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Schiff Nutrition International, Inc., (NYSE: SHF), announced results for the fiscal 2013 first quarter ended August 31, 2012.
“We are pleased to report another strong quarter for Schiff Nutrition,” stated Tarang Amin, president and chief executive officer. “Net sales increased 46% and Adjusted EBITDA increased 81% versus year ago, reflecting progress executing our growth strategy to build leading brands in four key conditions. Our brand building, innovation, and customer initiatives continue to drive MegaRed
® in heart health, Move Free
® in joint care, Airborne
® in immune support, and Digestive Advantage
® in probiotics. Gross margin improvement was driven by branded growth and strong operational execution including lean manufacturing and sourcing initiatives. Given our first quarter performance and expectations for the balance of the year, we are taking up our fiscal 2013 guidance.”
Fiscal 2013 First Quarter Results
Net sales were $85.1 million, compared to $58.2 million for the same period in fiscal 2012. Branded sales increased 49.3% to $74.8 million and reflect the contribution of the Airborne acquisition completed on March 30, 2012, compared to $50.1 million in fiscal 2012.
Gross profit margin was 47.1% for the fiscal 2013 first quarter. Fiscal 2013 first quarter results were negatively impacted by a $1.6 million purchase accounting adjustment related to acquired Airborne inventory. The purchase accounting adjustment lowered gross profit margin by 1.8 percentage points. Gross profit margin for the fiscal 2012 first quarter was 44.7%.
Total operating expenses increased to $27.7 million, from $18.3 million a year ago, primarily reflecting the company’s continued emphasis on support for advertising and brand building.
Net income for the fiscal 2013 first quarter was $6.0 million, compared to net income of $4.7 million for the same period in fiscal 2012. Earnings per diluted share were $0.20 for the fiscal 2013 first quarter, compared to $0.16 for the same period in fiscal 2012.
Adjusted EBITDA, which is defined as income from operations before depreciation, amortization, stock-based compensation and completed acquisition, including transaction and other related costs, was $17.4 million for the fiscal 2013 first quarter, compared to $9.6 million for the same period in fiscal 2012.
The company is raising fiscal 2013 guidance as follows:
Fiscal Year 2013 Guidance
As of July 31, 2012
As of September 18, 2012
Net sales growth(compared to fiscal 2012)
40.0% to 43.0%
43.0% to 46.0%
Gross profit margin
48.0% to 50.0%
49.0% to 51.0%
Selling & marketing expense(% of net sales)
25.0% to 27.0%
25.0% to 27.0%
Other operating expenses(in millions)
$35.0 to $37.0
$36.0 to $38.0
12.5% to 14.0%
14.5% to 16.0%
Conference Call Information
Schiff will hold a conference call today, September 18
th, at 11:00 a.m. ET. The event will be webcast at
http://www.schiffnutrition.com/press_conference_calls.asp. The webcast replay will be available for 90 days. If you do not have Internet access, the dial-in number will be 888-771-4371 for domestic callers and 847-585-4405 for international callers. The participant access code is 33249843. A replay of the call will be available by dialing 888-843-7419 for domestic callers and 630-652-3042 for international callers, and entering access code 33249843. The telephone replay will be available through September 25
Reconciliation of Adjusted EBITDA to Income from Operations
This press release refers to non-GAAP financial measures. The company defines "Adjusted EBITDA" as income from operations before depreciation, amortization, stock-based compensation and completed acquisition, including transaction and other related costs. This non-GAAP financial measure is not prepared in accordance with generally accepted accounting principles (GAAP) 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 the company’s operating performance. Management also believes Adjusted EBITDA enhances an investor's understanding of the company’s results of operations because it measures the company’s operating performance exclusive of completed acquisition, including transaction and other related costs and non-cash charges for depreciation, amortization and stock-based compensation. Management also provides this non-GAAP measurement as a way to help investors better understand the company’s core operating performance, enhance comparisons of the company’s core operating performance from period to period and to allow better comparisons of the company’s operating performance to that of its competitors.