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 28, 2010 - 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, 2010.
For the fiscal third quarter ended June 30, 2010, net sales were $696 million, compared to $652 million for the fiscal third quarter ended June 30, 2009, an increase of $44 million or 7%. Net income for the fiscal third quarter ended June 30, 2010 was $66 million, or $1.03 per diluted share, compared to net income of $46 million, or $0.73 per diluted share, for the fiscal third quarter ended June 30, 2009.
Net income for the fiscal third quarter of 2010 reflects greater sales and overall higher gross profits. The overall gross profit percentage for the fiscal third quarter of 2010 increased 3% to 48% from 45% for the fiscal third quarter of 2009. Net income for the fiscal third quarter of 2009 includes an aggregate after-tax impact of $0.17 per diluted share for certain non-recurring expenses.
Net income for the fiscal third quarter of 2010 benefited from the Company’s increased television advertising in the second fiscal quarter to support its Nature’s Bounty, Osteo Bi Flex, Ester C and Pure Protein brands. The Company expects its branded sales for the remainder of fiscal 2010 to benefit from the additional advertising.
Adjusted EBITDA for the fiscal third quarter of 2010 was $125 million, compared to $109 million for the fiscal third quarter of 2009. The Company’s balance sheet continues to be
strong and well capitalized. During the first nine months of fiscal 2010, the Company repaid $43 million of its long term debt. At June 30, 2010, the Company’s working capital was $831 million, which included $294 million in cash or equivalents, total assets were $2 billion, and $325 million remained undrawn and available under the Company’s Revolving Credit Facility.
For the nine months ended June 30, 2010, net sales were $2.2 billion compared to $1.9 billion for the nine months ended June 30, 2009, an increase of $244 million or 13%. Net income for the nine months ended June 30, 2010, was $188 million, or $2.94 per diluted share, compared to net income of $82 million, or $1.31 per diluted share, for the nine months ended June 30, 2009.
Adjusted EBITDA for the nine months ended June 30, 2010 was $372 million, compared to $225 million for the nine months ended June 30, 2009.
OPERATIONS FOR THE FISCAL THIRD QUARTER ENDED JUNE 30, 2010
Net sales for the Wholesale/US Nutrition division, which markets various branded products, including Nature’s Bounty, Osteo Bi-Flex, Rexall, Sundown, Ester-C, Pure Protein, Solgar, and private label products, increased $38 million, or 10%, to $435 million. Overall gross profit for the Wholesale/US Nutrition division was 39% for the fiscal third quarter of 2010, compared with 33% for the fiscal third quarter of 2009, a 6% increase. NBTY’s branded products, which have higher gross profit margins than the Company’s private label products, continued to represent a larger part of the wholesale business. Private label sales, which have lower gross profits, accounted for 36% of wholesale sales in the fiscal third quarter of 2010.
Pressure from competition in the private label business continued in this fiscal quarter, but was offset in part, by increased branded sales and improved supply chain management. We anticipate continued competitive pressures in private label for the remainder of this fiscal year.
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 July 3, 2010, Nielsen reported an increase in the entire category of 9.8%. According to Nielsen, for that same period, the Company’s Wholesale brands increased 20.8%.
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 $53 million, a 3% increase from the prior like quarter. Same store sales were also up 2% for the fiscal third quarter of 2010. The modernization of the Vitamin World stores has continued.
During the fiscal third quarter of 2010, the North American Retail division opened 5 new stores and closed 2 stores. At the end of the fiscal third quarter of 2010, the North American Retail division operated a total of 534 stores, consisting of 451 Vitamin World stores in the United States and 83 LeNaturiste stores in Canada.
European Retail net sales for the fiscal third quarter ended June 30, 2010 were $152 million, a 1% increase compared to $151 million for the prior like quarter. In local currency (British Pound Sterling), European Retail net sales increased 5% and same store sales increased 1%. The Company has continued to integrate the Julian Graves operations into its European Retail Division. During this fiscal quarter, 24 Julian Graves stores were converted into Holland & Barrett or GNC stores.
