Nutrisystem, Inc. NTRI +2.93%, a leading provider of weight management products and services, reported financial results for the first quarter 2011. The company also announced that the Board of Directors has declared a quarterly dividend of $0.175 per share, payable May 19, 2011, to shareholders of record as of May 9, 2011.
The following are financial highlights for the first quarter ended March 31, 2011:
· Revenues were $132.7 million, compared to $158.8 million for Q1 2010.
· Operating loss from continuing operations was $5.2 million, compared to operating income from continuing operations of $7.8 million for Q1 2010.
· Net loss was $3.4 million, compared to net income of $4.8 million for Q1 2010.
· Net loss per diluted share for the first quarter was 12 cents, compared to net income of 15 cents per diluted share (which included a one-cent loss from discontinued operations) for Q1 2010.
· Adjusted EBITDA was $1.1 million, compared to $12.9 million for Q1 2010. Adjusted EBITDA is defined as (loss) income from continuing operations excluding non-cash employee compensation, other expense, interest, income taxes and depreciation and amortization.
· One-time charges related to the Company's February 2011 reduction in force totaled $2.7 million on a pretax basis or $1.7 million after tax, and negatively impacted earnings per share by $0.06 in the quarter.
· Cash and cash equivalents was $48.1 million at March 31, 2011.
Joe Redling, Chairman and Chief Executive Officer, said, "First quarter results improved dramatically after our slow start to the year as consumers responded to our 'Rollback' price promotion, which featured Nutrisystem's best food selections at our lowest prices since 2003. Customer starts improved as the quarter progressed, and we experienced significant gains in response and conversion."
Mr. Redling continued, "We are pleased that our actions and course corrections implemented in the quarter drove better-than-expected first quarter results. We successfully balanced aggressive price promotion with improved marketing efficiency. We expect to selectively leverage price promotions to spur demand in the coming quarters. While this will likely continue to pressure gross margins in 2011, we plan to focus on optimizing in-year profitability through marketing efficiency and cost controls while investing in the development of new products and new sales channels to fuel future growth."
David Clark, Chief Financial Officer, added, "Operating results stabilized over the course of quarter, as we carefully managed marketing spend and discretionary expenses. We are increasing guidance to reflect the better-than-expected first quarter results, and now expect earnings per share for the year to fall in the range of $0.55 to $0.65 for the year. For the second quarter, we expect earnings per share in the range of $0.25 to $0.30."
Mr. Clark continued, "Nutrisystem continues to generate strong cash flow, with operating cash flow of $13.3 million during the quarter. We increased cash balances while paying a 17.5 cent per share dividend and incurring $1.4 million of capital expenditures. We are pleased that the Board of Directors authorized payment of a quarterly dividend in May, reflecting confidence in our expected full year cash flow."
A webcast of the conference call is available on the Investor Relations section of Nutrisystem's website for 30 days. Interested parties unable to access the conference call via the webcast may dial 913-312-0958 and reference conference ID 5606877.
Nutrisystem, Inc. NTRI +2.93% is the number one home delivery weight loss company. Nutrisystem is sold direct to the consumer through nutrisystem.com, by phone, and at select retailers, with convenient home delivery. The Company offers proven nutritionally balanced weight loss programs designed for women, men and seniors, as well as the Nutrisystem(R) D(TM) program, specifically designed to help people with type 2 diabetes who want to lose weight and manage their diabetes. The Nutrisystem programs are based on more than 39 years of nutrition research and the science of the low glycemic index, and offer a variety of great tasting, satisfying high-fiber, good carbohydrate meals that are heart healthy. Nutrisystem was named the "Least Expensive Home Delivery Program" by CBS Money Watch in January 2011. The program has no membership fees and provides weight management support and counseling by trained weight loss coaches and online weight management tools free of charge. Nutrisystem proudly supports the American Diabetes Association in its movement to Stop Diabetes(TM), as well as to help in increasing awareness of the correlation between weight loss and improvements in diabetes control. For more information or to become a customer visit http://www.nutrisystem.com.