April 01, 2014
Financial News, April 2014
Avon Partners with Coty
Avon Products Inc. (AVP—NYSE) and Coty Inc. have executed a letter of intent regarding a commercial arrangement where Avon Brazil would market and sell select Coty fragrances and its ancillaries through Avon’s 1.5 million independent Sales Representatives in Brazil.
Although the details are still being finalized, the intent is for Avon to carry a collection of Coty’s celebrity and lifestyle fragrances in the Avon Brochure in Brazil.
Avon’s strong direct sales footprint, broad geographic coverage and extensive service model in Brazil will give Brazilian consumers improved access to an expanded portfolio of fragrances. The broad portfolio of Coty’s celebrity and lifestyle brands has strong consumer appeal, allowing Avon Representatives to better serve their customers, grow their consumer base and increase their earnings.
The arrangement is subject to final documentation, which the companies plan to complete over the next few months.
2013 Annual and Quarterly Results
Global nutrition company Herbalife Ltd. (HLF—NYSE) reported record fourth quarter 2013 and full-year results.
2013 Fourth Quarter Results
For the fourth quarter ended Dec. 31, 2013, net sales were $1.3 billion, reflecting an increase of 20 percent compared to the same period in 2012, on volume point growth of 13 percent. Net income for the quarter was $123.5 million, or $1.15 per diluted share. On an adjusted basis, adjusted net income for the quarter was $137.2 million, or $1.28 per diluted share, as compared to 2012 fourth quarter net income of $112.2 million and EPS of $1.00.
In regional results, net sales in North America were $210.3 million, compared to $197.1 million for the same time period the previous year. Mexico net sales of $142.6 million were an increase over $132.1 million in the same period of 2012. South and Central America sales were $290.1 million, also an increase over the prior year sales of $203.3 million. EMEA sales were $197.6 million, compared to $164.7 million. Asia Pacific sales of $279.6 million dropped from $295.2 million in 2012. China sales were up at $148.4 million, compared to $67.1 million in the prior year.
2013 Annual Results
For the 12 months ended Dec. 31, 2013, the company reported record net sales of $4.8 billion, an 18 percent increase, on 13 percent growth in volume compared to 2012. For the same period, the company reported net income of $527.5 million, or $4.91 per diluted share. On an adjusted basis, adjusted net income of $577.4 million, or $5.37 per diluted share, reflected increases of 24 percent and 36 percent respectively, over 2012 net income of $464.0 million and EPS of $3.94.
For the year ended Dec. 31, 2013, Herbalife generated cash flow from operations of $772.9 million, an increase of 36 percent compared to 2012; paid dividends of $123.1 million; invested $162.5 million in capital expenditures; and repurchased $297.4 million in common shares outstanding under the previous share repurchase program.
Herbalife recently announced that the board of directors approved an increase in its share repurchase authorization to $1.5 billion. Following repurchases made in connection with the company’s recent financing transaction on Feb. 7, 2014, the remaining authorized capacity under the repurchase program is $814 million.
Herbalife reported that its board of directors has also approved a dividend of 30 cents per share to shareholders of record March 4, 2014, which was payable on March 18, 2014.
Nu Skin Enterprises Inc.
Nu Skin Enterprises Inc. (NUS—NYSE) announced record fourth quarter and full-year results for 2013.
2013 Fourth Quarter Results
For the fourth quarter, revenue was $1.06 billion, an 82 percent improvement over the prior-year period. Revenue was negatively impacted 4 percent by foreign currency fluctuations. Earnings per share for the quarter were $2.02, a 108 percent year-over-year improvement.
In Greater China, fourth quarter revenue increased 248 percent to $481.6 million, compared to $138.3 million in the prior-year period. Fourth quarter revenue in North Asia was $286.3 million, compared to $246.9 million for the same period in 2012. Revenue in South Asia/Pacific was $99.5 million, a 57 percent increase compared to the prior year. In the Americas, revenue improved 59 percent to $126.1 million, compared to $79.1 million in the prior-year period. Revenue in Europe was $62.3 million, a 21 percent improvement over the prior year.
The company’s operating margin was 17.9 percent for the quarter, compared to 15.4 percent in the prior year. Gross margin during the quarter was 84.4 percent, up 80 basis points over the prior-year period.
The company’s cash and short-term investment position at the end of the quarter was $547.1 million. Dividend payments during the quarter were $17.6 million, and the company repurchased $50.0 million of its outstanding shares, leaving $395 million in the company’s repurchase authorization at year end.
2013 Annual Results
The company reported full-year 2013 revenue of $3.177 billion, a 49 percent year-over-year improvement. Annual revenue was negatively impacted 3 percent by foreign currency fluctuations. Earnings per share for the year were $5.94, a 69 percent increase over 2012. Operating margin for the year was 17.4 percent, up 140 basis points compared to 2012.
