PARK CITY, Utah, Jan. 28, 2016 /PRNewswire/ -- Nutraceutical
International Corporation (NASDAQ: NUTR) today reported
results for the fiscal 2016 first quarter ended December 31, 2015. Net sales for the fiscal
2016 first quarter were $56.0
million, compared to $53.0
million for the same quarter of fiscal 2015. For the
first quarter of fiscal 2016, net income was $4.2 million, or $0.45 diluted earnings per share, compared to net
income of $3.4 million, or
$0.35 diluted earnings per share, for
the same quarter of fiscal 2015.
Operating cash flow for the fiscal 2016 first quarter was
$6.9 million, compared to
$3.0 million for the same quarter of
fiscal 2015. The fiscal 2016 first quarter operating cash
flow, combined with net borrowings of $16.5
million, was primarily used to invest $19.0 million in an acquisition of a natural
product business, $2.1 million in
purchases of property, plant and equipment and $1.6 million in purchases of common stock for
treasury.
Bill Gay, chairman and chief
executive officer, commented, "Our fiscal 2016 first quarter net
sales growth of 5.5% was primarily generated from our October 2015 acquisition of Dynamic Health.
Operational leverage relating to this acquisition enabled quarterly
Adjusted EBITDA to expand by $1.5 million to
$10.3 million and net income to increase by $0.8 million to $4.2 million. We are hopeful that
future potential synergies from this acquisition will continue to
strengthen our business following the relocation of Dynamic
Health's manufacturing operations to Tulsa, OK, which we are targeting for the last
half of calendar 2016."
Mr. Gay stated, "The acquisition and integration of innovative
brands like Dynamic Health, which has liquid manufacturing
capabilities, is fundamentally important to our long-term growth
objectives. Management seeks to acquire unique brands and
products that are complementary to our existing business model and
enhance our ability to serve our key customer base, the health and
natural food channel. Dynamic Health's liquid production
expertise expands our product offerings into faster growing product
categories such as therapeutic organic fruit juice concentrates,
organic and non-organic liquid nutritional supplements, organic
liquid consumable juice drinks and organic vegetable drinks.
Business integrations of any size are complex and time-consuming,
but we believe we have the management talent and resources to
accomplish this relocation and integration while minimizing
disruption."
Mr. Gay continued, "Our balance sheet and cash flows remain
strong and this recent purchase will provide a solid base for
additional acquisitions over the coming years. Key
stakeholders such as our lending group continue to be supportive of
our strategy. The integration of numerous acquisitions over the
past 20 plus years has demonstrated the potential of our platform
business model. Our focus remains on identifying acquisition
opportunities that offer a unique add-on to our existing product
mix. Equally important is leveraging anticipated operational
synergies to achieve our long-term growth and financial
objectives. For over 20 years, our strategy has been to
actively acquire quality brands and integrate their operations,
which includes centralizing and consolidating distribution,
marketing, sales and administrative functions and costs."
Mr. Gay also stated, "These integration steps have been critical
to the long-term success of the business model. For example,
depending on the size of the business acquired, we have made an
effort to discontinue underperforming products where possible and
we have been successful combining brands into brand
collections. Eliminating or combining duplicative products
across brands has the effect of reducing sales slightly while
enhancing gross margins. We have also tried to limit product and
customer concentrations, which helps reduce excessive financial
exposure and volatility. However, as we have repeated this
acquisition and integration process many times over the years, we
believe the overall result is becoming more obvious—the creation of
a business that has the potential to generate positive returns on a
relatively consistent basis, even in difficult environments.
We thank our shareholders, managers, employees and customers for
their ongoing support of this effort and of our business."
ABOUT NUTRACEUTICAL
We are an integrated manufacturer, marketer, distributor and
retailer of branded nutritional supplements and other natural
products sold primarily to and through domestic health and natural
food stores. Internationally, we market and distribute
branded nutritional supplements and other natural products to and
through health and natural product distributors and
retailers. Our core business strategy is to acquire,
integrate and operate businesses in the natural products industry
that manufacture, market and distribute branded nutritional
supplements. We believe that the consolidation and
integration of these acquired businesses provide ongoing financial
synergies through increased scale and market penetration, as well
as strengthened customer relationships.
We manufacture and sell nutritional supplements and other
natural products under numerous brands, including Solaray®,
KAL®, Dynamic Health™, Nature's Life®,
LifeTime®, Natural Balance®, NaturalCare®,
Health from the Sun®, Pioneer®, Nutra
BioGenesis™, Life-flo®, Organix South®,
Heritage Store® and Monarch
Nutraceuticals™.
We own neighborhood natural food markets, which operate under
the trade names The Real Food Company™, Thom's Natural
Foods™, Cornucopia Community Market™ and
Granola's™. We also own health food stores, which
operate under various trade names, including Fresh Vitamins™
and Peachtree Natural Foods®.
We manufacture and/or distribute one of the broadest branded
product lines in the industry, with approximately 7,500 SKUs,
including approximately 750 SKUs exclusively sold
internationally. We believe that, as a result of our emphasis
on innovation, quality, loyalty, education and customer service,
our brands are widely recognized in health and natural food stores
and among their customers.
