March 01, 2012
Financial News, March 2012
Primerica Inc. (PRI—NYSE) announced that Citigroup has sold approximately 8 million shares of Primerica’s common stock, representing all of the remaining shares beneficially owned by Citigroup following Primerica’s April 2010 initial public offering. The process began when Primerica was spun off in a 2010 IPO, after which Citigroup beneficially owned approximately 40 percent of Primerica common stock. In April 2011, Citigroup publicly sold 12 million shares of Primerica common stock, reducing its ownership stake to 23.1 percent. Primerica repurchased $200 million in shares in November 2011, reducing Citigroup’s ownership to 12.5 percent. This last sale completes the process as Citi has sold all of the shares remaining in its original equity stake in Primerica.
Primerica Inc., headquartered in Duluth, Ga., is a distributor of financial products to middle-income families in North America.
Nu Skin Enterprises Inc.
Nu Skin Enterprises Inc. (NUS—NYSE) announced record fourth quarter and annual results. Revenue for the quarter ended Dec. 31, 2011, was $495.3 million, a 23 percent improvement over the prior year. Earnings per share for the quarter increased 31 percent to 76 cents, compared to 58 cents in the prior year.
2011 Annual Results
The company reported annual revenue of $1.74 billion, a 13 percent year-over-year improvement. Annual revenue was positively impacted 6 percent by foreign currency fluctuations. Earnings per share for the year were $2.38, a 13 percent increase over 2010, or $2.69, a 27 percent improvement, when excluding non-cash charges of $32.8 million associated with a Japan customs ruling during the year.
Fourth Quarter 2011 Results
There was a strong showing in Greater China, with fourth quarter revenue improving 66 percent to $110.6 million for the quarter. Strong performances were also found in South Asia/Pacific with $65.2 million for the fourth quarter, a 27 percent improvement over the prior year, as well as the Americas, which grew 25 percent to $76.9 million, compared to $61.4 million for the prior year. Fourth quarter revenue in North Asia grew 13 percent to $204.3 million, compared to $180.6 million for the same period in 2010, and revenue in Europe was $38.3 million, an 8 percent decrease over the prior year.
The company’s operating margin improved to 15.3 percent, compared to 14.7 percent in the prior year. Gross margin for the quarter was 83.8 percent, a 150 basis point improvement over the prior year. Selling expenses, as a percent of revenue, were 43.3 percent, compared to 42.1 percent in 2010.
For 2011, increased revenue and a higher level of profitability resulted in cash from operations improving to $224 million. During the year, the company paid $37 million in dividends and repurchased approximately $67 million of its stock. The company ended the year with $291 million in cash and current investments and $137 million of debt.
Nu Skin Enterprises Inc. demonstrates its tradition of innovation through a comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives.
Avon Products Inc.
Avon Products Inc. (AVP—NYSE) reported fourth quarter and full year 2011 results.
Fourth Quarter 2011 Results
Fourth quarter total revenue of $3.0 billion decreased 4 percent or 1 percent in constant dollars. Fourth quarter 2011 gross margin was 61.1 percent, 70 basis points lower than the prior-year quarter primarily due to an inventory-related charge in Brazil and commodity cost pressures.
Operating profit was $13 million in the quarter and operating margin was 0.4 percent, significantly impacted by a non-cash charge of $263 million, or 38 cents per diluted share, to adjust goodwill and an intangible asset related to the acquisition of Silpada Designs Inc. Adjusted non-GAAP operating profit was down 31 percent, and adjusted non-GAAP operating margin was 9.4 percent, down 360 basis points from a year ago due to higher field and distribution costs in Brazil, higher investments in RVP in the United States, and lower gross margin.
Income from continuing operations in the fourth quarter of 2011 was $0.3 million or zero cents per diluted share, significantly impacted by the Silpada impairment charge. Excluding the impact of restructuring costs and the impairment charge, adjusted non-GAAP income from continuing operations was $172 million, or $0.39 per diluted share.
