LAKEWOOD, Colo., Feb. 4, 2021 /PRNewswire/ -- Natural Grocers
by Vitamin Cottage, Inc. (NYSE: NGVC) today announced results for
its first quarter of fiscal 2021 ended December 31, 2020 and confirmed its outlook for
fiscal 2021.
Highlights for First Quarter Fiscal 2021 Compared to First
Quarter Fiscal 2020
- Net sales increased 15.2% to $265.0
million;
- Daily average comparable store sales increased 12.7%;
- Operating income increased 82.7% to $5.2
million;
- Net income increased 94.4% to $3.6
million with diluted earnings per share of $0.16;
- Adjusted EBITDA increased 25.5% to $13.2
million; and
- Opened one new store, resulting in a 3.2% new store growth rate
for the twelve-month period ended December
31, 2020.
"We had a strong start to fiscal 2021, with first quarter
results reflecting robust sales and profitability growth. Daily
average comparable store sales increased 12.7%, net sales increased
15.2% and net income increased 94.4%, compared to the first quarter
of fiscal 2020. Our results continue to reflect strong increases in
average basket size consistent with recent trends as customers made
fewer shopping trips to our stores but increased their spend per
trip. Our success is directly attributable to our commitment to our
founding principles, which include providing the highest quality,
healthy foods at an Always Affordable PriceSM. These
principles truly speak to today's consumer," said Kemper Isely, Co-President. "We are extremely
grateful for the dedication of each of our good4uSM Crew
members. We continue to prioritize the safety of our customers and
crew amidst the COVID-19 pandemic."
Operating Results — First Quarter Fiscal 2021 Compared to
First Quarter Fiscal 2020
During the first quarter of fiscal 2021, net sales increased
$35.0 million, or 15.2%, to
$265.0 million compared to the same
period in fiscal 2020, driven by a $29.2
million increase in comparable store sales and a
$5.8 million increase in new store
sales. Daily average comparable store sales increased 12.7% in the
first quarter of fiscal 2021 compared to a 1.9% increase in the
first quarter of fiscal 2020. The daily average comparable store
sales increase during the first quarter of fiscal 2021 reflected a
21.4% increase in daily average transaction size, partially offset
by a 7.1% decrease in daily average transaction count. During the
first quarter of fiscal 2021, recent trends continued as customers
made fewer shopping trips to our stores but increased their spend
per trip. The increase in net sales during the three months ended
December 31, 2020 was primarily
driven by the continued strong demand for food at home during the
pandemic, in addition to marketing initiatives, promotional
campaigns and increased membership in and usage of the {N}power®
customer loyalty program.
Gross profit increased $12.5
million, or 20.7%, to $73.0
million for the three months ended December 31, 2020 compared to $60.5 million for the three months ended
December 31, 2019. Gross profit
reflects earnings after both product and occupancy expenses. Gross
margin increased to 27.6% for the three months ended December 31, 2020 compared to 26.3% for the three
months ended December 31, 2019. The
increase in gross margin for the three months ended December 31, 2020 was primarily driven by store
occupancy and shrink expense leverage, as well as an improved
product margin.
Store expenses during the first quarter of fiscal 2021 increased
17.3%, to $60.3 million, compared to
the same period in fiscal 2020. Store expenses as a percentage of
sales increased to 22.8% during the first quarter of fiscal 2021
compared to 22.4% in the first quarter of fiscal 2020. Elevated
labor-related expenses were the primary driver of the increase in
store expenses during the quarter.
Administrative expenses increased 25.5% to $7.3 million during the first quarter of fiscal
2021 compared to $5.8 million for the
same period in fiscal 2020. Administrative expenses as a percentage
of sales increased to 2.8% during the first quarter of fiscal 2021
compared to 2.5% in the first quarter of fiscal 2020.
Operating income increased 82.7% to $5.2
million during the first quarter of fiscal 2021 compared to
the comparable period in fiscal 2020. Operating margin during the
first quarter of fiscal 2021 increased to 2.0% compared to 1.2% in
the same period in fiscal 2020.
Net income for the first quarter of fiscal 2021 was $3.6 million, or $0.16 of diluted earnings per share, compared to
net income of $1.9 million, or
$0.08 of diluted earnings per share
in the first quarter of fiscal 2020.
