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July 01, 2013

Financial News

Financial News, July 2013

Click here to order the July 2013 issue in which this article appeared or click here to download it to your mobile device.


Avon Products Inc.

Avon Products Inc. (AVP—NYSE) reported first quarter 2013 results. For the first quarter of 2013, total revenue of $2.5 billion decreased 4 percent, but was relatively unchanged in constant dollars.

First quarter 2013 gross margin was 62.1 percent. Adjusted gross margin was 62.5 percent, 160 basis points higher than the prior-year quarter, primarily due to lower freight costs, as well as lower material costs, including the benefits from productivity initiatives.

Operating profit was $172 million and operating margin was 6.9 percent in the quarter. Operating profit was negatively impacted by $20 million associated with costs to implement (CTI) restructuring and $13 million associated with the highly inflationary accounting for a 32 percent devaluation of the Venezuelan currency. Adjusted operating profit was $206 million and adjusted operating margin was 8.3 percent, 450 basis points higher than the first quarter of 2012.

During the first quarter 2013, as part of the company’s refinancing activities, the company prepaid the $535 million of outstanding private notes plus a make-whole premium. Additionally, the company repaid $380 million of the outstanding term loan principal. These repayments resulted in a $73 million pre-tax loss on extinguishment of debt.

First quarter 2013 net loss was $13 million, or a loss of 3 cents per share. Adjusted net income was $112 million, or 26 cents per share.

The overall net cash provided in the first quarter was $279 million, which compares with the use of $30 million in first quarter 2012, and this was primarily due to proceeds related to the issuance of debt, partially offset by debt repayment and cash used for operations.

Avon’s net debt (total debt less cash) for the first quarter of 2013 was $2.1 billion, up $160 million from the year- end level.

First quarter 2013 revenue in Latin America was $1.14 billion, unchanged year over year, or up 7 percent in constant dollars. Q4 revenue in Europe, Middle East and Africa was $733.1 million, up 1 percent, or up 3 percent in constant dollars. North America’s fourth quarter revenue was $406.2 million, down 15 percent year over year and in constant dollars. This was negatively impacted by a decline of 21 percent in Silpada revenue compared to the previous year. Asia Pacific’s revenue was $200.0 million, down 10 percent, or down 12 percent in constant dollars.

In other news, Avon declared a regular quarterly dividend on its common stock of 6 cents per share, payable June 3, 2013, to shareholders of record on May 14, 2013.

Avon, the company for women, is a leading global beauty company, with nearly $11 billion in annual revenue. Avon is sold through more than 6 million active independent Avon sales representatives in over 100 countries.


AL International Inc.

AL International Inc. (JCOF—OTC.BB) announced its financial results for the first quarter ended March 31, 2013.

For the quarter ended March 31, 2013, AL International’s consolidated revenue increased 30.8 percent to $20.8 million, compared to $15.9 million for the quarter ended March 31, 2012.

Al International’s gross profit for the current quarter increased 37.8 percent to $12.4 million, compared to $9.0 million recorded in the prior quarter. Operating expenses increased only 14.6 percent to $11.0 million, compared to $9.6 million for the quarter ended March 31, 2012.

The company reported a net income available to common stockholders of $1.06 million for the current quarter, compared to a net loss available to common stockholders of ($855,000) for the quarter ended March 31, 2012.

Adjusted EBITDA was $2.2 million in the current quarter compared to ($134,000) for the quarter ended March 31, 2012.

As of March 31, 2013, the balance sheet showed cash of $4.1 million, working capital of $2.1 million and total assets of $28.8 million.

AL International Inc. is a 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.


Computer Vision Systems Laboratories Corp.

Computer Vision Systems Laboratories Corp. (CVSL—OTC.BB) Chairman John Rochon announced that the company has filed a Schedule 14C with the Securities and Exchange Commission with the decision to amend CVSL’s Florida Articles of Incorporation to change its name to CVSL Inc. and to increase its authorized shares of common stock. Rochon stated that having additional authorized shares available was necessary to pursue its acquisition strategy in the direct selling industry.

