Exhibit 99.1
FOR IMMEDIATE RELEASE | ||||
Contact: |
| Harvey Kamil |
| Carl Hymans |
|
| NBTY, Inc. |
| G.S. Schwartz & Co. |
|
| President & Chief Financial Officer |
| 212-725-4500 |
|
| 631-200-2020 |
| carlh@schwartz.com |
NBTY REPORTS FOURTH QUARTER AND FISCAL YEAR RESULTS
BOHEMIA, N.Y. — November 5, 2007 - NBTY, Inc. (NYSE:NTY) (www.NBTY.com), a leading global manufacturer and marketer of nutritional supplements, today announced results for the fiscal fourth quarter and fiscal year ended September 30, 2007.
For the fiscal fourth quarter ended September 30, 2007, net sales were $496 million compared to net sales of $468 million for the fiscal fourth quarter ended September 30, 2006, an increase of $29 million, or 6%. Net income for the fiscal fourth quarter ended September 30, 2007 was $48 million, or $0.70 per diluted share, compared to net income of $38 million, or $0.54 per diluted share for the fiscal fourth quarter ended September 30, 2006.
The rise in net income for the fiscal fourth quarter reflects the aforementioned sales increase, gross profit improvement and SG&A cost controls. Net sales increased $29 million; gross profit increased to 52% in the fiscal fourth quarter 2007 from 49% in the fiscal fourth quarter 2006; and SG&A costs as a percentage of sales decreased to 31.9% in the fiscal fourth quarter 2007 from 32.5% in the fiscal fourth quarter 2006.
Adjusted EBITDA for the fiscal fourth quarter rose to $87 million from $70 million for the fiscal fourth quarter of 2006.
Results for the fiscal fourth quarter ended September 30, 2007 include an impairment charge of approximately $2 million, after tax, or $0.03 per diluted share, to reflect the current fair
market value of a building in Augusta, Georgia, which is currently offered for sale. Without this charge, earnings per share for the fiscal fourth quarter of 2007 would have been $0.73 per diluted share.
For the fiscal year ended September 30, 2007, net sales were $2.0 billion, compared to net sales of $1.9 billion for the prior fiscal year, an increase of $134 million, or 7%. Net income for the fiscal year ended September 30, 2007 was $208 million, or $3.00 per diluted share, compared to $112 million, or $1.62 per diluted share, for the prior like period.
Adjusted EBITDA for fiscal 2007 rose to $378 million from $249 million for fiscal 2006. At September 30, 2007, NBTY had working capital of $575 million, of which $214 million consisted of cash and short term investments, and total assets of $1.5 billion.
NBTY purchased, in open market transactions, 716,000 shares of its common stock; 421,000 shares were acquired in the fiscal fourth quarter 2007 for approximately $15 million and an additional 295,000 shares were acquired in October 2007 for approximately $10 million. These shares were purchased under an existing publicly-announced authorization.
Preliminary and unaudited net sales for October 2007 were $175 million. A detailed breakdown is shown in the last table.
OPERATIONS FOR THE FISCAL FOURTH QUARTER ENDED SEPTEMBER 30, 2007
The Wholesale/US Nutrition division continues to generate increased sales and significantly contributed to NBTY’s overall strong performance. Net sales for the Wholesale/US Nutrition division, which markets Nature’s Bounty, Solgar, Osteo Bi-Flex, Rexall, Ester-C and other brands, increased $19 million, or 9%, to $237 million from $217 million for the prior like quarter.
During the fiscal fourth quarter of 2007, gross profit for the Wholesale/US Nutrition operation increased to 41% compared to 35% for the prior like quarter. The Company experienced higher purchase prices of certain products including whey protein during the fiscal fourth
quarter 2007. The Company anticipates passing on these higher prices to customers in fiscal 2008.