Adjusted EBITDA increased 25.5% to $13.2
million in the first quarter of fiscal 2021 compared to
$10.6 million in the first quarter of
fiscal 2020.
Balance Sheet and Cash Flow
As of December 31, 2020, the
Company had $24.7 million in cash and
cash equivalents, no outstanding balance on the Company's
$50.0 million revolving credit
facility and $35.0 million
outstanding on the fully drawn term loan facility.
During the first quarter of fiscal 2021, the Company generated
$12.3 million in cash from operations
and invested $3.7 million in net
capital expenditures.
Dividend Announcement
Today, the Company announced the declaration of a quarterly cash
dividend of $0.07 per common share.
The dividend will be paid on March 17,
2021 to all stockholders of record at the close of business
on March 1, 2021.
Growth and Development
During the first quarter of fiscal 2021, the Company opened one
new store, ending the quarter with a total store count of 160
stores in 20 states. The Company's one store opening during the
first quarter of fiscal 2021 compared to opening two new stores in
the first quarter of fiscal 2020, resulting in 3.2% and 2.6% unit
growth rates for the twelve month periods ended December 31, 2020 and December 31, 2019, respectively. Since
December 31, 2020, the Company has
not opened any new stores.
As of February 4, 2021, the
Company has signed leases for six new stores which will be
located in Colorado, Missouri, Nevada, and Oregon. These new stores are planned to open
during fiscal 2021 and beyond.
Fiscal 2021 Outlook
The Company is confirming its fiscal 2021 outlook, which was
previously announced on November 19,
2020. The fiscal 2021 outlook reflects current trends in
light of the rapidly evolving COVID-19 environment and related
government mandates. While the Company cannot predict the duration
or severity of the pandemic and related government mandates, the
Company expects these factors will continue to impact its
operations and financial performance through fiscal 2021. The
Company expects:
|
Fiscal
2021
Outlook
|
Number of new
stores
|
5-6
|
Number of
relocations
|
3-5
|
Daily average
comparable store sales growth
|
-2.0% to
2.0%
|
Diluted earnings per
share
|
$0.60 to
$0.70
|
|
|
Capital expenditures
(in millions)
|
$28 to $35
|
Earnings Conference Call
The Company will host a conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time) to discuss this earnings
release. The dial-in number is 1-888-347-6606 (US); 1-855-669-9657
(Canada); or 1-412-902-4289
(International). The conference ID is "Natural Grocers by Vitamin
Cottage." A simultaneous audio webcast will be available at
http://Investors.NaturalGrocers.com and archived for a minimum of
30 days.
About Natural Grocers by Vitamin Cottage
Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is an
expanding specialty retailer of natural and organic groceries, body
care products and dietary supplements. The products sold by Natural
Grocers must meet strict quality guidelines and may not contain
artificial colors, flavors, preservatives or sweeteners, or
partially hydrogenated or hydrogenated oils. The Company sells only
USDA certified organic produce and exclusively pasture-raised,
non-confinement dairy products, and free-range eggs. Natural
Grocers' flexible smaller-store format allows it to offer
affordable prices in a shopper-friendly, safe and convenient retail
environment. The Company also provides extensive free science-based
nutrition education programs to help customers make informed health
and nutrition choices. The Company, founded in 1955, has 160 stores
in 20 states.
Visit www.NaturalGrocers.com for more information and store
locations.
Forward-Looking Statements
The following constitutes a "safe harbor" statement under the
Private Securities Litigation Reform Act of 1995. Except for the
historical information contained herein, statements in this release
are "forward-looking statements" and are based on current
expectations and assumptions that are subject to risks and
uncertainties. All statements that are not statements of historical
fact are forward-looking statements. Actual results could differ
materially from those described in the forward-looking statements
because of factors such as risks and challenges related to the
COVID-19 pandemic and government mandates, the economy, changes in
the Company's industry, business strategy, goals and expectations
concerning the Company's market position, future operations,
margins, profitability, capital expenditures, liquidity and capital
resources, future growth, other financial and operating information
and other risks detailed in the Company's Annual Report on Form
10-K for the fiscal year ended September 30,
2020 (the Form 10-K) and the Company's subsequent quarterly
reports on Form 10-Q. The information contained herein speaks only
as of the date of this release and the Company undertakes no
obligation to update forward-looking statements, except as may be
required by the securities laws.
