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February 01, 2014

Financial News

Financial News, February 2014

Click here to order the February 2014 issue in which this article appeared or click here to download it to your mobile device.

Herbalife Ltd.

Global nutrition company Herbalife (HLF—NYSE) announced that PricewaterhouseCoopers LLP, Herbalife’s independent registered public accounting firm (PwC), has completed its re-audit of the company’s consolidated financial statements for the fiscal years ended Dec. 31, 2010, 2011 and 2012, and the audit of the effectiveness of the company’s internal control over financial reporting as of Dec. 31, 2012.

The company filed an amended 10-K/A for the fiscal year ended Dec. 31, 2012, following the completed re-audit of the company’s 2010, 2011 and 2012 financial statements. Additionally, the company filed amended 10-Q/As for each of these quarters of 2013 following the completion of SAS 100 reviews of those periods by PwC. With these amended filings, the company is now up to date with its SEC periodic filings. There were no material changes to the company’s audited 2010, 2011 or 2012 financial statements included in the amended 10-K/A or to the company’s first, second or third quarter 2013 financial statements included in the amended 10-Q/A, compared with the company’s previously filed financial statements for and as of each of such periods.

As previously announced, the change in the company’s independent auditors to PwC, and the corresponding need to perform re-audits, was the result of the resignation of Herbalife’s former independent auditor, KPMG LLP, due to the impairment of KPMG’s independence resulting from its now former partner’s unlawful activities. As previously publicly stated by KPMG, their resignation was not related to Herbalife’s financial statements, its accounting practices, the integrity of Herbalife’s management, or any other reason.

Herbalife Ltd. is a global nutrition company that sells weight-management, nutritional and personal care products intended to support a healthy lifestyle. Herbalife products are sold in more than 90 countries to and through a network of independent distributors.

Primerica Inc.

AGF Investments Inc., PFSL Fund Management Ltd., and PFSL Investments Canada Ltd. announced the six-year extension of their Fund of Funds relationship agreement. The two organizations have been working together since 1986.

Under the extended agreement, in which both parties have been operating since 2006, PFSL, the trustee and investment fund manager of Primerica Concert Funds, will continue to invest directly in a tailored group of AGF Funds. The AGF-Primerica relationship was also strengthened by an additional agreement solidified in October 2012, which supports the Primerica Common Sense Funds. AGF will continue to support the needs of over 10,000 of Primerica’s representatives.

For more than 55 years AGF has remained one of the largest independent global investment management firms. With similar company roots, Primerica, the largest independent financial services marketing company in North America, shares in AGF’s mission of helping Canadian investors reach their financial goals. With the reaffirmation of this agreement, both AGF and Primerica will continue to deliver on their commitment to providing investment management excellence and superior client service.

Primerica Inc. (PRI—NYSE), headquartered in Duluth, Ga., is a leading distributor of financial products to middle income households in North America.

Quarterly Results

Crius Energy Trust

Crius Energy Trust (KWH-UN.TO—TORONTO) announced its financial results for the three-month period ended Sept. 30, 2013. All figures in U.S. dollars unless otherwise noted.

Revenue for the third quarter was $145.6 million. Revenue was driven by customer growth in the strategic marketing partnership and network marketing channels and seasonally higher electricity volumes. Gross margin was $30.0 million, representing 20.6 percent of revenue.

Adjusted EBITDA was $10.5 million, representing 7.2 percent of revenue and was impacted by $5.0 million due to weather variation from historical norms in July and August. Normalizing for weather impacts, Adjusted EBITDA for the quarter would have been $15.5 million.

Total cash and availability was $33.9 million, consisting of $16.8 million of cash, no long-term debt and availability under the credit facility with Macquarie Energy of $17.1 million as of Sept. 30, 2013.

Crius expanded its product suite to include residential solar energy products and services through a reseller agreement with SolarCity, a full-service solar provider in the U.S. Viridian Energy also started offering natural gas products in Maryland, Virginia and the District of Columbia.

The company’s Viridian Energy brand added both customers and independent contractors during the third quarter. Sales efforts for the network marketing channel ramped up in September at Viridian Energy’s annual convention, PowerUp!®, in Washington D.C. Management sees the higher-usage, higher- retention Viridian marketing channel as a key source of long-term revenue growth, and the addition of solar products and services will further promote long-term customer relationships within the channel.

LifeVantage Corp.

LifeVantage Corp. (LFVN—NASDAQ), a company dedicated to helping people achieve healthy living through a combination of a compelling business opportunity and scientifically validated products, reported financial results for the fiscal 2014 first quarter ended Sept. 30, 2013.

For the first fiscal quarter ended Sept. 30, 2013, the company reported net revenue of $51.3 million, compared to $52.9 million for the same period in fiscal 2013. Revenue for the quarter was negatively impacted 7.4 percent by foreign currency fluctuation.

