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February 01, 2013

Financial News

Financial News, February 2013

Avon Products Inc.

Avon Products Inc. (AVP—NYSE) has outlined initial steps toward the company’s previously communicated annual cost-savings target of $400 million by the end of 2015.

Initial steps of the cost-savings initiative will include a targeted global headcount reduction of approximately 1,500 positions and related actions. The company also announced that it will exit the South Korea and Vietnam markets. These actions are aimed at concentrating resources on high-priority markets and activities and boosting efficiencies, and are expected to be largely completed before the end of 2013.

As part of these initial steps, Avon announced that the company will close its distribution facilities in Atlanta, Ga., and Pasadena, Calif. These changes will allow the company to focus on those activities which can best support its Representatives, help them grow their businesses and meet the needs of their customers.

The decision to close these U.S. facilities is an effort to right-size the company’s U.S. supply chain footprint, reduce complexities and restore the health of the U.S. business. Orders processed at the Atlanta branch will begin to transition to Avon’s Zanesville, Ohio, facility in coming months, and that process is expected to be completed this summer. Plans for the Pasadena facility are still in development, and orders processed at that branch are expected to transition in 2014.

Cost to implement these actions is expected to be in the range of $80–90 million before taxes, of which approximately $50–60 million is expected to be recorded in the fourth quarter of 2012. The company anticipates that these initial steps will account for approximately 20 percent of the total targeted savings.

The company expects to communicate additional steps toward the cost-savings goal as it progresses.

Avon, the company for women, is a leading global beauty company, with over $11 billion in annual revenue. As the world’s largest direct seller, Avon markets to women in more than 100 countries through over 6 million active independent Avon sales representatives.


Blyth Inc.

Blyth Inc. (BTH—NYSE), a direct to consumer company and designer and marketer of candles, accessories for the home, and health and wellness products, announced that it and the other members of ViSalus have reached an agreement whereby Blyth increased its ownership in ViSalus to more than 80 percent for a payment of $57.4 million to the other members of ViSalus. In addition, the other members of ViSalus have agreed to exchange their membership interests for capital stock of ViSalus Inc., which will be redeemable in December 2017 for a total redemption price of $147.5 million. ViSalus was also to redeem in January 2013 all of the outstanding interests under its Equity Incentive Plan for $25.3 million, which was to be funded by Blyth.

The new agreement between Blyth and the other members of ViSalus provides for a series of transactions that achieve the mutually shared objectives of providing ViSalus’ founders and its management team the opportunity to participate in ViSalus’ future results through their ongoing ownership and participation in a new management incentive plan. In addition, the new agreement should improve Blyth’s long-term liquidity by providing for a redemption of the ViSalus stock it does not own in December 2017. All of the members of ViSalus agreed to sell their interests in ViSalus ratably, allowing Blyth to achieve an ownership position in excess of 80 percent.

In addition, ViSalus is entering into new five-year employment agreements with Ryan Blair, ViSalus’ CEO, and Blake Mallen, its Chief Marketing Officer. ViSalus also intends to create a management incentive plan and to issue stock options and restricted stock units that will vest over an eight-year period to Blair, Mallen and ViSalus’ third founder, Nick Sarnicola, Global Ambassador. ViSalus also intends to issue stock options and restricted stock units to its senior management team that will vest over a three-year period.

In other news, Blyth Inc. indicated that it has repurchased shares in the open market under its share repurchase authorization. During its fourth fiscal quarter, and subsequent to the finalization and disclosure of its new agreement with the ViSalus founders, the company repurchased 411,336 shares, or approximately 2.5 percent of its 17 million shares outstanding. The company has 1.6 million shares remaining in its existing authorization.

Blyth Inc., headquartered in Greenwich, Conn., is focused on both the direct selling and direct marketing channels. It designs and markets home fragrance products and decorative accessories, as well as weight management products, nutritional supplements and energy drink mixes. Its products are sold direct to the consumer in North America through PartyLite and ViSalus.


LifeVantage Corp.

LifeVantage Corp. (LFVN—NASDAQ), a science-based nutraceutical company and maker of the patented dietary supplement Protandim®, the Nrf2 Synergizer®, announced that its board of directors approved a share repurchase program that authorizes the company to utilize up to $5 million to purchase shares of its common stock. Any such repurchases will be made out of existing cash or free cash flow from continuing operations.

The repurchase program permits LifeVantage to purchase shares from time to time through a variety of methods, including in the open market, through privately negotiated transactions or other means as determined by the company’s management, in accordance with applicable securities laws. As part of the repurchase program, the company expects that it will enter into a prearranged stock repurchase plan, which would operate in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934. Accordingly, transactions, if any, under the prearranged repurchase plan would be effected in accordance with the terms of the stock repurchase plan, including specified price, volume and timing conditions.