At the same time, Rochon announced that Rochon Capital Partners, Ltd., CVSL’s majority shareholder, intends to defer receipt of the previously approved additional 504,813,514 shares that it would receive promptly following the increase in the number of CVSL’s authorized shares.

CVSL is a development-stage company with plans under way to make it the platform for a brand strategy of acquiring multiple privately held direct selling companies.


Herbalife Ltd.

Herbalife Ltd. (HLF—NYSE) reported first quarter net sales of $1.1 billion, reflecting an increase of 17 percent compared to the same time period in 2012 on volume point growth of 13 percent. Adjusted net income for the quarter of $137.4 million, or $1.27 per diluted share, compares to 2012 first quarter net income of $108.2 million and EPS of 88 cents, respectively. On a reported basis, first quarter 2013 EPS of $1.10 increased 25 percent, compared to the 88 cents reported in the comparable quarter last year.

For the quarter ended March 31, 2013, the company generated cash flow from operations of $137.6 million, an increase of 14 percent compared to 2012; paid dividends of $30.9 million; invested $24.9 million in capital expenditures; and repurchased $162.4 million in common shares outstanding under the share repurchase program.

In regional results, for the first quarter volume points increased in all regions, and ranged from a 4 percent increase from the previous year in North America to 33 percent increase in South and Central America. The number of average active sales leaders also increased in all regions. The lowest percentage was in North America, with 9 percent. The highest came out of South and Central America, with 28 percent.

The company also reported that its board of directors has approved a dividend of 30 cents per share to shareholders of record May 14, 2013, payable on May 28, 2013.

During the first quarter, the company repurchased 4.0 million shares at an average cost of $40.61. There is currently $787.6 million remaining on the existing $1 billion share repurchase authorization.

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 over 80 countries through and to a network of independent distributors.


Medifast Inc.


Medifast Inc. (MED—NYSE), a manufacturer and provider of clinically proven, portion-controlled weight-loss products and programs, reported financial results for the first quarter ended March 31, 2013.

For the first quarter, Medifast net revenue increased 8 percent to $96.0 million from net revenue of $88.9 million in the first quarter of the prior year.

Revenue in the direct sales channel, Take Shape For Life, increased 12 percent to $59.4 million in the first quarter of 2013, compared to $53.0 million in the same period last year. Growth in revenue for Take Shape For Life was driven by increased customer product sales.

Gross profit for the first quarter of 2013 increased 8 percent to $72.4 million, compared to $66.8 million in the first quarter of the prior year. The company’s gross profit margin increased 30 basis points to 75.4 percent in the first quarter, versus 75.1 percent in the first quarter of 2012.

Operating income was $8.6 million, or 8.9 percent as a percent of net revenue, compared to $6.1 million, or 6.9 percent as a percent of net revenue in the first quarter of 2012.

Net income was $5.9 million, or 43 cents per diluted share based on approximately 13.9 million shares outstanding, compared to net income of $4.0 million, or 29 cents per diluted share, for the comparable quarter last year.

The company also announced it has paid off the remaining value of its outstanding long-term notes and is now completely debt-free.

The loans, initiated in September 2007, were originally taken out to consolidate debt associated principally with the Owings Mills, Md. manufacturing facility and the Ridgely, Md., distribution center.

Medifast was founded in 1980 and is located in Owings Mills. It sells its products and programs via four 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.


Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced record first quarter results with revenue of $550.1 million, a 19 percent improvement over the prior-year period. Revenue was negatively impacted 3 percent by foreign currency fluctuations. Earnings per share for the quarter were 90 cents, a 22 percent year-over-year improvement.

In regional results, first-quarter revenue in North Asia was $188.2 million, compared to $182.2 million for the same period in 2012. In Greater China, revenue increased 90 percent to $175.7 million, compared to $92.6 million in the prior-year period. Revenue in the Americas improved 15 percent to $76.5 million, compared to $66.3 million in the prior-year period. U.S. revenue grew by 7 percent during the quarter.

Revenue in South Asia/Pacific was $67.2 million, a 13 percent decline compared to the prior year. Excluding the prior-year’s product launch sales, revenue would have been up 8 percent. Revenue in the EMEA region was $42.4 million, a 3 percent decline over the prior-year period.

