Though it has yet to set terms, online health products retailer Vitacost.com Inc. believes a healthy dose of new capital from an initial public offering will pump up new expansion plans.
Vitacost.com, which is reporting 2006 net income of $173,000 on revenue of $66.3 million vs. a net loss of $617,000 on sales of $41.5 million in 2005, will use the proceeds to expand its manufacturing and distribution facilities. Specifically, Vitacost.com, No. 160 in the Internet Retailer Top 500 Guide, would use approximately $12 million to retrofit a 112,000 square foot manufacturing and distribution facility in Lexington, NC, and a second facility in Las Vegas. The remainder of the funds would be used for general working capital.
Vitacost.com carries an online inventory of about 7,000 SKUs from more than 400 brands, but the retailer’s Nutraceutical Sciences Institute private label products accounted for approximately 37% of net sales in 2006 and 87% of net sales from online orders. Each month Vitacost.com receives about 700,000 visitors, and generates an average of 19,000 orders each week, the company says in its S1 filing with the Securities and Exchange Commission. An S1 is required for companies wishing to sell stock or debt publicly that have not been regularly reporting to the SEC.
The filing also notes that within the past year Vitacost.com has increased its active marketing database from 305,000 to 452,000 customer names. About 70% of all sales are from repeat customers. Thomas Weisel Partners LLC, Robert W. Baird & Co. and Cantor Fitzgerald & Co. are acting as underwriters.
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