Nutrisystem, Inc. NTRI, a leading provider of weight management products and services, today reported that the Company achieved its previously provided revenue, adjusted EBITDA and earnings per share guidance for the fourth quarter and 2014 fiscal year and provided an outlook for 2015.
Dawn Zier, President and Chief Executive Officer, stated, "I am pleased we have delivered six consecutive quarters of year-over-year revenue growth. Our strong results for fiscal 2014 demonstrate the successful execution of our turnaround plan as well as our ability to be nimble and proactively address evolving customer needs. We're attracting new customers to the brand, successfully launching new products, implementing new pricing strategies, and operating with strategic and financial discipline to drive growth to our top and bottom lines."
Full Year 2014
- Revenue increased 13% to $403.1 million, compared to $358.1 million in 2013.
- Adjusted EBITDA grew 35% to $42.7 million, compared to $31.6 million in 2013.
- Net income increased 66% to $19.3 million, compared to adjusted net income of $11.6 million in 2013.
- GAAP diluted earnings per share increased 65% to $0.66 per share from adjusted earnings of $0.40 per share in 2013.
- Cash, cash equivalents, and short term investments increased $2.9 million to $29.2 million at December 31, 2014 from $26.3 million at December 31, 2013. The Company had no borrowings outstanding under its bank facility.
- In 2014, the Company returned $20.4 million in cash to stockholders via dividends. The Board of Directors has declared a quarterly dividend of $0.175 per share, payable March 23, 2015 to stockholders of record as of March 12, 2015.
Fourth Quarter 2014
- Revenue grew 13% to $79.2 million, compared to $69.9 million in the fourth quarter of 2013.
- Gross profit margin improved 380 basis points to 51.5% and gross profit increased 22% to $40.8 million compared to the fourth quarter of 2013.
- Adjusted EBITDA increased 152% to $11.6 million, compared to adjusted EBITDA of $4.6 million in the fourth quarter of 2013.
- Earnings per share increased to $0.18 from $0.04 in the fourth quarter of 2013.
Ms. Zier added, "We look forward to entering a new chapter of continued growth, innovation, and profitability fueled by the positive momentum generated this past year and our 2015 Diet Season performance to date. We are well positioned to continue growing our direct-to-consumer and retail businesses by leveraging our broad integrated marketing, distribution, segmentation and price-optimization capabilities."
Mike Monahan, Chief Financial Officer, commented, "We continued to improve our profit contribution per customer and expanded our adjusted EBITDA margins by 180 basis points in 2014. Our 2015 guidance implies continued margin expansion with increased investments in marketing and product development to support future growth."
Our first quarter and full year 2015 guidance is as follows. Reconciliations of certain GAAP to non-GAAP measures are provided later in this press release.
First Quarter and Full Year 2015 Guidance
- First quarter revenue expected to be in the range of $129 to $134 million, adjusted EBITDA between $4.5 and $6.7 million, and GAAP earnings per share between $0.02 and $0.07.
- Full year revenue expected to be in the range of $425 to $445 million, adjusted EBITDA between $47.8 and $52.5 million, and GAAP earnings per share between $0.73 and $0.83.
Conference Call and Webcast
Management will host a conference call to discuss fourth quarter and full year 2014 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 the Nutrisystem website (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 website for 30 days following the event and can be accessed at 877-870-5176 using replay pin number 13601170.
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 and one-time charges. Adjusted net income is defined as net income as reported excluding one-time charges.
Forward-Looking Statements
Information provided and statements contained in this press release that are not purely historical, such as first 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, specific factors discussed herein and in other press releases and public filings made by the Company (including filings by the Company with the Securities and Exchange Commission). 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. 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, multi-day kits available at select retail outlets and a new free app and digital platform NuMi® by Nutrisystem. Nutrisystem meal plans feature a wide variety of choices, including more than 100 foods containing no artificial preservatives or artificial flavors, along with comprehensive counseling options from trained weight-loss coaches, registered dietitians and certified diabetes educators. Nutrisystem® plans are consistent with national guidelines for dietary intake meeting targets for fat, sodium, sugar, cholesterol, fiber and physical activity. Plans can be customized to specific dietary needs and preferences including the Nutrisystem® D® program for people with Type 2 diabetes or pre-diabetes. Nutrisystem® weight loss plans are available directly to consumers through www.nutrisystem.com, by phone (1-800-435-4074) and at select retailers. The NuMi multi-platform system and downloadable App can be found at http://www.numi.com. For more information, go to NutrisystemNews.com.
