Nutraceutical International Corporation (NASDAQ: NUTR) reported results for the fiscal 2011 second quarter ended March 31, 2011. Net sales for the fiscal 2011 second quarter were $49.5 million compared to $47.9 million for the same quarter of fiscal 2010. For the second quarter of fiscal 2011, net income was $4.6 million, or $0.44 diluted earnings per share, compared to net income of $5.1 million, or $0.49 diluted earnings per share, for the same quarter of fiscal 2010.
Net sales for the six months ended March 31, 2011 were $94.8 million compared to $92.7 million for the same period in fiscal 2010. For the six months ended March 31, 2011, net income was $8.5 million, or $0.81 per diluted share, compared to net income of $9.0 million, or $0.86 per diluted share, for the same period of fiscal 2010.
Operating cash flow for the six months ended March 31, 2011 was $15.7 million compared to $11.0 million for the same period of fiscal 2010. This operating cash flow was primarily used to invest $7.4 million in acquisitions of branded natural product businesses, $3.4 million in purchases of property and equipment, $1.9 million in repurchases of common stock and $1.0 million to repay net borrowings on the Company's revolving credit facility.
Bill Gay, chairman and chief executive officer, commented, "Our fiscal 2011 second quarter net sales growth was primarily attributable to acquisitions completed during the previous twelve months. Net income, cash flow and EBITDA remained strong but were impacted slightly by the consolidation and relocation costs of acquired businesses. The health and natural foods retail market remains solid although competitive regarding promotions and incentives. Individual and chain retail success appears mixed as many stores continue to encounter the headwinds of a sluggish economic environment."
Mr. Gay continued, "We continue to repurchase our stock in the open market at what we believe are favorable multiples, invest internally in operational labor-saving improvements and actively pursue potential acquisitions. The refitting and expansion of our recently acquired liquid manufacturing facility is estimated to take another nine months. We have already relocated the manufacturing operations of two recent acquisitions to this facility and will move a couple of other lines during our third quarter. We continue to focus on identifying acquisitions that enable us to leverage our facilities, utilize our national sales assets and distribution capabilities as well as provide innovative products we don't currently sell. Management appreciates the ongoing support from our investors and employees in growing our company."
We are an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. Our core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. We believe that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.
We manufacture and sell nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids™, NaturalCare®,Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™.
We own neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™. We also own health food stores, which operate under the trade names Fresh Vitamins™ and Granola's™.
We manufacture and/or distribute one of the broadest branded product lines in the industry with over 5,500 SKUs, including over 700 SKUs sold internationally. We believe that as a result of our emphasis on innovation, quality, loyalty, education and customer service, our brands are widely recognized in health and natural food stores and among their customers.