Friday, June 12, 2009

PTF(perusing the filings) - Maybe they're just jogging instead?

AlphaNinja - Nutrisystem's (NTRI) $700 per client weight-loss system is facing more headwinds, forcing the company to reduce spending.

In addition to reducing headcount, the company is throwing in the towel on its ZeroWater investment, resulting in a writedown and tax savings.

“Streamlining work processes and right sizing our organization improves our position for economic recovery and future growth; however, it is never easy to reduce the work force. People are the foundation of Nutrisystem and we thank them for their efforts and for the work that lies ahead,” commented Chairman and CEO Joe Redling. The overall cost-cutting program is expected to reduce pre-tax expenses by $5-8 million for 2009."

This company has FAT margins, and throws off real, significant cash flow. The only question to me is, at what price is the stock a buy? Free Cash Flow should range about $35-$40million in 2010. A FCFY (Free-Cash-Flow-Yield) of about 9%. Not dirt cheap, but you don't get a growing, profitable company for dirt cheap.

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