| NUTRISYSTEM, INC. AND SUBSIDIARIES | |||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
| (Unaudited, in thousands, except per share amounts) | |||||||||||||
|
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||
|
2014 |
2013 |
2014 |
2013 |
||||||||||
| REVENUE | $ | 79,233 | $ | 69,873 | $ | 403,083 | $ | 358,086 | |||||
| COSTS AND EXPENSES: | |||||||||||||
| Cost of revenue | 38,448 | 36,514 | 199,053 | 184,210 | |||||||||
| Marketing | 17,584 | 15,235 | 107,706 | 95,784 | |||||||||
| General and administrative | 12,776 | 15,290 | 59,231 | 58,227 | |||||||||
| Depreciation and amortization | 2,102 | 2,093 | 7,849 | 8,896 | |||||||||
| Total costs and expenses | 70,910 | 69,132 | 373,839 | 347,117 | |||||||||
| Operating income | 8,323 | 741 | 29,244 | 10,969 | |||||||||
| INTEREST EXPENSE (INCOME), net | 9 | (34 | ) | 142 | 89 | ||||||||
| Income before income tax expense (benefit) | 8,314 | 775 | 29,102 | 10,880 | |||||||||
|
INCOME TAX EXPENSE (BENEFIT) |
3,006 | (520 | ) | 9,791 | 3,510 | ||||||||
| Net income | $ | 5,308 | $ | 1,295 | $ | 19,311 | $ | 7,370 | |||||
| BASIC INCOME PER COMMON SHARE | $ | 0.18 | $ | 0.04 | $ | 0.67 | $ | 0.26 | |||||
| DILUTED INCOME PER COMMON SHARE | $ | 0.18 | $ | 0.04 | $ | 0.66 | $ | 0.25 | |||||
| WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||||||||||
| Basic | 28,299 | 28,003 | 28,323 | 28,013 | |||||||||
| Diluted | 28,933 | 28,542 | 28,787 | 28,287 | |||||||||
| DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.175 | $ | 0.175 | $ | 0.70 | $ | 0.70 | |||||
| NUTRISYSTEM, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited, in thousands, except par value amounts) | ||||||||
|
December 31, |
||||||||
|
2014 |
2013 | |||||||
|
ASSETS |
||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 12,620 | $ | 9,772 | ||||
| Short term investments | 16,627 | 16,551 | ||||||
| Receivables | 12,206 | 7,738 | ||||||
| Inventories | 26,899 | 26,088 | ||||||
| Prepaid income taxes | 0 | 2,167 | ||||||
| Deferred income taxes | 1,051 | 931 | ||||||
| Other current assets | 7,095 | 6,034 | ||||||
| Total current assets | 76,498 | 69,281 | ||||||
| FIXED ASSETS, net | 26,851 | 26,029 | ||||||
| DEFERRED INCOME TAXES | 5,461 | 5,924 | ||||||
| OTHER ASSETS | 1,082 | 1,211 | ||||||
| Total assets | $ | 109,892 | $ | 102,445 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 34,261 | $ | 29,117 | ||||
| Accrued payroll and related benefits | 6,550 | 6,723 | ||||||
| Income taxes payable | 301 | 0 | ||||||
| Deferred revenue | 4,424 | 4,228 | ||||||
| Other accrued expenses and current liabilities | 6,131 | 7,441 | ||||||
| Total current liabilities | 51,667 | 47,509 | ||||||
| NON-CURRENT LIABILITIES | 2,710 | 2,779 | ||||||
| Total liabilities | 54,377 | 50,288 | ||||||
| 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; shares issued – 28,990 at December 31, 2014 and 28,866 at December 31, 2013) |
29 | 29 | ||||||
| Additional paid-in capital | 29,992 | 24,095 | ||||||
| Treasury stock, at cost, 249 shares at December 31, 2014 and 158 shares at December 31, 2013 | (3,062 | ) | (1,586 | ) | ||||
| Retained earnings | 28,552 | 29,611 | ||||||
| Accumulated other comprehensive income | 4 | 8 | ||||||
| Total stockholders' equity | 55,515 | 52,157 | ||||||
| Total liabilities and stockholders' equity | $ | 109,892 | $ | 102,445 | ||||
| NUTRISYSTEM, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited, in thousands) | ||||||||
|
Year Ended December 31, |
||||||||
| 2014 | 2013 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 19,311 | $ | 7,370 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 7,849 | 8,896 | ||||||
| Loss on disposal of fixed assets | 35 | 145 | ||||||
| Share–based compensation expense | 5,651 | 5,832 | ||||||
| Deferred income tax benefit | (248 | ) | (1,560 | ) | ||||
| Other non-cash charges | 22 | 48 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | (4,468 | ) | 749 | |||||
| Inventories | (811 | ) | (2,451 | ) | ||||
| Other assets | (932 | ) | 1,192 | |||||
| Accounts payable | 4,688 | 6,018 | ||||||
| Accrued payroll and related benefits | (173 | ) | 5,397 | |||||
| Deferred revenue | 196 | 885 | ||||||
| Income taxes | 3,051 | 2,316 | ||||||
| Other accrued expenses and liabilities | (1,364 | ) | 549 | |||||
| Net cash provided by operating activities | 32,807 | 35,386 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of short term investments | (8,225 | ) | (24,513 | ) | ||||