The European Retail division continues to leverage its premier status, high street locations and brand awareness to generate these results. At June 30, 2010, the European Retail division consisted of 586 Holland & Barrett stores, 296 Julian Graves stores and 43 GNC stores in the UK, 29 Nature’s Way stores in Ireland, and 88 DeTuinen stores in the Netherlands, for a total of 1,042 stores in Europe and 8 Holland & Barrett franchised stores in South Africa, Singapore and Malta.
Net sales from Direct Response/E-Commerce operations for the fiscal third quarter of 2010 increased 7% to $57 million from $53 million for the fiscal third quarter of 2009. As this
division varies its promotional strategy throughout the fiscal year, its results should be viewed on an annual and not quarterly basis. 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. On-line sales were 56% of total sales for the fiscal third quarter of 2010, compared with 51% for the prior comparable quarter.
NBTY Chairman and CEO, Scott Rudolph, said: “We are pleased to report another quarter of strong sales growth and overall gross profit improvement. We are furthering our initiatives to increase sales, and improve supply chain management as part of our strategic efforts to meet the challenge of the competitive nature of the business. We are confident of our ability to maintain global leadership in the nutritional supplement industry.”
ABOUT NBTY, INC.
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.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, Ester-C® (www.Ester- C. com) and Natural Wealth (www.naturalwealth.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.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the Merger, the Company will prepare a proxy statement to be filed with the SEC. When completed, a definitive proxy statement and a form of proxy will be mailed to the stockholders of the Company. BEFORE MAKING ANY VOTING DECISION, THE COMPANY’S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE MERGER CAREFULLY AND IN ITS ENTIRETY BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. The Company’s stockholders will be able to obtain, without charge, a copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s website at http://www.sec.gov. The Company’s stockholders will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by directing a request by mail or telephone to NBTY, Inc, Attn: General Counsel, 2100 Smithtown Avenue, Ronkonkoma, New York 11779, telephone: (631) 567-9500, or from the Company’s website, http://www.nbty.com.
PARTICIPANTS IN SOLICITATION
The Company and its directors and officers may be deemed to be participants in the solicitation of proxies from the Company’s stockholders with respect to the Merger. Information about the Company’s directors and executive officers and their ownership of the Company’s common stock is set forth in the proxy statement for the Company’s 2010 Annual Meeting of Stockholders, which was filed with the SEC on January 15, 2010. Stockholders may obtain additional information regarding the interests of the Company and its directors and executive officers in the Merger, which may be different than those of the Company’s stockholders generally, by reading the proxy statement and other relevant documents regarding the Merger, when filed with the SEC.
(TABLES FOLLOW)
NBTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
|
| Three months |
| ||||
|
| ended June 30, |
| ||||
|
| 2010 |
| 2009 |
| ||
|
|
|
|
|
| ||
Net sales |
| $ | 695,856 |
| $ | 651,707 |
|
|
|
|
|
|
| ||
Costs and expenses: |
|
|
|
|
| ||
Cost of sales |
| 363,355 |
| 359,240 |
| ||
Advertising, promotion and catalog |
| 37,003 |
| 23,570 |
| ||
Selling, general and administrative |
| 192,118 |
| 182,618 |
| ||
IT project termination costs |
| — |
| 10,127 |
| ||
|
| 592,476 |
| 575,555 |
| ||
|
|
|
|
|
| ||
Income from operations |
| 103,380 |
| 76,152 |
| ||
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
| ||
Interest |
| (7,312 | ) | (8,402 | ) | ||
Miscellaneous, net |
| 68 |
| 3,396 |
| ||
|
| (7,244 | ) | (5,006 | ) | ||
|
|
|
|
|
| ||
Income before provision for income taxes |
| 96,136 |
| 71,146 |
| ||
|
|
|
|
|
| ||
Provision for income taxes |
| 29,953 |
| 25,229 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 66,183 |
| $ | 45,917 |
|
|
|
|
|
|
| ||
Net income per share: |
|
|
|
|
| ||
Basic |
| $ | 1.04 |
| $ | 0.74 |
|
Diluted |
| $ | 1.03 |
| $ | 0.73 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding: |
|
|
|
|
| ||
Basic |
| 63,378 |
| 61,796 |
| ||
Diluted |
| 64,139 |
| 63,264 |
| ||
NBTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
|
| Nine months |
| ||||
|
| ended June 30, |
| ||||
|
| 2010 |
| 2009 |
| ||
|
|
|
|
|
| ||
Net sales |
| $ | 2,152,167 |
| $ | 1,907,813 |
|
|
|
|
|
|
| ||
Costs and expenses: |
|
|
|
|
| ||
Cost of sales |
| 1,155,470 |
| 1,091,386 |
| ||
Advertising, promotion and catalog |
| 116,682 |
| 87,889 |
| ||
Selling, general and administrative |
| 575,443 |
| 553,177 |
| ||
IT project termination costs |
| — |
| 18,774 |
| ||
|
| 1,847,595 |
| 1,751,226 |
| ||
|
|
|
|
|
| ||
Income from operations |
| 304,572 |
| 156,587 |
| ||
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
| ||
Interest |
| (22,984 | ) | (26,780 | ) | ||
Miscellaneous, net |
| 2,613 |
| (1,959 | ) | ||
|
| (20,371 | ) | (28,739 | ) | ||
|
|
|
|
|
| ||
Income before provision for income taxes |
| 284,201 |
| 127,848 |
| ||
|
|
|
|
|
| ||
Provision for income taxes |
| 95,776 |
| 45,386 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 188,425 |
| $ | 82,462 |
|
|
|
|
|
|
| ||
Net income per share: |
|
|
|
|
| ||
Basic |
| $ | 2.99 |
| $ | 1.34 |
|
Diluted |
| $ | 2.94 |
| $ | 1.31 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding: |
|
|
|
|
| ||
Basic |
| 63,014 |
| 61,665 |
| ||
Diluted |
| 64,087 |
| 63,124 |
| ||
|
| NET SALES |
| ||||||
|
| (Unaudited) |
| ||||||
|
| THREE MONTHS ENDED |
| ||||||
|
| JUNE 30, |
| ||||||
|
|
|
|
|
| Percentage |
| ||
(In thousands) |
| 2010 |
| 2009 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
Wholesale / US Nutrition |
| $ | 434,592 |
| $ | 396,162 |
| 10 | % |
|
|
|
|
|
|
|
| ||
North American Retail |
| 52,543 |
| 51,223 |
| 3 | % | ||
|
|
|
|
|
|
|
| ||
European Retail |
| 152,051 |
| 151,293 |
| 1 | % | ||
|
|
|
|
|
|
|
| ||
Direct Response / E-Commerce |
| 56,670 |
| 53,029 |
| 7 | % | ||
|
|
|
|
|
|
|
| ||
Total |
| $ | 695,856 |
| $ | 651,707 |
| 7 | % |
|
| GROSS PROFIT |
| ||||
|
| PERCENTAGES |
| ||||
|
| (Unaudited) |
| ||||
|
| THREE MONTHS ENDED |
| ||||
|
| JUNE 30, |
| ||||
|
|
|
|
|
| Increase |
|
|
| 2010 |
| 2009 |
| - Decrease |
|
|
|
|
|
|
|
|
|
Wholesale / US Nutrition |
| 39 | % | 33 | % | 6 | % |
|
|
|
|
|
|
|
|