The Wholesale/US Nutrition division utilizes valuable consumer preference sales data generated by the Company’s Vitamin World retail stores and Puritan’s Pride Direct Response/E-Commerce operations to empower its wholesale customers with this latest data. The Vitamin World stores are used as a laboratory for new ideas and are an effective tool in determining and monitoring consumer preferences. This information, as well as scanned sales data from the Vitamin World stores, is shared on a real time basis with our wholesale customers to give them a competitive advantage.
Net sales for the North American Retail division increased $1 million, or 2%, to $57 million from $56 million for the fiscal fourth quarter ended September 30, 2006. Vitamin World was profitable for the current fiscal quarter. However, LeNaturiste, the Company’s Canadian retail chain, continued to operate at a loss during this period. Same store sales for North American Retail increased 5% for the fiscal fourth quarter of 2007. The North American Retail division is operating under new management who are focused on rationalizing SKU’s, enhancing visual merchandising and increasing customer traffic. During the fiscal fourth quarter of 2007, Vitamin World closed 3 under-performing stores and Le Naturiste closed 5 stores.
European Retail net sales for the fiscal fourth quarter of 2007 increased $13 million, or 9%, to $155 million from $142 million for the fiscal fourth quarter of 2006. European retail net sales in local currency increased 1% for the fiscal fourth quarter of 2007. European Retail division continues to operate in a difficult environment. During the fiscal fourth quarter, the European Retail division opened 4 stores. This division anticipates opening 34 new stores during fiscal 2008 in high street locations that have recently become available.
Net sales from Direct Response/E-Commerce operations for the fiscal fourth quarter of 2007 decreased $5 million, or 10%, to $47 million from $52 million for the fiscal fourth quarter of 2006. The Company is focused on maintaining its market share in this segment; accordingly, prices were lowered in response to a highly competitive environment. More
orders were received than in the prior like period. However, because of lowered prices, the average order size at Puritan’s Pride decreased to $62 from $73.
Since Puritan’s Pride varies its promotional strategy throughout the fiscal year, the results for this division should be viewed on an annual and not quarterly basis.
Online sales represent 40% of total Direct Response/E-Commerce sales for this fiscal fourth quarter compared to 34% in the prior like quarter. This increase reflects on-going efforts to garner greater online consumer sales and to capitalize on the continuing surge in shopping via the web. Puritan’s Pride views the Internet as the driver of future growth and continues to incorporate new technologies to expand this business. Puritan’s Pride remains the leader in the direct response and e-commerce sectors and continues to increase the number of products available via its catalog and web sites.
OPERATIONS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2007
Net sales for the Wholesale/US Nutrition division increased $92 million, or 10%, to $977 million from $885 million for fiscal year 2006. Gross profit for the Wholesale operation increased to 41% compared to 32% for the prior like fiscal year, reflecting in part more efficient supply chain management.
Net sales for the North American Retail division decreased $11 million, or 5%, to $223 million from $234 million for fiscal year 2006. North American Retail same store sales increased 1% for fiscal 2007. At the end of fiscal 2007, the North American Retail division operated a total of 537 stores, with 457 in the US and 80 in Canada.
European Retail net sales for the fiscal year increased $55 million, or 10%, to $620 million for the fiscal year 2007 from $565 million for the fiscal year 2006. European Retail same store sales in local currency decreased 1% but increased 8% in US dollars for fiscal 2007.
The European Retail business continues to leverage its premier status, high street locations and brand awareness. As of September 30, 2007, the European Retail business operated a
total of 626 stores, comprised of 507 Holland & Barrett stores and 31 GNC stores in the UK, 19 Nature’s Way stores in Ireland, and 69 DeTuinen stores in the Netherlands.
Net sales from Direct Response/E-Commerce operations for the fiscal year 2007 decreased $2 million, or 1% to $194 million from $196 million for the fiscal year 2006. The decrease in sales reflects the aforementioned lowering of prices to garner greater market share in a highly competitive environment.
Online sales represent 38% of total Direct Response/E-Commerce sales for this fiscal year 2007 compared to 33% for fiscal year 2006.
