Nutraceutical Reports Fiscal 2014 Q3 Results

                 Nutraceutical Reports Fiscal 2014 Q3 Results

PR Newswire

PARK CITY, Utah, July 31, 2014

PARK CITY, Utah, July 31, 2014 /PRNewswire/ -- Nutraceutical International
Corporation (NASDAQ: NUTR) today reported results for the fiscal 2014 third
quarter ended June 30, 2014. Net sales for the fiscal 2014 third quarter were
$55.6 million compared to $50.8 million for the same quarter of fiscal 2013.
For the third quarter of fiscal 2014, net income was $4.0 million, or $0.41
diluted earnings per share, compared to net income of $3.8 million, or $0.39
diluted earnings per share, for the same quarter of fiscal 2013.

Net sales for the nine months ended June 30, 2014 were $162.0 million compared
to $157.1 million for the same period of fiscal 2013. For the nine months
ended June 30, 2014, net income was $12.5 million, or $1.27 diluted earnings
per share, compared to net income of $12.9 million, or $1.31 diluted earnings
per share, for the same period of fiscal 2013.

Operating cash flow for the nine months ended June 30, 2014 was $16.1 million
compared to $19.2 million for the same period of fiscal 2013. The operating
cash flow for the nine months ended June 30, 2014, combined with net
borrowings of $9.0 million and existing cash, was primarily used to invest
$16.2 million in acquisitions of natural product businesses, $8.6 million in
purchases of property, plant and equipment and $3.8 million in purchases of
common stock for treasury.

Bill Gay, chairman and chief executive officer, commented, "Our June 2014
quarterly net sales growth of 9.5% was a solid improvement over the net sales
decline experienced during the March 2014 quarter. Growth came from recently
completed acquisitions as well as ongoing sales of branded products. Our
increased net income and Adjusted EBITDA for the third quarter were primarily
the result of the increase in net sales. We continue to invest in
acquisitions, facilities and technology to maintain our focus on consistent
long-term growth."

Mr. Gay stated, "In addition to the ongoing efforts by management to review
and reduce our overall cost structure, we intend to increase our focus on
inventory management. The financial success of our business is heavily
impacted by raw material and packaging costs, which are by far the primary
component of our cost of goods sold. We source over 4,000 raw materials and
components in order to produce over 7,500 SKUs. Aggressively managing these
purchases helps assure timely production and customer delivery. Labor and
overhead are also important drivers, but impact product costs to a lesser

Mr. Gay continued, "We believe that our business model provides a competitive
advantage due in part to the number and differentiation between our brands,
including differences in product formulations, delivery forms, packaging and
labeling, as well as the unique and specific manufacturing steps, equipment
and laboratory testing required for each type of ingredient and product. This
complexity in our business requires management to exercise diligence on a
consistent basis. Our customers appreciate the diversity of our product
offering as well as our commitment to superior products. We appreciate the
long-term support of our customers and stockholders for our business strategy
as we strive to implement ongoing improvements and continued financial

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 various trade
names including Fresh Vitamins™, Granola's™, Nature's Discount®, Warehouse
Vitamins™ and Peachtree Natural Foods®.

We manufacture and/or distribute one of the broadest branded product lines in
the industry with over 7,500 SKUs, including approximately 1,000 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.