The company’s operating margin was 15.0 percent for the quarter, compared to 15.5 percent in the prior year. Gross margin during the quarter was 83.6 percent, consistent with the prior year.

Dividend payments during the quarter were $17.5 million, and the company repurchased $14.6 million of its outstanding shares.

Nu Skin also announced that its board of directors has declared a quarterly dividend of 30 cents per share, which was payable on June 12, 2013, to stockholders of record on May 24, 2013.

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.


Relìv International Inc.

Relìv International Inc. (RELV—NASDAQ), a maker of nutritional supplements that promote optimal health, reported its financial results for the first quarter of 2013.

Relìv reported net sales of $18.9 million for the first quarter of 2013, compared to net sales of $19.7 million for the first quarter of 2012. U.S. net sales declined by 4.2 percent for the quarter, compared to the same quarter in 2012. International net sales for the quarter declined 5.7 percent, with the continued growth in Europe of 26.6 percent offset by declines in Asia and Australia of 55.3 percent and 17.0 percent, respectively.

The company reported net income of $195,000, or 2 cents per diluted share, for the first quarter of 2013, compared to net income of $532,000, or 4 cents per diluted share, for the first quarter of 2012. Income from operations for the first quarter of 2013 was $435,000, compared to $914,000 in the same quarter of 2012.

Relìv also announced that the board of directors has declared a dividend of 2 cents per share to all shareholders of record as of May 20, 2013, to be paid on or about May 30, 2013. Relìv currently pays dividends twice a year, and this represents the company’s first dividend in 2013.

Relìv International, based in Chesterfield, Mo., produces nutritional supplements that promote optimal nutrition along with premium skincare products. The company sells its products through an international network marketing system of independent distributors in 16 countries.


Tupperware Brands Corp.

Tupperware Brands Corp. (TUP—NYSE) reported first quarter 2013 sales and profit, with sales of $662.9 million, compared with $639.5 million in 2012, up 4 percent in dollars and up 6 percent in local currency.

GAAP net income for the quarter was $58.2 million, or $1.06 per diluted share, compared with 2012 first quarter GAAP net income and diluted EPS of $58.3 million and $1.02 per share, respectively. Adjusted diluted earnings per share of $1.18 in the quarter was 15 cents, or 15 percent, better than 2012 in U.S. dollars.

The company repurchased in the open market 1.28 million shares for $100 million in the first quarter of 2013.

According to Rick Goings, Chairman and CEO, sales in emerging markets were up 13 percent, in local currency, in the quarter and comprised 62 percent of sales. Established markets of Western Europe (including Scandinavia), the United States, Canada, Australia and Japan were down 3 percent in local currency.

Tupperware also announced that its board of directors declared the company’s regular quarterly dividend of 62 cents per share, payable on July 8, 2013, to shareholders of record as of June 19, 2013.

Tupperware is a portfolio of global direct selling companies, selling innovative, premium products across multiple brands and categories through an independent salesforce of 2.7 million.


USANA Health Sciences Inc.

USANA Health Sciences Inc. (USNA—NYSE) announced record financial results for its fiscal first quarter ended March 30, 2013.

Net sales for the first quarter of 2013 increased by 9.7 percent to $169.1 million, compared with $154.1 million in the prior-year period.

Net earnings for the first quarter increased to $17.8 million, an improvement of 29.3 percent, compared with the prior-year period. Earnings per share for the quarter increased by 42.2 percent to $1.28, compared with 90 cents in the first quarter of the prior year. Total diluted common shares outstanding as of March 30, 2013, were 13.9 million, compared with 15.3 million as of March 31, 2012.

Net sales in Asia Pacific increased by 9.9 percent to $104.9 million, compared with $95.5 million for the first quarter of the prior year. During the first quarter of 2013, net sales in North America/Europe increased by 9.4 percent to $64.2 million, compared with $58.6 million in the prior-year period.

Founded in 1992, USANA Health Sciences is a nutritional company that manufactures high-quality supplements and personal care, energy, and weight-management products in Salt Lake City. USANA’s products are sold directly to preferred customers and associates in 18 international markets.


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.