Wednesday, October 29, 2008

Schiff Nutrition International Inc. (WNI): Healthy Products, Healthy Profits?

Schiff Nutrition International (WNI) is a maker and distributor of branded and private label vitamins, nutritional supplements, and nutrition bars in the United States and across the globe. The company’s brands include Schiff, Move Free, Tiger’s Milk, and Fi-Bar. The Tiger’s Milk brand, which is probably the most widely known of the company’s products to consumers, includes nutrition bars that supply protein, vitamins, and other nutrients with fewer calories. Schiff Nutrition also makes the Move Free brand of joint supplements to promote better joint health.

The company is growing and focusing on its private label business, which is expected to benefit from the aging US population. For its fiscal first quarter ended September 19, Schiff reported net income of $3.2 million, or $0.11 a share, compared with $1.6 million, or $0.06 a share, a year ago. The company had sales of $47.8 million, easily beating analyst estimates of $45.2 million. Brokerage firm B. Riley & Co. is the only sell-side firm currently covering Schiff shares and rates the company a “buy” with a price target of $8.50.

Insiders own about 31 percent of Schiff’s shares while 42 institutions own another 41 percent. Mutual fund owners include American Century, Gabelli Funds, DFA and Harvey Partners. Utah-based Schiff competes with NTY Inc. and privately held Atkins Nutritionals Inc. and Experimental and Applied Sciences Inc. The company’s newest product, the recently launched MegaRed, is a gelcap used in promoting cardiovascular health. Schiffs sells its products primarily through mass merchandisers, warehouse clubs, super markets, drug stores, and health food stores.

Schiff was founded in 1996 and was formerly known as Weider Nutrition International, Inc. It is still a unit of Weider Health and Fitness. Shares of Schiff, which has a market value of $142 million, closed at $5.19 on Tuesday and have traded between $4.54 and $7.01 over the past 52 weeks.

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