For further information regarding risks and uncertainties
associated with the Company's business, please refer to the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Risk Factors" sections of the Company's
filings with the Securities and Exchange Commission, including, but
not limited to, the Form 10-K and the Company's subsequent
quarterly reports on Form 10-Q, copies of which may be obtained by
contacting Investor Relations at 303-986-4600 or by visiting the
Company's website at http://Investors.NaturalGrocers.com.
Investor Contact:
Reed Anderson, ICR 646-277-1260,
reed.anderson@icrinc.com
NATURAL GROCERS BY
VITAMIN COTTAGE, INC.
|
|
Consolidated
Statements of Income
(Unaudited)
(Dollars in thousands, except per share
data)
|
|
|
|
Three months
ended
December
31,
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Net sales
|
|
$
|
265,045
|
|
230,030
|
|
Cost of goods sold
and occupancy costs
|
|
192,020
|
|
169,506
|
|
Gross
profit
|
|
73,025
|
|
60,524
|
|
Store
expenses
|
|
60,330
|
|
51,427
|
|
Administrative
expenses
|
|
7,304
|
|
5,819
|
|
Pre-opening and
relocation expenses
|
|
189
|
|
430
|
|
Operating
income
|
|
5,202
|
|
2,848
|
|
Interest expense,
net
|
|
(510)
|
|
(536)
|
|
Income before income
taxes
|
|
4,692
|
|
2,312
|
|
Provision for income
taxes
|
|
(1,060)
|
|
(444)
|
|
Net income
|
|
$
|
3,632
|
|
1,868
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
Basic
|
|
$
|
0.16
|
|
0.08
|
|
Diluted
|
|
$
|
0.16
|
|
0.08
|
|
Weighted average
number of shares of common stock outstanding:
|
|
|
|
|
|
Basic
|
|
22,558,946
|
|
22,471,350
|
|
Diluted
|
|
22,690,817
|
|
22,542,967
|
|
NATURAL GROCERS BY
VITAMIN COTTAGE, INC.
|
|
Consolidated
Balance Sheets
(Dollars in thousands, except per share
data)
|
|
|
|
|
December
31,
2020
|
|
September 30,
2020
|
|
Assets
|
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
24,661
|
|
28,534
|
|
Accounts receivable,
net
|
|
6,703
|
|
8,519
|
|
Merchandise
inventory
|
|
99,598
|
|
100,175
|
|
Prepaid expenses and
other current assets
|
|
3,754
|
|
6,185
|
|
Total current
assets
|
|
134,716
|
|
143,413
|
|
Property and
equipment, net
|
|
145,105
|
|
147,929
|
|
Operating lease
assets, net
|
|
333,735
|
|
339,239
|
|
Finance lease assets,
net
|
|
39,275
|
|
40,096
|
|
Deposits and other
assets(1)
|
|
622
|
|
647
|
|
Goodwill and other
intangible assets, net
|
|
10,638
|
|
10,468
|
|
Total
other assets
|
|
384,270
|
|
390,450
|
|
Total
assets
|
|
$
|
664,091
|
|
681,792
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
|
65,750
|
|
69,163
|
|
Accrued
expenses
|
|
23,306
|
|
24,995
|
|
Term loan facility,
current portion
|
|
1,750
|
|
—
|
|
Operating lease
obligations, current portion
|
|
32,196
|
|
32,156
|
|
Finance lease
obligations, current portion
|
|
2,929
|
|
2,836
|
|
Total current
liabilities
|
|
125,931
|
|
129,150
|
|
Long-term
liabilities:
|
|
|
|
|
|
Term loan facility,
net of current portion
|
|
33,250
|
|
—
|
|
Operating lease
obligations, net of current portion
|
|
320,004
|
|
325,641
|
|
Finance lease
obligations, net of current portion
|
|
38,748
|
|
39,506
|
|
Deferred income tax
liabilities, net
|
|
16,000
|
|
14,429
|
|
Total long-term
liabilities
|
|
408,002
|
|
379,576
|
|
Total
liabilities
|
|
533,933
|
|
508,726
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common stock, $0.001
par value, 50,000,000 shares authorized, and 22,563,649 and
22,546,765 shares issued and outstanding at December 31, 2020 and
September 30, 2020, respectively
|
|
23
|
|
23
|
|
Additional paid-in
capital
|
|
56,918
|
|
56,752
|
|
Retained
earnings
|
|
73,217
|
|
116,291
|
|
Total stockholders'
equity
|
|
130,158
|
|
173,066
|
|
Total liabilities and
stockholders' equity
|
|
$
664,091
|
|
681,792
|
|
|
(1) Certain prior year amounts have
been combined for consistency with current year
presentation.