In response to recent media reports in China and the ensuing investigation by Chinese regulators, the company’s audit committee recently began an internal review of the company’s China operations. The company is unable at this time to predict the timing and outcome of the review. Given this review and the possibility that various components of its annual report on Form 10-K could be impacted, the company’s board of directors had determined that it could not file its annual report by the March 3 due date. The company currently expects that the audit committee will have made sufficient progress in its review to enable the company to file its annual report by the March 18 extended filing deadline.
Nu Skin Enterprises Inc. also announced its board of directors has declared a 15 percent increase in its quarterly cash dividend to 35 cents per share, compared to the previous dividend of 30 cents per share. The dividend is payable on March 26, 2014, to stockholders of record on March 14, 2014. The increase would move the company’s annual dividend to $1.38 per share, subject to regular quarterly determination by the board of directors, compared to $1.20 per share for 2013.
Tupperware Brands Corp.
Tupperware Brands Corp. (TUP—NYSE) announced record fourth quarter and full-year 2013 operating results.
2013 Fourth Quarter Results
For the quarter ended Dec. 28, 2013, net sales were $717 million. Emerging markets, accounting for 63 percent of sales, achieved a 12 percent increase in local currency, driven by large populations, greater penetration and emerging middle classes. Established markets were down 5 percent in local currency, a 3 percentage point improvement over the third quarter.
GAAP net income of $89.7 million versus $74.5 million in the prior year, which included $13.2 million pretax more of expense items, was up 21 percent in dollars and 29 percent in local currency. Adjusted diluted EPS of $1.81 included 9 cents of negative impact versus 2012 from changes in foreign exchange rates, which was 3 cents worse than assumed in October’s guidance.
Full-year cash flow from operating activities net of investing activities was $263 million, $29 million over 2012 and $13 million over the high end of October’s guidance range.
In the fourth quarter, the company returned $107 million to shareholders through a dividend payout of $32 million and the repurchase of 832,000 shares for $75 million. Since 2007, 20 million shares have been repurchased for $1.2 billion, with $0.8 billion left under an authorization that runs until February 2017.
Europe sales were down 1 percent versus last year reported and down 2 percent in local currency. Continued strong results in Turkey and Tupperware South Africa’s and France’s return to growth were offset by the impact of low activity primarily in other established markets and CIS.
Asia Pacific sales were up 1 percent reported and 12 percent in local currency, driven by the emerging markets up 17 percent in local currency, led by China up over 20 percent, Indonesia, up 33 percent, and Malaysia Singapore up 17 percent.
Tupperware North America sales were up 4 percent reported and in local currency. Tupperware Mexico was up 14 percent, including an eight-point benefit from higher B2B sales. Beauty North America sales were down 14 percent reported and 13 percent in local currency.
South America sales were up 17 percent reported and 28 percent in local currency, primarily as a result of continued growth in Brazil, which was up 19 percent in local currency driven by an 18 percent salesforce increase.
2013 Annual Results
For the year ended Dec. 28, 2013, the company reported net sales of $2.67 billion, up 3 percent reported from $2.58 billion in 2012. For the year, the company’s GAAP net income of $274.2 million is up 42 percent from $193.0 the previous year, and diluted earnings per share of $5.17 are up 51 percent from $3.42 the prior year.
LifeVantage Corp. (LFVN—NASDAQ) reported financial results for the fiscal 2014 second quarter ended Dec. 31, 2013.
2014 Second Quarter Results
For the second fiscal quarter ended Dec. 31, 2013, the company reported net revenue of $51.5 million, compared to $53.4 million for the same period in fiscal 2013. Revenue growth of $2.3 million, or 7.2 percent, in the Americas and $1.9 million from Hong Kong was offset by lower sales in Japan. Revenue for the quarter was negatively impacted $3.6 million, or 6.7 percent, by foreign currency fluctuation.
Gross profit for the second fiscal quarter ended Dec. 31, 2013, was $43.6 million, compared to $38.8 million for the same period last year, delivering a gross margin of 84.6 percent, compared to 72.5 percent in the prior year period.
Operating income for the second fiscal quarter of 2014 was $5.2 million, compared to $0.5 million in the same period last year, including one-time expenses. Operating margin for the current quarter was 10.0 percent.
Net income for the second fiscal quarter of 2014 was $3.3 million, or 3 cents per diluted share. This compares to net income in the second fiscal quarter of 2013 of $209,000, or zero cents per diluted share, including one-time expenses.
Direct Selling News has accumulated this information from public sources, including press releases and SEC filings. The information is presumed accurate and reliable. However, it is not an endorsement of any investment opportunity. Proper and considerable due diligence should be completed before making any investment.