NBTY Chairman and CEO, Scott Rudolph, said: “Our significant increases in revenue and profitability are reflected in NBTY’s ongoing initiatives to drive sales and expand our premiere position as the leading nutritional supplement company in the world. Our growing financial strength and expanding market position continue to play a vital role in our ability to generate future growth and shareholder value.”
ABOUT NBTY
NBTY is a leading global vertically integrated manufacturer, marketer and distributor of a broad line of high-quality, value-priced nutritional supplements in the United States and throughout the world. Under a number of NBTY and third party brands, the Company offers over 22,000 products, including products marketed by the Company’s Nature’s Bounty® (www.NaturesBounty.com), Vitamin World® (www.VitaminWorld.com), Puritan’s Pride® (www.Puritan.com), Holland & Barrett® (www.HollandAndBarrett.com), Rexall® (www.RexallSundown.com), Sundown® (www.RexallSundown.com), MET-Rx® (www.MetRX.com), WORLDWIDE Sport Nutrition® (www.SportNutrition.com), American Health® (www.AmericanHealthUS.com), GNC (UK)® (www.GNC.co.uk), DeTuinen® (www.DeTuinen.nl), LeNaturiste™ (www.LeNaturiste.com), SISU® (www.SISU.com),
Osteo Bi-Flex® (www.osteobiflex.com), PureProtein® (www.pureprotein.net), Solgar® (www.Solgar.com) and Ester-C® (www.Ester-C.com) brands.
This release refers to non-GAAP financial measures, such as Adjusted EBITDA. “ADJUSTED EBITDA” is defined as net income, excluding the aggregate amount of all non-cash losses reducing net income, plus interest, taxes, depreciation and amortization. This non-GAAP financial measure is not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of the non-GAAP measure to the comparable GAAP measure is included in the attached financial tables. Management believes the presentation of Adjusted EBITDA is relevant and useful because Adjusted EBITDA is a measurement industry analysts utilize when evaluating NBTY’s operating performance. Management also believes Adjusted EBITDA enhances an investor’s understanding of NBTY’s results of operations because it
measures NBTY’s operating performance exclusive of interest and non-cash charges for depreciation and amortization. Management also provides this non-GAAP measurement as a way to help investors better understand its core operating performance, enhance comparisons of NBTY’s core operating performance from period to period and to allow better comparisons of NBTY’s operating performance to that of its competitors.
This release contains certain 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 terminology such as “subject to,” “believe,” “expects,” “plan,” “project,” “estimate,” “intend,” “may,” “will,” “should,” “can,” or “anticipates,” or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy. Although all of these forward looking statements are believed to be reasonable, they are inherently uncertain. Factors which may materially affect such forward-looking statements include: (i) slow or negative growth in the nutritional supplement industry; (ii) interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest or disruption of mail service; (iii) adverse publicity regarding nutritional supplements; (iv) inability to retain customers of companies (or mailing lists) recently acquired; (v) increased competition; (vi) increased costs; (vii) loss or retirement of key members of management; (viii) increases in the cost of borrowings and/or unavailability of additional debt or equity capital; (ix) unavailability of, or inability to consummate, advantageous acquisitions in the future, including those that may be subject to bankruptcy approval or the inability of NBTY to integrate acquisitions into the mainstream of its business; (x) changes in general worldwide economic and political conditions in the markets in which NBTY may compete from time to time; (xi) the inability of NBTY to gain and/or hold market share of its wholesale