June 02, 2011
Financial News, June 2011
Citigroup Inc. Prices Offering of 12 Million Shares of Its Primerica Common Stock
Primerica Inc. (PRI-NYSE) has announced that the public offering of 12 million shares of Primerica’s common stock held by a subsidiary of Citigroup Inc. (C-NYSE) has valued at a price per share to the public of $22.75. Citigroup has granted the underwriters in the offering an option for 30 days to purchase up to an additional 1.8 million shares of Primerica’s common stock to cover over-allotments, if any.
Immediately following completion of the offering, Citigroup will beneficially own between approximately 20.7 percent and 23.1 percent of Primerica’s outstanding common stock, depending on whether and the extent to which the underwriters exercise their over-allotment option. All of the shares are being sold by Citigroup, and Citigroup will receive all of the net proceeds from the offering. Citigroup Global Markets Inc. is acting as sole book-running manager for the offering.
Medifast Inc. (MED-NYSE) has reported financial results for the first quarter ended March 31. The company reports its 46th consecutive quarter of profitability, with net revenue that has increased 23 percent to $74.3 million from net revenue of $60.6 million in the first quarter of the prior year.
Revenue in the direct sales channel, Take Shape for Life, increased 25 percent to $46.8 million in the first quarter of 2011, compared to $37.6 million in the same period last year. Growth in revenues for Take Shape for Life was driven by increased customer product sales as a result of an increase in active health coaches. The number of active health coaches increased 41 percent to approximately 10,000, compared to 7,100 in the first quarter of 2010.
Gross profit for the first quarter of 2011 increased 24 percent to $56.7 million, compared to $45.8 million in the first quarter of the prior year. The company’s gross profit margin increased 80 basis points to 76.3 percent in the first quarter versus 75.5 percent in the first quarter of 2010.
Operating income for the first quarter of 2011 increased 23 percent to $10.1 million, compared to $8.2 million in the same period a year ago. The operating margin of 13.5 percent was consistent as compared to last year.
Net income for the first quarter of 2011 was $6.4 million, or 44 cents per diluted share, compared to net income of $4.9 million, or 33 cents per share, for the comparable period last year.
In the direct selling segment of Blyth Inc. (BTH-NYSE), fourth quarter net sales declined 9 percent to $211.5 million, versus $232.2 million for the same period last year. PartyLite’s U.S. sales declined 25 percent and active independent sales consultants total over 18,000 in the United States, versus over 22,000 in last year’s fourth quarter. In PartyLite Canada, sales declined 12 percent in U.S. dollars during the quarter, which translated into a decline of 16 percent in local currency, with active independent sales consultants totaling approximately 5,000 this year and last year.
ViSalus Sciences experienced significant fourth quarter sales and distributor growth. Blyth invested in ViSalus in 2008 and has recently closed on the second phase of its acquisition of the company. Blyth now owns 57.5 percent of ViSalus.
Fourth quarter operating profit in the direct selling segment was $30.9 million, versus $39.2 million in the same period last year.
On April 4, Blyth Inc. signed a definitive agreement to sell its Midwest-CBK wholesale business to MVP International. The transaction took place during the first quarter of fiscal year 2012 and had no impact on fourth quarter or full fiscal year 2011 sales or earnings.
Pre-Paid Legal Services Inc.
Pre-Paid Legal Services Inc. (PPD-NYSE) announced results for the first quarter ended March 31. Net income for the first quarter of 2011 decreased 10 percent to $16.8 million from $18.8 million for the prior year’s first quarter. Diluted earnings per share for the 2011 first quarter decreased 8 percent to $1.72 per share from $1.87 per share for the prior year’s comparable quarter due to a decrease in net income of 10 percent partially offset by a decrease of 3 percent in the weighted average outstanding shares.
Net cash provided by operating activities decreased 3 percent to $25.9 million for the first quarter of 2011 from $26.7 million for 2010. At March 31, there was more than $96 million in cash and cash equivalents and unpledged investments remaining after the company retired all of its debt during the 2010 fourth quarter.
Tupperware Brands Corp.
Tupperware Brands Corp. (TUP-NYSE) reported record first quarter 2011 sales and profit, with a sales increase in local currency of 10 percent, over an 11 percent increase in 2010, before a positive impact from foreign exchange rates of 4 percent. This resulted in record reported sales that were 14 percent above the first quarter of 2010.
