Exhibit 99.1
NUTRISYSTEM, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2009 RESULTS; ANNOUNCES QUARTERLY DIVIDEND OF $0.175 PER SHARE
Reports Full Year Revenues of $528 Million and Adjusted EPS from Continuing Operations of $1.02
Horsham, PA - March 1, 2010-Nutrisystem, Inc. (NASDAQ: NTRI), a leading provider of weight management products and services, today reported financial results for the fourth quarter and year ended 2009, including adjusted EPS from continuing operations prior to the previously announced one-time impairment charge related to Nu-Kitchen, of $0.18 for fourth quarter 2009 and $1.02 for the full year 2009. Highlights for the quarter and full year ended December 31, 2009 include:
Fourth Quarter 2009
- Revenues of $106.2 million as compared to $114.6 million for Q4 2008;
- Operating income from continuing operations of $4.0 million as compared to $8.9 million for Q4 2008;
- Net income of $2.7 million, or $0.09 per diluted share, which included the one- time Nu-Kitchen impairment charge reflected in depreciation and amortization expense. This compares to Q4 2008 net loss of $3.3 million, or $(0.11) per diluted share.
- Adjusted EPS from continuing operations of $0.18 before previously announced Nu-Kitchen one-time impairment charge of $2.9 million (net of tax) or $0.09 per share; and
- Adjusted EBITDA of $14.5 million compared to $13.5 million for Q4 2008. Adjusted EBITDA is defined as income from continuing operations excluding non-cash employee compensation, other income or expense, equity and impairment loss, interest, income taxes and depreciation and amortization;
Full Year 2009
- Revenues of $527.7 million as compared to $687.7 million for 2008;
- Operating income from continuing operations of $43.3 million as compared to $90.1 million for 2008;
- Net income of $28.8 million, or $0.92 per diluted share, which included the one-time Nu-Kitchen impairment charge reflected in depreciation and amortization expense. This compares to 2008 net income of $46.3 million, or $1.45 per diluted share.
- Adjusted EPS from continuing operations of $1.02 before previously announced Nu-Kitchen one-time impairment charge of $2.9 million (net of tax) or $0.09 per share; and
- Adjusted EBITDA of $68.9 million as compared to $106.4 million for 2008. Adjusted EBITDA is defined as income from continuing operations excluding non-cash employee compensation, other income or expense, equity and impairment loss, interest, income taxes and depreciation and amortization;
"2009 was a year of challenges for the U.S. consumer. Our revenue was suppressed by these macro-economic conditions. We were encouraged in the second half of the year as we started to close the gap with improvements in new customer starts and full implementation of cost reductions within the organization," stated Chairman and CEO Joe Redling. "The macro-economic headwinds continue to impact the diet category, and while the first month of 2010 was challenging we are encouraged by recent signs that year over year growth can be achieved."
The Board of Directors declared the Company's quarterly dividend of $0.175 per share, payable March 22, 2010, to shareholders of record as of March 11, 2010. While the Company intends to continue to pay regular quarterly dividends, the declaration and payment of future dividends are discretionary and will be subject to determination by the Board of Directors each quarter following its review of the Company's financial performance.
"In the second half of 2009, we saw improvement in trends in revenue, new customers, gross margin as well as reduced G&A expenses. While we expect these trends to continue into 2010, their impact will be offset in the first quarter by higher media rates and one-time costs related to retail," said David Clark, Chief Financial Officer. "For the full year 2010, we expect these pressures to subside, and anticipate a modest year-over-year profitability improvement."
Conference Call and Webcast
Management will host a webcast to discuss fourth quarter and year end 2009 financial results as well as the outlook for 2010 today at 4:30 PM Eastern time. The webcast will include remarks from Chairman and Chief Executive Officer Joe Redling and Chief Financial Officer David Clark.
The webcast will be available live under the Investor Relations section of Nutrisystem's website, www.nutrisystem.com. Please click on Investor Relations at the bottom of the home page and then click on the microphone icon on the Investor Relations home page. Interested parties unable to access the conference call via the webcast may dial 1-866-831-9862 (outside US/Canada 706-758-5226); the conference ID is 56501256. A replay of the conference call will be available on the Company website following the event.