North American Retail |
| 67 | % | 67 | % | 0 | % |
|
|
|
|
|
|
|
|
European Retail |
| 62 | % | 61 | % | 1 | % |
|
|
|
|
|
|
|
|
Direct Response / E-Commerce |
| 63 | % | 64 | % | -1 | % |
|
|
|
|
|
|
|
|
Total |
| 48 | % | 45 | % | 3 | % |
|
| NET SALES |
| ||||||
|
| (Unaudited) |
| ||||||
|
| NINE MONTHS ENDED |
| ||||||
|
| JUNE 30, |
| ||||||
|
|
|
|
|
| Percentage |
| ||
(In thousands) |
| 2010 |
| 2009 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
Wholesale / US Nutrition |
| $ | 1,332,280 |
| $ | 1,152,930 |
| 16 | % |
|
|
|
|
|
|
|
| ||
North American Retail |
| 158,770 |
| 151,577 |
| 5 | % | ||
|
|
|
|
|
|
|
| ||
European Retail |
| 487,059 |
| 441,757 |
| 10 | % | ||
|
|
|
|
|
|
|
| ||
Direct Response / E-Commerce |
| 174,058 |
| 161,549 |
| 8 | % | ||
|
|
|
|
|
|
|
| ||
Total |
| $ | 2,152,167 |
| $ | 1,907,813 |
| 13 | % |
|
| GROSS PROFIT |
| ||||
|
| PERCENTAGES |
| ||||
|
| (Unaudited) |
| ||||
|
| NINE MONTHS ENDED |
| ||||
|
| JUNE 30, |
| ||||
|
|
|
|
|
| Increase |
|
|
| 2010 |
| 2009 |
| - Decrease |
|
|
|
|
|
|
|
|
|
Wholesale / US Nutrition |
| 36 | % | 29 | % | 7 | % |
|
|
|
|
|
|
|
|
North American Retail |
| 67 | % | 67 | % | 0 | % |
|
|
|
|
|
|
|
|
European Retail |
| 62 | % | 62 | % | 0 | % |
|
|
|
|
|
|
|
|
Direct Response / E-Commerce |
| 62 | % | 62 | % | 0 | % |
|
|
|
|
|
|
|
|
Total |
| 46 | % | 43 | % | 3 | % |
ADJUSTED EBITDA**
Reconciliation of GAAP Measures to Non-GAAP Measures
(Unaudited)
(In thousands)
|
| THREE MONTHS ENDED JUNE 30, 2010 |
| |||||||||||||
|
| Pretax Income |
| Depreciation and |
| Interest |
| Non-cash |
| Adjusted |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 82,537 |
| $ | 3,642 |
| $ | — |
| $ | 3,606 |
| $ | 89,785 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| 3,955 |
| 613 |
| — |
| 63 |
| 4,631 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 20,401 |
| 3,316 |
| — |
| 148 |
| 23,865 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response / E-Commerce |
| 15,440 |
| 1,143 |
| — |
| 15 |
| 16,598 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 122,333 |
| 8,714 |
| — |
| 3,832 |
| 134,879 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (26,197 | ) | 7,598 |
| 7,312 |
| 1,397 |
| (9,890 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 96,136 |
| $ | 16,312 |
| $ | 7,312 |
| $ | 5,229 |
| $ | 124,989 |
|
|
| THREE MONTHS ENDED |
| |||||||||||||
|
| Pretax Income |
| Depreciation and |
| 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 |
|
** 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)
|
| NINE MONTHS ENDED |
| |||||||||||||
|
| Pretax Income |
| Depreciation |
| Interest |
| Non-cash |
| Adjusted |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Wholesale / US Nutrition |
| $ | 224,229 |
| $ | 10,973 |
| $ | — |
| $ | 9,284 |
| $ | 244,486 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
North American Retail |
| 6,479 |
| 1,944 |
| — |
| 184 |
| 8,607 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
European Retail |
| 80,924 |
| 10,400 |
| — |
| 474 |
| 91,798 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Direct Response / E-Commerce |
| 49,841 |
| 3,555 |
| — |
| 57 |
| 53,453 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Segment Results |
| 361,473 |
| 26,872 |
| — |
| 9,999 |
| 398,344 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Corporate / Manufacturing |
