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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Vitamin Shoppe Inc | NYSE:VSI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.50 | 0 | 01:00:00 |
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
11-3664322
|
(State or Other Jurisdiction
of Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value per share
|
VSI
|
The New York Stock Exchange
|
Large accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
x
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
|
|
Page
No.
|
|
||
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
|
|
EX 31.1
|
|
|
EX 31.2
|
|
|
EX 32.1
|
|
|
EX 32.2
|
|
|
EX-101
|
INSTANCE DOCUMENT
|
|
EX-101
|
SCHEMA DOCUMENT
|
|
EX-101
|
CALCULATION LINKBASE DOCUMENT
|
|
EX-101
|
DEFINITION LINKBASE DOCUMENT
|
|
EX-101
|
LABELS LINKBASE DOCUMENT
|
|
EX-101
|
PRESENTATION LINKBASE DOCUMENT
|
|
|
September 28, 2019
|
|
December 29, 2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
15,995
|
|
|
$
|
2,668
|
|
Inventories
|
181,815
|
|
|
189,273
|
|
||
Prepaid expenses and other current assets
|
23,601
|
|
|
27,921
|
|
||
Total current assets
|
221,411
|
|
|
219,862
|
|
||
Right-of-use assets
|
424,868
|
|
|
—
|
|
||
Property and equipment, net of accumulated depreciation and amortization of $338,044 and $312,977 in 2019 and 2018, respectively
|
112,755
|
|
|
123,002
|
|
||
Intangibles, net
|
2,283
|
|
|
11,088
|
|
||
Deferred taxes
|
35,695
|
|
|
31,659
|
|
||
Other long-term assets
|
3,250
|
|
|
2,468
|
|
||
Total assets
|
$
|
800,262
|
|
|
$
|
388,079
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Revolving credit facility
|
$
|
—
|
|
|
$
|
—
|
|
Accounts payable
|
38,203
|
|
|
39,789
|
|
||
Accrued expenses and other current liabilities
|
56,337
|
|
|
65,508
|
|
||
Short-term lease liabilities
|
96,756
|
|
|
500
|
|
||
Total current liabilities
|
191,296
|
|
|
105,797
|
|
||
Long-term lease liabilities
|
368,828
|
|
|
934
|
|
||
Convertible notes, net
|
57,422
|
|
|
55,570
|
|
||
Deferred rent
|
—
|
|
|
37,034
|
|
||
Other long-term liabilities
|
308
|
|
|
403
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 250,000,000 shares authorized and no shares issued and outstanding at September 28, 2019 and December 29, 2018
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 400,000,000 shares authorized, 24,366,706 shares issued and 24,060,705 shares outstanding at September 28, 2019, and 24,234,651 shares issued and 23,974,031 shares outstanding at December 29, 2018
|
244
|
|
|
242
|
|
||
Additional paid-in capital
|
86,990
|
|
|
85,853
|
|
||
Treasury stock, at cost; 306,001 shares at September 28, 2019 and 260,620 shares at December 29, 2018
|
(7,625
|
)
|
|
(7,314
|
)
|
||
Retained earnings
|
102,799
|
|
|
109,560
|
|
||
Total stockholders’ equity
|
182,408
|
|
|
188,341
|
|
||
Total liabilities and stockholders’ equity
|
$
|
800,262
|
|
|
$
|
388,079
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net sales
|
$
|
253,133
|
|
|
$
|
276,636
|
|
|
$
|
807,341
|
|
|
$
|
865,703
|
|
Cost of goods sold
|
172,565
|
|
|
189,945
|
|
|
541,687
|
|
|
591,665
|
|
||||
Gross profit
|
80,568
|
|
|
86,691
|
|
|
265,654
|
|
|
274,038
|
|
||||
Selling, general and administrative expenses
|
82,493
|
|
|
82,747
|
|
|
254,071
|
|
|
260,263
|
|
||||
Impairment charges on fixed, intangible and right-of-use assets
|
521
|
|
|
718
|
|
|
11,404
|
|
|
1,551
|
|
||||
Income (loss) from operations
|
(2,446
|
)
|
|
3,226
|
|
|
179
|
|
|
12,224
|
|
||||
Gain on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
16,229
|
|
||||
Interest expense, net
|
1,080
|
|
|
1,289
|
|
|
3,221
|
|
|
5,429
|
|
||||
Income (loss) before provision (benefit) for income taxes
|
(3,526
|
)
|
|
1,937
|
|
|
(3,042
|
)
|
|
23,024
|
|
||||
Provision (benefit) for income taxes
|
(117
|
)
|
|
57
|
|
|
440
|
|
|
6,204
|
|
||||
Net income (loss) from continuing operations
|
(3,409
|
)
|
|
1,880
|
|
|
(3,482
|
)
|
|
16,820
|
|
||||
Net loss from discontinued operations, net of tax
|
—
|
|
|
(3,626
|
)
|
|
—
|
|
|
(15,245
|
)
|
||||
Net income (loss)
|
$
|
(3,409
|
)
|
|
$
|
(1,746
|
)
|
|
$
|
(3,482
|
)
|
|
$
|
1,575
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
23,716,403
|
|
|
23,545,842
|
|
|
23,646,617
|
|
|
23,477,982
|
|
||||
Diluted
|
23,716,403
|
|
|
23,545,842
|
|
|
23,646,617
|
|
|
23,743,856
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.14
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.15
|
)
|
|
$
|
0.72
|
|
Diluted
|
$
|
(0.14
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.15
|
)
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss from discontinued operations per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
—
|
|
|
$
|
(0.15
|
)
|
|
$
|
—
|
|
|
$
|
(0.65
|
)
|
Diluted
|
$
|
—
|
|
|
$
|
(0.15
|
)
|
|
$
|
—
|
|
|
$
|
(0.64
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.14
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.07
|
|
Diluted
|
$
|
(0.14
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.07
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-In Capital
|
|
Retained Earnings
|
|
|
||||||||||||||||
|
Shares
|
|
Amounts
|
|
Shares
|
|
Amounts
|
|
|
|
Total
|
||||||||||||||
Balance at December 29, 2018
|
24,234,651
|
|
|
$
|
242
|
|
|
(260,620
|
)
|
|
$
|
(7,314
|
)
|
|
$
|
85,853
|
|
|
$
|
109,560
|
|
|
$
|
188,341
|
|
Adoption of ASU 2016-02
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,279
|
)
|
|
(3,279
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,497
|
|
|
3,497
|
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
632
|
|
|
—
|
|
|
632
|
|
|||||
Issuance of shares
|
197,205
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(41,347
|
)
|
|
(287
|
)
|
|
—
|
|
|
—
|
|
|
(287
|
)
|
|||||
Cancellation of restricted shares
|
(63,274
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of shares under employee stock purchase plan
|
20,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|
