Tags: US | Earns | Vitacostcom

Vitacost.com Shares Plunge After CEO Quits

Monday, 16 Aug 2010 12:42 PM

Shares of Vitacost.com Inc. plunged 12 percent Monday after the online retailer of vitamins and supplements reported a second-quarter loss and said CEO Ira P. Kerker has left the company.

The Boca Raton, Fla., company said in a statement Kerker has also resigned from its board of directors, effective immediately. Vitamin Shoppe founder Jeffrey J. Horowitz, who joined the board earlier this month, was named interim CEO.

The company canceled a conference call it had scheduled for Monday afternoon to discuss earnings. It said it won't be providing updated guidance for the rest of the year and announced that its board has terminated its deal with Oppenheimer & Co. Inc. to evaluate various strategic options.

Vitacost.com said it lost $1.4 million, or 5 cents per share, in the three months that ended June 30. That compares with net income of $3.5 million, or 15 cents per share, in the same quarter last year, when the company had fewer outstanding shares.

Excluding one-time or nonrecurring items, the company reported an adjusted loss of 2 cents per share. Sales rose 14 percent to $54 million compared to the same quarter last year.

The results missed both internal and analyst estimates. Analysts polled by Thomson Reuters had expected profit of 7 cents per share on $57 million in revenue.

Vitacost.com shares dropped $1.04 to $7.31 in midday trading.

The company said its sales were hurt at the start of the quarter by manufacturing logistics issues the company was working through. Sales also were affected by deep discounts offered by competitors.

Vitacost.com's sales and marketing expenses grew 63 percent in the quarter to $5.1 million due in part to increased spending on online advertising and higher call center staffing levels.

The company has hired recruitment firm Spencer Stuart to search for a new CEO and to find additional board candidates. Vitacost.com said it is looking to add up to four new independent directors and expand the size of the board from seven to nine directors.

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Shares of Vitacost.com Inc. plunged 12 percent Monday after the online retailer of vitamins and supplements reported a second-quarter loss and said CEO Ira P. Kerker has left the company.The Boca Raton, Fla., company said in a statement Kerker has also resigned from its...
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