About Nutrisystem, Inc.
Nutrisystem, Inc. (NASDAQ: NTRI) is a leading provider of weight management products and services. Nutrisystem is sold direct to the consumer through nutrisystem.com, by phone, and at select retailers, for convenient home delivery. The Company offers proven nutritionally balancedweight loss programs designed for women, men, and seniors, as well as the clinically tested Nutrisystem D plan, designed to help people with type 2 diabetes who want tolose weight. The Nutrisystem program is based on 35 years of nutrition research and the science of the low glycemic index, and offers a variety of great tasting, satisfying high-fiber, heart healthy, good carbohydrate meals that contain zero trans fats. Nutrisystem was named the "Best Value" of the six most popular commercial diet programs bySmartMoneymagazine in January, 2010. The program has no membership fees and provides 24/7 weight management support by trained weight loss coaches and online weight manageme nt tools free of charge. In 2009 Nutrisystem was selected as the #1 overall online retailer in the Food and Drug category and #46 out of the top 500 online retailers overall by Internet Retailer Magazine. Nutrisystem also proudly supports the American Diabetes Association in its Movement to Stop Diabetes. For more information or to become a customer visit http://www.nutrisystem.com or call 1-800-435-4074.
Forward-Looking Statement Disclaimer
This press release may contain forward-looking statements that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding Nutrisystem's plans and expectations for the first quarter of 2010 and the full year 2010, continuing to reduce costs and improve operating efficiency, continuing to pay regular quarterly dividends and other statements that are not statements of historical fact constitute forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, which are described in Nutrisystem, Inc.'s Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. The actual results may differ materially from any forward-looking statements due to such risks and uncertainties. Nutrisystem, Inc. undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release .
Contact:
Cindy Warner Investor Relations Nutrisystem, Inc. Tel: 215-346-8136 Email: IR@nutrisystem.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, _______________________ |
| | 2009 | 2008 | 2009 | 2008 |
| | | | |
REVENUE | $ 106,197 | $ 114,563 | $ 527,731 | $ 687,741 |
COSTS AND EXPENSES: | | | | |
Cost of revenue | 48,690 | 53,539 | 243,690 | 326,453 |
Marketing | 28,031 | 26,578 | 147,017 | 175,027 |
General and administrative | 17,609 | 23,214 | 77,389 | 87,605 |
Depreciation and amortization | 7,909 | 2,338 | 16,294 | 8,508 |
Total costs and expenses | 102,239 | 105,669 | 484,390 | 597,593 |
Operating income from continuing operations | 3,958 | 8,894 | 43,341 | 90,148 |
OTHER INCOME (EXPENSE) | 68 | (1,061) | 407 | (1,145) |
EQUITY AND IMPAIRMENT LOSS | - | (6,798) | (4,000) | (9,458) |
INTEREST INCOME (EXPENSE), net | 120 | (54) | 106 | 454 |
Income from continuing operations before income taxes | 4,146 | 981 | 39,854 | 79,999 |
INCOME TAXES | 1,269 | 4,338 | 10,818 | 33,572 |
Income (loss) from continuing operations | 2,877 | (3,357) | 29,036 | 46,427 |
DISCONTINUED OPERATIONS: | | | | |
(Loss) gain on discontinued operations, net of income taxes | (159) | 28 | (246) | (174) |
Net income (loss) | $ 2,718 | $ (3,329) | $ 28,790 | $ 46,253 |
BASIC INCOME (LOSS) PER COMMON SHARE: | | | | |
Income (loss) from continuing operations | $ 0.09 | $ (0.11) | $ 0.94 | $ 1.48 |