—
|
|
|
84
|
|
|||||
Balance at March 30, 2019
|
24,389,426
|
|
|
244
|
|
|
(301,967
|
)
|
|
(7,602
|
)
|
|
86,568
|
|
|
109,778
|
|
|
188,988
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,570
|
)
|
|
(3,570
|
)
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
314
|
|
|
—
|
|
|
314
|
|
|||||
Issuance of shares
|
60,140
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(1,105
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Cancellation of restricted shares
|
(148,073
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of shares under employee stock purchase plan
|
34,207
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|
—
|
|
|
150
|
|
|||||
Balance at June 29, 2019
|
24,335,700
|
|
|
243
|
|
|
(303,072
|
)
|
|
(7,607
|
)
|
|
87,034
|
|
|
106,208
|
|
|
185,878
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,409
|
)
|
|
(3,409
|
)
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
—
|
|
|
(110
|
)
|
|||||
Issuance of shares
|
13,890
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(2,929
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||
Cancellation of restricted shares
|
(2,793
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of shares under employee stock purchase plan
|
19,909
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
66
|
|
|||||
Balance at September 28, 2019
|
24,366,706
|
|
|
$
|
244
|
|
|
(306,001
|
)
|
|
$
|
(7,625
|
)
|
|
$
|
86,990
|
|
|
$
|
102,799
|
|
|
$
|
182,408
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-In Capital
|
|
Retained Earnings
|
|
|
||||||||||||||||
|
Shares
|
|
Amounts
|
|
Shares
|
|
Amounts
|
|
|
|
Total
|
||||||||||||||
Balance at December 30, 2017
|
24,220,509
|
|
|
$
|
242
|
|
|
(198,561
|
)
|
|
$
|
(7,010
|
)
|
|
$
|
88,823
|
|
|
$
|
113,312
|
|
|
$
|
195,367
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,859
|
)
|
|
(3,859
|
)
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
875
|
|
|
—
|
|
|
875
|
|
|||||
Issuance of restricted shares
|
288,149
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(42,339
|
)
|
|
(185
|
)
|
|
—
|
|
|
—
|
|
|
(185
|
)
|
|||||
Cancellation of restricted shares
|
(5,492
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of shares under employee stock purchase plan
|
29,149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
—
|
|
|
107
|
|
|||||
Repurchases of Convertible Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,849
|
)
|
|
—
|
|
|
(5,849
|
)
|
|||||
Balance at March 31, 2018
|
24,532,315
|
|
|
245
|
|
|
(240,900
|
)
|
|
(7,195
|
)
|
|
83,953
|
|
|
109,453
|
|
|
186,456
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,180
|
|
|
7,180
|
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
|||||
Issuance of restricted shares
|
17,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(13,100
|
)
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
|||||
Cancellation of restricted shares
|
(276,344
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Repurchases of Convertible Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(26
|
)
|
|||||
Balance at June 30, 2018
|
24,273,510
|
|
|
243
|
|
|
(254,000
|
)
|
|
(7,254
|
)
|
|
83,985
|
|
|
116,633
|
|
|
193,607
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,746
|
)
|
|
(1,746
|
)
|
|||||
Equity compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
809
|
|
|
—
|
|
|
809
|
|
|||||
Issuance of restricted shares
|
40,770
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(2,717
|
)
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|||||
Cancellation of restricted shares
|
(90,734
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of shares under employee stock purchase plan
|
25,052
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
86
|
|
|||||
Balance at September 29, 2018
|
24,248,598
|
|
|
$
|
242
|
|
|
(256,717
|
)
|
|
$
|
(7,285
|
)
|
|
$
|
84,881
|
|
|
$
|
114,887
|
|
|
$
|
192,725
|
|
|
Nine Months Ended
|
||||||
|
September 28, 2019
|
|
September 29, 2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(3,482
|
)
|
|
$
|
1,575
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization of fixed assets, intangible assets and finance leases right-of-use assets
|
30,708
|
|
|
32,002
|
|
||
Impairment charges on intangible assets
|
9,000
|
|
|
8,174
|
|
||
Impairment charges on fixed assets
|
994
|
|
|
9,591
|
|
||
Impairment charges on right-of-use assets
|
1,410
|
|
|
—
|
|
||
Loss on sale of FDC Vitamins, LLC
|
—
|
|
|
203
|
|
||
Amortization of deferred financing fees
|
329
|
|
|
485
|
|
||
Gain on extinguishment of debt
|
—
|
|
|
(16,229
|
)
|
||
Amortization of debt discount on convertible notes
|
1,612
|
|
|
2,570
|
|
||
Deferred income taxes
|
(2,876
|
)
|
|
14,478
|
|
||
Deferred rent
|
—
|
|
|
(2,835
|
)
|
||
Non-cash portion of lease expense for operating leases
|
69,692
|
|
|
—
|
|
||
Equity compensation expense
|
837
|
|
|
1,740
|
|
||
Tax benefits on exercises of equity awards
|
438
|
|
|
743
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
—
|
|
|
(1,458
|
)
|
||
Inventories
|
7,458
|
|
|
33,925
|
|
||
Prepaid expenses and other current assets
|
4,483
|
|
|
(1,143
|
)
|
||
Other long-term assets
|
(1,039
|
)
|
|
(35
|
)
|
||
Accounts payable
|
(1,428
|
)
|
|
(3,994
|
)
|
||
Accrued expenses and other current liabilities
|
(10,032
|
)
|
|
(2,147
|
)
|
||
Operating lease liabilities
|
(73,617
|
)
|
|
—
|
|
||
Other long-term liabilities
|
(475
|
)
|
|
(46
|
)
|
||
Net cash provided by operating activities
|
34,012
|
|
|
77,599
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(19,447
|
)
|
|
(24,655
|
)
|
||
Net proceeds on sale of FDC Vitamins, LLC
|
—
|
|
|
14,847
|
|
||
Trademarks and other intangible assets
|
(469
|
)
|
|
(250
|
)
|
||
Net cash used in investing activities
|
(19,916
|
)
|
|
(10,058
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under revolving credit facility
|
10,000
|
|
|
125,000
|
|
||
Repayments of borrowings under revolving credit facility
