Form 8-K Vitamin Shoppe, Inc. For: Nov 04

 

 

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): November 4, 2015

 

 

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)

300 Harmon Meadow Blvd.

Secaucus, New Jersey 07094

(Addresses of Principal Executive Offices, including Zip Code)

(201) 868-5959

(Registrant’s Telephone Number, Including Area Code)

2101 91^st Street

North Bergen, New Jersey 07047

(Former Name, Former Address and Former Fiscal Year, if changed since last report)

 

 

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 November 4, 2015, Vitamin Shoppe, Inc. issued a press release containing its preliminary unaudited financial results for its fiscal third quarter ended September 26, 2015. A copy of the press release is attached hereto as Exhibit 99.1.

 

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS

 

(d)

Exhibits.

 

Exhibit No.
99.1		Earnings release issued by Vitamin Shoppe, Inc., dated November 4, 2015.

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 Exhibit 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 Exhibit 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: November 4, 2015		By:		/s/ Brenda Galgano
				Name:		Brenda Galgano
				Title:		Chief Financial Officer

Exhibit 99.1

 

VITAMIN SHOPPE, INC.
300 Harmon Meadow Blvd Secaucus, NJ 07094 (201) 868-5959 www.vitaminshoppe.com		NEWS RELEASE

Vitamin Shoppe, Inc. Announces Third Quarter 2015 Results

Third Quarter 2015 Highlights:

- Total revenue increased 1.6%

- Total comparable sales were 0.1%

- Opened 15 stores

- GAAP fully diluted earnings per share of $0.48, and adjusted fully diluted earnings per share of $0.52

SECAUCUS, N.J., November 4, 2015 — Vitamin Shoppe, Inc. (NYSE: VSI), a multi-channel specialty retailer and manufacturer of nutritional products, today announced preliminary results for the three months ended September 26, 2015. Total net sales in the third quarter increased 1.6% to $313.9 million compared to $308.9 million in the same period of the prior year. Reported fully-diluted earnings per share in third quarter 2015 were $0.48, compared with $0.40 in third quarter 2014. Excluding non-operating items in both periods, adjusted EPS was $0.52 and $0.47, respectively.

Commenting on the quarter’s results, Colin Watts, Chief Executive Officer of the Company stated, “I am pleased with the progress we are making in view of ongoing industry softness, and that we delivered year over year improvement in earnings per share. While we still faced some challenges for topline growth in the quarter, our comparable sales improved when compared with the prior quarter. Additionally, we are encouraged by the ongoing year over year increase in product gross margins.”

---

Mr. Watts added, “Looking ahead, we have begun to test, and in some cases, scale several new demand creation initiatives tied to our reinvention strategy that we expect will be important contributors to revenue growth beginning in 2016. We are well along with this process and anticipate sharing our multi-year reinvention strategy and long term business outlook in early 2016.”

Third Quarter 2015 Results

Sales growth in the quarter was primarily driven by growth from non-comp stores. Retail comparable sales were 0.1% and e-commerce comparable sales were up 0.6%. Retail sales growth was partially offset by a decrease in manufacturing third-party sales. The company opened 15 stores in the quarter and closed one.

Cost of goods sold, which includes product, distribution, manufacturing and store occupancy costs, decreased $2.4 million, or 1.2%, to $209.2 million for the three months ended September 26, 2015, compared with $211.6 million for the three months ended September 27, 2014.

Gross profit increased $7.4 million, or 7.6%, to $104.7 million for 2015 third quarter, compared with $97.3 million for third quarter 2014. Gross profit as a percentage of net sales was 33.4% in third quarter 2015, up from 31.5% in 2014. Excluding the impact of last year’s purchase accounting charge of $3.3 million for Nutri-Force, gross margin in third quarter 2015 was up approximately 80 basis points as higher product margins were partially offset by deleverage on store occupancy costs.

Selling, general and administrative expenses (SG&A), including operating payroll and related benefits, advertising expense and depreciation and amortization increased $4.6 million, or 6.0%, to $81.4 million for the quarter ended September 26, 2015, compared with $76.7 million for the quarter ended September 27, 2014. SG&A includes approximately $1.0 million of reinvention cost and $0.6 million of integration-related

---

costs. SG&A for third quarter 2014 includes integration related expenses of approximately $0.3 million. Excluding these items for both periods, SG&A as a percent of revenue was 25.4% in third quarter 2015 and 24.8% in third quarter 2014. This increase in SG&A rate was driven by Nutri-Force, higher store payroll and benefits, and depreciation and amortization expense.