Net loss from discontinued operations | - | - | (0.01) | (0.01) |
Net income (loss) | $ 0.09 | $ (0.11) | $ 0.93 | $ 1.47 |
DILUTED INCOME (LOSS) PER COMMON SHARE: | | | | |
Income (loss) from continuing operations | $ 0.09 | $ (0.11) | $ 0.93 | $ 1.46 |
Net loss from discontinued operations | - | - | (0.01) | (0.01) |
Net income (loss) | $ 0.09 | $ (0.11) | $ 0.92 | $ 1.45 |
| | | | | |
WEIGHTED AVERAGE SHARES OUTSTANDING: | | | | |
Basic | 29,610 | 29,516 | 29,458 | 30,684 |
Diluted | 30,075 | 29,907 | 29,769 | 31,172 |
NUTRISYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share and per share amounts)
| | Year Ended December 31, ------------------------------------ |
| | 2009 | 2008 |
ASSETS | | |
CURRENT ASSETS: | | |
Cash and cash equivalents | $ 32,198 | $ 38,309 |
Marketable securities | 30,324 | - |
Receivables | 13,057 | 17,200 |
Inventories, net | 52,012 | 50,986 |
Prepaid income taxes | 2,420 | 3,714 |
Deferred income taxes | 2,756 | 1,651 |
Other current assets | 10,682 | 8,611 |
Current assets of discontinued operation | 166 | 325 |
Total current assets | 143,615 | 120,796 |
FIXED ASSETS, net | 21,164 | 24,312 |
EQUITY INVESTMENT | - | 4,000 |
GOODWILL | - | 2,717 |
IDENTIFIABLE INTANGIBLE ASSETS, net | 250 | 2,590 |
OTHER ASSETS | 5,758 | 5,056 |
| $ 170,787 | $ 159,471 |
LIABILITIES AND STOCKHOLDERS' EQUITY | | |
CURRENT LIABILITIES: | | |
Accounts payable | $ 32,488 | $ 31,448 |
Accrued payroll and related benefits | 1,097 | 2,150 |
Deferred revenue | 3,853 | 4,964 |
Other accrued expenses and current liabilities | 2,653 | 3,743 |
Current liabilities of discontinued operation | 183 | 43 |
Total current liabilities | 40,274 | 42,348 |
NON-CURRENT LIABILITIES | 1,550 | 1,298 |
Total liabilities | 41,824 | 43,646 |
COMMITMENTS AND CONTINGENCIES | | |
STOCKHOLDERS' EQUITY: | | |
Preferred stock, $.001 par value (5,000,000 shares authorized, no shares issued and outstanding) | - | - |
Common stock, $.001 par value (100,000,000 shares authorized; shares
issued - 30,949,784 at December 31, 2009 and 30,784,920 at December 31, 2008) | 29 | 29 |
Additional paid-in capital | 6,515 | - |
Retained earnings | 122,503 | 115,771 |
Accumulated other comprehensive (loss) income | (84) | 25 |
Total stockholders' equity | 128,963 | 115,825 |
| $ 170,787 | $ 159,471 |
NUTRISYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
| | Year Ended December 31, ------------------------------------ |
| | 2009 | 2008 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | |
Net income | $ 28,790 | $ 46,253 |
Adjustments to reconcile net income to net cash provided by operating activities: | | |
Loss on discontinued operation | 246 | 174 |
Depreciation and amortization | 16,294 | 8,508 |
Loss (gain) on disposal of fixed assets | 113 | (71) |
Share-based expense | 9,382 | 7,978 |
Deferred income tax (benefit) expense | (1,397) | 493 |
Equity and impairment loss | 4,000 | 9,458 |
Changes in operating assets and liabilities: | | |
Accrued interest income | - | 19 |
Receivables | 4,199 | 1,840 |
Inventories | (929) | 31,237 |
Other assets | (2,431) | 3,248 |
Accounts payable | 949 | (13,970) |
Accrued payroll and related benefits | (1,054) | 245 |
Deferred revenue | (1,111) | 4,964 |
Income taxes | 1,341 | (6,664) |
Other accrued expenses and liabilities | (825) | (1,231) |
Net cash provided by operating activities of continuing operations | 57,567 | 92,481 |
Net cash used in operating activities of discontinued operation | (103) | (192) |
Net cash provided by operating activities | 57,464 | 92,289 |