|
(10,000
|
)
|
|
(137,000
|
)
|
||
Purchases of convertible notes
|
—
|
|
|
(57,158
|
)
|
||
Bank overdraft
|
(386
|
)
|
|
1,881
|
|
||
Issuance of shares under employee stock purchase plan
|
301
|
|
|
194
|
|
||
Purchases of treasury stock
|
(311
|
)
|
|
(275
|
)
|
||
Other financing activities
|
(373
|
)
|
|
(339
|
)
|
Net cash used in financing activities
|
(769
|
)
|
|
(67,697
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
1
|
|
||
Net increase (decrease) in cash and cash equivalents
|
13,327
|
|
|
(155
|
)
|
||
Cash and cash equivalents beginning of period
|
2,668
|
|
|
1,947
|
|
||
Cash and cash equivalents end of period
|
$
|
15,995
|
|
|
$
|
1,792
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
969
|
|
|
$
|
2,219
|
|
Income taxes paid (refunded)
|
$
|
350
|
|
|
$
|
(10,729
|
)
|
Supplemental disclosures of non-cash investing activities:
|
|
|
|
||||
Liability for purchases of property and equipment
|
$
|
4,930
|
|
|
$
|
1,829
|
|
Reconciliation of the Major Line Items Constituting Loss of Discontinued Operations to the After-Tax Loss of Discontinued Operations That Are Presented in the Statements of Operations
(in thousands) |
|||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 29, 2018
|
|
September 29, 2018
|
||||
Major classes of line items constituting net loss on discontinued operations:
|
|
|
|
||||
Net sales (1)
|
$
|
761
|
|
|
$
|
11,187
|
|
Cost of goods sold
|
2,417
|
|
|
9,756
|
|
||
Fixed assets impairment charges
|
—
|
|
|
7,236
|
|
||
Gross loss
|
(1,656
|
)
|
|
(5,805
|
)
|
||
Selling, general and administrative expenses
|
629
|
|
|
2,581
|
|
||
Intangible assets and fixed assets impairment charges
|
—
|
|
|
8,978
|
|
||
Discontinued operations loss
|
40
|
|
|
203
|
|
||
Loss before provision (benefit) for income taxes
|
(2,325
|
)
|
|
(17,567
|
)
|
||
Provision (benefit) for income taxes
|
1,301
|
|
|
(2,322
|
)
|
||
Net loss
|
$
|
(3,626
|
)
|
|
$
|
(15,245
|
)
|
|
|
|
|
(1)
|
Revenue related to a transition services agreement during the three and nine months ended September 29, 2018 was $0.8 million and $2.4 million, respectively.
|
Cash Flow Disclosures for Discontinued Operations
(in thousands) |
|||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 29, 2018
|
|
September 29, 2018
|
||||
Cash flows provided by (used in) operating activities
|
$
|
936
|
|
|
$
|
(14,180
|
)
|
Cash flows provided by (used in) investing activities
|
$
|
(882
|
)
|
|
$
|
14,752
|
|
|
|
|
|
||||
Depreciation and amortization
|
$
|
—
|
|
|
$
|
769
|
|
Capital expenditures
|
$
|
—
|
|
|
$
|
94
|
|
|
|
|
|
|
September 28, 2019
|
|
December 29, 2018
|
||||||||||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Accumulated Impairment Charges
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Accumulated Impairment Charges
|
|
Net
|
||||||||||||||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Goodwill
|
$
|
210,633
|
|
|
$
|
—
|
|
|
$
|
210,633
|
|
|
$
|
—
|
|
|
$
|
210,633
|
|
|
$
|
—
|
|
|
$
|
210,633
|
|
|
$
|
—
|
|
Tradenames – Indefinite-lived (1)
|
68,405
|
|
|
—
|
|
|
68,405
|
|
|
—
|
|
|
68,405
|
|
|
—
|
|
|
59,405
|
|
|
9,000
|
|
||||||||
Tradenames – Definite-lived
|
6,233
|
|
|
3,950
|
|
|
—
|
|
|
2,283
|
|
|
5,764
|
|
|
3,676
|
|
|
—
|
|
|
2,088
|
|
||||||||
|
$
|
285,271
|
|
|
$
|
3,950
|
|
|
$
|
279,038
|
|
|
$
|
2,283
|
|
|
$
|
284,802
|
|
|
$
|
3,676
|
|
|
$
|
270,038
|
|
|
$
|
11,088
|
|
(1)
|
During the second quarter of Fiscal 2019, the Company experienced a sustained reduction to its market capitalization. In addition, the Company revised its forecast for Fiscal 2019 and updated its long-range plan. Based on these factors, the Company concluded that an impairment trigger occurred and therefore an interim impairment test of the Vitamin Shoppe tradename was performed. The results of the interim impairment test indicated that the carrying value of the Vitamin Shoppe tradename exceeded its fair value. The Company recorded an impairment charge on the Vitamin Shoppe tradename of $9.0 million during the second quarter of Fiscal 2019, which represented the full remaining carrying value of this indefinite-lived tradename.
|
|
|
||
Remainder of Fiscal 2019
|
$
|
91
|
|
Fiscal 2020
|
381
|
|
|
Fiscal 2021
|
381
|
|
|
Fiscal 2022
|
378
|
|
|
Fiscal 2023
|
335
|
|
|
Thereafter
|
717
|
|
|
|
$
|
2,283
|
|
|
September 28, 2019
|
|
December 29, 2018
|
||||
Accrued salaries and related expenses
|
$
|
11,889
|
|
|
$
|
24,048
|
|
Sales tax payable and related expenses
|
7,491
|
|
|
7,092
|
|
||
Deferred sales
|
4,024
|
|
|
5,455
|
|
||
Other accrued expenses
|
32,933
|
|
|
28,913
|
|
||
|
$
|
56,337
|
|
|
$
|
65,508
|
|
|
September 28, 2019
|
|
December 29, 2018
|
||||
Liability component:
|
|
|
|
||||
Principal
|
$
|
60,439
|
|
|
$
|
60,439
|
|
Conversion feature
|
(17,115
|
)
|
|
(17,115
|
)
|
||
Liability portion of debt issuance costs
|
(2,675
|
)
|
|
(2,675
|
)
|
||
Amortization
|
16,773
|
|
|
14,921
|
|
||
Net carrying amount
|
$
|
57,422
|
|
|
$
|
55,570
|
|
|
|
|
|
||||
Equity component:
|
|
|
|
||||
Conversion feature
|
$
|
18,862
|
|
|
$
|
18,862
|
|
Equity portion of debt issuance costs
|
(793
|
)
|
|
(793
|
)
|
||
Deferred taxes
|
941
|
|
|
941
|
|
||
Net carrying amount
|
$
|
19,010
|
|
|
$
|
19,010
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Amortization of debt discount on Convertible Notes
|
$
|
544
|
|
|
$
|
594
|
|
|
$
|
1,612
|
|
|
$
|
2,570
|
|
Interest on Convertible Notes
|
340
|
|
|
390
|
|
|
1,020
|
|
|
1,738
|
|
||||
Amortization of deferred financing fees
|
110
|
|
|
120
|
|
|
329
|
|
|
485
|
|
||||
Interest / fees on the Revolving Credit Facility and other interest
|
86
|
|
|
185
|
|
|
260
|
|
|
636
|
|
||||
Interest expense, net
|
$
|
1,080
|
|
|
$
|
1,289
|
|
|
$
|
3,221
|
|
|
$
|
5,429
|
|
•
|
Lease liability and right-of use asset are recognized at the later of the lease commencement date and the date of adoption of December 30, 2018.
