities and stockholders equity |
$ | 485,030 | $ | 485,717 | ||||
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