Natural Grocers by Vitamin tage(NGVC) - 2025 Q1 - Quarterly Report

PART I. Financial Information Financial Statements The company presents its unaudited interim consolidated financial statements for the quarter ended December 31, 2024 Consolidated Balance Sheets Total assets slightly decreased to $648.9 million while stockholders' equity increased to $181.9 million as of December 31, 2024 Consolidated Balance Sheets (in thousands) | | December 31, 2024 | September 30, 2024 | | :--- | :--- | :--- | | Total current assets | $144,525 | $147,058 | | Total assets | $648,879 | $655,476 | | Total current liabilities | $150,127 | $164,130 | | Total liabilities | $467,003 | $481,222 | | Total stockholders' equity | $181,876 | $174,254 | Consolidated Statements of Income Net sales grew 9.4% to $330.2 million, driving a 28.1% increase in net income to $9.9 million for the quarter Consolidated Statements of Income (in thousands, except per share data) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | | :--- | :--- | :--- | | Net sales | $330,221 | $301,750 | | Gross profit | $98,824 | $88,760 | | Operating income | $13,348 | $10,803 | | Net income | $9,938 | $7,755 | | Diluted EPS | $0.43 | $0.34 | Consolidated Statements of Cash Flows Net cash from operations decreased significantly to $2.7 million, contributing to a $2.6 million net decrease in cash Consolidated Statements of Cash Flows (in thousands) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,682 | $16,624 | | Net cash used in investing activities | ($9,417) | ($11,807) | | Net cash provided by (used in) financing activities | $4,180 | ($9,539) | | Net decrease in cash and cash equivalents | ($2,555) | ($4,722) | | Cash and cash equivalents, end of period | $6,316 | $13,620 | Notes to Unaudited Interim Consolidated Financial Statements These notes detail accounting policies, revenue disaggregation by product category, dividend payments, and lease data - The company operated 167 stores as of December 31, 2024, a decrease from 169 stores as of September 30, 2024[28] - The company paid a quarterly cash dividend of $0.12 per share in Q1 fiscal 2025, compared to $0.10 per share in Q1 fiscal 2024, which also included a $1.00 special cash dividend[56] Revenue by Product Category (in thousands) | | Three months ended Dec 31, 2024 | % of Net Sales | Three months ended Dec 31, 2023 | % of Net Sales | | :--- | :--- | :--- | :--- | :--- | | Grocery | $236,624 | 72% | $212,135 | 70% | | Dietary supplements | $61,531 | 18% | $59,974 | 20% | | Body care, pet care and other | $32,066 | 10% | $29,641 | 10% | | Total | $330,221 | 100% | $301,750 | 100% | Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes Q1 fiscal 2025 performance, highlighting strong sales growth, improved margins, and liquidity Company Overview The company operates 167 stores in 21 states and plans for new store openings and remodels in fiscal 2025 - As of December 31, 2024, the company operated 167 stores in 21 states[85] - In fiscal year 2025, the company plans to open four to six new stores and relocate/remodel two to four existing stores[87] Performance Highlights Q1 fiscal 2025 performance featured a 9.4% net sales increase and a 28.1% rise in net income Q1 FY2025 Performance Highlights vs. Q1 FY2024 | Metric | Q1 FY2025 | Change | | :--- | :--- | :--- | | Net sales | $330.2 million | +9.4% | | Daily average comparable store sales | N/A | +8.9% | | Net income | $9.9 million | +28.1% | | EBITDA | $21.3 million | +16.7% | | Adjusted EBITDA | $22.8 million | +21.7% | Results of Operations Net sales rose 9.4% driven by comparable store sales, while gross margin improved to 29.9% - The 8.9% increase in daily average comparable store sales was driven by a 5.3% increase in daily average transaction count and a 3.4% increase in daily average transaction size[105] - Gross margin increased to 29.9% from 29.4% in the prior year, primarily due to store occupancy cost leverage and higher product margin[106] Results of Operations (in thousands) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | $330,221 | $301,750 | 9.4% | | Gross profit | $98,824 | $88,760 | 11.3% | | Operating income | $13,348 | $10,803 | 23.6% | | Net income | $9,938 | $7,755 | 28.1% | Non-GAAP Financial Measures Non-GAAP measures show Adjusted EBITDA rose 21.7% to $22.8 million with an expanded margin of 6.9% Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | | :--- | :--- | :--- | | Net income | $9,938 | $7,755 | | Interest expense, net | 923 | 894 | | Provision for income taxes | 2,487 | 2,154 | | Depreciation and amortization | 7,950 | 7,451 | | EBITDA | $21,298 | $18,254 | | Impairment and store closing costs | 87 | 90 | | Share-based compensation | 1,435 | 406 | | Adjusted EBITDA | $22,820 | $18,750 | Liquidity and Capital Resources The company maintains liquidity through operations and its credit facility, with $61.4 million available for borrowing - As of December 31, 2024, the company had $6.3 million in cash and cash equivalents and $61.4 million available for borrowing under its Credit Facility[120] - The company plans to spend approximately $26.6 million to $34.6 million on capital expenditures during the remainder of fiscal year 2025[127] - The share repurchase program has $8.1 million remaining for future repurchases and will terminate on May 31, 2026[121] Quantitative and Qualitative Disclosures About Market Risk No material changes to the company's market risk position have occurred since the last annual report - There have been no material changes regarding the company's market risk position from the information provided in the most recent Form 10-K[138] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Based on an evaluation, the principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[140] - There were no changes in internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[141] PART II. Other Information Legal Proceedings The company is not involved in any legal proceedings expected to have a material adverse effect - The company is involved in ordinary course legal proceedings but does not believe any currently pending case will have a material adverse effect on its financial statements[143] Risk Factors There have been no material changes to the risk factors disclosed in the company's latest Form 10-K - There have been no material changes from the risk factors disclosed in Part I, Item 1A, of the company's Form 10-K[144] Exhibits This section indexes all exhibits filed with the Form 10-Q, including corporate documents and certifications - The exhibits index lists key corporate documents, officer certifications (302 and 906), and XBRL data files submitted with the report[147]