|
•
|
The lease liability is measured as the present value of the remaining lease payments using the discount rate based on the Company's incremental borrowing rates as no interest rates are explicitly stated in the lease agreements.
|
•
|
The right-of-use asset is measured based on the value of the lease liability, adjusted for the following:
|
•
|
Additions to the amount of the lease liability include:
|
•
|
Prepaid rent
|
•
|
Unamortized initial direct costs
|
•
|
Favorable assets resulting from business combinations
|
•
|
Reductions to the amount of the lease liability include:
|
•
|
Accrued / deferred rent
|
•
|
Lease incentives
|
•
|
Impairment charges
|
•
|
Cease use liabilities, such as lease termination costs
|
•
|
Unfavorable liabilities resulting from business combinations
|
•
|
Write-off of any unamortized initial direct costs that are no longer initial direct costs under Topic 842 as an adjustment to equity. For leases which commenced prior to adoption, this write-off is not applicable as the Company has elected the package of practical expedients, as noted below.
|
•
|
Lease liability and right-of-use asset are recognized based on the carrying value of the existing asset and liability at the later of the lease commencement date and the date of adoption of December 30, 2018.
|
•
|
Include any unamortized initial direct costs that meet the Topic 842 initial direct costs definition; write-off any unamortized initial direct costs that are no longer initial direct costs under Topic 842 as an adjustment to equity. For existing leases, this write-off is not applicable as the Company has elected the package of practical expedients, as noted below.
|
•
|
For leases that commenced before the effective date, (1) the Company need not reassess whether any expired or existing contracts are or contain leases, (2) the Company need not reassess the lease classification for any expired or existing leases and (3) the Company need not reassess initial direct costs for any existing leases.
|
•
|
To use hindsight in determining lease term and in assessing impairment of the Company’s right-of-use assets.
|
•
|
To not allocate the consideration in the contract between separate non-lease components and lease components.
|
|
|
Three Months
Ended
|
|
Nine Months Ended
|
||||
|
|
September 28, 2019
|
|
September 28, 2019
|
||||
|
|
(in thousands)
|
|
(in thousands)
|
||||
Lease cost
|
|
|
|
|
||||
Finance lease cost:
|
|
|
|
|
||||
Amortization of right-of-use assets
|
|
$
|
110
|
|
|
$
|
349
|
|
Interest on lease liabilities
|
|
13
|
|
|
45
|
|
||
Operating lease cost
|
|
29,252
|
|
|
88,315
|
|
||
Variable lease cost
|
|
2,884
|
|
|
8,390
|
|
||
Sublease income
|
|
(337
|
)
|
|
(879
|
)
|
||
Total lease cost
|
|
$
|
31,922
|
|
|
$
|
96,220
|
|
|
|
|
|
|
||||
Other Information
|
|
|
|
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
||||
Operating cash flows from finance leases
|
|
$
|
13
|
|
|
$
|
45
|
|
Operating cash flows from operating leases
|
|
$
|
30,628
|
|
|
$
|
91,978
|
|
Financing cash flows from finance leases
|
|
$
|
126
|
|
|
$
|
373
|
|
Right-of-use assets obtained in exchange for new finance lease liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
|
$
|
12,416
|
|
|
$
|
40,435
|
|
|
|
|
|
|
||||
|
|
|
|
As of
|
||||
|
|
|
|
September 28, 2019
|
||||
Weighted-average remaining lease term, in years – finance leases
|
|
|
|
|
2.0
|
|
||
Weighted-average remaining lease term, in years – operating leases
|
|
|
|
|
5.1
|
|
||
Weighted-average discount rate – finance leases
|
|
|
|
|
4.7
|
%
|
||
Weighted-average discount rate – operating leases
|
|
|
|
|
5.4
|
%
|
Right-of-use assets - operating leases
|
$
|
423,987
|
|
Right-of-use assets - finance leases
|
881
|
|
|
Total right-of-use assets
|
$
|
424,868
|
|
|
|
Operating
Leases
|
|
Finance
Leases
|
||||
Undiscounted cash flows:
|
|
|
|
|
||||
Year 1
|
|
$
|
118,458
|
|
|
$
|
558
|
|
Year 2
|
|
107,318
|
|
|
502
|
|
||
Year 3
|
|
92,140
|
|
|
56
|
|
||
Year 4
|
|
74,340
|
|
|
—
|
|
||
Year 5
|
|
53,768
|
|
|
—
|
|
||
Beyond Year 5
|
|
97,060
|
|
|
—
|
|
||
|
|
$
|
543,084
|
|
|
$
|
1,116
|
|
|
|
|
|
|
||||
Present values
|
|
$
|
464,523
|
|
|
$
|
1,061
|
|
|
|
|
|
|
||||
Short-term lease liabilities
|
|
$
|
96,238
|
|
|
$
|
518
|
|
Long-term lease liabilities
|
|
368,285
|
|
|
543
|
|
||
Total lease liabilities
|
|
$
|
464,523
|
|
|
$
|
1,061
|
|
|
|
|
|
|
||||
Difference between undiscounted cash flows and discounted cash flows
|
|
$
|
78,561
|
|
|
$
|
55
|
|
Fiscal year
|
Total
Operating
Leases (1)
|
||
2019
|
$
|
121,227
|
|
2020
|
108,993
|
|
|
2021
|
95,529
|
|
|
2022
|
80,274
|
|
|
2023
|
61,847
|
|
|
Thereafter
|
115,852
|
|
|
|
$
|
583,722
|
|
(1)
|