| Proceeds from sales of short term investments | 8,121 | 11,137 | ||||||
| Capital additions | (8,265 | ) | (7,614 | ) | ||||
| Proceeds from the sale of fixed assets | 0 | 28 | ||||||
| Net cash used in investing activities | (8,369 | ) | (20,962 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Exercise of stock options | 314 | 0 | ||||||
| Taxes related to equity compensation awards, net | (1,534 | ) | (825 | ) | ||||
| Payment of dividends | (20,370 | ) | (20,013 | ) | ||||
| Net cash used in financing activities | (21,590 | ) | (20,838 | ) | ||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2,848 | (6,414 | ) | |||||
| CASH AND CASH EQUIVALENTS, beginning of year | 9,772 | 16,186 | ||||||
| CASH AND CASH EQUIVALENTS, end of year | $ | 12,620 | $ | 9,772 | ||||
| NUTRISYSTEM, INC. AND SUBSIDIARIES | |||||||||||||
| ADJUSTED EBITDA RECONCILIATION TO GAAP RESULTS | |||||||||||||
| (Unaudited, in thousands) | |||||||||||||
| Three Months Ended | Year Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||
| Net income | $ | 5,308 | $ | 1,295 | $ | 19,311 | $ | 7,370 | |||||
| Interest expense (income), net | 9 | (34 | ) | 142 | 89 | ||||||||
| Income tax expense (benefit) | 3,006 | (520 | ) | 9,791 | 3,510 | ||||||||
| Depreciation and amortization | 2,102 | 2,093 | 7,849 | 8,896 | |||||||||
| EBITDA | 10,425 | 2,834 | 37,093 | 19,865 | |||||||||
| Non-cash employee compensation | |||||||||||||
| expense | 1,178 | 1,801 | 5,621 | 5,311 | |||||||||
| One-time charges | |||||||||||||
| Settlement with supplier | 0 | 0 | 0 | 5,000 | |||||||||
| Severance and related charges | 0 | 0 | 0 | 1,441 | |||||||||
| Total one-time charges | 0 | 0 | 0 | 6,441 | |||||||||
| Adjusted EBITDA | $ | 11,603 | $ | 4,635 | $ | 42,714 | $ | 31,617 | |||||
| NUTRISYSTEM, INC. AND SUBSIDIARIES | ||||||||||||
| ADJUSTED EBITDA GUIDANCE RECONCILIATION TO GAAP MEASURES | ||||||||||||
| (Unaudited, in thousands) | ||||||||||||
| Three Months Ending | Year Ending | |||||||||||
| March 31, 2015 | December 31, 2015 | |||||||||||
| Low | High | Low | High | |||||||||
| Net income | $ | 627 | $ | 2,079 | $ | 21,608 | $ | 24,710 | ||||
| Interest expense, net | 50 | 50 | 230 | 230 | ||||||||
| Income tax expense | 323 | 1,071 | 11,132 | 12,730 | ||||||||
| Depreciation and amortization | 2,250 | 2,250 | 9,100 | 9,100 | ||||||||
| EBITDA | 3,250 | 5,450 | 42,070 | 46,770 | ||||||||
|
Non-cash employee
compensation expense |
1,250 | 1,250 | 5,730 | 5,730 | ||||||||
| Adjusted EBITDA | $ | 4,500 | $ | 6,700 | $ | 47,800 | $ | 52,500 | ||||
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 and one-time charges.
| NUTRISYSTEM, INC. AND SUBSIDIARIES | ||||||||||||||
| ADJUSTED NET INCOME RECONCILIATION TO GAAP RESULTS | ||||||||||||||
| (Unaudited, in thousands, except per share amounts) | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||
| Net income as reported | $ | 5,308 | $ | 1,295 | $ | 19,311 | $ | 7,370 | ||||||
| Income tax expense (benefit) as reported | 3,006 | (520 | ) | 9,791 | 3,510 | |||||||||
| Income before income tax expense (benefit) | 8,314 | 775 | 29,102 | 10,880 | ||||||||||
| Adjustment for one-time charges | 0 | 0 | 0 | 6,441 | ||||||||||
| Adjusted income before income tax expense | ||||||||||||||
| (benefit) | 8,314 | 775 | 29,102 | 17,321 | ||||||||||
| Adjusted income tax expense (benefit) | 3,006 | (520 | ) | 9,791 |
5,716 |
(a) |
||||||||
| Adjusted net income | $ | 5,308 | $ | 1,295 | $ | 19,311 | $ | 11,605 | ||||||
| Adjusted diluted income per common share (b) | $ | 0.18 | $ | 0.04 | $ | 0.66 | $ | 0.40 | ||||||
| Diluted weighted average shares | ||||||||||||||
| outstanding | 28,933 | 28,542 | 28,787 | 28,287 | ||||||||||
(a) Adjusted income tax expense for the year ended December 31, 2013 has been calculated using a tax rate of 33%.
(b) Included in the results for the year ended December 31, 2013 was $0.15 of adjusted income per common share for one-time charges. No adjustments for one-time charges were included for the three months ended December 31, 2014 or 2013, or for the year ended December 31, 2014.
Statement Regarding Non-GAAP Financial Measures
We believe EBITDA, adjusted EBITDA, adjusted EBITDA guidance, and adjusted net income 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.
ICR, Inc.
John Mills, Partner
646-277-1254
ir@nutrisystem.com
John.Mills@Icrinc.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