and/or retail customers anywhere in the world; (xii) unavailability of electricity in certain geographical areas; (xiii) the inability of NBTY to obtain and/or renew insurance and/or the costs of the same; (xiv) exposure to and expense of defending and resolving product liability and intellectual property claims and other litigation; (xv) the ability of NBTY to successfully implement its business strategy; (xvi) the inability of NBTY to manage its retail, wholesale, manufacturing and other operations efficiently; (xvii) consumer acceptance of NBTY’s products; (xviii) the inability of NBTY to renew leases for its retail locations; (xix) the inability of NBTY’s retail stores to attain or maintain profitability; (xx) the absence of clinical trials for many of NBTY’s products; (xxi) sales and earnings volatility and/or trends for the Company and its market segments; (xxii) the efficacy of NBTY’s Internet and on-line sales and marketing strategies; (xxiii) fluctuations in foreign currencies, including the British Pound, the Euro and the Canadian dollar; (xxiv) import-export controls on sales to foreign countries; (xxv) the inability of NBTY to secure favorable new sites for, and delays in opening, new retail and manufacturing locations; (xxvi) introduction of and compliance with new federal, state, local or foreign legislation or regulation or adverse determinations by regulators anywhere in the world (including the banning of products) and more particularly Good Manufacturing Practices in the United States, the Food Supplements Directive and Traditional Herbal Medicinal Products Directive in Europe and Section 404 requirements of the Sarbanes-Oxley Act of 2002; (xxvii) the mix of NBTY’s products and the profit margins thereon; (xxviii) the availability and pricing of raw materials; (xxix) risk factors discussed in NBTY’s filings with the U.S. Securities and Exchange Commission; (xxx) adverse effects on NBTY as a result of increased energy prices and potentially reduced traffic flow to NBTY’s retail locations; (xxxi)
adverse tax determinations; (xxxii) the loss of a significant customer of the Company; and (xxxiii) other factors beyond the Company’s control.
Readers are cautioned not to place undue reliance on forward-looking statements. NBTY cannot guarantee future results, trends, events, levels of activity, performance or achievements. NBTY does not undertake and specifically declines any obligation to update, republish or revise forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events.
Consequently, such forward-looking statements should be regarded solely as NBTY’s current plans, estimates and beliefs.
(TABLES FOLLOW)
NBTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts) |
|
|
|
|
| ||
|
| For the three months |
| ||||
|
| ended September 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
Net sales |
| $ | 496,441 |
| $ | 467,912 |
|
|
|
|
|
|
| ||
Costs and expenses: |
|
|
|
|
| ||
Cost of sales |
| 239,609 |
| 238,523 |
| ||
Advertising, promotion and catalog |
| 30,654 |
| 23,276 |
| ||
Selling, general and administrative |
| 158,610 |
| 151,910 |
| ||
|
| 428,873 |
| 413,709 |
| ||
|
|
|
|
|
| ||
Income from operations |
| 67,568 |
| 54,203 |
| ||
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
| ||
Interest |
| (3,713 | ) | (4,516 | ) | ||
Miscellaneous, net |
| 5,656 |
| 1,603 |
| ||
|
| 1,943 |
| (2,913 | ) | ||
|
|
|
|
|
| ||
Income before provision for income taxes |
| 69,511 |
| 51,290 |
| ||
|
|
|
|
|
| ||
Provision for income taxes |
| 21,014 |
| 13,627 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 48,497 |
| $ | 37,663 |
|
|
|
|
|
|
| ||
Net income per share: |
|
|
|
|
| ||
Basic |
| $ | 0.72 |
| $ | 0.56 |
|
Diluted |
| $ | 0.70 |
| $ | 0.54 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding: |
|
|
|
|
| ||
Basic |
| 67,235 |
| 67,206 |
| ||
Diluted |
| 69,245 |
| 69,242 |
| ||
NBTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts) |