Store operating leases included in the above table do not include contingent rent based upon sales volume. Operating leases do not include common area maintenance costs or real estate taxes that are paid to the landlord during the year, which combined represented approximately 18.5% of our minimum lease obligations for Fiscal 2018.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|||||||||
|
Sales fulfilled in stores
|
$
|
216,636
|
|
|
$
|
240,642
|
|
|
$
|
693,215
|
|
|
$
|
752,933
|
|
|
Direct to consumer sales
|
36,497
|
|
|
35,994
|
|
|
114,126
|
|
|
112,770
|
|
||||
Net sales
|
$
|
253,133
|
|
|
$
|
276,636
|
|
|
$
|
807,341
|
|
|
$
|
865,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Product Category
|
|
|
|
|
|
|
|
|||||||||
|
Vitamins, Minerals, Herbs and Homeopathy
|
$
|
73,836
|
|
|
$
|
80,825
|
|
|
$
|
236,384
|
|
|
$
|
253,626
|
|
|
Sports Nutrition
|
71,608
|
|
|
82,143
|
|
|
230,827
|
|
|
261,151
|
|
||||
|
Specialty Supplements
|
69,087
|
|
|
72,019
|
|
|
215,151
|
|
|
223,427
|
|
||||
|
Other
|
37,991
|
|
|
41,078
|
|
|
123,198
|
|
|
125,700
|
|
||||
|
|
252,522
|
|
|
276,065
|
|
|
805,560
|
|
|
863,904
|
|
||||
|
Delivery Revenue
|
611
|
|
|
571
|
|
|
1,781
|
|
|
1,799
|
|
||||
|
Total net sales
|
$
|
253,133
|
|
|
$
|
276,636
|
|
|
$
|
807,341
|
|
|
$
|
865,703
|
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
Contract
Liabilities
|
||||
|
|
|
|
||||
Balances as of December 29, 2018
|
$
|
8,211
|
|
|
$
|
7,287
|
|
Increase / (Decrease)
|
771
|
|
|
(1,034
|
)
|
||
Balances as of March 30, 2019
|
8,982
|
|
|
6,253
|
|
||
Increase / (Decrease)
|
772
|
|
|
(1,113
|
)
|
||
Balances as of June 29, 2019
|
9,754
|
|
|
5,140
|
|
||
Increase / (Decrease)
|
(1,145
|
)
|
|
179
|
|
||
Balances as of September 28, 2019
|
$
|
8,609
|
|
|
$
|
5,319
|
|
|
|
|
|
||||
Balances as of December 30, 2017
|
$
|
10,937
|
|
|
$
|
7,511
|
|
Increase
|
1,055
|
|
|
899
|
|
||
Balances as of March 31, 2018
|
11,992
|
|
|
8,410
|
|
||
Increase / (Decrease)
|
(560
|
)
|
|
1,013
|
|
||
Balances as of June 30, 2018
|
11,432
|
|
|
9,423
|
|
||
Decrease
|
(515
|
)
|
|
(2,498
|
)
|
||
Balances as of September 29, 2018
|
$
|
10,917
|
|
|
$
|
6,925
|
|
|
Number of Unvested
Restricted Shares
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Unvested at December 29, 2018
|
436,397
|
|
|
$
|
11.70
|
|
Granted
|
226,539
|
|
|
$
|
6.47
|
|
Vested
|
(104,222
|
)
|
|
$
|
21.17
|
|
Canceled/forfeited
|
(214,140
|
)
|
|
$
|
6.74
|
|
Unvested at September 28, 2019
|
344,574
|
|
|
$
|
8.49
|
|
|
Number
of Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Life (years)
|
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||
Outstanding at December 29, 2018
|
272,000
|
|
|
$
|
17.13
|
|
|
|
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Canceled/forfeited
|
(36,050
|
)
|
|
$
|
30.17
|
|
|
|
|
|
||
Outstanding at September 28, 2019
|
235,950
|
|
|
$
|
15.13
|
|
|
7.03
|
|
$
|
261
|
|
Vested or expected to vest at September 28, 2019
|
225,677
|
|
|
$
|
15.54
|
|
|
6.98
|
|
|
||
Vested and exercisable at September 28, 2019
|
133,222
|
|
|
$
|
22.08
|
|
|
6.12
|
|
$
|
87
|
|
|
Nine Months Ended
|
|
|
September 29, 2018
|
|
Expected dividend yield
|
0.0
|
%
|
Weighted average expected volatility
|
42.61
|
%
|
Weighted average risk-free interest rate
|
2.54
|
%
|
Expected holding period
|
6.02 years
|
|
|
Number of Unvested
Performance Share
Units
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Unvested at December 29, 2018
|
443,869
|
|
|
$
|
10.64
|
|
Granted
|
372,504
|
|
|
$
|
6.82
|
|
Vested
|
(3,028
|
)
|
|
$
|
30.26
|
|
Canceled/forfeited
|
(171,252
|
)
|
|
$
|
10.15
|
|
Unvested at September 28, 2019
|
642,093
|
|
|
$
|
8.46
|
|
|
Number of Unvested
Restricted Share Units |
|
Weighted
Average Grant Date Fair Value |
|||
Unvested at December 29, 2018
|
89,340
|
|
|
$
|
7.84
|
|
Granted
|
159,144
|
|
|
$
|
3.77
|
|
Vested
|
(58,090
|
)
|
|
$
|
7.75
|
|
Canceled/forfeited
|
—
|
|
|
$
|
—
|
|
Unvested at September 28, 2019
|
190,394
|
|
|
$
|
4.46
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations
|
$
|
(3,409
|
)
|
|
$
|
1,880
|
|
|
$
|
(3,482
|
)
|
|
$
|
16,820
|
|
Net loss from discontinued operations
|
—
|
|
|
(3,626
|
)
|
|
—
|
|
|
(15,245
|
)
|
||||
Net income (loss)
|
$
|
(3,409
|
)
|
|
$
|
(1,746
|
)
|
|
$
|
(3,482
|
)
|
|
$
|
1,575
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
23,716,403
|
|
|
23,545,842
|
|
|
23,646,617
|
|
|
23,477,982
|
|
||||
Effect of dilutive securities (a):
|
|
|
|
|
|
|
|
||||||||
Stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
20,807
|
|
||||
Restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|
137,697
|
|
||||
Performance share units
|
—
|
|
|
—
|
|
|
—
|
|
|
80,543
|
|
||||
Restricted share units
|
—
|
|
|
—
|
|
|
—
|
|
|
26,827
|
|
||||
Diluted weighted average common shares outstanding
|
23,716,403
|
|
|
23,545,842
|
|
|
23,646,617
|
|
|
23,743,856
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) from continuing operations per common share
