BOHEMIA, N.Y., Jan 22, 2004 /PRNewswire-FirstCall via COMTEX/ -- NBTY, Inc. (NYSE: NTY) (www.NBTY.com), a leading manufacturer and marketer of nutritional supplements, today announced record results for the fiscal first quarter ended December 31, 2003.
For the fiscal first quarter ended December 31, 2003, sales increased 60% to $385 million, compared to $241 million for the fiscal first quarter ended December 31, 2002. Net income for the fiscal first quarter rose 42% to $24 million, or $0.34 per diluted share, compared to net income of $17 million, or $0.24 per diluted share, for the comparable prior period.
Results for the fiscal first quarter reflect increased sales across all of the Company's divisions and include the results of Rexall businesses acquired in July 2003. Rexall product lines recorded sales of $75 million. Without such product lines, sales would have increased 29% for the fiscal first quarter.
In this fiscal quarter, NBTY refinanced $224 million of Term B loans outstanding under its July 2003 credit agreement with a new class of Term C loans on more favorable terms, LIBOR plus 2%. NBTY's $375 million credit facility consisted of a $100 million revolving credit line, $50 million Term A loans and $225 million Term B loans. The Company repaid $24 million of Term A loans in the fiscal first quarter ended December 31, 2003 and an additional $10 million in January 2004.
OPERATIONS FOR THE FISCAL FIRST QUARTER ENDED DECEMBER 31, 2003
The US Nutrition wholesale division, which operates Nature's Bounty and Rexall, increased its sales 142% to $179 million, compared with $74 million for the comparable prior period. Sales results include $75 million from Rexall product lines, such as Osteo Bi-Flex(R), MET-Rx(R), Sundown(R) and Carb Solutions(R). These sales include a charge of approximately $15 million for returns associated with Rexall's pre-acquisition sales ($11 million of actual returns and $4 million of anticipated returns). The Company has maintained Rexall's retail shelf space and optimizes that space by replacing slow-moving Rexall products with faster-selling, better value Rexall and Nature's Bounty products.
US Nutrition's results reflect the synergies resulting from the Rexall integration as well as sustained growth in mass market sales. NBTY continues to increase its wholesale presence in the nutritional supplement marketplace and to leverage valuable consumer sales information from its Vitamin World and Puritan's Pride direct-response/e-commerce operations in order to provide its mass-market customers with data and analyses to drive sales.
Vitamin World sales for the fiscal first quarter increased 6% to $53 million, from $50 million in the comparable prior period. Vitamin World operations achieved profitability in the fiscal first quarter and EBITDA (as defined in non-GAAP financial measures below) increased to $3.4 million from $1.3 million for the fiscal first quarter a year ago. Same store sales increased 7%. During the fiscal first quarter Vitamin World opened 11 new stores, closed one store and at the end of the quarter operated 543 stores.
NBTY's European retail sales for the fiscal first quarter increased 42% to $117 million from $83 million for the fiscal first quarter a year ago. This increase includes sales generated by the 51 GNC stores in the UK and 67 DeTuinen stores in the Netherlands that NBTY acquired in fiscal 2003. GNC (UK) and DeTuinen generated sales of $9 million and $11 million, respectively, for the fiscal first quarter. The combined results of GNC (UK) and DeTuinen were profitable. During the fiscal first quarter, the Company's European retail division opened 7 new stores and at the end of the quarter operated 596 stores in the UK, Ireland and the Netherlands.
Holland & Barrett's same store sales for the fiscal first quarter increased 16%. This result includes the positive effect of the strong British pound. Without the effect of foreign exchange, Holland & Barrett same store sales increased 7%.
Puritan's Pride direct response/e-commerce sales for the fiscal first quarter increased 3% to $35 million from $34 million for the fiscal first quarter a year ago. Puritan's Pride on-line sales increased 51% for the fiscal first quarter and comprised 20% of all Puritan's Pride sales for this fiscal first quarter. NBTY remains the leader in the direct response and e-commerce sector and continues to increase the number of products available via its catalog and websites.
NBTY Chairman and CEO, Scott Rudolph, said: "We are pleased to report a record quarter with sales increases across all divisions. The integration of Rexall is on target. We are confident in the long-term outlook for the Company and anticipate continued growth in revenue and market share for NBTY."
NBTY is a leading vertically integrated manufacturer and distributor of a broad line of high-quality, value-priced nutritional supplements in the United States and throughout the world. The Company markets approximately 1,500 products under several brands, including Nature's Bounty(R), Vitamin World(R), Puritan's Pride(R), Holland & Barrett(R), Rexall(R), Sundown(R), MET-Rx(R), WORLDWIDE Sport Nutrition(R), American Health(R), GNC (UK)(R) and DeTuinen(R).
This release refers to non-GAAP financial measures, such as EBITDA. "EBITDA" is defined as earnings before 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 EBITDA is relevant and useful because EBITDA is a measurement industry analysts utilize when evaluating NBTY's operating performance. Management also believes 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. All of these forward-looking statements, which can be identified by the use of terminology such as "subject to," "believe," "expects," "may," "will," "should," "can," or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy which, although believed to be reasonable, 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 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 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; (xiv) exposure to and expense of defending and resolving, product liability 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 on its retail locations; (xix) 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; (xxii) the efficacy of NBTY's Internet and on-line sales and marketing; (xxiii) fluctuations in foreign currencies, including the British Pound; (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 locations; (xxvi) introduction of 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 the Food Supplements Directive and the Traditional Herbal Medicinal Products Directive in Europe; (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; and (xxx) other factors beyond NBTY'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.