May 3, 2016 - Dawn Zier, President and CEO stated, “The Nutrisystem brand continues to resonate well with customers. Turbo10, Turbo shakes, and new flexible options drove better-than-expected first quarter results. “Looking ahead, we are focused on unlocking additional value to propel our future growth. We are on track to launch the South Beach Diet for the 2017 diet season and continue to test Shake360, which is being targeted to a new demographic of customers. We believe these initiatives, coupled with the continued development and growth of our core brand, will position Nutrisystem to capture a greater share of the expanding weight-loss market and further penetrate the broader health and wellness space.”
First Quarter 2016 Compared to First Quarter 2015
- Revenue increased 18% to $162.1 million, compared to $137.2 million.
- GAAP net income was $2.6 million.
Mike Monahan, CFO, commented, “We exceeded our first quarter financial goals and are now projecting increased top and bottom line growth ranges in 2016. Due to the continued growth in our business and the strength of our balance sheet, we are announcing our Board’s authorization of a $50 million stock buyback."
Second quarter 2016 revenue is expected to be in the range of $145 to $150 million, adjusted EBITDA between $27.5 and $29.5 million, and diluted income per common share between $0.48 and $0.53.
Full year 2016 revenue is now expected to be in the range of $517 to $532 million compared to previous range of $505 to $525 million, adjusted EBITDA between $66.0 and $70.5 million compared to previous range of $62.5 to $67.0 million.
A complete press release with financial tables can be found here:
Conference Call Info.
Management reported that the Turbo 10 program has been a success, retail sales improved in the latter part of the quarter, and that revenues per customer increased, with better reactivations. Gross margin for the quarter was 51.5% of sales. The company spent $59 million on marketing in Q1. NS had$40 mill. in reactivation revenues in Q1 and projects $36 mill. in retail sales for the year. Management reported that 1/3 of its customers add Turbo shakes to their order. They are very popular. Length of stay on the firm's 28-day program declined slightly, but this was more than offset by shifts to more flexible a la carte options/services. Retail sales for Q1 were $7.7 mill. and QVC sales were $6.6 million. The company laid out a timeline and plan to launch the South Beach Diet line for the 2017 diet season. They plan for South Beach to address younger dieters under age 45 who desire to "eat clean". The South Beach URL (website address) will come under the firm's control in July. Testing will commence, followed by development of the website and an app and foods, followed by a launch in January.
Marketdata analysts feel that NutriSystem is very well diversified currently, in terms of its products, its distribution channels, and price points. The addition of the popular and well-known South Beach Diet line will further strengthen its product line and reach new customers. We are impressed with its strategy and progress.