Nutrisystem, Inc. (NTRI 22.25, −0.16, −0.71%), a leading provider of weight management products and services, today reported financial results for the second quarter of 2010. Highlights for the second quarter ended June 30, 2010 include:
– Revenues of $141.6 million, an increase of 8% as compared to $131.0 million for Q2 2009;
– Operating income from continuing operations of $20.0 million, an increase of 68% as compared to $11.9 million for Q2 2009;
– Net income of $12.6 million, an increase of 43% as compared to $8.8 million for Q2 2009;
– Adjusted EBITDA of $26.2 million, an increase of 57% as compared to $16.6 million for Q2 2009. Adjusted EBITDA is defined as income from continuing operations excluding non-cash employee compensation, other income (expense), equity and impairment loss, interest, income (taxes)benefit and depreciation and amortization;
– Fully diluted earnings per share of $0.40, an increase of 43% as compared to $0.28 in the second quarter of 2009; and
– Cash, cash equivalents and marketable securities of $88.9 million at June 30, 2010 with no debt and $200 million available under its credit agreement, as compared to $62.2 million in cash, cash equivalents and marketable securities at December 31, 2009 with no debt and $200 million available under its credit agreement.
"Strength in new customer growth coupled with continued improvements in marketing efficiency led the way, as we exceeded nearly all prior year metrics in the second quarter," stated Chairman and Chief Executive Officer Joe Redling.
"We had a 240 basis point improvement in gross margin based on reductions in our cost of goods sold and we expect this margin to be sustainable for the remainder of the year," said David Clark, Chief Financial Officer.
The Board of Directors declared a quarterly dividend of $0.175 per share, payable August 19, 2010, to shareholders of record as of August 9, 2010. While the Company intends to continue to pay regular quarterly dividends, the declaration and payment of future dividends are discretionary and will be subject to determination by the Board of Directors each quarter following its review of the Company's financial performance.
"We remain committed to returning value to shareholders as evidenced by the continuation of our dividend. Furthermore, during the second quarter and through July 28, 2010 the Company utilized a portion of our cash balances to repurchase $69.5 million of our own stock, allowing us to retire approximately 10% of our outstanding shares," added Clark. "We are very encouraged by our second quarter performance, however uncertainty in the macro environment and the seasonality of the business lead us to be cautious regarding the outlook for the balance of the year. Based on the share repurchases and current business trends we are raising the lower end of our full year diluted EPS guidance to $1.07 per share while maintaining the upper end of guidance at $1.12 per share."
Conference Call and Webcast
Management will host a webcast to discuss second quarter 2010 financial results today at 4:30 PM Eastern time. The webcast will include remarks from Chairman and Chief Executive Officer Joe Redling and Chief Financial Officer David Clark.
The webcast will be available live under the Investor Relations section of Nutrisystem's website, www.nutrisystem.com. Please click on Investor Relations at the bottom of the home page and then click on the microphone icon on the Investor Relations home page. Interested parties unable to access the conference call via the webcast may dial 866-831-9862 (outside US/Canada 706-758), the conference ID is 89173412. A replay of the conference call will be available on the Company website following the event.
About Nutrisystem, Inc.
Nutrisystem, Inc. (NTRI 22.25, -0.16, -0.71%) is a leading provider of weight management products and services. Nutrisystem is sold direct to the consumer through nutrisystem.com, by phone, and at select retailers, with convenient home delivery. The Company offers proven nutritionally balanced weight loss programs designed for women, men, and seniors, as well as the clinically tested Nutrisystem D plan, designed to help people with type 2 diabetes who want to lose weight. The Nutrisystem program is based on more than 35 years of nutrition research and the science of the low glycemic index, and offers a variety of great tasting, satisfying high-fiber, good carbohydrate meals that are heart healthy. Nutrisystem was named the "Best Value" of the six most popular commercial diet programs by SmartMoney magazine in January 2010. The program has no membership fees and provides 24/7 weight management support by trained weight loss coaches and online weight management tools free of charge. In 2010 Internet Retailer magazine recognized Nutrisystem as one of the top two overall online retailers in the Food and Drug category, and as number 56 of the top 500 online retailers overall. Nutrisystem proudly supports the American Diabetes Association in its Movement to Stop Diabetes and WomenHeart, The National Coalition for Women with Heart Disease, in its mission to bring about a greater awareness of the link between heart disease and obesity. For more information or to become a customer visit http://www.nutrisystem.com or call 1-800-435-4074.
Forward-Looking Statement Disclaimer
This press release may contain forward-looking statements that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding Nutrisystem's plans and expectations for the third quarter of 2010 and the full year 2010, continuing to pay regular quarterly dividends and other statements that are not statements of historical fact constitute forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, which are described in Nutrisystem, Inc.'s Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. The actual results may differ materially from any forward-looking statements due to such risks and uncertainties. Nutrisystem, Inc. undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.