|
|
|
|
| ||
|
| For the fiscal years |
| ||||
|
| ended September 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
Net sales |
| $ | 2,014,506 |
| $ | 1,880,222 |
|
|
|
|
|
|
| ||
Costs and expenses: |
|
|
|
|
| ||
Cost of sales |
| 966,784 |
| 992,197 |
| ||
Advertising, promotion and catalog |
| 120,126 |
| 103,614 |
| ||
Selling, general and administrative |
| 619,995 |
| 598,742 |
| ||
Trademark impairment |
| — |
| 10,450 |
| ||
|
| 1,706,905 |
| 1,705,003 |
| ||
|
|
|
|
|
| ||
Income from operations |
| 307,601 |
| 175,219 |
| ||
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
| ||
Interest |
| (16,749 | ) | (25,924 | ) | ||
Miscellaneous, net |
| 13,124 |
| 3,532 |
| ||
|
| (3,625 | ) | (22,392 | ) | ||
|
|
|
|
|
| ||
Income before provision for income taxes |
| 303,976 |
| 152,827 |
| ||
|
|
|
|
|
| ||
Provision for income taxes |
| 96,044 |
| 41,042 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 207,932 |
| $ | 111,785 |
|
|
|
|
|
|
| ||
Net income per share: |
|
|
|
|
| ||
Basic |
| $ | 3.09 |
| $ | 1.66 |
|
Diluted |
| $ | 3.00 |
| $ | 1.62 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding: |
|
|
|
|
| ||
Basic |
| 67,268 |
| 67,199 |
| ||
Diluted |
| 69,404 |
| 69,130 |
| ||
SALES
(Unaudited)
|
| THREE MONTHS ENDED |
| FISCAL YEARS ENDED |
| ||||||||||||
|
| SEPTEMBER 30, |
| SEPTEMBER 30, |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
| Percentage |
|
|
|
|
| Percentage |
| ||||
(In thousands) |
| 2007 |
| 2006 |
| Change |
| 2007 |
| 2006 |
| Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Wholesale/US Nutrition |
| $ | 236,941 |
| $ | 217,484 |
| 9 | % | $ | 976,814 |
| $ | 885,146 |
| 10 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
North American Retail |
| 57,033 |
| 56,105 |
| 2 | % | 223,435 |
| 234,215 |
| -5 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
European Retail |
| 155,072 |
| 141,888 |
| 9 | % | 620,281 |
| 564,933 |
| 10 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Direct Response/E-Commerce |
| 47,395 |
| 52,435 |
| -10 | % | 193,976 |
| 195,928 |
| -1 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
| $ | 496,441 |
| $ | 467,912 |
| 6 | % | $ | 2,014,506 |
| $ | 1,880,222 |
| 7 | % |
GROSS PROFIT
PERCENTAGES
(Unaudited)
|
| THREE MONTHS ENDED |
| FISCAL YEARS ENDED |
| ||||||||
|
| SEPTEMBER 30, |
| SEPTEMBER 30, |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Percentage |
|
|
|
|
| Percentage |
|
|
| 2007 |
| 2006 |
| Change |
| 2007 |
| 2006 |
| Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale/US Nutrition |
| 41 | % | 35 | % | 6 | % | 41 | % | 32 | % | 9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North American Retail |
| 59 | % | 59 | % | 0 | % | 59 | % | 58 | % | 1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
European Retail |
| 64 | % | 63 | % | 1 | % | 64 | % | 62 | % | 2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Response/E-Commerce |
| 57 | % | 58 | % | -1 | % | 60 | % | 59 | % | 1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
| 52 | % | 49 | % | 3 | % | 52 | % | 47 | % | 5 | % |
ADJUSTED EBITDA** |
Reconciliation of GAAP Measures to Non-GAAP Measures ** |
(Unaudited) |
(In thousands) |
| THREE MONTHS ENDED SEPTEMBER 30, 2007 |
| |||||||||||||
|
| Pretax Income (Loss) |
| Depreciation and |
| Interest |
| Non-cash |
| Adjusted |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 43,852 |
| $ | 2,731 |
| $ | — |
| $ | — |
| $ | 46,583 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| 745 |
| 854 |
|
|
| 202 |
| 1,801 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 37,874 |
| 2,821 |
|
|
|
|
| 40,695 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response /E-Commerce |
| 10,828 |
| 1,248 |
|
|
|
|
| 12,076 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 93,299 |
| 7,654 |
| — |
| 202 |
| 101,155 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (23,788 | ) | 5,910 |
| 3,713 |
| — |
