Vitacost.com, Inc.
VITC,
announced that effective September 1, 2012, the Company has entered into an
agreement to exit its manufacturing operations and lease its manufacturing
facilities to a third party provider. Approximately forty percent of the
Company's proprietary products are currently supplied by contract
manufacturers, and this transaction outsources the remaining portion. The
transaction is expected to be margin accretive over the next 12 months and
neutral in the near term as the Company sells through its existing inventory.
In addition, the Company expects the transaction to have approximately a $4.0
million to $5.0 million positive impact on cash in 2013 through the reduction
in proprietary inventory levels.
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