Income from operations in third quarter 2015 of $23.4 million compared to $20.5 million in the same period of the prior year. As a percentage of net sales, income from operations was 7.4% for third quarter 2015 compared with 6.7% for third quarter 2014. Adjusted for the items noted above in both periods, including the Nutri-Force purchase accounting, income from operations as a percentage of sales was 8.0% in third quarter 2015 and 7.8% in third quarter 2014.

Net income was $14.1 million for third quarter 2015 compared to $12.2 million in the same period of the prior year. Reported earnings per diluted share were $0.48 in third quarter 2015 compared with $0.40 in third quarter 2014. Adjusted EPS was $0.52 for third quarter 2015 and $0.47 for third quarter 2014.

Balance Sheet and Cash Flow

Cash and equivalents at September 26, 2015 were $2.0 million. During the quarter the Company paid $10 million on the line of credit leaving $8.0 million drawn at quarter end.

Capital expenditures were $9.6 million in the quarter. Funds were primarily expended on new stores and IT investments.

During the quarter the Company repurchased 355,021 shares of its common stock for a total purchase price of $12.4 million. As of September 26, 2015, the Company had repurchased 2,253,392 shares for a total of $95.8 million.

2015 Outlook

Management expects the following for 2015:

 

•

Net sales increase of approximately 5%

---

•

Total comparable sales growth to be approximately flat

 

•

50 new stores

 

•

Adjusted earnings per diluted share in the range of $2.05 to $2.15 for the full-year 2015. This excludes the impact of non-operating items and assumes completion of the 2014 share buyback program.

Non-GAAP Financial Measures

Adjusted information is non-GAAP financial information provided to enhance the user’s overall understanding of the Company’s performance and related trends. The Company provides a reconciliation of adjusted financial information to the GAAP financial results in Table 4 titled “Supplemental Operating Data”.

Webcast

Management will host a conference call to discuss the third quarter 2015 results at 8:30a.m. Eastern Time (ET) today. Interested investors and other parties may listen to the simultaneous webcast of the conference call by logging onto the Investor Relations section of the Company’s website at www.vitaminshoppe.com. A telephonic replay will be available beginning at 11:30a.m. ET on November 4, 2015 and can be accessed by dialing 1-877-870-5176 or 1-858-384-5517 for international callers. The passcode for the replay is 9463025. The telephonic replay will be available until 11:59 p.m. ET on November 11, 2015. The webcast will also be archived on the company’s website at www.vitaminshoppe.com in the investor relations section.

About the Vitamin Shoppe, Inc. (NYSE: VSI)

Vitamin Shoppe is a multi-channel specialty retailer and contract manufacturer of nutritional products based in Secaucus, New Jersey. In its stores and on its websites, the Company carries one of the most comprehensive retail assortments in the industry, including vitamins, minerals, specialty supplements, herbs, sports nutrition, homeopathic remedies, green living products, and beauty aids. In addition to offering products from approximately 850 national brands, the Vitamin Shoppe also carries products under The Vitamin Shoppe^®, BodyTech^®, True Athlete^®, MyTrition^®, plnt^TM, ProBioCare^TM, Next Step^TM, Betancourt and Nutri-Force Sports^® brands. The Vitamin Shoppe conducts business through more than 700 company-operated retail stores under The Vitamin Shoppe, Super Supplements and Vitapath retail banners, and primarily through its website, www.VitaminShoppe.com.Follow the Vitamin Shoppe on Facebook at http://www.facebook.com/THEVITAMINSHOPPE and on Twitter at http://twitter.com/VitaminShoppe.