This Press Release contains 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. These forward-looking
statements can be identified by the use of terms such as "believe," "expects,"
"plan," "intend," "may," "will," "should," "can," or "anticipates," or the
negative thereof, or variations thereon, or comparable terminology, or by
discussions of strategy. These statements involve known and unknown risks,
uncertainties and other factors that may cause industry trends or our actual
results to be materially different from any future results expressed or
implied by these statements. Important factors that may cause our results to
differ from these forward-looking statements include, but are not limited to:
(i) changes in or new government regulations or increased enforcement of the
same, (ii) unavailability of desirable acquisitions, inability to complete
them or inability to integrate them, (iii) increased costs, including from
increased raw material or energy prices, (iv) changes in general worldwide
economic or political conditions, (v) adverse publicity or negative consumer
perception regarding nutritional supplements, (vi) issues with obtaining raw
materials of adequate quality or quantity, (vii) litigation and claims,
including product liability, intellectual property and other types, (viii)
disruptions from or following acquisitions including the loss of customers,
(ix) increased competition, (x) slow or negative growth in the nutritional
supplement industry or the healthy foods channel, (xi) the loss of key
personnel or the inability to manage our operations efficiently, (xii)
problems with information management systems, manufacturing efficiencies and
operations, (xiii) insurance coverage issues, (xiv) the volatility of the
stock market generally and of our stock specifically, (xv) increases in the
cost of borrowings or unavailability of additional debt or equity capital, or
both, or fluctuations in foreign currencies, and (xvi) interruption of
business or negative impact on sales and earnings due to acts of God, acts of
war, terrorism, bio-terrorism, civil unrest and other factors outside of our
control. Copies of our SEC reports are available upon request from our
investor relations department or may be obtained at the SEC's website

(unaudited; dollars in thousands)
                                        June 30,        September 30,
                                        2014              2013
 Current assets, net                $     80,053  $     75,048
 Property, plant and equipment, net 79,337            76,214
 Goodwill                           23,496            15,821
 Other non-current assets, net      28,783            25,227
                                        $    211,669   $    192,310
Liabilities and Stockholders' Equity
 Current liabilities                $     22,427  $     21,796
 Long-term liabilities              41,640            32,638
 Stockholders' equity             147,602           137,876
                                        $    211,669   $    192,310

(unaudited; dollars in thousands, except per share data)
                           Three months ended June    Nine months ended June
                           30,                        30,
                           2014          2013         2014         2013
Net sales                  $  55,625   $  50,814  $ 162,034   $ 157,141
Cost of sales              28,473        25,935       81,660       79,971
     Gross profit          27,152        24,879       80,374       77,170
Operating expenses
     Selling, general and  19,762        17,896       57,625       54,324
     Amortization of       704           556          1,940        1,701
     intangible assets
Income from operations     6,686         6,427        20,809       21,145
Interest and other         356           336          1,024        1,024
expense, net
Income before provision    6,330         6,091        19,785       20,121
for income taxes
Provision for income taxes 2,333         2,249        7,329        7,249
Net income                 $   3,997  $          $  12,456  $  12,872
Net income per common
     Basic                 $          $         $         $   
                           0.41         0.39        1.27        1.32
     Diluted               0.41          0.39         1.27         1.31
Weighted average common
shares outstanding
     Basic                 9,798,393     9,765,639    9,826,516    9,766,442
     Diluted               9,806,793     9,793,045    9,835,666    9,794,851

(unaudited; dollars in thousands)
                             Three months ended June  Nine months ended June
                             30,                      30,
                             2014          2013       2014          2013
Net income                   $ 3,997       $ 3,842    $ 12,456      $ 12,872
Provision for income taxes   2,333         2,249      7,329         7,249
Interest and other expense,  356           336        1,024         1,024
net (1)
Depreciation and             2,942         2,486      8,357         7,325
Adjusted EBITDA              $ 9,628       $ 8,913    $ 29,166      $ 28,470

(1) Includes amortization of deferred financing fees.

Non-GAAP Financial Measures
 Adjusted EBITDA (a non-GAAP measure) is defined in our performance
measures as earnings before net interest and other expense, taxes,
depreciation and amortization. We believe that Adjusted EBITDA provides
useful additional information to analysts, creditors, investment bankers and
management regarding operating performance and debt covenant compliance.
Adjusted EBITDA has some inherent limitations in measuring operating
performance due to the exclusion of certain financial elements such as
depreciation and amortization and is not necessarily comparable to other
similarly-titled captions of other companies due to potential inconsistencies
in the method of calculation. Furthermore, Adjusted EBITDA is not intended to
be an alternative to net income in determining our operating performance in
accordance with generally accepted accounting principles.

SOURCE Nutraceutical International Corporation

Contact: Cory McQueen, Vice President and Chief Financial Officer, (435)
Press spacebar to pause and continue. Press esc to stop.