LAKEWOOD, Colo., Nov. 19, 2020 /PRNewswire/ -- Natural Grocers by
Vitamin Cottage, Inc. (NYSE: NGVC) today announced results for its
fourth quarter and fiscal year ended September 30, 2020 and provided its outlook for
fiscal 2021.
Highlights for Fourth Quarter Fiscal 2020 Compared to Fourth
Quarter Fiscal 2019
- Net sales increased 16.3% to $264.2
million;
- Daily average comparable store sales increased 13.2%;
- Operating income increased 78.7% to $5.0
million;
- Net income increased 174.2% to $3.7
million with diluted earnings per share of $0.16;
- Adjusted EBITDA increased 28.1% to $13.3
million;
- Opened no new stores and relocated one store, resulting in a
3.9% new store growth rate for the twelve-month period ended
September 30, 2020; and
- The Board of Directors has declared a special cash dividend of
$2.00 per common share and a
quarterly cash dividend of $0.07 per
common share.
"Fourth quarter results continue to reflect strong sales and
profitability trends, with daily average comparable store sales
increasing 13.2%, net sales increasing 16.3% and net income
increasing 174.2%, compared to the same period in fiscal 2019. Our
proactive and effective response to serving our valued customers
amidst the COVID-19 pandemic and related government mandates has
leveraged our strong customer loyalty, which is reflected in our
results. Our focus continues to be on safely providing the highest
quality, healthy foods at Always Affordable Prices," said
Kemper Isely, Co-President. "Our
good4u Crew members' commitment to our founding principles has been
the driving force behind our ongoing success. As we continue to
navigate this evolving environment, we are guided by our core
principles and are focused on the well-being of our crew members
and customers. We are extremely thankful for each of our crew
members' dedication to the communities we serve."
Isely continued "We are also proud to announce today that our
Board of Directors has declared a special cash dividend of
$2.00 per common share in addition to
our quarterly cash dividend of $0.07
per share, reflecting our strong cash flow, financial position and
confidence in our business outlook. We are committed to driving
value for our valued and loyal shareholders."
In addition to presenting the financial results of Natural
Grocers by Vitamin Cottage, Inc. and its subsidiaries
(collectively, the Company) in conformity with U.S. generally
accepted accounting principles (GAAP), the Company is also
presenting EBITDA and Adjusted EBITDA, which are non-GAAP financial
measures. The reconciliation from GAAP to these non-GAAP financial
measures is provided at the end of this earnings release.
Operating Results — Fourth Quarter Fiscal 2020 Compared to
Fourth Quarter Fiscal 2019
During the fourth quarter of fiscal 2020, net sales increased
$37.0 million, or 16.3%, to
$264.2 million compared to the same
period in fiscal 2019, driven by a $29.9
million increase in comparable store sales and a
$7.1 million increase in new store
sales. Daily average comparable store sales increased 13.2% in the
fourth quarter of fiscal 2020 compared to a 1.8% increase in the
fourth quarter of fiscal 2019. The daily average comparable store
sales increase during the fourth quarter of fiscal 2020 reflected a
23.7% increase in daily average transaction size, partially offset
by an 8.5% decrease in daily average transaction count. During the
fourth quarter of fiscal 2020, customers continued the trend of
reducing their frequency of shopping trips while increasing their
average basket size as a result of social distancing practices. The
increase in net sales during the three months ended September 30, 2020 was primarily driven by
continued elevated demand for food at home as a result of the
ongoing COVID-19 pandemic and related government mandates, as well
as marketing initiatives, promotional campaigns, and increased
membership in and usage of the {N}power® customer
loyalty program.
Gross profit increased $13.4
million, or 22.8%, to $72.4
million for the three months ended September 30, 2020 compared to $59.0 million for the three months ended
September 30, 2019. Gross profit
reflects earnings after both product and occupancy expenses. Gross
margin increased to 27.4% for the three months ended September 30, 2020 compared to 26.0% for the
three months ended September 30,
2019. The increase in gross margin for the three months
ended September 30, 2020 was
primarily driven by improved product margin as well as a decrease
in occupancy and shrink expenses, as a percentage of sales.
