Exhibit 99.1
FOR IMMEDIATE RELEASE |
| |
Contact: Harvey Kamil | Carl Hymans | |
NBTY, Inc. | G.S. Schwartz & Co. | |
President and Chief Financial Officer | 212-725-4500 | |
631-200-2020 | carlh@schwartz.com | |
NBTY REPORTS THIRD QUARTER RESULTS
RONKONKOMA, N.Y. — July 27, 2009 - NBTY, Inc. (NYSE: NTY) (www.NBTY.com), a leading global manufacturer and marketer of nutritional supplements, today announced results for the fiscal third quarter and nine months ended June 30, 2009.
For the fiscal third quarter ended June 30, 2009, net sales were $652 million compared to $535 million for the fiscal third quarter ended June 30, 2008, an increase of $117 million or 22%. Included in this total are net sales of $27 million from Julian Graves, which NBTY acquired in September 2008. The Leiner Health Products business, which was acquired in July 2008, has been fully integrated into NBTY operations and accordingly, its sales can no longer be separately identified.
Net income for the fiscal third quarter ended June 30, 2009 was $46 million, or $0.73 per diluted share, which is comparable to the $46 million, or $0.72 per diluted share, for the fiscal third quarter ended June 30, 2008.
Net income for the fiscal third quarter reflects operational efficiencies and improved supply chain management. Included in expenses for the quarter were the following: $10 million for terminated IT projects determined to be ineffective and uneconomical, $4 million in legal expenses associated with Julian Graves Competition Commission issues in the UK, and a $3 million impairment charge to record the current market value of an idle plant. The aggregate after-tax impact of these items was $0.17 per diluted share.
Adjusted EBITDA for the fiscal third quarter of 2009 was a record $109 million, compared to $87 million for the fiscal third quarter of 2008. The Company’s balance sheet continues to be strong and well capitalized. At June 30, 2009, working capital was $614 million, total assets were $1.9 billion, $325 million remains undrawn under the Company’s Revolving Credit Facility, and book value per share was $17.24.
OPERATIONS FOR THE FISCAL THIRD QUARTER ENDED JUNE 30, 2009
Overall gross profit margins for the fiscal third quarter of 2009 were 45% compared to 51% for the fiscal third quarter of 2008. This reflects an on-going trend of private label sales constituting a greater portion of the Company’s overall sales. Private label sales traditionally have a lower gross profit and, accordingly, overall gross profit margin decreased.
Net sales for the Wholesale/US Nutrition division, which markets various brands including Nature’s Bounty, Osteo Bi-Flex, Rexall, Sundown, Ester-C, Solgar, and private label products, increased $113 million, or 40%, to $396 million.
The Nielsen Company tracks industry-wide sales of vitamins, minerals, herbs and other supplements in the food, drug and mass market sectors. For the thirteen week period ended June 27, 2009, Nielsen reported an increase in the entire category of 9.8%. According to Nielsen, for that same period, the Company’s Wholesale brands reported a 10.5% increase.
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, comprised of Vitamin World Stores in the United States and LeNaturiste stores in Canada, were $51 million, compared to $50 million, for the prior like quarter. While operating in a difficult retail environment in the US and
Canada, the Division’s same store sales increased 1% for the fiscal third quarter of 2009. Vitamin World’s modernization of its stores had a favorable impact on its operations in the fiscal third quarter.
During the fiscal third quarter of 2009, the North American Retail division closed 4 stores and added 1 new store. At the end of the fiscal third quarter of 2009, the North American Retail division operated a total of 528 stores, consisting of 442 Vitamin World stores in the United States and 86 LeNaturiste stores in Canada.
European Retail net sales for the fiscal third quarter ended June 30, 2009 were $151 million compared to $146 million, for the prior like quarter. European Retail net sales for the third fiscal quarter include $27 million from Julian Graves, which NBTY acquired in September 2008. Excluding Julian Graves sales, European Retail net sales increased 8% in local currency (British Pound Sterling), and decreased 14% in US dollars for the third fiscal quarter, compared to the prior like quarter. European Retail division same store sales in local currency increased 6% from the prior like period.