This Press Release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
with respect to our financial condition, results of operations and
business. These forward-looking statements can be identified
by the use of terms such as "believe," "expects," "plan," "intend,"
"may," "will," "should," "can," or "anticipates," or the negative
thereof, or variations thereon, or comparable terminology, or by
discussions of strategy. These statements involve known and unknown
risks, uncertainties and other factors that may cause industry
trends or our actual results to be materially different from any
future results expressed or implied by these statements.
Important factors that may cause our results to differ from these
forward-looking statements include, but are not limited to: (i)
changes in or new government regulations or increased enforcement
of the same including adverse determinations by regulators; (ii)
unavailability of desirable acquisitions, inability to complete
them or inability to integrate them; (iii) increased costs,
including from increased raw material or energy prices; (iv)
changes in general worldwide economic or political conditions; (v)
adverse publicity or negative consumer perception regarding
nutritional supplements; (vi) issues with obtaining raw materials
of adequate quality or quantity; (vii) litigation and claims,
including product liability, intellectual property and other
types; (viii) disruptions from or following acquisitions
including the loss of customers; (ix) increased competition; (x)
slow or negative growth in the nutritional supplement industry or
the healthy foods channel; (xi) the loss of key personnel or the
inability to manage our operations efficiently; (xii) problems with
information management systems, manufacturing efficiencies and
operations, including system interruptions and
security/cybersecurity breaches; (xiii) insurance coverage issues;
(xiv) the volatility of the stock market generally and of our stock
specifically; (xv) increases in the cost of borrowings or
unavailability of additional debt or equity capital, or both, or
fluctuations in foreign currencies; and (xvi) interruption of
business or negative impact on sales and earnings due to acts of
God, acts of war, terrorism, bio-terrorism, civil unrest and other
factors outside of our control. Copies of our SEC reports are
available upon request from our investor relations department or
may be obtained at the SEC's website
(www.sec.gov).
NUTRACEUTICAL
INTERNATIONAL CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited;
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
September
30,
|
|
|
|
2015
|
|
2015
|
Assets
|
|
|
|
|
Current assets,
net
|
$
90,627
|
|
$
86,215
|
Property, plant and
equipment, net
|
77,908
|
|
77,645
|
Goodwill
|
30,925
|
|
24,384
|
Other non-current assets,
net
|
29,756
|
|
24,205
|
|
|
|
$ 229,216
|
|
$ 212,449
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
$
17,663
|
|
$
20,528
|
Long-term
liabilities
|
48,178
|
|
31,674
|
Stockholders'
equity
|
163,375
|
|
160,247
|
|
|
|
$ 229,216
|
|
$ 212,449
|
NUTRACEUTICAL
INTERNATIONAL CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(unaudited;
dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
|
|
2015
|
|
2014
|
Net sales
|
$ 55,959
|
|
$ 53,044
|
Cost of
sales
|
27,851
|
|
27,189
|
|
|
Gross
profit
|
28,108
|
|
25,855
|
Operating
expenses
|
|
|
|
|
|
Selling, general and
administrative
|
20,342
|
|
19,554
|
|
|
Amortization of
intangible assets
|
981
|
|
732
|
Income from
operations
|
6,785
|
|
5,569
|
Interest and other
expense, net
|
274
|
|
297
|
Income before
provision for income taxes
|
6,511
|
|
5,272
|
Provision for income
taxes
|
2,270
|
|
1,921
|
|
|
|
|
|
|
Net income
|
$ 4,241
|
|
$ 3,351
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share
|
|
|
|
|
|
Basic
|
$ 0.45
|
|
$ 0.35
|
|
|
Diluted
|
0.45
|
|
0.35
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
Basic
|
9,459,470
|
|
9,653,113
|
|
|
Diluted
|
9,459,470
|
|
9,660,007
|
NUTRACEUTICAL
INTERNATIONAL CORPORATION
|
ADJUSTED EBITDA
SCHEDULE
|
(unaudited;
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Net income
|
$ 4,241
|
|
$ 3,351
|
Provision for income
taxes
|
2,270
|
|
1,921
|
Interest and other
expense, net (1)
|
274
|
|
297
|
Depreciation and
amortization
|
3,482
|
|
3,239
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 10,267
|
|
$ 8,808
|
(1)
|
Includes amortization
of deferred financing fees.
|
Non-GAAP Financial
Measures
|
Adjusted EBITDA (a
non-GAAP measure) is defined in our performance measures as
earnings before net interest and other expense, taxes,
depreciation, amortization and goodwill and intangible asset
impairments. We believe that Adjusted EBITDA provides useful
additional information to analysts, creditors, investment bankers
and management regarding operating performance and debt covenant
compliance. Adjusted EBITDA has some inherent limitations in
measuring operating performance due to the exclusion of certain
financial elements such as depreciation and amortization and is not
necessarily comparable to other similarly-titled captions of other
companies due to potential inconsistencies in the method of
calculation. Furthermore, Adjusted EBITDA is not intended to
be an alternative to net income in determining our operating
performance in accordance with generally accepted accounting
principles.
|
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SOURCE Nutraceutical International Corporation