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NutriSystem Inc Reports Operating Results (10-Q)

August 06, 2012 | About:
10qk

10qk

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NutriSystem Inc (NTRI) filed Quarterly Report for the period ended 2012-06-30.

Nutrisystem Inc. has a market cap of $291.3 million; its shares were traded at around $10.29 with a P/E ratio of 31.1 and P/S ratio of 0.7. The dividend yield of Nutrisystem Inc. stocks is 6.8%. Nutrisystem Inc. had an annual average earning growth of 54% over the past 10 years.

Highlight of Business Operations:

Revenue. Revenue increased to $124.6 million in the second quarter of 2012 from $116.1 million for the second quarter of 2011. The revenue increase occurred primarily due to increased new customers, increased reactivation and on-program revenue. In the second quarter of 2012, the direct channel accounted for 95% of total revenue compared to 3% for QVC and 2% for other. In the second quarter of 2011, the direct channel accounted for 96% of total revenue compared to 4% for QVC.

General and administrative expense increased to $20.2 million in the second quarter of 2012, which includes $6.6 million of severance and related charges, compared to $14.8 million in the second quarter of 2011. General and administrative expense as a percent of revenue increased to 16.2% in the second quarter of 2012 from 12.8% for the second quarter of 2011. The increase was primarily attributable to increased compensation, benefits and temporary help ($920,000) as well as increased non-cash expense for share-based payment arrangements ($2.2 million) and recruiting costs ($458,000) primarily relating to Mr. Redlings cessation of employment. There were also increased professional, outside and computer services expenses ($1.1 million) primarily due to increased legal fees.

Revenue. Revenue increased to $253.1 million in the six months ended June 30, 2012 from $248.8 million in the comparable period of 2011. The revenue increase occurred primarily due to increased new customers and increased on-program revenue, which offset decreases in average selling prices. In the six months ended June 30, 2012, the direct channel accounted for 95% of total revenue compared to 3% for QVC and 2% for other. In the six months ended June 30, 2011, the direct channel accounted for 96% of total revenue compared to 4% for QVC.

Marketing expense increased to $73.8 million in the six months ended June 30, 2012 from $72.6 million in the comparable period of 2011. Marketing expense as a percent of revenue decreased to 29.1% in the six months ended June 30, 2012 from 29.2% for the comparable period of 2011. Substantially all marketing spending promoted the direct business. The increase in marketing expense was primarily attributable to increased spending for advertising media ($525,000) and public relations ($2.0 million). These increases were partially offset by decreases in marketing consulting ($334,000) and television production ($1.1 million). In total, media spending was $63.2 million in the six months ended June 30, 2012 and $62.7 million in the six months ended June 30, 2011.

General and administrative expense was $36.7 million in both the six months ended June 30, 2012 and June 30, 2011. Included in general and administrative expense for the six months ended June 30, 2012 was $6.9 million of severance and related charges. General and administrative expense as a percent of revenue decreased to 14.5% in the six months ended June 30, 2012 from 14.7% for the second quarter of 2011. Spending remained constant year over year due to lower compensation, benefits and temporary help ($1.3 million) offset by increased recruiting costs ($506,000) and non-cash expense for share-based payment arrangements ($480,000). There were also increased professional, outside and computer services expenses ($306,000) primarily due to increased legal fees which partially offset reductions in outside consulting expenses.

Read the The complete Report

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