The Julian Graves acquisition was provisionally approved by the UK Competition Commission on July 22, 2009. The final decision by the UK Competition Commission is expected on or before September 3, 2009. During the third fiscal quarter Julian Graves operated at a breakeven despite not being integrated with the Company’s European operations.
The European Retail division continues to leverage its premier status, high street locations and brand awareness in a difficult retail environment. The European Retail division consists of 534 Holland & Barrett stores, 350 Julian Graves stores and 31 GNC stores in the UK, 24 Nature’s Way stores in Ireland, and 73 DeTuinen stores in the Netherlands, for a total of 1,012 stores in Europe. During the fiscal third quarter of 2009, Holland & Barrett opened 2 franchised stores in South Africa, for a total of 9 franchised stores in South Africa.
Net sales from Direct Response/E-Commerce operations for the fiscal third quarter of 2009 decreased $2 million, or 3% to $53 million from $55 million for the fiscal third quarter of 2008. As this division varies its promotional strategy throughout the fiscal year, its results should be viewed on an annual and not quarterly basis. For the fiscal third quarter of 2009, compared
with the prior like quarter, gross profit percentage for this division increased 6% to 64%; average order size increased $11.57 to $77.37. Puritan’s Pride is 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 NINE MONTHS ENDED JUNE 30, 2009
For the fiscal nine months ended June 30, 2009, net sales were $1.9 billion compared to $1.6 billion for the fiscal nine months ended June 30, 2008, an increase of $330 million or 21%.
Net income for the fiscal nine months ended June 30, 2009 was $82 million, or $1.31 per diluted share, compared to $136 million, or $2.06 per diluted share, for the fiscal nine months ended June 30, 2008. Net income for the fiscal nine months ended June 30, 2009 reflects the improved operations for the third quarter, decreases in foreign exchange rates, terminated IT project costs and the aforementioned other costs. The aggregate after-tax impact of these items was $0.27 per diluted share. Overall gross profit margins for the fiscal nine months ended June 30, 2009 were 43% compared to 52% for the fiscal nine months ended June 30, 2008.
As a result of the Leiner acquisition, during the first and second fiscal quarters, the Company experienced lower gross margins on the private label business and additional cost pressures as Leiner inventory levels were not adequate to maintain customer fulfillment levels at the time of its acquisition. In order to maintain adequate customer fulfillment levels, NBTY purchased products at higher costs which negatively impacted results.
NBTY Chairman and CEO, Scott Rudolph, said: “NBTY generated a significant increase in sales for the quarter, particularly in our wholesale sector, which continues to benefit from the Leiner acquisition. We are now experiencing operating leverage generating long-term growth, garnering greater market share and enhancing our position as the global leader in the nutritional supplement industry.”
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 25,000 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.Rexall.com), Sundown® (www.SundownNutrition.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), Solgar® (www.Solgar.com), Good ‘n’ Natural® (www.goodnnatural.com), Home Health™ (www.homehealthus.com), Julian Graves, and Ester-C® (www.Ester-C.com) brands. NBTY routinely posts information that may be important to investors on its web site.