Store expenses during the fourth quarter of fiscal 2020
increased 20.2% compared to the same period in fiscal 2019 to
$60.2 million. Store expenses as a
percentage of sales increased to 22.8% during the fourth quarter of
fiscal 2020 compared to 22.0% in the fourth quarter of fiscal 2019.
This increase was a result of elevated labor-related expenses
during the quarter, partially offset by lower marketing and
depreciation expenses, all as a percentage of sales.
Administrative expenses increased 22.3% to $7.1 million during the fourth quarter of fiscal
2020 compared to $5.8 million for the
same period in fiscal 2019. Administrative expenses as a percentage
of sales increased to 2.7% during the fourth quarter of fiscal 2020
compared to 2.6% in the fourth quarter of fiscal 2019.
Operating income increased 78.7% to $5.0
million during the fourth quarter of fiscal 2020 compared to
the comparable period in fiscal 2019. Operating margin during the
fourth quarter of fiscal 2020 increased to 1.9% compared to 1.2% in
the same period in fiscal 2019.
Net income for the fourth quarter of fiscal 2020 was
$3.7 million, or $0.16 of diluted earnings per share, compared to
net income of $1.4 million, or
$0.06 of diluted earnings per share
in the fourth quarter of fiscal 2019.
Adjusted EBITDA increased 28.1% to $13.3
million in the fourth quarter of fiscal 2020 compared to
$10.3 million in the fourth quarter
of fiscal 2019.
Operating Results — Fiscal 2020 Compared to Fiscal
2019
During fiscal 2020, net sales increased $133.3 million, or 14.7%, to $1.0 billion compared to fiscal 2019, primarily
driven by a $111.0 million increase
in comparable store sales and a $22.5
million increase in new store sales, partially offset by a
$0.2 million decrease in sales from
one store that closed during the first quarter of fiscal 2019.
Daily average comparable store sales increased 12.0% in fiscal 2020
compared to a 3.1% increase in fiscal 2019. The daily average
comparable store sales increase during fiscal 2020 reflected a
17.2% increase in average transaction size, partially offset by a
4.5% decrease in daily average transaction count, reflecting
consumers' social distancing practices and demand for food at home
amid the COVID-19 pandemic. Also contributing to the increase in
net sales in fiscal 2020 were marketing initiatives, promotional
campaigns and increased membership in and usage of the {N}power
customer loyalty program.
Gross profit during fiscal 2020 increased 18.6% to $283.1 million. Gross profit reflects earnings
after both product and occupancy expenses. Gross margin was 27.3%
of sales for fiscal 2020 compared to 26.4% of sales for fiscal
2019. The increase in gross margin was primarily driven by leverage
of occupancy and shrink expenses, both as a percentage of sales, as
well as improved product margin.
Store expenses during fiscal 2020 increased $29.3 million, or 14.8%, to $227.1 million. The increase in store expenses
during fiscal 2020 was due primarily to increased labor-related
expenses. Store expenses as a percentage of sales was 21.9% during
fiscal 2020, consistent with fiscal 2019.
Administrative expenses during fiscal 2020 increased 17.3% to
$26.8 million compared to fiscal
2019. Administrative expenses as a percentage of sales were 2.6%
during fiscal 2020 compared to 2.5% in fiscal 2019.
Operating income increased 65.5% to $27.7
million during fiscal 2020 compared to $16.8 million in fiscal 2019. Operating margin
increased 80 basis points to 2.7% compared to 1.9% in fiscal
2019.
Net income for fiscal 2020 was $20.0
million, or $0.89 of diluted
earnings per share, compared to $9.4
million, or $0.42 of diluted
earnings per share, for fiscal 2019.
Adjusted EBITDA increased 29.1% to $59.6
million in fiscal 2020 compared to $46.1 million in fiscal 2019.
