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Nutraceutical International Corp. Reports Operating Results (10-K)

November 23, 2010 | About:
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10qk

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Nutraceutical International Corp. (NUTR) filed Annual Report for the period ended 2010-09-30.

Nutraceutical International Corp. has a market cap of $172.4 million; its shares were traded at around $16.57 with a P/E ratio of 11 and P/S ratio of 1.1. Nutraceutical International Corp. had an annual average earning growth of 5.5% over the past 10 years. GuruFocus rated Nutraceutical International Corp. the business predictability rank of 3-star.NUTR is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

The aggregate market value of voting stock held by non-affiliates of the Registrant as of March 31, 2010 at a closing sale price of $14.94 as reported by the Nasdaq National Market was approximately $138.3 million. Shares of common stock held by each officer and director and by each person who owns or may be deemed to own 10% or more of the outstanding common stock have been excluded since such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

According to Nutrition Business Journal, the total retail natural products market (the "Natural Products Market") is highly fragmented and totaled approximately $108.3 billion in retail sales in calendar 2009. The Natural Products Market is comprised of the following submarkets (with estimated calendar 2009 sales indicated): (i) personal care, $10.4 billion, (ii) natural and organic foods, $33.7 billion, (iii) functional foods, $37.3 billion and (iv) vitamins, minerals and supplements, $26.9 billion. Historically, our primary focus has been on vitamins, minerals and supplements (the "VMS Market"), but recently we have increased our effort in other areas within the Natural Products Market.

The total retail VMS Market is highly fragmented with estimated sales of $26.9 billion in calendar 2009, $25.2 billion in calendar 2008 and $23.7 billion in calendar 2007. We believe that the VMS Market reached its present size due to a number of factors, including (i) interest in healthier lifestyles, living longer and living well, (ii) the publication of research findings supporting the positive health effects of certain nutritional supplements and (iii) the aging of the "Baby Boom" generation combined with the tendency of consumers to purchase more nutritional supplements and natural foods as they age. Over the last few years, some publicly-traded companies in the Natural Products Market and industry analysts have commented on slowing growth trends and/or ongoing softness in sales of some nutritional supplements. We believe this may be the result of, among other things, the lack of any recent industry-wide "hit" products, negative press releases regarding certain ingredients and companies in the VMS Market and increased market and pricing competition, as well as competition from food and pharmaceutical companies.

We have a commitment to research and development and to introducing innovative products to correspond with consumer trends and scientific research. We believe that product quality and innovation are fundamental to our long-term growth and success. Through our research and development efforts, we seek to (i) test the safety, purity and potency of products, (ii) develop more effective and efficient means of producing ingredients for use in products, (iii) develop testing methods for ensuring and verifying the consistency of the dosage of ingredients included in our products, (iv) develop new, more effective product delivery forms and (v) develop new products either by combining existing ingredients used in nutritional supplements or identifying new ingredients that can be used in nutritional supplements. Our efforts are designed to lead not only to the development of new and improved products, but also to ensure effective manufacturing quality control measures. For the years ended September 30, 2008, 2009 and 2010, we incurred $1.1 million, $3.0 million and $3.9 million, respectively, in research and development expenditures.

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