Shares of Natural Grocers by Vitamin Cottage Inc. in early morning trading Thursday reached $19.15, nearly 28 percent higher than its initial public offering price target of $15 a share.
The stock debuted Wednesday on the New York Stock Exchange under the symbol NGVC.
The Lakewood, Colo.-based company operates 54 Natural Grocers in 11 states: Colorado, Idaho, Kansas, Missouri, Montana, Nebraska, New Mexico, Oklahoma, Texas, Utah and Wyoming.
In its initial filing with the Securities and Exchange Commission (SEC), the company said the U.S. market can support at least 1,100 stores, including over 180 additional NGVC stores in the 12 states it currently operates or have signed leases.
Just over 7.1 million shares were sold in the IPO. NGVC raised a total of $54 million in the IPO by selling 3.6 million shares.
Another 3.5 million shares were sold by the selling stockholders, but NGVC did not receive any of those proceeds.
"The growth in the organic and natural foods industry and growing consumer interest in health and nutrition has enabled us to continue to open new stores and enter new markets," the company said in the SEC filing.
"We intend to continue expanding our store base through new store openings in existing markets, as well as penetrating new markets, by leveraging our core competencies of site selection and efficient store openings," the company said.
NGVC opened 10 stores in FY2011 and is on track to open 10 more in by the end of FY 2011 in September.
The company said a typical new store averages approximately 9,500 selling square feet - about one quarter of which is dedicated to dietary supplements.
The company said it would use proceeds from the IPO to repay its term loan and its revolving credit facility.
NGVC said it has had over 40 consecutive quarters of positive comparable store sales growth, including 10.2 percent for the six months ended March 31.
The company had net sales of nearly $160 million for the six months ended March 31, which is a 26 percent increase compared to the same six months the year before.
For the year ended Sept. 30, the company reported net sales of $264.5 million, up 16.6 percent compared to the year before.
NGVC said net sales increased at a compound annual growth rate of 13.3 percent from FY2009 to FY2011.
Net income of $4 million for the six months ended March 31, compared to net income of $2.2 million for the same six months last year. For the year ended Sept. 30, NGVC reported net income of $4.6 million, down compared to net income of $5.6 million for the previous year.
NGVC generated EBITDA of $11.1 million in the six months ended March 31, which increased $4 million, or 57.5 percent in the comparable last year.
"EBITDA has increased steadily, with a compound annual growth rate of 10.4 percent from fiscal year 2009 to fiscal year 2011," the company said.
SunTrust Robinson Humphrey, Inc. and Piper Jaffray & Co. are the lead underwriters.