Balance Sheet and Cash Flow
As of September 30, 2020, the
Company had $28.5 million in cash and
cash equivalents and $48.7 million
available for borrowing under its $50.0
million revolving credit facility, with $1.3 million of letters of credit outstanding.
Additionally, the Company today announces that it has entered into
a new $35.0 million term loan
facility with its existing lender to support the declaration of a
special dividend and further enhance its financial flexibility.
During fiscal 2020, the Company generated $66.5 million in cash from operations and
invested $29.6 million in net capital
expenditures, primarily for new stores.
Dividend Announcements
Today, the Company announced the declaration of a special cash
dividend of $2.00 per common share,
in addition to its quarterly cash dividend of $0.07 per common share. The special and quarterly
dividends will be paid on December 16,
2020 to all stockholders of record at the close of business
on November 30, 2020. The special
dividend will be funded through available cash and borrowings under
the Company's new $35.0 million term
loan facility.
Growth and Development
During the fourth quarter of fiscal 2020, the Company opened no
new stores and relocated one store, ending the quarter with a total
store count of 159 stores in 20 states. The Company opened six new
stores and relocated one store in fiscal 2020 compared to opening
six new stores and relocating five stores in fiscal 2019, resulting
in 3.9% and 3.4% unit growth rates for the twelve month periods
ended September 30, 2020 and
September 30, 2019, respectively.
Since September 30, 2020, the Company
has opened one new store in New
Mexico.
As of November 19, 2020, the
Company has signed leases for three new stores which will be
located in Missouri, Nevada, and Oregon. These new stores are planned to open
during fiscal 2021 and beyond.
Fiscal 2021 Outlook
The Company is introducing its fiscal 2021 outlook, reflecting
current trends in light of the rapidly evolving COVID-19
environment and related government mandates. While the Company
cannot predict the duration or severity of the pandemic and related
government mandates, the Company expects these factors will
continue to impact its operations and financial performance through
fiscal 2021. The Company expects:
|
Fiscal
2021 Outlook
|
Number of new
stores
|
5-6
|
Number of
relocations
|
3-5
|
Daily average
comparable store sales growth
|
-2.0% to
2.0%
|
Diluted earnings per
share
|
$0.60 to
$0.70
|
|
|
Capital expenditures
(in millions)
|
$28 to $35
|
Earnings Conference Call
The Company will host a conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time) to discuss this earnings
release. The dial-in number is 1-888-347-6606 (US); 1-855-669-9657
(Canada); or 1-412-902-4289
(International). The conference ID is "Natural Grocers by Vitamin
Cottage." A simultaneous audio webcast will be available at
http://Investors.NaturalGrocers.com and archived for a minimum of
30 days.
About Natural Grocers by Vitamin Cottage
Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is an
expanding specialty retailer of natural and organic groceries, body
care products and dietary supplements. The products sold by Natural
Grocers must meet strict quality guidelines and may not contain
artificial colors, flavors, preservatives or sweeteners, or
partially hydrogenated or hydrogenated oils. The Company sells only
USDA certified organic produce and exclusively pasture-raised,
non-confinement dairy products, and free-range eggs. Natural
Grocers' flexible smaller-store format allows it to offer
affordable prices in a shopper-friendly, safe and convenient retail
environment. The Company also provides extensive free science-based
nutrition education programs to help customers make informed health
and nutrition choices. The Company, founded in 1955, has 160 stores
in 20 states.
Visit www.NaturalGrocers.com for more information and store
locations.
Forward-Looking Statements
The following constitutes a "safe harbor" statement under the
Private Securities Litigation Reform Act of 1995. Except for the
historical information contained herein, statements in this release
are "forward-looking statements" and are based on current
expectations and assumptions that are subject to risks and
uncertainties. All statements that are not statements of historical
fact are forward-looking statements. Actual results could differ
materially from those described in the forward-looking statements
because of factors such as risks and challenges related to the
COVID-19 pandemic and government mandates, the economy, changes in
the Company's industry, business strategy, goals and expectations
concerning the Company's market position, future operations,
margins, profitability, capital expenditures, liquidity and capital
resources, future growth, other financial and operating information
and other risks detailed in the Company's Annual Report on Form
10-K for the fiscal year ended September 30,
2019 (the Form 10-K) and the Company's subsequent quarterly
reports on Form 10-Q. The information contained herein speaks only
as of the date of this release and the Company undertakes no
obligation to update forward-looking statements, except as may be
required by the securities laws.
