Nutrisystem, Inc. (NASDAQ:NTRI), 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:
“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”
- 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."