Nutraceutical International reports net income of $3.2M for fourth-quarter fiscal 2009

Nutraceutical International Corporation (Nasdaq: NUTR) today reported results for the fiscal 2009 fourth quarter and year ended September 30, 2009. Net sales for the fiscal 2009 fourth quarter were $41.4 million compared to $40.9 million for the same quarter of fiscal 2008. For the fourth quarter of fiscal 2009, net income was $3.2 million, or $0.29 diluted earnings per share, compared to net income of $1.5 million, or $0.14 diluted earnings per share, for the same quarter of fiscal 2008. Net income for the fourth quarter of fiscal 2008 included a non-cash goodwill impairment charge of $1.8 million after tax, or $0.17 per diluted share.

Net sales for the fiscal year ended September 30, 2009 were $162.3 million compared to $166.9 million for the same period in fiscal 2008. During the second quarter of fiscal 2009, the Company recorded a non-cash goodwill impairment charge of $37.5 million ($27.3 million after tax, or $2.52 per diluted share for the fiscal year ended September 30, 2009) resulting in a net loss of $(14.0) million, or $(1.29) per diluted share, for the fiscal year ended September 30, 2009, compared to net income of $11.9 million (including the $1.8 million goodwill impairment charge), or $1.07 per diluted share (including the goodwill impairment charge of $0.16 per share), for the same period of fiscal 2008.

Operating cash flow for the fiscal year ended September 30, 2009 was $27.8 million compared to $20.3 million for the same period of fiscal 2008. This operating cash flow was primarily used to invest $9.2 million in purchases of property and equipment, $4.6 million in the acquisition of a branded natural product business, $4.4 million in repurchases of common stock and $9.5 million to repay net borrowings on the Company's revolving credit facility.

Bill Gay, chairman and chief executive officer, commented, "Health and natural food store sales improved in the fourth quarter despite the ongoing economic uncertainties and we are hopeful that this strength will continue. Net income for the fourth quarter remained solid and cash flows increased as a result of inventory reductions. Gross margins declined slightly due to increased raw material prices and manufacturing overhead costs related to inventory decreases. Selling, general and administrative expense improvements throughout the fiscal year offset gross margin decreases. Our core customers are regaining confidence in their businesses and we remain optimistic about the coming year. Ongoing sales programs and promotions appear to be benefiting stores, consumers and our Company. It is encouraging that the public market has responded favorably to the Company's recent addition to the Russell 2000 stock index and we believe our financial strength and position as a value based stock will bring awareness to new investors this coming year."

Mr. Gay continued, "We believe gross margins will improve in fiscal 2010. We also expect acquisitions to contribute to sales, profitability, EBITDA and cash flow during fiscal 2010. The October 9, 2009 acquisition of the Lifetime® brand strengthens our product offerings, especially for those consumers who prefer liquid and powder delivery forms of nutritional supplements."