For further information regarding risks and uncertainties
associated with the Company's business, please refer to the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Risk Factors" sections of the Company's
filings with the Securities and Exchange Commission, including, but
not limited to, the Form 10-K and the Company's subsequent
quarterly reports on Form 10-Q, copies of which may be obtained by
contacting Investor Relations at 303-986-4600 or by visiting the
Company's website at http://Investors.NaturalGrocers.com.
Investor Contact:
Scott Van Winkle, ICR, Managing
Director, 617-956-6736, scott.vanwinkle@icrinc.com
NATURAL GROCERS BY
VITAMIN COTTAGE, INC. Consolidated Statements of
Income (Unaudited) (Dollars in thousands,
except per share data)
|
|
|
|
Three months
ended
September 30,
|
|
Year ended
September 30,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net sales
|
|
$
|
264,178
|
|
227,209
|
|
1,036,842
|
|
903,582
|
|
Cost of goods sold
and occupancy costs
|
|
191,765
|
|
168,241
|
|
753,701
|
|
664,829
|
|
Gross
profit
|
|
72,413
|
|
58,968
|
|
283,141
|
|
238,753
|
|
Store
expenses
|
|
60,187
|
|
50,070
|
|
227,069
|
|
197,792
|
|
Administrative
expenses
|
|
7,105
|
|
5,808
|
|
26,780
|
|
22,837
|
|
Pre-opening and
relocation expenses
|
|
163
|
|
316
|
|
1,543
|
|
1,358
|
|
Operating
income
|
|
4,958
|
|
2,774
|
|
27,749
|
|
16,766
|
|
Interest expense,
net
|
|
(491)
|
|
(1,161)
|
|
(2,048)
|
|
(4,952)
|
|
Income before income
taxes
|
|
4,467
|
|
1,613
|
|
25,701
|
|
11,814
|
|
Provision for income
taxes
|
|
(735)
|
|
(252)
|
|
(5,692)
|
|
(2,398)
|
|
Net income
|
|
$
|
3,732
|
|
1,361
|
|
20,009
|
|
9,416
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.17
|
|
0.06
|
|
0.89
|
|
0.42
|
|
Diluted
|
|
$
|
0.16
|
|
0.06
|
|
0.89
|
|
0.42
|
|
Weighted average
number of shares of common stock
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
22,531,447
|
|
22,458,944
|
|
22,501,779
|
|
22,424,328
|
|
Diluted
|
|
22,662,651
|
|
22,538,737
|
|
22,577,646
|
|
22,554,603
|
|
NATURAL GROCERS BY
VITAMIN COTTAGE, INC. Consolidated Balance
Sheets (Unaudited) (Dollars in thousands,
except per share data)
|
|
|
|
September
30,
|
|
|
2020
|
|
2019
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
28,534
|
|
6,214
|
Accounts receivable,
net
|
|
8,519
|
|
5,059
|
Merchandise
inventory
|
|
100,175
|
|
96,179
|
Prepaid expenses and
other current assets
|
|
6,185
|
|
7,728
|
Total current
assets
|
|
143,413
|
|
115,180
|
Property and
equipment, net
|
|
147,929
|
|
201,635
|
Other
assets:
|
|
|
|
|
Operating lease assets,
net
|
|
339,239
|
|
—
|
Finance lease assets,
net
|
|
40,096
|
|
—
|
Deposits and other
assets
|
|
616
|
|
1,638
|
Goodwill and other
intangible assets, net
|
|
10,468
|
|
8,644
|
Deferred financing
costs, net
|
|
31
|
|
17
|
Total other
assets
|
|
390,450
|
|
10,299
|
Total
assets
|
|
$
|
681,792
|
|
327,114
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
69,163
|
|
63,162
|
Accrued
expenses
|
|
24,995
|
|
19,061
|
Capital and financing
lease obligations, current portion
|
|
—
|
|
1,045
|
Operating lease obligations,
current portion
|
|
32,156
|
|
—
|
Finance lease obligations,
current portion
|
|
2,836
|
|
—
|
Total current
liabilities
|
|
129,150
|
|