|
NATURAL GROCERS BY
VITAMIN COTTAGE, INC.
|
|
Consolidated
Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
|
|
|
|
Three months
ended
December
31,
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
3,632
|
|
1,868
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
7,637
|
|
7,707
|
|
Loss on disposal of
property and equipment
|
|
—
|
|
1
|
|
Lease exit
costs
|
|
105
|
|
—
|
|
Share-based
compensation
|
|
248
|
|
279
|
|
Deferred income tax
expense
|
|
1,571
|
|
424
|
|
Non-cash interest
expense
|
|
3
|
|
3
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
Decrease (increase)
in:
|
|
|
|
|
|
Accounts receivable,
net
|
|
1,816
|
|
378
|
|
Merchandise
inventory
|
|
577
|
|
(1,966)
|
|
Prepaid expenses and
other assets
|
|
(550)
|
|
(371)
|
|
Income tax
receivable
|
|
3,004
|
|
29
|
|
Operating lease
asset
|
|
7,664
|
|
7,451
|
|
(Decrease) increase
in:
|
|
|
|
|
|
Operating lease
liability
|
|
(7,955)
|
|
(7,625)
|
|
Accounts
payable
|
|
(3,720)
|
|
(669)
|
|
Accrued
expenses
|
|
(1,689)
|
|
2,971
|
|
Net cash provided by
operating activities
|
|
12,343
|
|
10,480
|
|
Investing
activities:
|
|
|
|
|
|
Acquisition of
property and equipment
|
|
(3,273)
|
|
(10,982)
|
|
Acquisition of other
intangibles
|
|
(427)
|
|
(1,008)
|
|
Proceeds from property
insurance settlements
|
|
—
|
|
17
|
|
Net cash used in
investing activities
|
|
(3,700)
|
|
(11,973)
|
|
Financing
activities:
|
|
|
|
|
|
Borrowings under
revolving facility
|
|
—
|
|
113,000
|
|
Repayments under
revolving facility
|
|
—
|
|
(110,400)
|
|
Borrowings under term
loan facility
|
|
35,000
|
|
—
|
|
Finance lease
obligation payments
|
|
(675)
|
|
(519)
|
|
Dividend to
shareholders
|
|
(46,706)
|
|
(1,573)
|
|
Loan fees
paid
|
|
(53)
|
|
(25)
|
|
Payments on
withholding tax for restricted stock unit vesting
|
|
(82)
|
|
(47)
|
|
Net cash (used in)
provided by financing activities
|
|
(12,516)
|
|
436
|
|
Net decrease in cash
and cash equivalents
|
|
(3,873)
|
|
(1,057)
|
|
Cash and cash
equivalents, beginning of period
|
|
28,534
|
|
6,214
|
|
Cash and cash
equivalents, end of period
|
|
$
|
24,661
|
|
5,157
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
8
|
|
163
|
|
Cash paid for interest
on finance lease obligations, net of capitalized interest of $37
and $45, respectively
|
|
463
|
|
373
|
|
Income taxes
paid
|
|
—
|
|
10
|
|
Supplemental
disclosures of non-cash investing and financing
activities:
|
|
|
|
|
|
Acquisition of
property and equipment not yet paid
|
|
$
|
2,778
|
|
6,015
|
|
Acquisition of other
intangibles not yet paid
|
|
|
196
|
|
482
|
|
Property acquired
through operating lease obligations
|
|
|
2,769
|
|
6,378
|
|
Property acquired
through finance lease obligations
|
|
|
106
|
|
1,322
|
|
NATURAL GROCERS BY
VITAMIN COTTAGE, INC.
|
|
Non-GAAP financial
measures (Unaudited)
|
|
EBITDA and
Adjusted EBITDA
|
|
EBITDA and Adjusted
EBITDA are not measures of financial performance under GAAP.
We define EBITDA as net income before interest expense, provision
for income taxes, depreciation and amortization. We define
Adjusted EBITDA as EBITDA as 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 such as impairment charges,
store closing and lease exit costs and non-recurring items.