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; (xxxiii) potential investment losses as a result of liquidity conditions; and (xxxiv) 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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
| Three months |
| ||||
|
| ended June 30, |
| ||||
(In thousands, except per share amounts) |
| 2009 |
| 2008 |
| ||
|
|
|
|
|
| ||
Net sales |
| $ | 651,707 |
| $ | 534,519 |
|
|
|
|
|
|
| ||
Costs and expenses: |
|
|
|
|
| ||
Cost of sales |
| 359,240 |
| 262,455 |
| ||
Advertising, promotion and catalog |
| 23,570 |
| 35,732 |
| ||
Selling, general and administrative |
| 182,618 |
| 166,058 |
| ||
IT project termination costs |
| 10,127 |
| — |
| ||
|
| 575,555 |
| 464,245 |
| ||
|
|
|
|
|
| ||
Income from operations |
| 76,152 |
| 70,274 |
| ||
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
| ||
Interest |
| (8,402 | ) | (3,721 | ) | ||
Miscellaneous, net |
| 3,396 |
| 2,417 |
| ||
|
| (5,006 | ) | (1,304 | ) | ||
|
|
|
|
|
| ||
Income before provision for income taxes |
| 71,146 |
| 68,970 |
| ||
|
|
|
|
|
| ||
Provision for income taxes |
| 25,229 |
| 23,444 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 45,917 |
| $ | 45,526 |
|
|
|
|
|
|
| ||
Net income per share: |
|
|
|
|
| ||
Basic |
| $ | 0.74 |
| $ | 0.74 |
|
Diluted |
| $ | 0.73 |
| $ | 0.72 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding: |
|
|
|
|
| ||
Basic |
| 61,796 |
| 61,280 |
| ||
Diluted |
| 63,264 |
| 62,830 |
|
NBTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
| Nine months |
| ||||
|
| ended June 30, |
| ||||
(In thousands, except per share amounts) |
| 2009 |
| 2008 |
| ||
|
|
|
|
|
| ||
Net sales |
| $ | 1,907,813 |
| $ | 1,577,895 |
|
|
|
|
|
|
| ||
Costs and expenses: |
|
|
|
|
| ||
Cost of sales |
| 1,091,386 |
| 764,069 |
| ||
Advertising, promotion and catalog |
| 87,889 |
| 108,908 |
| ||
Selling, general and administrative |
| 553,177 |
| 500,590 |
| ||
IT project termination costs |
| 18,774 |
| — |
| ||
|
| 1,751,226 |
| 1,373,567 |
| ||
|
|
|
|
|
| ||
Income from operations |
| 156,587 |
| 204,328 |
| ||
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
| ||
Interest |
| (26,780 | ) | (11,239 | ) | ||
Miscellaneous, net |
| (1,959 | ) | 11,089 |
| ||
|
| (28,739 | ) | (150 | ) | ||
|
|
|
|
|
| ||
Income before provision for income taxes |
| 127,848 |
| 204,178 |
| ||
|
|
|
|
|
| ||
Provision for income taxes |
| 45,386 |
| 68,604 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 82,462 |
| $ | 135,574 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
Net income per share: |
|
|
|
|
| ||
Basic |
| $ | 1.34 |
| $ | 2.11 |
|
Diluted |
| $ | 1.31 |
| $ | 2.06 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding: |
|
|
|
|
| ||
Basic |
| 61,665 |
| 64,105 |
| ||
Diluted |
| 63,124 |
| 65,826 |
|
NET SALES
(Unaudited)
|
| THREE MONTHS ENDED |
| ||||||
|
|
|
|
|
| Percentage |
| ||
(In thousands) |
| 2009 |
| 2008 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
Wholesale / US Nutrition |
| $ | 396,162 |
| $ | 283,645 |
| 40 | % |
|
|
|
|
|
|
|
| ||
North American Retail |
| 51,223 |
| 50,415 |
| 2 | % | ||
|
|
|
|
|
|
|
| ||
European Retail |
| 151,293 |
| 145,670 |
| 4 | % | ||
|
|
|
|
|
|
|
| ||
Direct Response / E-Commerce |
| 53,029 |
| 54,789 |
| -3 | % | ||
|
|
|
|
|
|
|
| ||
Total |
| $ | 651,707 |
| $ | 534,519 |
| 22 | % |
GROSS PROFIT
