Nutrisystem takes bigger 4Q loss on charges

March 5, 2013

FORT WASHINGTON, Pa. (AP) -- Weight-loss company Nutrisystem Inc. said Tuesday it took a bigger loss in the fourth quarter as revenue fell and charges increased.

Nutrisystem's revenue fell 7 percent compared to a year ago, and the company said 2012 marked the fifth straight year its sales have declined. Nutrisystem said it expects further pressure in 2013.

In the fourth quarter, the company took $2.9 million in charges related to impairment and termination of third-party contracts and a $2 million charge to vacate a facility.

The company said it lost $5 million, or 18 cents per share, over the last three months of 2012. In the fourth quarter of 2011 Nutrisystem lost $1.2 million, or 4 cents per share. Revenue slipped to $62.5 million from $66.9 million.

Excluding the one-time items, Nutrisystem said its loss in the latest quarter amounted to 6 cents a share.

Nutrisystem posted a loss of $2.8 million, or 10 cents per share, in 2012. It reported net income of $12.3 million, or 43 cents per share, in 2011. Revenue fell 1 percent, to $396.9 million from $401.3 million.

The company expects an adjusted profit of 23 to 33 cents per share in 2013, and new CEO Dawn Zier said the company is working to improve its efficiency and reduce costs. But the shaky economy is hampering efforts to turn around the company's sales.

Nutrisystem announced in 2012 that CEO Joe Redling's contract wouldn't be renewed. He left the company in November, and Zier, formerly of Reader's Digest Association Inc., was hired as president and CEO. Zier said Tuesday that Nutrisystem has a strong brand, but needs to attract new customers and its price strategy has relied too heavily on discounting.

The company has announced additional changes since Zier was hired. Chief Marketing Officer Mike Amburgey left Nutrisystem in February to pursue other interests, and Chief Financial Officer David Clark is leaving the company to join MeetMe Inc.

Nutrisystem expects to take a loss of 3 to 8 cents per share in the first quarter. It is forecasting $2.2 million in one-time severance costs connected to leadership changes and reorganization.

Shares of Nutrisystem rose 6 cents to $8.26 Tuesday. The stock fell 6 cents to $8.20 in aftermarket trading.