Forward Looking Statements

This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including without limitation, statements under the caption “2015 Outlook”, statements regarding future financial results and performance, share repurchases, future business prospects, revenue, new stores, product offerings, integration of acquisitions, working capital, liquidity, capital expenditures, capital needs and interest costs,

---

industry based factors, including the level of competition in the vitamin, mineral and supplement industry, continued demand from the primary markets the Company serves, consumer perception of the Company’s products, the availability of raw materials, as well as economic conditions generally and factors more specific to the Company such as compliance with manufacturing regulations, certifications and practices and restrictions imposed by the Company’s revolving credit facility, including financial covenants and limitations on the Company’s ability to incur additional indebtedness and the Company’s future capital requirements, and other risks, uncertainties and factors set forth under Item 1A., entitled “Risk Factors”, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014 and in the Company’s other reports and documents filed with the SEC. These forward-looking statements can be identified by the use of words such as “outlook”, “believes”, “expects”, “potential”, “continues”, “may”, “will”, “should”, “seeks”, “predicts”, “intends”, “plans”, “estimates”, “anticipates”, “target”, “could” or the negative version of these words or other comparable words. These statements are subject to various risks and uncertainties, many of which are outside the Company’s control, including, among others the strength of the economy, changes in the overall level of consumer spending, the performance of the Company’s products within the prevailing retail environment, trade restrictions, availability of suitable store locations at appropriate terms, the availability of raw material and other specific factors discussed herein and in other Company SEC filings (including reports on Forms 10-K and 10-Q filed with the SEC). The Company believes that all forward-looking statements are based on reasonable assumptions when made; however, it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes with certainty and that, accordingly, one should not place undue reliance on these statements. Forward-looking statements speak only as of the date when made and the Company undertakes no obligation to update these statements in light of subsequent events or developments. Actual results may differ materially from anticipated results or outcomes discussed in any forward-looking statement.

 

Investor and Analyst Contact		Media Contact
Kathleen Heaney		Meghan Biango
646-912-3844		201-552-6017
[email protected]		[email protected]

---

TABLE 1

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share data)

(Unaudited)

 

		Three Months Ended								Nine Months Ended
		September 26,				September 27,				September 26,				September 27,
		2015				2014				2015				2014
Net sales		$	313,886			$	308,910			$	973,059			$	922,964
Cost of goods sold			209,177				211,616				645,441				613,294
Gross profit			104,709				97,294				327,618				309,670
Selling, general and administrative expenses			81,352				76,745				249,742				226,708
Income from operations			23,357				20,549				77,876				82,962
Interest expense, net			172				140				515				325
Income before provision for income taxes			23,185				20,409				77,361				82,637
Provision for income taxes			9,087				8,212				30,322				33,005
Net income		$	14,098			$	12,197			$	47,039			$	49,632
Weighted average common shares outstanding
Basic			28,988,779				30,332,506				29,238,808				30,327,800
Diluted			29,190,454				30,710,564				29,504,418				30,767,854
Net income per common share
Basic		$	0.49			$	0.40			$	1.61			$	1.64
Diluted		$	0.48			$	0.40			$	1.59			$	1.61

---

TABLE 2

VITAMIN SHOPPE, INC. AND SUBSIDIARY

SEGMENT DATA, KEY PERFORMANCE INDICATORS AND STORE INFO

($ in thousands)

(Unaudited)

 

		Three Months Ended								Nine Months Ended
		September 26,				September 27,				September 26,				September 27,
		2015				2014				2015				2014
Net sales:
Retail		$	270,213			$	260,324			$	836,396			$	802,378
Direct			31,254				31,337				96,444				99,148
Manufacturing			20,693				19,933				67,185				24,947
Segment net sales			322,160				311,594				1,000,025				926,473
Elimination of intersegment revenues			(8,274	)			(2,684	)			(26,966	)			(3,509	)
Net sales		$	313,886			$	308,910			$	973,059			$	922,964
Income from operations:
Retail		$	47,890			$	45,919			$	155,562			$	154,355
Direct			5,324				4,931				15,976				17,716
Manufacturing			(222	)			(2,141	)			(1,433	)			(3,012	)
Corporate costs			(29,635	)			(28,160	)			(92,229	)			(86,097	)
Income from operations		$	23,357			$	20,549			$	77,876			$	82,962
Increase in total comparable net sales			0.1	%			3.8	%			0.1	%			4.2	%
Increase in comparable store net sales			0.1	%			3.1	%			0.3	%			3.1	%
Increase (Decrease) in e-commerce comparable net sales			0.6	%			10.5	%			(2.1	%)			13.2	%
Gross profit as a percent of net sales			33.4	%			31.5	%			33.7	%			33.6	%
Income from operations as a percent of net sales			7.4	%			6.7	%			8.0	%			9.0	%
Capital Expenditures		$	9,646			$	11,783			$	30,172			$	30,801
Depreciation and Amortization		$	9,707			$	8,613			$	28,457			$	25,060
Management realignment charges		$	—			$	—			$	2,174			$	—
Accounts receivable bad debts reserve charge		$	—			$	—			$	1,370			$	—
Reinvention costs		$	1,026			$	—			$	1,026			$	—
Acquisition and integration costs		$	617			$	289			$	1,387			$	4,295
Inventory valuation step-up charge		$	—			$	3,306			$	—			$	4,506
Store Data:
Stores open at beginning of period			734				678				717				659
Stores opened			15				23				39				44
Stores closed			(1	)			—				(8	)			(2	)
Stores open at end of period			748				701				748				701
Total retail square footage at end of period (in thousands)			2,634				2,523				2,634				2,523