|
$
|
(0.14
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.15
|
)
|
|
$
|
0.72
|
|
Diluted net income (loss) from continuing operations per common share
|
$
|
(0.14
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.15
|
)
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net loss from discontinued operations per common share
|
$
|
—
|
|
|
$
|
(0.15
|
)
|
|
$
|
—
|
|
|
$
|
(0.65
|
)
|
Diluted net loss from discontinued operations per common share
|
$
|
—
|
|
|
$
|
(0.15
|
)
|
|
$
|
—
|
|
|
$
|
(0.64
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common share
|
$
|
(0.14
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.07
|
|
Diluted net income (loss) per common share
|
$
|
(0.14
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
0.07
|
|
•
|
Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
|
•
|
Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
|
|
September 28, 2019
|
|
December 29, 2018
|
||||
Fair Value
|
$
|
60,179
|
|
|
$
|
50,914
|
|
Carrying Value (1)
|
57,422
|
|
|
55,570
|
|
||
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net sales
|
$
|
253,133
|
|
|
$
|
276,636
|
|
|
$
|
807,341
|
|
|
$
|
865,703
|
|
Decrease in total comparable net sales (1)
|
(7.7
|
)%
|
|
(1.9
|
)%
|
|
(6.1
|
)%
|
|
(2.2
|
)%
|
||||
Gross profit as a percent of net sales
|
31.8
|
%
|
|
31.3
|
%
|
|
32.9
|
%
|
|
31.7
|
%
|
||||
Income (loss) from operations
|
$
|
(2,446
|
)
|
|
$
|
3,226
|
|
|
$
|
179
|
|
|
$
|
12,224
|
|
Adjusted EBITDA (2)
|
$
|
13,217
|
|
|
$
|
14,371
|
|
|
$
|
48,968
|
|
|
$
|
52,898
|
|
(1)
|
Total comparable net sales are comprised of comparable fulfilled in retail store sales and direct to consumer sales.
|
(2)
|
Adjusted EBITDA is defined as EBITDA (net income (loss) before interest expense, net, provision (benefit) for income taxes, depreciation and amortization), as further adjusted to exclude the effects of certain income and expense items that management believes make it more difficult to assess the Company's actual operating performance including certain items which are generally non-recurring. We have excluded the impact of such items from internal performance assessments. We believe that excluding such items helps investors compare our operating performance with our results in prior periods. We believe it is appropriate to exclude these items as they are not related to ongoing operating performance and, therefore, limit comparability between periods and between us and similar companies.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Net income (loss) from continuing operations
|
$
|
(3,409
|
)
|
|
$
|
1,880
|
|
|
$
|
(3,482
|
)
|
|
$
|
16,820
|
|
Additions:
|
|
|
|
|
|
|
|
||||||||
Provision (benefit) for income taxes
|
(117
|
)
|
|
57
|
|
|
440
|
|
|
6,204
|
|
||||
Interest expense, net
|
1,080
|
|
|
1,289
|
|
|
3,221
|
|
|
5,429
|
|
||||
Depreciation and amortization
|
10,944
|
|
|
10,504
|
|
|
30,708
|
|
|
31,233
|
|
||||
EBITDA
|
8,498
|
|
|
13,730
|
|
|
30,887
|
|
|
59,686
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Tradename impairment charge (a)
|
—
|
|
|
—
|
|
|
9,000
|
|
|
—
|
|
||||
Acquisition costs (b)
|
3,341
|
|
|
—
|
|
|
3,341
|
|
|
—
|
|
||||
Store closure costs (c)
|
620
|
|
|
—
|
|
|
2,433
|
|
|
—
|
|
||||
Management realignment costs (d)
|
225
|
|
|
363
|
|
|
1,681
|
|
|
2,211
|
|
||||
Right-of-use asset impairment charges (e)
|
317
|
|
|
—
|
|
|
1,410
|
|
|
—
|
|
||||
Legal settlement (f)
|
125
|
|
|
—
|
|
|
125
|
|
|
—
|
|
||||
Inventory obsolescence charge (g)
|
91
|
|
|
—
|
|
|
91
|
|
|
—
|
|
||||
Gain on extinguishment of debt (h)
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,229
|
)
|
||||
Inventory charge (i)
|
—
|
|
|
—
|
|
|
—
|
|
|
3,600
|
|
||||
Distribution center closing costs (j)
|
—
|
|
|
246
|
|
|
—
|
|
|
2,936
|
|
||||
Shareholder settlement (k)
|
—
|
|
|
32
|
|
|
—
|
|
|
694
|
|
||||
Adjusted EBITDA
|
$
|
13,217
|
|
|
$
|
14,371
|
|
|
$
|
48,968
|
|
|
$
|
52,898
|
|
(a)
|
Impairment charge on the Vitamin Shoppe tradename.
|
(b)
|
Costs related to the pending acquisition of Vitamin Shoppe.
|
(c)
|
Store closure costs primarily include lease termination fees.
|
(d)
|
Costs related to management turnover, including severance charges, recruitment costs and other professional fees.
|
(e)
|
Charges incurred to reflect the fair market value of the right-of-use assets associated with certain retail locations.
|
(f)
|
Costs incurred related to the settlement of a legal matter.
|
(g)
|
Write-off of inventory acquired in an asset purchase transaction.
|
(h)
|
Gain recognized on the repurchases of a portion of Convertible Notes.
|
(i)
|
Inventory charge resulting from an evaluation to optimize the Company's product assortment.
|
(j)
|
Costs related to the closing of the North Bergen, New Jersey distribution center.
