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Second Quarter 2012 Net Sales Up 25.2% Versus Prior Year
Earnings per Share of
Raises Full-Year Outlook for Revenue and EPS
Results for the Second Quarter of 2012
Net sales were
The Company also noted that, in the food, drug and mass channel, as reported by AC Nielsen, its products achieved 8% point-of-sale dollar growth over the last 52 weeks versus the prior year period, whereas the overall masstige color cosmetics category only grew 6%. This made Physicians Formula the fastest-growing masstige color cosmetics brand in dollar sales among the major five masstige brands in food, drug and mass during this period.
Gross margin for the second quarter of 2012 was 52.9% of net sales versus 48.4% in the prior year period. The improvement was primarily driven by favorable product mix, reductions in manufacturing costs, lower air freight and increased product recoveries.
Selling, general and administrative expenses ("SG&A") were
Net income for the second quarter of 2012 was
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") for the second quarter of 2012, as calculated by its lenders in the Company's senior credit agreement, was
Results for the First Six Months of 2012
Net sales for the first six months of 2012 were
Net income for the first six months of 2012 was
For the first half of 2012, Adjusted EBITDA was
Liquidity Considerations
Net cash provided by operating activities for the first six months of 2012 was
As of
As of
Outlook
Ms. Jackel commented, "Due to our strong first half performance and the strength of our 2012 new color cosmetics product launch, we are increasing our expectations for net sales growth to be between 10% and 13% for the full year 2012 from the 8% to 11% range we previously projected. We now expect diluted earnings per common share to be between
Conference Call
The conference call is scheduled to begin at
About
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, forward-looking statements can be identified by words such as "anticipates," "estimates," "expects," "believes," "plans," "predicts," and similar terms. In particular, this press release may include forward-looking statements about management's expectations regarding the Company's refinancing, strategy, liquidity, financial performance and outlook. These forward-looking statements are based on current expectations, estimates and projections about the Company's business and its industry, based on management's beliefs and assumptions. Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results
discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to: the loss of any significant retailer customers; the demand for the Company's products; the Company's ability to expand its product offerings; the competitive environment in the Company's business; the Company's operations and ability to achieve cost savings; the effect of technological and regulatory changes; the Company's cash needs and financial performance; the Company's ability to comply with the financial covenants in its debt agreements; changes in general economic or market conditions; and other factors discussed in the Company's filings with the
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| (In thousands, except share and per share data) | ||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | |
| NET SALES | $ 26,131 | $ 20,868 | $ 52,336 | $ 42,006 |
| COST OF SALES | 12,316 | 10,773 | 25,119 | 21,643 |
| GROSS PROFIT | 13,815 | 10,095 | 27,217 | 20,363 |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 10,467 | 10,034 | 20,249 | 18,853 |
| INCOME FROM OPERATIONS | 3,348 | 61 | 6,968 | 1,510 |
| INTEREST EXPENSE, NET | 122 | 631 | 278 | 1,226 |
| OTHER EXPENSE (INCOME) | 11 | (1) | (22) | (13) |
| INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES | 3,215 | (569) | 6,712 | 297 |
| PROVISION (BENEFIT) FOR INCOME TAXES | 1,259 | (241) | 2,332 | 174 |
| NET INCOME (LOSS) | $ 1,956 | $ (328) | $ 4,380 | $ 123 |
| NET INCOME (LOSS) PER COMMON SHARE: | ||||
| Basic | $ 0.14 | $ (0.02) | $ 0.32 | $ 0.01 |
| Diluted | $ 0.13 | $ (0.02) | $ 0.29 | $ 0.01 |
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: | ||||
| Basic | 13,712,558 | 13,590,899 | 13,690,903 | 13,590,287 |
| Diluted | 14,917,635 | 13,590,899 | 14,859,179 | 14,891,863 |
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (Unaudited) | ||
| (In thousands) | ||
|
2012 |
December 31, 2011 |
|
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $ 1,180 | $ 3 |
| Accounts receivable, net | 18,985 | 25,758 |
| Inventories | 22,793 | 25,223 |
| Prepaid expenses and other current assets | 2,260 | 1,940 |
| Income taxes receivable | 313 | 437 |
| Deferred tax assets, net | 7,562 | 8,677 |
| Total current assets | 53,093 | 62,038 |
| PROPERTY AND EQUIPMENT, NET | 2,232 | 2,597 |
| OTHER ASSETS, NET | 5,363 | 5,357 |
| INTANGIBLE ASSETS, NET | 29,604 | 30,486 |
| TOTAL ASSETS | $ 90,292 | $ 100,478 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| CURRENT LIABILITIES: | ||
| Accounts payable | $ 6,351 | $ 10,445 |
| Accrued expenses | 1,864 | 3,739 |
| Trade allowances | 8,595 | 7,457 |
| Sales returns reserve | 5,938 | 10,941 |
| Income taxes payable | 7 | -- |
| Line of credit borrowings | -- | 4,690 |
| Current portion of long-term debt | 1,000 | 1,000 |
| Total current liabilities | 23,755 | 38,272 |
| DEFERRED TAX LIABILITIES, NET | 8,155 | 8,155 |
| LONG-TERM DEBT | 2,417 | 2,917 |
| OTHER LONG-TERM LIABILITIES | 298 | 272 |
| Total liabilities | 34,625 | 49,616 |
| STOCKHOLDERS' EQUITY: | ||
| Series A preferred stock | -- | -- |
| Common stock | 137 | 136 |
| Additional paid-in capital | 63,235 | 62,811 |
| Accumulated deficit | (7,705) | (12,085) |
| Total stockholders' equity | 55,667 | 50,862 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 90,292 | $ 100,478 |
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(Unaudited)
(In thousands)
Pursuant to our senior credit agreement, Adjusted EBITDA is defined as net income (loss) before depreciation, amortization, interest expense, income taxes, goodwill and intangible asset impairment charges, stock-based compensation and non-cash inventory obsolescence charges.
Adjusted EBITDA is a financial measure not computed in accordance with
A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA follows (in thousands):
|
Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2012 | 2011 | 2012 | 2011 | |
| Net income (loss) | $ 1,956 | $ (328) | $ 4,380 | $ 123 |
| Plus: | ||||
| Depreciation and amortization | 1,161 | 1,234 | 2,361 | 2,428 |
| Interest expense, net | 122 | 631 | 278 | 1,226 |
| Provision (benefit) for income taxes | 1,259 | (241) | 2,332 | 174 |
| EBITDA | 4,498 | 1,296 | 9,351 | 3,951 |
| Stock-based compensation | 106 | 157 | 232 | 379 |
| Non-cash inventory obsolescence charges | (187) | (58) | (662) | 202 |
| Adjusted EBITDA | $ 4,417 | $ 1,395 | $ 8,921 | $ 4,532 |
(FACE/F)
CONTACT:Source:Anne Rakunas ICR, Inc. (310) 954-1113
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