CASH FLOWS FROM INVESTING ACTIVITIES: | | |
Purchases of marketable securities | (30,344) | - |
Sales of marketable securities | - | 1,750 |
Cash paid for acquisition of business | - | (5,717) |
Capital additions | (8,352) | (11,624) |
Proceeds from the sale of fixed assets | 125 | 1,120 |
Net cash used in investing activities | (38,571) | (14,471) |
CASH FLOWS FROM FINANCING ACTIVITIES: | | |
Borrowings under credit facility | - | 35,000 |
Repayments of borrowings under credit facility | - | (35,000) |
Exercise of stock options | 563 | 1,022 |
Equity compensation awards, net | (2,170) | 2,184 |
Repurchase and retirement of common stock | (1,939) | (67,085) |
Payment of dividends | (21,421) | (16,251) |
Net cash used in financing activities | (24,967) | (80,130) |
Effect of exchange rate changes on cash and cash equivalents | (193) | (247) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (6,267) | (2,559) |
CASH AND CASH EQUIVALENTS,
beginning of year | 38,631 | 41,190 |
CASH AND CASH EQUIVALENTS,
end of year | 32,364 | 38,631 |
LESS CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATION, end of year | 166 | 322 |
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS, end of year | $ 32,198 | $ 38,309 |
NUTRISYSTEM, INC. AND SUBSIDIARIES
ADJUSTED EBITDA RECONCILIATION TO GAAP RESULTS
(in thousands)
| Three Months Ended December 31, | Year Ended December 31, |
| 2009 | | 2008 | | 2009 | | 2008 |
| | | | | | | |
Adjusted EBITDA | $ 14,523 | | $ 13,501 | | $ 68,935 | | $ 106,355 |
Non-cash employee compensation expense | (2,656) | | (2,269) | | (9,300) | | (7,699) |
Other income (expense) | 68 | | (1,061) | | 407 | | (1,145) |
Equity and impairment loss | - | | (6,798) | | (4,000) | | (9,458) |
Interest income (expense), net | 120 | | (54) | | 106 | | 454 |
Income taxes | (1,269) | | (4,338) | | (10,818) | | (33,572) |
Depreciation and amortization | (7,909) | | (2,338) | | (16,294) | | (8,508) |
| | | | | | | |
Income (loss) from continuing operations | $ 2,877 | | $ (3,357) | | $ 29,036 | | $ 46,427 |
Adjusted EBITDA is defined as income from continuing operations excluding non-cash employee compensation, other income or expense, equity and impairment loss, interest, income taxes and depreciation and amortization. We believe Adjusted EBITDA is a useful performance metric for management and investors because it is more indicative of the ongoing operations of the company.
Adjusted EBITDA excludes 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.
NUTRISYSTEM, INC. AND SUBSIDIARIES
EPS IMPACT OF NU-KITCHEN RECONCILIATION TO GAAP RESULTS
(in thousands)
| Three Months Ended December 31, | Year Ended December 31, |
| 2009 | | 2008 | | 2009 | | 2008 |
| | | | | | | |
Adjusted income (loss) from continuing operations | $ 5,783 | | $ (3,357) | | $ 31,942 | | $ 46,427 |
Impairment loss | (4,541) | | - | | (4,541) | | - |
Income taxes associated with impairment loss | 1,635 | | - | | 1,635 | | - |
Income (loss) from continuing operations | $ 2,877 | | $ (3,357) | | $ 29,036 | | $ 46,427 |
| | | | | | | |
Diluted income per common share: | | | | | | | |
Income (loss) from continuing operations | $ 0.09 | | $ (0.11) | | $ 0 .93 | | $ 1 .46 |
Adjusted income (loss) from continuing operations | $ 0.18 | | $ (0.11) | | $ 1.02 | | $ 1 .46 |
The reconciliation to GAAP results for the three months and year ended December 31, 2009 and 2008, respectively, does not reflect any adjustment for the impact of Zero Water equity and impairment loss or any tax consequences related to the impairment.