Gross profit for the first fiscal quarter ended Sept. 30, 2013, was $43.5 million, compared to $45.1 million for the same period last year, delivering a gross margin of 84.8 percent, compared to 85.2 percent in the prior year period.

Operating income for the first fiscal quarter of 2014 was $5.1 million, compared to $6.9 million in the same period last year. Operating margin in the first fiscal quarter of 2014 was 9.9 percent, compared to 13.1 percent in the prior year period.

Net income for the first fiscal quarter of 2014 was $3.3 million, or 3 cents per diluted share. This compares to net income in the first fiscal quarter of 2013 of $4.2 million, or 3 cents per diluted share.

The company’s cash and cash equivalents at Sept. 30, 2013, were $28.0 million, compared to $26.3 million as of June 30, 2013. The company generated $4.9 million of cash flow from operations in the first fiscal quarter of 2014 compared to $0.9 million in the first fiscal quarter of 2013.

In the first fiscal quarter of 2014, the company completed its $5 million stock repurchase program that was implemented in the fourth quarter of fiscal 2013. In the first quarter of fiscal 2014 the company repurchased 1.1 million shares for $2.9 million.

LifeVantage Corp., a leader in Nrf2 science and the maker of  Protandim®, the Nrf2 Synergizer® patented dietary supplement, is a science-based network marketing company. LifeVantage was founded in 2003 and is headquartered in Salt Lake City.

Natural Health Trends Corp.

Natural Health Trends Corp. (NHTC—OTC.BB), a direct selling company that markets premium-quality personal care, wellness and “quality of life” products under the NHT Global brand, announced financial results for the quarter and nine months ended Sept. 30, 2013.

For the third quarter, total revenues were $14.2 million, up 52 percent compared to $9.3 million for the third quarter last year, and up 34 percent sequentially from the $10.6 million for the second quarter this year. This was the third consecutive sequential quarterly increase in revenues.

Operating income was $1.3 million, an increase of 68 percent compared to $789,000 last year, and an increase of 40 percent sequentially compared to the $948,000 in the second quarter this year. Net income was $1.3 million, or 12 cents per diluted share, compared to $747,000, or 7 cents per diluted share last year.

Cash and cash equivalents increased to $9.1 million as of Sept. 30, 2013, from $4.2 million at Dec. 31, 2012, and $6.7 million at June 30, 2013.

Total revenues for the nine months ended Sept. 30, 2013, increased 14 percent to $33.4 million from $29.4 million in the same period last year.

Operating income for the first nine months was $2.6 million compared to $2.2 million in the same period last year. Year-to-date net income increased 20 percent to $2.5 million, or 22 cents per diluted share, compared to $2.1 million, or 19 cents per diluted share, in the same period last year.

Natural Health Trends Corp. is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, North America and Europe. The company markets premium-quality personal care, wellness and “quality of life” products under the NHT Global brand.

ForeverGreen Worldwide Corp.

ForeverGreen Worldwide Corp. (FVRG—OTC.BB), a leading provider of nutritional foods and other healthy products, announced Q3 2013 earnings, for the quarter ended Sept. 30, 2013.

For the third quarter, sales increased to $4.8 million from $3.1 million for Q3 2012, a 56.6 percent increase. Gross profit reached $1.5 million, compared to $974,562 during Q3 2012, a 56.7 percent increase. Net income for the quarter was $326,929 or 2 cents EPS, versus a net loss of $107,585 or 1 cent EPS loss during the comparable period during 2012.

For the nine month ended Sept. 30, 2013, sales increased to $11.5 million from $9.8 million for 2012, an increase of 17.5 percent. Gross profit increased to $3.7 million from $3.0 million last year, a 22.5 percent increase. Net income for the nine-month period increased to $110,090 or 1 cent EPS, compared to a net loss of $273,248 or a 2 cents EPS loss for the first nine months of 2012.

ForeverGreen Worldwide Corp. develops, manufactures and distributes an expansive line of all-natural whole foods and products to North America, Australia, Europe, Asia, South America and Africa.

Share Repurchases

Medifast Inc.

Medifast Inc. (MED­—NYSE), a U.S. manufacturer and provider of clinically proven, portion-controlled weight-loss products and programs, announced that, as of Dec. 9, 2013, it had completed the repurchase of 786,000 of its common shares under its existing 1.13 million share repurchase authorization at an average price of $25.46.

The company purchased the shares in the open market using cash on hand. The balance of 339,000 shares under the authorization remains open until May 29, 2014.

Medifast sells its products and programs via four unique distribution channels: the Web and national call centers, the Take Shape For Life personal coaching division, Medifast Weight Control Centers, and a national network of physicians. Medifast was founded in 1980 and is located in Owings Mills, Md.

Quarterly Dividends

Educational Development Corp.

Educational Development Corp. (EDUC—NASDAQ) announced their quarterly cash dividend. The board of directors has authorized an 8 cents-per-share cash dividend. The dividend was payable on Dec. 20, 2013, to shareholders of record Dec. 13, 2013.

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.

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.