PERCENTAGES
(Unaudited)
|
| THREE MONTHS ENDED |
| ||||
|
|
|
|
|
| Increase |
|
|
| 2009 |
| 2008 |
| - Decrease |
|
|
|
|
|
|
|
|
|
Wholesale / US Nutrition |
| 33 | % | 41 | % | -8 | % |
|
|
|
|
|
|
|
|
North American Retail |
| 67 | % | 66 | % | 1 | % |
|
|
|
|
|
|
|
|
European Retail |
| 61 | % | 62 | % | -1 | % |
|
|
|
|
|
|
|
|
Direct Response / E-Commerce |
| 64 | % | 58 | % | 6 | % |
|
|
|
|
|
|
|
|
Total |
| 45 | % | 51 | % | -6 | % |
NET SALES
(Unaudited)
|
| NINE MONTHS ENDED |
| ||||||
|
| JUNE 30, |
| ||||||
|
|
|
|
|
| Percentage |
| ||
(In thousands) |
| 2009 |
| 2008 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
Wholesale / US Nutrition |
| $ | 1,152,930 |
| $ | 801,943 |
| 44 | % |
|
|
|
|
|
|
|
| ||
North American Retail |
| 151,577 |
| 158,501 |
| -4 | % | ||
|
|
|
|
|
|
|
| ||
European Retail |
| 441,757 |
| 462,337 |
| -4 | % | ||
|
|
|
|
|
|
|
| ||
Direct Response / E-Commerce |
| 161,549 |
| 155,114 |
| 4 | % | ||
|
|
|
|
|
|
|
| ||
Total |
| $ | 1,907,813 |
| $ | 1,577,895 |
| 21 | % |
|
|
|
|
|
|
|
| ||
GROSS PROFIT |
| ||||||||
|
| ||||||||
|
| NINE MONTHS ENDED |
| ||||||
|
| JUNE 30, |
| ||||||
|
|
|
|
|
| Increase |
| ||
|
| 2009 |
| 2008 |
| - Decrease |
| ||
|
|
|
|
|
|
|
| ||
Wholesale / US Nutrition |
| 29 | % | 42 | % | -13 | % | ||
|
|
|
|
|
|
|
| ||
North American Retail |
| 67 | % | 62 | % | 5 | % | ||
|
|
|
|
|
|
|
| ||
European Retail |
| 62 | % | 62 | % | 0 | % | ||
|
|
|
|
|
|
|
| ||
Direct Response / E-Commerce |
| 62 | % | 59 | % | 3 | % | ||
|
|
|
|
|
|
|
| ||
Total |
| 43 | % | 52 | % | -9 | % |
ADJUSTED EBITDA**
Reconciliation of GAAP Measures to Non-GAAP Measures
(Unaudited)
|
| THREE MONTHS ENDED |
| |||||||||||||
(In thousands) |
| Pretax |
| Depreciation |
| Interest |
| Non-cash |
| Adjusted |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 61,905 |
| $ | 3,681 |
| $ | — |
| $ | 24 |
| $ | 65,610 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| (2,274 | ) | 758 |
| — |
| 5,560 |
| 4,044 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 14,070 |
| 3,634 |
| — |
| 5,591 |
| 23,295 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response / E-Commerce |
| 18,166 |
| 1,245 |
| — |
| 790 |
| 20,201 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 91,867 |
| 9,318 |
| — |
| 11,965 |
| 113,150 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (20,721 | ) | 7,486 |
| 8,402 |
| 832 |
| (4,001 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 71,146 |
| $ | 16,804 |
| $ | 8,402 |
| $ | 12,797 |
| $ | 109,149 |
|
|
| THREE MONTHS ENDED |
| |||||||||||||
|
| Pretax |
| Depreciation |
| Interest |
| Non-cash |
| Adjusted |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 49,136 |
| $ | 2,587 |
| $ | — |
| $ | 31 |
| $ | 51,754 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| 1,873 |
| 750 |
| — |
| 18 |
| 2,641 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 28,249 |
| 3,049 |
| — |
| 49 |
| 31,347 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response / E-Commerce |
| 6,044 |
| 1,248 |
| — |
| 23 |
| 7,315 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 85,302 |
| 7,634 |
| — |
| 121 |
| 93,057 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (16,332 | ) | 5,749 |
| 3,721 |
| 537 |
| (6,325 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 68,970 |
| $ | 13,383 |
| $ | 3,721 |
| $ | 658 |
| $ | 86,732 |
|