| (14,165 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 69,511 |
| $ | 13,564 |
| $ | 3,713 |
| $ | 202 |
| $ | 86,990 |
|
|
| THREE MONTHS ENDED SEPTEMBER 30, 2006 |
| |||||||||||||
|
| Pretax Income |
| Depreciation and amortization |
| Interest |
| Non-cash charges |
| Adjusted EBITDA** |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 27,661 |
| $ | 2,550 |
| $ | — |
| $ | (128 | ) | $ | 30,083 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| 199 |
| 1,188 |
| — |
| 736 |
| 2,123 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 34,283 |
| 2,843 |
| — |
| — |
| 37,126 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response /E-Commerce |
| 14,202 |
| 1,261 |
| — |
| — |
| 15,463 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 76,345 |
| 7,842 |
| — |
| 608 |
| 84,795 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (25,055 | ) | 6,222 |
| 4,516 |
| — |
| (14,317 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 51,290 |
| $ | 14,064 |
| $ | 4,516 |
| $ | 608 |
| $ | 70,478 |
|
** ** SINCE ADJUSTED EBITDA IS NOT A MEASURE OF PERFORMANCE CALCULATED IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”), IT SHOULD NOT BE CONSIDERED IN ISOLATION OF, OR AS A SUBSTITUTE FOR OR SUPERIOR TO, OTHER MEASURES OF FINANCIAL PERFORMANCE PREPARED IN ACCORDANCE WITH GAAP, SUCH AS OPERATING INCOME, NET INCOME AND CASH FLOWS FROM OPERATING ACTIVITIES. IN ADDITION, THE COMPANY’S DEFINITION OF ADJUSTED EBITDA IS NOT NECESSARILY COMPARABLE TO SIMILARLY TITLED MEASURES REPORTED BY OTHER COMPANIES.
ADJUSTED EBITDA** |
Reconciliation of GAAP Measures to Non-GAAP Measures ** |
(Unaudited) |
(In thousands) |
| FISCAL YEAR ENDED SEPTEMBER 30, 2007 |
| |||||||||||||
|
| Pretax Income |
| Depreciation and amortization |
| Interest |
| Non-cash charges |
| Adjusted EBITDA** |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 196,770 |
| $ | 11,062 |
| $ | — |
| $ | — |
| $ | 207,832 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| 2,771 |
| 3,883 |
|
|
| 1,336 |
| 7,990 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 156,966 |
| 11,154 |
|
|
| — |
| 168,120 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response /E-Commerce |
| 50,706 |
| 5,030 |
|
|
| — |
| 55,736 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 407,213 |
| 31,129 |
| — |
| 1,336 |
| 439,678 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (103,237 | ) | 24,472 |
| 16,749 |
| — |
| (62,016 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 303,976 |
| $ | 55,601 |
| $ | 16,749 |
| $ | 1,336 |
| $ | 377,662 |
|
|
| FISCAL YEAR ENDED SEPTEMBER 30, 2006 |
| |||||||||||||
|
| Pretax Income |
| Depreciation and amortization |
| Interest |
| Non-cash charges |
| Adjusted EBITDA** |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 75,823 |
| $ | 10,159 |
| $ | — |
| $ | 11,370 |
| $ | 97,352 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| 332 |
| 4,884 |
| — |
| 3,141 |
| 8,357 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 143,456 |
| 11,174 |
| — |
| — |
| 154,630 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response / |
| 52,748 |
| 5,051 |
| — |
| — |
| 57,799 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 272,359 |
| 31,268 |
| — |
| 14,511 |
| 318,138 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (119,532 | ) | 24,780 |
| 25,924 |
| — |
| (68,828 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 152,827 |
| $ | 56,048 |
| $ | 25,924 |
| $ | 14,511 |
| $ | 249,310 |
|
** SINCE ADJUSTED EBITDA IS NOT A MEASURE OF PERFORMANCE CALCULATED IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”), IT SHOULD NOT BE CONSIDERED IN ISOLATION OF, OR AS A SUBSTITUTE FOR OR SUPERIOR TO, OTHER MEASURES OF FINANCIAL PERFORMANCE PREPARED IN ACCORDANCE WITH GAAP, SUCH AS OPERATING INCOME, NET INCOME AND CASH FLOWS FROM OPERATING ACTIVITIES. IN ADDITION, THE COMPANY’S DEFINITION OF ADJUSTED EBITDA IS NOT NECESSARILY COMPARABLE TO SIMILARLY TITLED MEASURES REPORTED BY OTHER COMPANIES.
NBTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars and shares in thousands, except per share amounts) |
|
|
|
|
| ||
|
| September 30, |
| September 30, |
| ||
|
| 2007 |
| 2006 |
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 92,902 |
| $ | 89,805 |
|
Investments |
| 121,382 |
| — |
| ||
Accounts receivable, net |
| 98,454 |
| 89,154 |
| ||
Inventories |
| 384,990 |
| 354,496 |
| ||
Deferred income taxes |
| 21,441 |
| 26,636 |
| ||
Prepaid expenses and other current assets |
| 54,460 |
| 42,261 |
| ||
Total current assets |
| 773,629 |
| 602,352 |
| ||
|
|
|
|
|
| ||
Property, plant and equipment, net |
| 323,154 |
| 309,437 |
| ||
Goodwill |
| 251,753 |
| 235,959 |
| ||
Intangible assets, net |
| 157,548 |
| 146,169 |
| ||
Other assets |
| 28,851 |
| 10,393 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 1,534,935 |
| $ | 1,304,310 |
|
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Current portion of long-term debt |
| $ | 989 |
| $ | 18,660 |
|
Accounts payable |
| 71,852 |
| 64,211 |
| ||
Accrued expenses and other current liabilities |
| 125,533 |
| 127,768 |
| ||
Total current liabilities |
| 198,374 |
| 210,639 |
| ||
|
|
|
|
|
| ||
Long-term debt, net of current portion |
| 210,106 |
| 191,045 |
| ||
Deferred income taxes |
| 61,788 |
| 55,276 |
| ||
Other liabilities |
| 8,697 |
| 7,918 |
| ||
Total liabilities |
| 478,965 |
| 464,878 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock, $0.008 par; authorized 175,000 shares; issued and outstanding 67,118 shares and 67,212 shares at September 30, 2007 and September 30, 2006, respectively |
| 537 |
| 538 |
| ||
Capital in excess of par |
| 143,244 |
| 138,777 |
| ||
Retained earnings |
| 864,852 |
| 671,060 |
| ||
Accumulated other comprehensive income |
| 47,337 |
| 29,057 |
| ||
Total stockholders’ equity |
| 1,055,970 |
| 839,432 |
| ||
|
|
|
|
|
| ||
Total liabilities and stockholders’ equity |
| $ | 1,534,935 |
| $ | 1,304,310 |
|
NBTY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands) |
| For the fiscal year |
| ||||
|
| ended September 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net income |
| $ | 207,932 |
| $ | 111,785 |
|
Adjustments to reconcile net income to cash and cash equivalents provided by operating activities: |
|
|
|
|
| ||
Impairments and disposals of property, plant and equipment |
| 4,682 |
| 4,420 |
| ||
Depreciation and amortization |
| 55,601 |
| 56,048 |
| ||
Foreign currency transaction (gain) loss |
| (4,878 | ) | 1,851 |
| ||
Amortization and write-off of deferred charges |
| 1,972 |
| 4,354 |
| ||
Gain on extinguishment of debt |
| — |
| (425 | ) | ||
Gain on settlement of interest rate swap |
| — |
| (353 | ) | ||
Trademark impairment |
| — |
| 10,450 |
| ||
Allowance for doubtful accounts |
| (1,575 | ) | 1,427 |
| ||
Inventory reserves |
| 12,832 |
| 8,908 |
| ||
Deferred income taxes |
| (164 | ) | (12,019 | ) | ||
Excess income tax benefit from exercise of stock options |
| (3,294 | ) | (15 | ) | ||
Changes in operating assets and liabilities, net of acquisition: |