The adjustment to EBITDA for the three months ended December 31,
2020 is related to lease exit costs associated with one store that
closed in the first quarter of fiscal year 2019.
|
|
The following table
reconciles net income to EBITDA and Adjusted EBITDA, dollars in
thousands:
|
|
|
|
|
Three months
ended
December
31,
|
|
|
|
|
2020
|
|
2019
|
|
|
Net income
|
|
$
|
3,632
|
|
1,868
|
|
|
Interest expense,
net
|
|
510
|
|
536
|
|
|
Provision for income
taxes
|
|
1,060
|
|
444
|
|
|
Depreciation and
amortization
|
|
7,637
|
|
7,707
|
|
|
EBITDA
|
|
|
12,839
|
|
10,555
|
|
|
Lease exit
costs
|
|
|
405
|
|
—
|
|
|
Adjusted
EBITDA
|
|
$
|
13,244
|
|
10,555
|
|
|
EBITDA increased 21.6% to $12.8
million in the three months ended December 31, 2020 compared to $10.6 million for the three months ended
December 31, 2019. EBITDA as a
percentage of sales was 4.8% and 4.6% in the three months ended
December 31, 2020 and 2019,
respectively.
Adjusted EBITDA increased 25.5% to $13.2
million in the three months ended December 31, 2020 compared to $10.6 million in the three months ended
December 31, 2019. Adjusted
EBITDA as a percentage of sales was 5.0% and 4.6% for the three
months ended December 31, 2020 and
2019, respectively.
Management believes some investors' understanding of our
performance is enhanced by including EBITDA and Adjusted EBITDA,
non-GAAP financial measures. We believe EBITDA and Adjusted
EBITDA provide additional information about: (i) our operating
performance, because it assists us in comparing the operating
performance of our stores on a consistent basis, as it removes the
impact of non-cash depreciation and amortization expense as well as
items not directly resulting from our core operations such as
interest expense and income taxes and (ii) our performance and the
effectiveness of our operational strategies. Additionally,
EBITDA is a component of a measure in our financial covenants under
our credit facility.
Furthermore, management believes some investors use EBITDA and
Adjusted EBITDA as supplemental measures to evaluate the overall
operating performance of companies in our industry. Management
believes some investors' understanding of our performance is
enhanced by including these non-GAAP financial measures as a
reasonable basis for comparing our ongoing results of operations.
By providing these non-GAAP financial measures, together with a
reconciliation from net income, we believe we are enhancing
analysts' and investors' understanding of our business and our
results of operations, as well as assisting analysts and investors
in evaluating how well we are executing our strategic
initiatives.
Our competitors may define EBITDA and Adjusted EBITDA
differently, and as a result, our measure of EBITDA and Adjusted
EBITDA may not be directly comparable to those of other companies.
Items excluded from EBITDA are significant components in
understanding and assessing financial performance. EBITDA and
Adjusted EBITDA are supplemental measures of operating performance
that do not represent, and should not be considered in isolation or
as an alternative to, or substitute for, net income or other
financial statement data presented in the consolidated financial
statements as indicators of financial performance. EBITDA and
Adjusted EBITDA have limitations as an analytical tool, and should
not be considered in isolation, or as an alternative to, or as a
substitute for, analysis of our results as reported under GAAP.
Some of the limitations are:
- EBITDA and Adjusted EBITDA do not reflect our cash
expenditures, or future requirements for capital expenditures or
contractual commitments;
- EBITDA and Adjusted EBITDA do not reflect changes in, or cash
requirements for, our working capital needs;
- EBITDA and Adjusted EBITDA do not reflect any impact for single
lease expense for leases classified as finance leases;
- EBITDA and Adjusted EBITDA do not reflect the interest expense,
or the cash requirements necessary to service interest or principal
payments on our debt;
- EBITDA and Adjusted EBITDA do not reflect our tax expense or
the cash requirements to pay our taxes; and
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future and EBITDA and Adjusted EBITDA do not
reflect any cash requirements for such replacements.
Due to these limitations, EBITDA and Adjusted EBITDA should not
be considered as a measure of discretionary cash available to us to
invest in the growth of our business. We compensate for these
limitations by relying primarily on our GAAP results and using
EBITDA and Adjusted EBITDA as supplemental information.
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SOURCE Natural Grocers by Vitamin Cottage, Inc.