83,268
|
Long-term
liabilities:
|
|
|
|
|
Capital and financing
lease obligations, net of current portion
|
|
—
|
|
51,475
|
Operating lease obligations,
net of current portion
|
|
325,641
|
|
—
|
Finance lease obligations,
net of current portion
|
|
39,506
|
|
—
|
Revolving credit
facility
|
|
—
|
|
5,692
|
Deferred income tax
liabilities, net
|
|
14,429
|
|
10,420
|
Deferred
rent
|
|
—
|
|
11,393
|
Leasehold
incentives
|
|
—
|
|
7,960
|
Total long-term
liabilities
|
|
379,576
|
|
86,940
|
Total
liabilities
|
|
508,726
|
|
170,208
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.001
par value. 50,000,000 shares authorized,
22,546,765 and 22,510,279 shares issued at 2020 and 2019,
respectively,
and 22,546,765 and 22,463,057 outstanding at 2020 and 2019,
respectively
|
|
23
|
|
23
|
Additional paid-in
capital
|
|
56,752
|
|
56,319
|
Retained
earnings
|
|
116,291
|
|
100,923
|
Common stock in treasury at
cost, 0 and 47,222 shares at
2020 and 2019, respectively
|
|
—
|
|
(359)
|
Total stockholders'
equity
|
|
173,066
|
|
156,906
|
Total liabilities and
stockholders' equity
|
|
$
|
681,792
|
|
327,114
|
NATURAL GROCERS BY
VITAMIN COTTAGE, INC. Consolidated Statements of Cash
Flows (Unaudited) (Dollars in
thousands)
|
|
|
|
Year ended
September 30,
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
20,009
|
|
9,416
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
31,193
|
|
28,977
|
|
|
|
Impairment of
long-lived assets and store closing costs
|
|
612
|
|
380
|
|
|
|
Gain on disposal of
property and equipment
|
|
(42)
|
|
(131)
|
|
|
|
Share-based
compensation
|
|
1,129
|
|
1,185
|
|
|
|
Deferred income tax
expense
|
|
3,742
|
|
3,973
|
|
|
|
Non-cash interest
expense
|
|
12
|
|
13
|
|
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
(Increase) decrease
in:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
(3,418)
|
|
(315)
|
|
|
|
Income tax
receivable
|
|
2,350
|
|
(5,174)
|
|
|
|
Merchandise
inventory
|
|
(3,996)
|
|
(1,951)
|
|
|
|
Prepaid expenses and
other assets
|
|
(762)
|
|
42
|
|
|
|
Operating lease
asset
|
|
30,206
|
|
—
|
|
|
|
(Decrease) increase
in:
|
|
|
|
|
|
|
|
Operating lease
liability
|
|
(30,569)
|
|
—
|
|
|
|
Accounts
payable
|
|
10,103
|
|
1,024
|
|
|
|
Accrued
expenses
|
|
5,934
|
|
1,211
|
|
|
|
Deferred
compensation
|
|
—
|
|
(688)
|
|
|
|
Deferred rent and
leasehold incentives
|
|
—
|
|
(580)
|
|
|
|
Net cash provided by
operating activities
|
|
66,503
|
|
37,382
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
Acquisition of
property and equipment
|
|
(26,752)
|
|
(30,030)
|
|
|
|
Acquisition of other
intangibles
|
|
(2,832)
|
|
(2,703)
|
|
|
|
Proceeds from sale of
property and equipment
|
|
—
|
|
836
|
|
|
|
Proceeds from property
insurance settlements
|
|
27
|
|
32
|
|
|
|
Net cash used in
investing activities
|
|
(29,557)
|
|
(31,865)
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Borrowings under
credit facility
|
|
236,100
|
|
405,900
|
|
|
|
Repayments under
credit facility
|
|
(241,792)
|
|
(413,400)
|
|
|
|
Capital and financing
lease obligations payments
|
|
—
|
|
(780)
|
|
|
|
Finance lease
obligation payments
|
|
(2,271)
|
|
—
|
|
|
|
Dividends to
shareholders
|
|
(6,301)
|
|
—
|
|
|
|
Loan fees
paid
|
|
(25)
|
|
—
|
|
|
|
Payments on