* REFLECTS REVISED ALLOCATIONS OF CORPORATE/MANUFACTURING COSTS
** 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)
|
| NINE MONTHS ENDED |
| |||||||||||||
(In thousands) |
| Pretax |
| Depreciation |
| Interest |
| Non-cash |
| Adjusted |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 110,968 |
| $ | 10,991 |
| $ | — |
| $ | (3 | ) | $ | 121,956 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| (4,160 | ) | 2,255 |
| — |
| 5,607 |
| 3,702 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 60,559 |
| 10,598 |
| — |
| 5,681 |
| 76,838 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response / E-Commerce |
| 38,119 |
| 3,777 |
| — |
| 5,413 |
| 47,309 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 205,486 |
| 27,621 |
| — |
| 16,698 |
| 249,805 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (77,638 | ) | 23,983 |
| 26,780 |
| 1,836 |
| (25,039 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 127,848 |
| $ | 51,604 |
| $ | 26,780 |
| $ | 18,534 |
| $ | 224,766 |
|
|
| NINE MONTHS ENDED |
| |||||||||||||
|
| Pretax |
| Depreciation |
| Interest |
| Non-cash |
| Adjusted |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 128,678 |
| $ | 7,858 |
| $ | — |
| $ | 79 |
| $ | 136,615 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| (1,733 | ) | 2,404 |
| — |
| 384 |
| 1,055 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 97,582 |
| 9,081 |
| — |
| 90 |
| 106,753 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response / E-Commerce |
| 25,699 |
| 3,988 |
| — |
| 43 |
| 29,730 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 250,226 |
| 23,331 |
| — |
| 596 |
| 274,153 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (46,048 | ) | 17,707 |
| 11,239 |
| 930 |
| (16,172 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 204,178 |
| $ | 41,038 |
| $ | 11,239 |
| $ | 1,526 |
| $ | 257,981 |
|
* REFLECTS REVISED ALLOCATIONS OF CORPORATE/MANUFACTURING COSTS
** 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.
Condensed Consolidated Balance Sheets
(Unaudited)
|
| June 30, |
| September 30, |
| ||
(In thousands, except per share amounts) |
| 2009 |
| 2008 |
| ||
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 69,817 |
| $ | 90,180 |
|
Accounts receivable, net |
| 131,754 |
| 122,878 |
| ||
Inventories |
| 634,613 |
| 585,239 |
| ||
Deferred income taxes |
| 25,353 |
| 25,098 |
| ||
Other current assets |
| 36,545 |
| 75,971 |
| ||
|
|
|
|
|
| ||
Total current assets |
| 898,082 |
| 899,366 |
| ||
|
|
|
|
|
| ||
Property, plant and equipment, net |
| 387,858 |
| 419,066 |
| ||
Goodwill |
| 337,988 |
| 342,379 |
| ||
Intangible assets, net |
| 216,726 |
| 230,424 |
| ||
Other assets |
| 35,260 |
| 45,123 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 1,875,914 |
| $ | 1,936,358 |
|
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Current portion of long-term debt |
| $ | 31,635 |
| $ | 33,309 |
|
Accounts payable |
| 106,999 |
| 120,620 |
| ||
Accrued expenses and other current liabilities |
| 145,732 |
| 172,035 |
| ||
Total current liabilities |
| 284,366 |
| 325,964 |
| ||
|
|
|
|
|
| ||
Long-term debt, net of current portion |
| 453,454 |
| 538,402 |
| ||
Deferred income taxes |
| 38,737 |
| 49,139 |
| ||
Other liabilities |
| 32,724 |
| 24,657 |
| ||
Total liabilities |
| 809,281 |
| 938,162 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
|
|
|
|
|
| ||