LifeVantage is a leader in Nrf2 science and sells anti-aging products to reduce oxidative stress at the cellular level. The company was founded in 2003 and is headquartered in Salt Lake City.


AL International Inc.

AL International Inc. (JCOF—OTC.BB), a global direct marketer of lifestyle and nutritional products and gourmet fortified coffee, announced that its board of directors has authorized a JCOF Stock Repurchase Program to repurchase up to 15 million of the company’s issued and outstanding common shares from time to time on the open market or via private transactions through block trades. Any purchases made by the company under the Stock Repurchase Program will be discretionary and at prices considered to be attractive, subject to availability of stock, general market conditions, trading prices and alternative uses of capital. The repurchase program is effective immediately and is expected to run through fourth quarter 2013.

AL International Inc. is a fast-growing, innovative, multidimensional company that offers a wide range of consumer products and services, primarily through person-to-person selling relationships that comprise a “network of networks.” AL International was formed after the merger of Youngevity Essential Life Sciences and Javalution Coffee Co. in the summer of 2011.


Primerica Inc.

Primerica Inc. (PRI—NYSE), the largest independent financial services marketing company in North America, announced that D. Richard Williams and John A. Addison Jr., its co-CEOs, have each sold 20,000 shares of the company’s common stock. The sales are part of Rule 10b5-1 trading plans, signed in June 2012, pursuant to which transactions occur automatically with no further action on the executives’ part. The 10b5-1 trading plans were put in place to implement personal estate, tax and charitable giving plans.

Also Primerica announced that Warburg Pincus LLC has agreed to sell 3,600,000 shares of Primerica’s common stock in an underwritten public offering. Immediately following completion of the offering, Warburg Pincus will beneficially own approximately 15 percent of Primerica’s outstanding common stock. All of the shares are being sold by Warburg Pincus, and Warburg Pincus will receive all of the net proceeds from the offering. Citigroup is acting as book-running manager for the offering. Primerica intends to purchase 1,200,000 shares of its common stock in the offering.

The offering is being made pursuant to Primerica’s existing effective shelf registration statement that was previously filed with the Securities and Exchange Commission. The offering of these securities is being made only by means of a prospectus and a related prospectus supplement.

Primerica Inc., headquartered in Duluth, Ga., is a distributor of financial products to middle-income families in North America. In addition, Primerica provides an entrepreneurial full- or part-time business opportunity for individuals seeking to earn income by distributing the company’s financial products.


Educational Development Corp.

Educational Development Corp. (EDUC—NASDAQ) announced their quarterly cash dividend. The board of directors has authorized a cash dividend of 12 cents per share. The dividend was payable on Dec. 21, 2012, to shareholders of record Dec. 14, 2012.

Educational Development Corp. sells children’s books, including Usborne Books and the Kane/Miller line of international children’s titles through a multi-level sales organization of independent consultants, through 5,000 retail stores and over the Internet.


Just Energy Group Inc.

Just Energy Group Inc. (JE—NYSE and JE—TSX) filed notice with the Toronto Stock Exchange and the New York Stock Exchange announcing its December dividend. A dividend of CAN$0.10333/common share (CAN$1.24 annually) was payable on Jan. 31, 2013, to shareholders of record at the close of business on Jan. 15, 2013. This dividend is designated as an “eligible dividend” for Canadian income tax purposes.

Just Energy also reports that at Dec. 31, 2012, the conversion price for each CAN$1,000 of its outstanding 6 percent convertible unsecured subordinated debenture issued on Oct. 2, 2007, has been adjusted in accordance with the Trust Indenture dated Dec. 2, 2007, as supplemented from time to time, to CAN$26.91 convertible into 37.17 common shares of Just Energy Group Inc.

Established in 1997, Just Energy is primarily a competitive retailer of natural gas and electricity. Just Energy is the parent to direct seller Momentis.


Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced that it plans to increase its regularly scheduled dividend payments by 50 percent for 2013. With this planned increase, the company will have increased dividends for each of the 12 consecutive years since it instituted the payment of dividends to stockholders.

Beginning with its regular first quarter dividend in 2013, the company currently expects to pay a quarterly dividend of 30 cents per share, or $1.20 per year, compared to the previous quarterly dividend of 20 cents per share, or 80 cents per year.

Nu Skin Enterprises Inc. has a comprehensive anti-aging product portfolio and operates in 53 markets worldwide with more than 900,000 active distributors and preferred customers.


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.