Latin America’s fourth quarter 2011 revenue was up 2 percent year over year, or up 6 percent in constant dollars. Q4 revenue in North America was down 7 percent on both a reported and constant-dollar basis. In Central & Eastern Europe, revenue was down 9 percent, or down 8 percent in constant dollars. Western Europe, Middle East & Africa’s fourth quarter revenue decreased 9 percent or down 3 percent in constant dollars, and Asia Pacific’s revenue was down 6 percent year over year, or down 7 percent in constant dollars.
Full Year 2011 Results
Full year 2011 total revenue of $11.3 billion increased 4 percent or up 1 percent in constant dollars. Acquisitions contributed 1 percent to revenue growth during the year.
Operating profit of $855 million decreased 20 percent and operating margin was 7.6 percent, down 230 basis points. Excluding the impact of restructuring costs and the Silpada impairment charge, adjusted non-GAAP operating profit was $1.2 billion, down 6 percent, and adjusted non-GAAP operating margin was 10.3 percent, down 110 basis points from a year ago.
Full year income from continuing operations was $526 million, or $1.20 per diluted share, compared with $595 million, or $1.36 per diluted share last year. Adjusted non-GAAP income from continuing operations was $719 million, or $1.64 per diluted share, compared with $786 million, or $1.80 per diluted share.
Tupperware Brands Corp.
Tupperware Brands Corp. (TUP—NYSE) reported fourth quarter 2011 sales and profit, with a sales increase in dollars of 3 percent and 7 percent in local currency.
GAAP net income for the quarter of $86.9 million, or $1.50 per diluted share, compared with 2010 fourth quarter GAAP net income and EPS of $80.7 million and $1.26 per share, respectively.
Adjusted diluted earnings per share of $1.50 in the quarter was 12 cents, or 9 percent, better than 2010 in U.S. dollars, including a negative foreign currency impact of 7 cents. Excluding the impact of foreign exchange on the comparison, adjusted diluted earnings per share was up 19 cents, or 15 percent.
For the 53 weeks ended Dec. 31, 2011, the company reported sales of $2.6 billion, a 12 percent increase in dollars and 9 percent in local currency compared with 2010.
The company repurchased 1.6 million shares for $90 million in the Q4 of 2011, and in the full year repurchased 7.1 million shares for $426 million. Since 2007, the company has repurchased 12.2 million shares for $628 million and can repurchase up to $572 million of shares in 2012 and forward under its current authorization that runs until Feb. 1, 2015. The company expects to repurchase $50 million worth of shares in the first quarter of 2012.
The company’s Board of Directors also declared the company’s regular quarterly dividend is 36 cents per share, up 20 percent from the previous quarterly dividend of 30 cents per share. It is payable on April 6, 2012, to shareholders of record as of March 20, 2012.
Tupperware Brands Corp. 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.
Educational Development Corp.
Educational Development Corp. (EDUC—NASDAQ) reported results for the third quarter and year-to-date fiscal 2012, ended Nov. 30, 2011.
The company reports net revenue of $8.69 million for the quarter ended Nov. 30, 2011, compared to $9.48 million, and net earnings of $724,900, compared to $776,900 for the same period last year. For the year-to-date period ended Nov. 30, 2011, EDUC reports net revenue of $20.39 million, compared to $21.53 million, and net earnings of $1.15 million, compared to $1.16 million for the same period last year.
The company reports lower sales in the Home Business Division, which experienced a net revenue decline of 14 percent for the nine month period ended Nov. 30, 2011. The loss is offset by record sales for the same time period in the Publishing Division, which recorded a 10.6 percent gain. The Home Business Division continues to be a strategic part of the company’s marketing strategy and additional incentives have been announced to support this division and the field salesforce.
Educational Development Corp. sells children’s books, including Usborne Books and the Kane/Miller line of children’s titles through independent consultants, 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.