Common stock, $0.008 par; authorized 175,000 shares; issued and outstanding 61,872 and 61,599 shares at June 30, 2009 and September 30, 2008, respectively |
| 495 |
| 493 |
| ||
Capital in excess of par |
| 144,493 |
| 140,990 |
| ||
Retained earnings |
| 921,530 |
| 839,068 |
| ||
Accumulated other comprehensive income |
| 115 |
| 17,645 |
| ||
Total stockholders’ equity |
| 1,066,633 |
| 998,196 |
| ||
|
|
|
|
|
| ||
Total liabilities and stockholders’ equity |
| $ | 1,875,914 |
| $ | 1,936,358 |
|
NBTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
| Nine Months |
| ||||
|
| ended June 30, |
| ||||
(In thousands) |
| 2009 |
| 2008 |
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net income |
| $ | 82,462 |
| $ | 135,574 |
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
| ||
Impairments and disposals of assets |
| 4,520 |
| 441 |
| ||
Depreciation and amortization |
| 51,604 |
| 41,038 |
| ||
IT project termination costs |
| 16,521 |
| — |
| ||
Foreign currency transaction loss (gain) |
| 5,113 |
| (1,594 | ) | ||
Stock-based compensation |
| 2,013 |
| 1,176 |
| ||
Amortization of deferred charges |
| 951 |
| 562 |
| ||
Allowance for doubtful accounts |
| (366 | ) | (543 | ) | ||
Inventory reserves |
| 5,666 |
| 5,676 |
| ||
Deferred income taxes |
| 888 |
| 1,372 |
| ||
Excess income tax benefit from exercise of stock options |
| (55 | ) | (4,984 | ) | ||
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
| ||
Accounts receivable |
| (11,129 | ) | (3,376 | ) | ||
Inventories |
| (63,228 | ) | (26,438 | ) | ||
Other assets |
| 9,162 |
| 11,744 |
| ||
Accounts payable |
| (7,061 | ) | 675 |
| ||
Accrued expenses and other liabilities |
| (8,915 | ) | 472 |
| ||
Net cash provided by operating activities |
| 88,146 |
| 161,795 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Purchase of property, plant and equipment |
| (38,584 | ) | (32,031 | ) | ||
Purchase of available-for-sale investments |
| — |
| (364,917 | ) | ||
Proceeds from sale of available-for-sale investments |
| — |
| 463,087 |
| ||
Cash paid for acquisitions, net of cash acquired |
| (264 | ) | (5,072 | ) | ||
Acquisition working capital escrow |
| — |
| (11,500 | ) | ||
Escrow refund, net of purchase price adjustments |
| 14,460 |
| — |
| ||
Net cash (used in) provided by investing activities |
| (24,388 | ) | 49,567 |
| ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Principal payments under long-term debt agreements and capital leases |
| (25,176 | ) | (720 | ) | ||
Proceeds from borrowings under the Revolving Credit Facility |
| 95,000 |
| — |
| ||
Principal payments under the Revolving Credit Facility |
| (155,000 | ) | — |
| ||
Excess income tax benefit from exercise of stock options |
| 55 |
| 4,984 |
| ||
Proceeds from stock options exercised |
| 1,437 |
| 3,852 |
| ||
Purchase of treasury stock (subsequently retired) |
| — |
| (188,432 | ) | ||
|
|
|
|
|
| ||
Net cash used in financing activities |
| (83,684 | ) | (180,316 | ) | ||
|
|
|
|
|
| ||
Effect of exchange rate changes on cash and cash equivalents |
| (437 | ) | (1,972 | ) | ||
|
|
|
|
|
| ||
Net (decrease) increase in cash and cash equivalents |
| (20,363 | ) | 29,074 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at beginning of period |
| 90,180 |
| 92,902 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at end of period |
| $ | 69,817 |
| $ | 121,976 |
|