---

TABLE 3

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

 

		September 26,				December 27,
		2015				2014
ASSETS
Current assets:
Cash and cash equivalents		$	1,981			$	12,166
Accounts receivable, net of allowance of $973 and $1,883 in 2015 and 2014, respectively			5,065				10,376
Inventories			218,096				187,027
Prepaid expenses and other current assets			37,391				37,029
Total current assets			262,533				246,598
Property and equipment, net of accumulated depreciation and amortization of $263,878 and $238,613 in 2015 and 2014, respectively			139,701				140,596
Goodwill			243,269				243,269
Other intangibles, net			87,824				89,025
Other assets			2,937				2,903
Total assets		$	736,264			$	722,391
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Revolving credit facility		$	8,000			$	8,000
Accounts payable			44,008				37,396
Accrued expenses and other current liabilities			65,497				75,820
Total current liabilities			117,505				121,216
Deferred income taxes			12,472				9,151
Deferred rent			40,458				39,388
Other long-term liabilities			627				702
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 250,000,000 shares authorized and no shares issued and outstanding at September 26, 2015 and December 27, 2014			—				—
Common stock, $0.01 par value; 400,000,000 shares authorized, 29,233,983 shares issued and 29,115,012 shares outstanding at September 26, 2015, and 30,106,337 shares issued and 30,048,881 shares outstanding at December 27, 2014			292				301
Additional paid-in capital			235,839				267,083
Treasury stock, at cost; 118,971 shares at September 26, 2015 and 57,456 shares at December 27, 2014			(5,187	)			(2,695	)
Accumulated other comprehensive loss			(109	)			(83	)
Retained earnings			334,367				287,328
Total stockholders’ equity			565,202				551,934
Total liabilities and stockholders’ equity		$	736,264			$	722,391

---

TABLE 4

VITAMIN SHOPPE, INC. AND SUBSIDIARY

SUPPLEMENTAL OPERATING DATA

(Unaudited)

 

Three months ended September 26, 2015		Net Income Per Common Share (2)
GAAP diluted earnings per share		$	0.48
Adjustments:
Reinvention costs		$	0.02
Integration costs			0.01
Adjusted diluted earnings per share (1)		$	0.52
Three months ended September 27, 2014		Net Income Per Common Share (2)
GAAP diluted earnings per share		$	0.40
Adjustments:
Inventory valuation step-up charge		$	0.06
Integration costs			0.01
Adjusted diluted earnings per share (1)		$	0.47
Nine months ended September 26, 2015		Net Income Per Common Share (2)
GAAP diluted earnings per share		$	1.59
Adjustments:
Management realignment charges		$	0.05
Account receivable bad debts reserve charge			0.03
Integration costs			0.03
Reinvention costs			0.02
Adjusted diluted earnings per share (1)		$	1.72
Nine months ended September 27, 2014		Net Income Per Common Share (2)
GAAP diluted earnings per share		$	1.61
Adjustments:
Inventory valuation step-up charge		$	0.09
Acquisition and integration costs			0.08
Adjusted diluted earnings per share (1)		$	1.79

 

(1)	Adjusted information is non-GAAP financial information provided to enhance the user’s overall understanding of the Company’s performance and related trends.

(2)	Per share amounts may not sum due to rounding.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Result of AGM
• Ibogaine Treatment for Borderline Personality Disorder Launched by Ibogaine By David Dardashti
• Penns Woods Bancorp, Inc. Reports First Quarter 2024 Earnings