Diluted GAAP earnings per share of 88 cents for the first quarter of 2011 was up 15 cents, or 21 percent versus last year. Adjusted diluted earnings per share of 90 cents in the quarter was 14 cents better than 2010, including the positive foreign currency impact of 4 cents.
Tupperware North America sales were up 10 percent in local currency (up 13 percent reported) versus prior year. Tupperware United States and Canada had a 17 percent increase in the quarter (up 18 percent reported). First quarter pretax profit for the segment was up 37 percent in local currency (up 45 percent reported).
Beauty North America sales were up 3 percent in local currency (up 7 percent reported). BeautiControl had an 8 percent decrease in sales (down 7 percent reported). The segment’s pretax profit in the quarter decreased 19 percent in local currency (down 14 percent reported), reflecting the investments by BeautiControl.
Avon Products Inc.
Avon Products Inc. (AVP-NYSE) reported first quarter 2011 total revenue of $2.6 billion, 7 percent higher than that of first quarter 2010. Acquisitions contributed approximately 2 percent to revenue growth in the first quarter.
Avon’s Beauty sales increased 8 percent year over year, with gains in all categories during the first quarter of 2011: 10 percent growth in fragrance, 6 percent in color, 7 percent in skincare, and 8 percent in personal care.
First quarter 2011 operating profit of $247 million was up 29 percent compared with the year-ago quarter and operating margin was 9.4 percent, up 160 basis points year over year. Adjusted operating profit was up 11 percent, and adjusted operating margin was 9.9 percent, up 30 basis points from a year ago.
Income from continuing operations in the first quarter of 2011 was $152 million, or 35 cents per share, compared with $43 million, or 10 cents per share, in the year-ago quarter. Adjusted income from continuing operations was $161 million, or 37 cents per share, compared with $144 million, or 33 cents per share, in the year-ago first quarter.
First-quarter revenue in North America was down 2 percent in both reported and constant dollars. The acquisition of Silpada Designs Inc. had a favorable impact on first quarter revenue of approximately 8 percentage points. North America’s first-quarter operating profit was down 36 percent. Adjusted operating profit was down 18 percent, with an adjusted operating margin of 7.7 percent, down 150 basis points, reflecting fixed overhead with lower revenues, partially offset by improved bad debt. Silpada added 20 basis points to the North America adjusted operating margin.
Herbalife Ltd. (HLF-NYSE) reported that first quarter net sales increased 28.5 percent and local currency net sales increased 24.7 percent, compared to the same time period in 2010. Adjusted net income for the quarter of $88.3 million, or $1.43 per diluted share, compares to 2010 first quarter adjusted net income and EPS of $61.5 million and 98 cents, respectively. On a reported basis, first quarter 2011 EPS of $1.41 increased 70 percent, compared to the 83 cents reported in the comparable quarter last year.
For the quarter ended March 31, the company generated cash flow from operations of $107.5 million, an increase of 23.0 percent compared to the first quarter 2010, paid dividends of $14.8 million and invested $28.3 million in capital expenditures.
The company reported that its board of directors has approved a post-stock split dividend of 20 cents per share to shareholders of record effective May 24 payable on June 7.
USANA Health Sciences Inc.
USANA Health Sciences Inc. (USNA-NYSE) announced financial results for its fiscal first quarter ended April 2.
Net sales in the first quarter of 2011 increased by 20.6 percent to $143.6 million, compared with $119.1 million in the first quarter of the prior year. BabyCare in the first quarter added $5.7 million in sales and 11,000 associates.
Net earnings in the first quarter increased by 17.7 percent to $11.4 million, or 70 cents per share, compared with 60 cents per share in the first quarter of the prior year.
During the first quarter of 2011, net sales in the North America region decreased by 0.8 percent to $60.0 million, compared with the first quarter of the prior year.
LifeVantage Corp. (LFVN.OB-OTCBB) announced preliminary net revenue for its third fiscal quarter of 2011 of approximately $10 million. This represents an increase of approximately $2.6 million or 35 percent over net revenue of $7.4 million for the three-month period ended Dec. 31, 2010. This is also an approximate $7.3 million or 270 percent increase in net revenue over the $2.7 million net revenue reported for the same quarter last year.