|
(k)
|
Professional fees incurred related to shareholder settlement.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||
Store Data:
|
|
|
|
|
|
|
|
||||
Stores open at beginning of period
|
765
|
|
|
782
|
|
|
774
|
|
|
785
|
|
Stores opened
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
Stores closed
|
(2
|
)
|
|
(3
|
)
|
|
(11
|
)
|
|
(7
|
)
|
Stores open at end of period
|
764
|
|
|
780
|
|
|
764
|
|
|
780
|
|
Total retail square footage at end of period (in thousands)
|
2,673
|
|
|
2,718
|
|
|
2,673
|
|
|
2,718
|
|
Average store square footage at end of period
|
3,499
|
|
|
3,485
|
|
|
3,499
|
|
|
3,485
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
$
Change
|
|
%
Change
|
|||||||
Net sales
|
$
|
253,133
|
|
|
$
|
276,636
|
|
|
$
|
(23,503
|
)
|
|
(8.5
|
)%
|
Cost of goods sold
|
172,565
|
|
|
189,945
|
|
|
(17,380
|
)
|
|
(9.2
|
)%
|
|||
Cost of goods sold as % of net sales
|
68.2
|
%
|
|
68.7
|
%
|
|
|
|
|
|||||
Gross profit
|
80,568
|
|
|
86,691
|
|
|
(6,123
|
)
|
|
(7.1
|
)%
|
|||
Gross profit as % of net sales
|
31.8
|
%
|
|
31.3
|
%
|
|
|
|
|
|||||
Selling, general and administrative expenses
|
82,493
|
|
|
82,747
|
|
|
(254
|
)
|
|
(0.3
|
)%
|
|||
SG&A expenses as % of net sales
|
32.6
|
%
|
|
29.9
|
%
|
|
|
|
|
|||||
Impairment charges on fixed and right-of-use assets
|
521
|
|
|
718
|
|
|
(197
|
)
|
|
(27.4
|
)%
|
|||
Impairment charges as % of net sales
|
0.2
|
%
|
|
0.3
|
%
|
|
|
|
|
|||||
Income (loss) from operations
|
(2,446
|
)
|
|
3,226
|
|
|
(5,672
|
)
|
|
(175.8
|
)%
|
|||
Income (loss) from operations as % of net sales
|
(1.0
|
)%
|
|
1.2
|
%
|
|
|
|
|
|||||
Interest expense, net
|
1,080
|
|
|
1,289
|
|
|
(209
|
)
|
|
(16.2
|
)%
|
|||
Income (loss) before provision (benefit) for income taxes
|
(3,526
|
)
|
|
1,937
|
|
|
(5,463
|
)
|
|
(282.0
|
)%
|
|||
Provision (benefit) for income taxes
|
(117
|
)
|
|
57
|
|
|
(174
|
)
|
|
(305.3
|
)%
|
|||
Net income (loss) from continuing operations
|
(3,409
|
)
|
|
1,880
|
|
|
(5,289
|
)
|
|
(281.3
|
)%
|
|||
Net loss from discontinued operations
|
—
|
|
|
(3,626
|
)
|
|
3,626
|
|
|
(100.0
|
)%
|
|||
Net income (loss)
|
$
|
(3,409
|
)
|
|
$
|
(1,746
|
)
|
|
$
|
(1,663
|
)
|
|
95.2
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
$
Change
|
|
%
Change
|
|||||||
SG&A Expenses (in thousands):
|
|
|
|
|
|
|
|
|||||||
Store Payroll and Benefits (a)
|
$
|
33,894
|
|
|
$
|
34,693
|
|
|
$
|
(799
|
)
|
|
(2.3
|
)%
|
Store Payroll & benefits as % of net sales
|
13.4
|
%
|
|
12.5
|
%
|
|
|
|
|
|||||
Advertising and Promotion (b)
|
6,418
|
|
|
5,934
|
|
|
484
|
|
|
8.2
|
%
|
|||
Advertising & promotion as % of net sales
|
2.5
|
%
|
|
2.1
|
%
|
|
|
|
|
|||||
Other SG&A (c)
|
42,181
|
|
|
42,120
|
|
|
61
|
|
|
0.1
|
%
|
|||
Other SG&A as % of net sales
|
16.7
|
%
|
|
15.2
|
%
|
|
|
|
|
|||||
Total SG&A Expenses
|
$
|
82,493
|
|
|
$
|
82,747
|
|
|
$
|
(254
|
)
|
|
(0.3
|
)%
|
(a)
|
Store payroll and benefits decreased primarily due to store closures and more efficient distribution of labor.
|
(b)
|
Advertising and promotion expenses increased primarily due to higher digital advertising expenditures partially offset by lower advertising expenditures at retail locations.
|
(c)
|
Other selling, general and administrative expenses included lower overhead expenses totaling $4.1 million which primarily includes a decrease in incentive compensation and is partially offset by an increase in depreciation and amortization of $0.7 million. The three months ended September 28, 2019 includes costs related to the pending acquisition of Vitamin Shoppe of $3.3 million, store closure costs of $0.6 million and management realignment costs of $0.2 million. The three months ended September 29, 2018 includes management realignment costs of $0.4 million and costs related to the closing of the North Bergen, New Jersey distribution center of $0.2 million.