| (77,272 | ) | 23,199 |
| 22,984 |
| 4,365 |
| (26,724 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total |
| $ | 284,201 |
| $ | 50,071 |
| $ | 22,984 |
| $ | 14,364 |
| $ | 371,620 |
|
|
| NINE MONTHS ENDED |
| |||||||||||||
|
| Pretax Income |
| 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 |
|
** 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 TITLES MEASURES REPORTED BY OTHER COMPANIES.
NBTY, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share amounts)
|
| June 30, |
| September 30, |
| ||
|
| 2010 |
| 2009 |
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 293,632 |
| $ | 106,001 |
|
Accounts receivable, net |
| 146,233 |
| 155,863 |
| ||
Inventories |
| 642,305 |
| 658,534 |
| ||
Deferred income taxes |
| 27,912 |
| 28,154 |
| ||
Other current assets |
| 51,369 |
| 49,999 |
| ||
Total current assets |
| 1,161,451 |
| 998,551 |
| ||
|
|
|
|
|
| ||
Property, plant and equipment, net |
| 367,661 |
| 373,817 |
| ||
Goodwill |
| 332,805 |
| 339,099 |
| ||
Intangible assets, net |
| 198,569 |
| 214,139 |
| ||
Other assets |
| 19,304 |
| 34,615 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 2,079,790 |
| $ | 1,960,221 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Current portion of long-term debt |
| $ | 70,791 |
| $ | 38,893 |
|
Accounts payable |
| 105,737 |
| 128,485 |
| ||
Accrued expenses and other current liabilities |
| 154,120 |
| 156,734 |
| ||
Total current liabilities |
| 330,648 |
| 324,112 |
| ||
|
|
|
|
|
| ||
Long-term debt, net of current portion |
| 361,830 |
| 437,629 |
| ||
Deferred income taxes |
| 40,198 |
| 36,422 |
| ||
Other liabilities |
| 33,906 |
| 34,233 |
| ||
Total liabilities |
| 766,582 |
| 832,396 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
|
|
|
|
|
| ||
Common stock, $0.008 par; authorized 175,000 shares; issued and outstanding 63,411 and 61,874 shares at June 30, 2010 and September 30, 2009, respectively |
| 507 |
| 495 |
| ||
Capital in excess of par |
| 167,602 |
| 145,885 |
| ||
Retained earnings |
| 1,173,222 |
| 984,797 |
| ||
Accumulated other comprehensive income |
| (28,123 | ) | (3,352 | ) | ||
Total stockholders’ equity |
| 1,313,208 |
| 1,127,825 |
| ||
|
|
|
|
|
| ||
Total liabilities and stockholders’ equity |
| 2,079,790 |
| $ | 1,960,221 |
| |
NBTY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
|
| Nine months |
| ||||
|
| ended June 30, |
| ||||
|
| 2010 |
| 2009 |
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net income |
| $ | 188,425 |
| $ | 82,462 |
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
| ||
Impairments and disposals of assets |
| 10,033 |
| 4,520 |
| ||
IT project termination costs |
| — |
| 16,521 |
| ||
Depreciation and amortization |
| 50,071 |
| 51,604 |
| ||
Foreign currency transaction loss |
| 1,312 |
| 5,113 |
| ||
Stock-based compensation |
| 5,308 |
| 2,013 |
| ||
Amortization of deferred charges |
| 1,093 |
| 951 |
| ||
Allowance for doubtful accounts |
| 1,977 |
| (366 | ) | ||
Inventory reserves |
| 3,317 |
| 5,666 |
| ||
Deferred income taxes |
| 2,048 |
| 888 |
| ||
Excess income tax benefit from exercise of stock options |
| (6,097 | ) | (55 | ) | ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| 8,770 |
| (11,129 | ) | ||
Inventories |
| 6,445 |
| (63,228 | ) | ||
Other assets |
| 12,036 |
| 9,162 |
| ||
Accounts payable |
| (21,358 | ) | (7,061 | ) | ||
Accrued expenses and other liabilities |
| 7,335 |
| (8,915 | ) | ||
Net cash provided by operating activities |
| 270,715 |
| 88,146 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Purchase of property, plant and equipment |
| (40,358 | ) | (38,584 | ) | ||
Cash paid for acquisitions |
| (11,875 | ) | (264 | ) | ||
Proceeds from sale of investments |
| 2,000 |
| — |
| ||
Escrow refund, net of purchase price adjustments |
| — |
| 14,460 |
| ||
Net cash used in investing activities |
| (50,233 | ) | (24,388 | ) | ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Principal payments under long-term debt agreements and capital leases |
| (42,992 | ) | (25,176 | ) | ||
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 |
| 6,097 |
| 55 |
| ||
Proceeds from stock options exercised |
| 10,324 |
| 1,437 |
| ||
Net cash used in financing activities |
| (26,571 | ) | (83,684 | ) | ||
|
|
|
|
|
| ||
Effect of exchange rate changes on cash and cash equivalents |
| (6,280 | ) | (437 | ) | ||
|
|
|
|
|
| ||
Net increase (decrease) in cash and cash equivalents |
| 187,631 |
| (20,363 | ) | ||
|
|
|
|
|
| ||
Cash and cash equivalents at beginning of period |
| 106,001 |
| 90,180 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents at end of period |
| $ | 293,632 |
| $ | 69,817 |
|