|
|
|
|
| ||
Accounts receivable |
| 361 |
| (16,056 | ) | ||
Inventories |
| (29,229 | ) | 131,469 |
| ||
Prepaid expenses and other current assets |
| (259 | ) | 11,105 |
| ||
Other assets |
| (378 | ) | 1,954 |
| ||
Accounts payable |
| 1,025 |
| (4,852 | ) | ||
Accrued expenses and other liabilities |
| (3,632 | ) | 2,912 |
| ||
Net cash provided by operating activities |
| 240,996 |
| 312,963 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Purchase of property, plant and equipment |
| (51,374 | ) | (35,308 | ) | ||
Proceeds from sale of property, plant, and equipment |
| 100 |
| 1,426 |
| ||
Purchase of available-for-sale investments |
| (449,766 | ) | — |
| ||
Proceeds from sale of available-for-sale investments |
| 328,714 |
| 39,900 |
| ||
Cash paid for acquisition, net of cash acquired |
| (37,005 | ) | — |
| ||
Cash collateral securing loan |
| (18,861 | ) | — |
| ||
Purchase price settlements, net |
| (473 | ) | 1,845 |
| ||
Purchase of intangible assets |
| — |
| (478 | ) | ||
Net cash (used in) provided by investing activities |
| (228,665 | ) | 7,385 |
| ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Principal payments under long-term debt agreements and capital leases |
| (888 | ) | (312,107 | ) | ||
Proceeds from short-term borrowings |
| — |
| 18,204 |
| ||
Principal payments under the Revolving Credit Facility |
| — |
| (11,000 | ) | ||
Proceeds from borrowings under the Revolving Credit Facility |
| — |
| 5,000 |
| ||
Proceeds from settlement of interest rate swap |
| — |
| 353 |
| ||
Payments for financing fees |
| (1,649 | ) | — |
| ||
|
|
|
|
|
| ||
Excess income tax benefit from exercise of stock options |
| 3,294 |
| 15 |
| ||
|
|
|
|
|
| ||
Proceeds from stock options exercised |
| 1,840 |
| 105 |
| ||
Purchase of treasury stock (subsequently retired) |
| (14,808 | ) | — |
| ||
Net cash used in financing activities |
| (12,211 | ) | (299,430 | ) | ||
|
|
|
|
|
| ||
Effect of exchange rate changes on cash and cash equivalents |
| 2,977 |
| 1,605 |
| ||
|
|
|
|
|
| ||
Net increase in cash and cash equivalents |
| 3,097 |
| 22,523 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at beginning of year |
| 89,805 |
| 67,282 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at end of year |
| $ | 92,902 |
| $ | 89,805 |
|
NBTY’s preliminary unaudited net sales results for the month of October 2007 by segment are as follows:
NET SALES
(Preliminary and Unaudited)
FOR THE MONTH OF OCTOBER
($ In Millions)
|
| 2007 |
| 2006 |
| % Change |
| ||
|
|
|
|
|
|
|
| ||
Wholesale / US Nutrition |
| $ | 88 |
| $ | 87 |
| 1 | % |
|
|
|
|
|
|
|
| ||
North American Retail |
| $ | 19 |
| $ | 18 |
| 5 | % |
|
|
|
|
|
|
|
| ||
European Retail |
| $ | 55 |
| $ | 50 |
| 9 | % |
|
|
|
|
|
|
|
| ||
Direct Response / E-commerce |
| $ | 13 |
| $ | 12 |
| 6 | % |
|
|
|
|
|
|
|
| ||
Total |
| $ | 175 |
| $ | 168 |
| 4 | % |
European Retail net sales in local currency remained unchanged for October 2007. North American Retail same store sales increased 9% in October 2007.