withholding tax for restricted stock unit vesting
|
|
(337)
|
|
(421)
|
|
|
|
Net cash used in
financing activities
|
|
(14,626)
|
|
(8,701)
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
22,320
|
|
(3,184)
|
|
|
|
Cash and cash
equivalents, beginning of year
|
|
6,214
|
|
9,398
|
|
|
|
Cash and cash
equivalents, end of year
|
|
$
|
28,534
|
|
6,214
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
354
|
|
787
|
|
|
|
Cash paid for interest
on finance or capital and financing lease obligations, net of
capitalized interest of $102 and $268, respectively
|
|
1,690
|
|
4,148
|
|
|
|
Income taxes
paid
|
|
3,305
|
|
4,734
|
|
|
|
Deferred compensation
paid
|
|
—
|
|
700
|
|
|
|
Supplemental
disclosures of non-cash investing and financing
activities:
|
|
|
|
|
|
|
|
Acquisition of
property and equipment not yet paid
|
|
$
|
2,407
|
|
6,289
|
|
|
|
Acquisition of other
intangibles not yet paid
|
|
255
|
|
476
|
|
|
|
Proceeds from sale of
property and equipment not yet received
|
|
42
|
|
6
|
|
|
|
Property acquired
through capital and capital financing lease obligations
|
|
—
|
|
12,156
|
|
|
|
Property acquired
through operating lease obligations
|
|
13,204
|
|
—
|
|
|
|
Property acquired
through finance lease obligations
|
|
11,625
|
|
—
|
|
|
|
NATURAL GROCERS BY
VITAMIN COTTAGE, INC. Non-GAAP financial
measures (Unaudited)
|
|
EBITDA and
Adjusted EBITDA
|
|
EBITDA and Adjusted
EBITDA are not measures of financial performance under GAAP. We
define EBITDA as net income before interest expense, provision for
income taxes, depreciation and amortization. We define
Adjusted EBITDA as EBITDA as adjusted to exclude the effects of
certain income and expense items that management believes make it
more difficult to assess the Company's actual operating
performance, including certain items such as impairment charges,
store closing costs and non-recurring items. The adjustments
to EBITDA for the years ended September 30, 2020 and 2019 related
to impairment of long-lived assets charges.
|
|
The following table
reconciles net income to EBITDA and Adjusted EBITDA, dollars in
thousands:
|
|
|
|
Three Months
ended
September 30,
|
|
|
Year
ended September 30,
|
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
Net income
|
$
|
3,732
|
|
1,361
|
|
$
|
20,009
|
|
9,416
|
|
Interest
expense, net
|
|
491
|
|
1,161
|
|
|
2,048
|
|
4,952
|
|
Provision for income taxes
|
|
735
|
|
252
|
|
|
5,692
|
|
2,398
|
|
Depreciation and amortization
|
|
7,685
|
|
7,194
|
|
|
31,193
|
|
28,977
|
|
EBITDA
|
|
12,643
|
|
9,968
|
|
|
58,942
|
|
45,743
|
|
Impairment of
long-lived assets
|
|
612
|
|
380
|
|
|
612
|
|
380
|
|
Adjusted
EBITDA
|
$
|
13,255
|
|
10,348
|
|
$
|
59,554
|
|
46,123
|
|
EBITDA increased 26.8% to $12.6
million in the three months ended September 30, 2020 compared to $10.0 million in the three months ended
September 30, 2019. EBITDA as a
percentage of sales was 4.8% and 4.4% for the three months ended
September 30, 2020 and 2019,
respectively. EBITDA increased 28.9% to $58.9 million in the year ended September 30, 2020 compared to $45.7 million in the year ended September 30, 2019. EBITDA as a percentage
of sales was 5.7% and 5.1% for the years ended September 30, 2020 and 2019, respectively.