|
|
Nine Months Ended
|
|
|
|
|
|||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
$
Change
|
|
%
Change
|
|||||||
Net sales
|
$
|
807,341
|
|
|
$
|
865,703
|
|
|
$
|
(58,362
|
)
|
|
(6.7
|
)%
|
Cost of goods sold
|
541,687
|
|
|
591,665
|
|
|
(49,978
|
)
|
|
(8.4
|
)%
|
|||
Cost of goods sold as % of net sales
|
67.1
|
%
|
|
68.3
|
%
|
|
|
|
|
|||||
Gross profit
|
265,654
|
|
|
274,038
|
|
|
(8,384
|
)
|
|
(3.1
|
)%
|
|||
Gross profit as % of net sales
|
32.9
|
%
|
|
31.7
|
%
|
|
|
|
|
|||||
Selling, general and administrative expenses
|
254,071
|
|
|
260,263
|
|
|
(6,192
|
)
|
|
(2.4
|
)%
|
|||
SG&A expenses as % of net sales
|
31.5
|
%
|
|
30.1
|
%
|
|
|
|
|
|||||
Impairment charges on fixed, intangible and right-of-use assets
|
11,404
|
|
|
1,551
|
|
|
9,853
|
|
|
635.3
|
%
|
|||
Impairment charges as % of net sales
|
1.4
|
%
|
|
0.2
|
%
|
|
|
|
|
|||||
Income from operations
|
179
|
|
|
12,224
|
|
|
(12,045
|
)
|
|
(98.5
|
)%
|
|||
Income from operations as % of net sales
|
—
|
%
|
|
1.4
|
%
|
|
|
|
|
|||||
Gain on extinguishment of debt
|
—
|
|
|
16,229
|
|
|
(16,229
|
)
|
|
(100.0
|
)%
|
|||
Interest expense, net
|
3,221
|
|
|
5,429
|
|
|
(2,208
|
)
|
|
(40.7
|
)%
|
|||
Income (loss) before provision for income taxes
|
(3,042
|
)
|
|
23,024
|
|
|
(26,066
|
)
|
|
(113.2
|
)%
|
|||
Provision for income taxes
|
440
|
|
|
6,204
|
|
|
(5,764
|
)
|
|
(92.9
|
)%
|
|||
Net income (loss) from continuing operations
|
(3,482
|
)
|
|
16,820
|
|
|
(20,302
|
)
|
|
(120.7
|
)%
|
|||
Net loss from discontinued operations
|
—
|
|
|
(15,245
|
)
|
|
15,245
|
|
|
(100.0
|
)%
|
|||
Net income (loss)
|
$
|
(3,482
|
)
|
|
$
|
1,575
|
|
|
$
|
(5,057
|
)
|
|
(321.1
|
)%
|
|
Nine Months Ended
|
|
|
|
|
|||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
$
Change
|
|
%
Change
|
|||||||
SG&A Expenses (in thousands):
|
|
|
|
|
|
|
|
|||||||
Store Payroll and Benefits (a)
|
$
|
102,456
|
|
|
$
|
106,685
|
|
|
$
|
(4,229
|
)
|
|
(4.0
|
)%
|
Store Payroll & benefits as % of net sales
|
12.7
|
%
|
|
12.3
|
%
|
|
|
|
|
|||||
Advertising and Promotion (b)
|
21,622
|
|
|
19,307
|
|
|
2,315
|
|
|
12.0
|
%
|
|||
Advertising & promotion as % of net sales
|
2.7
|
%
|
|
2.2
|
%
|
|
|
|
|
|||||
Other SG&A (c)
|
129,993
|
|
|
134,271
|
|
|
(4,278
|
)
|
|
(3.2
|
)%
|
|||
Other SG&A as % of net sales
|
16.1
|
%
|
|
15.5
|
%
|
|
|
|
|
|||||
Total SG&A Expenses
|
$
|
254,071
|
|
|
$
|
260,263
|
|
|
$
|
(6,192
|
)
|
|
(2.4
|
)%
|
(a)
|
Store payroll and benefits decreased primarily due to a decrease in health insurance costs, store closures and lower store commissions.
|
(b)
|
Advertising and promotion expenses increased primarily due to higher digital advertising expenditures partially offset by lower advertising expenditures at retail locations.
|
(c)
|
Other selling, general and administrative expenses included lower overhead expenses totaling $8.1 million which includes decreases in incentive compensation and health insurance costs and is partially offset by an increase in depreciation and amortization of $0.7 million. The nine months ended September 28, 2019 includes costs related to the pending acquisition of Vitamin Shoppe of $3.3 million, store closure costs of $2.3 million and management realignment costs of $1.7 million. The nine months ended September 29, 2018 includes management realignment costs of $2.2 million, costs related to the closing of the North Bergen, New Jersey distribution center of $1.1 million and professional fees related to shareholder settlement of $0.7 million.
|
|
As of
|
||||||
|
September 28, 2019
|
|
December 29, 2018
|
||||
Balance Sheet Data:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
15,995
|
|
|
$
|
2,668
|
|
Working capital (a)
|
30,115
|
|
|
114,065
|
|
||
Total assets
|
800,262
|
|
|
388,079
|
|
||
Total debt (b)
|
58,483
|
|
|
57,005
|
|
|
Nine Months Ended
|
||||||
|
September 28, 2019
|
|
September 29, 2018
|
||||
Other Information:
|
|
|
|
||||
Depreciation and amortization of fixed assets, intangible assets and finance leases right-of-use assets
|
$
|
30,708
|
|
|
$
|
32,002
|
|
Cash Flows Provided By (Used In):
|
|
|
|
||||
Operating activities
|
$
|
34,012
|
|
|
$
|
77,599
|
|
Investing activities
|
(19,916
|
)
|
|
(10,058
|
)
|
||
Financing activities
|
(769
|
)
|
|
(67,697
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
1
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
13,327
|
|
|
$
|
(155
|
)
|
Period
|
Total Number
of Shares (or
Units)
Purchased
(1)
|
|
Average Price
Paid per Share
(or Unit)
|
|
Total Number of Shares (or Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs
(2)
|
|
Maximum Number (or
Approximate Dollar
Value) of Shares (or
Units) that May Yet
Be Purchased Under
the Plans or Programs
(in thousands) (2)
|
||||||
June 30, 2019 through July 27, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
70,000
|
|
July 28, 2019 through August 24, 2019
|
2,234
|
|
|
$
|
5.85
|
|
|
—
|
|
|
$
|
70,000
|
|
August 25, 2019 through September 28, 2019
|
695
|
|
|
$
|
6.47
|
|
|
—
|
|
|
$
|
70,000
|
|
Totals
|
2,929
|
|
|
|
|
—
|
|
|
|
(1)
|
Shares withheld to cover required tax payments on behalf of employees as their equity awards vest.
|
(2)
|
On August 5, 2014, May 6, 2015 and November 23, 2015, the Company’s board of directors approved share repurchase programs that enable the Company to purchase up to an aggregate of $300 million of its shares of common stock from time to time over three year periods ending on August 4, 2017, May 5, 2018 and November 22, 2018, respectively. On May 5, 2017, the Company's board of directors authorized the repurchase of up to an additional $70.0 million of equity and equity-linked securities. On October 31, 2018, the Company's board of directors approved a two year extension of the remaining repurchase program. On May 1, 2019, the Company’s board of directors increased the amount available under this program to $70.0 million. This repurchase program will expire on November 22, 2020.
|
2.1
|
3.1
|
3.2
|
10.1
|
31.1
|
31.2
|
32.1
|
32.2
|
101.1
|
The following financial information from the Company’s Quarterly Report on Form 10-Q, for the period ended September 28, 2019, formatted in eXtensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
|
|
|
|
VITAMIN SHOPPE, INC.
|
||
|
|
|
By:
|
|
/s/ Charles D. Knight
|
|
|
Charles D. Knight
|
|
|
EVP and Chief Financial Officer
|
1 Year Vitamin Shoppe Chart |
1 Month Vitamin Shoppe Chart |
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