Adjusted EBITDA increased 28.1% to $13.3
million in the three months ended September 30, 2020 compared to $10.3 million in the three months ended
September 30, 2019. Adjusted
EBITDA as a percentage of sales was 5.0% and 4.6% for the three
months ended September 30, 2020 and
2019, respectively. Adjusted EBITDA increased 29.1% to
$59.6 million in the year ended
September 30, 2020 compared to
$46.1 million in the year ended
September 30, 2019. Adjusted
EBITDA as a percentage of sales was 5.7% and 5.1% for the years
ended September 30, 2020 and 2019,
respectively.
Management believes some investors' understanding of our
performance is enhanced by including EBITDA and Adjusted EBITDA,
non-GAAP financial measures. We believe EBITDA and Adjusted
EBITDA provide additional information about: (i) our operating
performance, because it assists us in comparing the operating
performance of our stores on a consistent basis, as it removes the
impact of non-cash depreciation and amortization expense as well as
items not directly resulting from our core operations such as
interest expense and income taxes and (ii) our performance and the
effectiveness of our operational strategies. Additionally,
EBITDA is a component of a measure in our financial covenants under
our credit facility.
Furthermore, management believes some investors use EBITDA and
Adjusted EBITDA as supplemental measures to evaluate the overall
operating performance of companies in our industry. Management
believes some investors' understanding of our performance is
enhanced by including these non-GAAP financial measures as a
reasonable basis for comparing our ongoing results of operations.
By providing these non-GAAP financial measures, together with a
reconciliation from net income, we believe we are enhancing
analysts' and investors' understanding of our business and our
results of operations, as well as assisting analysts and investors
in evaluating how well we are executing our strategic
initiatives.
Our competitors may define EBITDA and Adjusted EBITDA
differently, and as a result, our measure of EBITDA and Adjusted
EBITDA may not be directly comparable to those of other companies.
Items excluded from EBITDA are significant components in
understanding and assessing financial performance. EBITDA and
Adjusted EBITDA are supplemental measures of operating performance
that do not represent, and should not be considered in isolation or
as an alternative to, or substitute for, net income or other
financial statement data presented in the consolidated financial
statements as indicators of financial performance. EBITDA and
Adjusted EBITDA have limitations as an analytical tool, and should
not be considered in isolation, or as an alternative to, or as a
substitute for, analysis of our results as reported under GAAP.
Some of the limitations are:
- EBITDA and Adjusted EBITDA do not reflect our cash
expenditures, or future requirements for capital expenditures or
contractual commitments;
- EBITDA and Adjusted EBITDA do not reflect changes in, or cash
requirements for, our working capital needs;
- EBITDA and Adjusted EBITDA do not reflect any impact for single
lease expense for leases classified as finance leases for the year
ending September 30, 2020;
- EBITDA and Adjusted EBITDA do not reflect any impact for
straight-line rent expense for leases classified as capital and
financing lease obligations for the year ended September 30, 2019 and prior;
- EBITDA and Adjusted EBITDA do not reflect the interest expense,
or the cash requirements necessary to service interest or principal
payments on our debt;
- EBITDA and Adjusted EBITDA do not reflect our tax expense or
the cash requirements to pay our taxes; and
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future and EBITDA and Adjusted EBITDA do not
reflect any cash requirements for such replacements.
Due to these limitations, EBITDA and Adjusted EBITDA should not
be considered as a measure of discretionary cash available to us to
invest in the growth of our business. We compensate for these
limitations by relying primarily on our GAAP results and using
EBITDA and Adjusted EBITDA as supplemental information.
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SOURCE Natural Grocers by Vitamin Cottage, Inc.