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March 01, 2013

Financial News

Financial News, March 2013

Herbalife Ltd.

Herbalife Ltd. (HLF—NYSE), a global nutrition company, provided an update on anticipated results for the fiscal year ended Dec. 31, 2012. The company reported preliminary, unaudited results.

Net sales for full-year and fourth quarter 2012 are expected to increase approximately 17.9 percent and 19.9 percent, compared to the prior year periods, respectively.

Fourth quarter EPS is expected to be in a range of $1.02 to $1.05, compared to prior year reported EPS of 86 cents. Fully diluted EPS for the full-year 2012 is expected to be in a range of $4.02 to $4.05, compared to prior year reported EPS of $3.30.

Herbalife also announced that the company expected to report full-year, audited results on Feb. 19, 2013, and expected to begin repurchasing shares of Herbalife stock, pursuant to its existing share repurchase authorization.

Herbalife Ltd. sells weight-management, nutritional and personal-care products intended to support a healthy lifestyle. Herbalife products are sold in more than 80 countries to and through a network of independent distributors.


USANA Health Sciences Inc.

USANA Health Sciences Inc. (USNA—NYSE) announced record financial results for its fiscal fourth quarter and full-year ended Dec. 29, 2012.

Fourth Quarter 2012 Results

Net sales for the fourth quarter of 2012 increased by 15.5 percent to $168.5 million, compared with $145.9 million in the prior-year period.

The growth in net sales was driven by increases in both the company’s Asia Pacific and North America/Europe regions. Favorable changes in currency exchange rates contributed approximately $3.0 million to the top line for the quarter.

Net earnings for the fourth quarter increased to $18.4 million, an improvement of 40.2 percent, compared with the prior-year period.

Earnings per share for the quarter increased by 46.0 percent to $1.27, compared with 87 cents in the fourth quarter of the prior year.

Net sales in the Asia Pacific region increased by 21.3 percent to $107.8 million, compared with $88.9 million for the fourth quarter of the prior year.

During the fourth quarter of 2012, net sales in the North America/Europe region increased by 6.4 percent to $60.7 million, compared with $57.1 million in the prior-year period.

The company ended the quarter with $71 million in cash and cash equivalents. Cash generated from operations totaled $29.2 million for the quarter.

2012 Annual Results

For the year ended Dec. 29, 2012, net sales increased by 11.5 percent to $648.7 million, compared with $581.9 million in the prior year. Net sales growth was driven by increases in both Asia Pacific and North America/ Europe regions.

Net earnings for the year ended Dec. 29, 2012, increased by 30.9 percent to $66.4 million, or $4.45 per share, compared with $3.26 per share in the prior year. The increase in net earnings was due primarily to higher net sales, lower relative associate incentive expense, and a lower effective tax rate of 32.5 percent for the full year.

Cash generated from operations totaled $92.8 million for the year ended Dec. 29, 2012. The company repurchased 1.6 million shares in 2012 for a total investment of $68.3 million. The company ended the year debt free with a remaining share repurchase authorization of approximately $32 million.

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


Tupperware Brands Corp.

Tupperware Brands Corp. (TUP—NYSE) reported sales and profit for the fourth quarter 2012 ended Dec. 29, 2012, with sales of $711 million, up 5 percent in dollars and up 6 percent in local currency.

Fourth Quarter 2012 Results

GAAP net income for the quarter was $74.5 million, or $1.34 per diluted share, compared with 2011 fourth quarter GAAP net income and diluted EPS of $86.9 million and $1.50 per share, respectively. Adjusted diluted earnings per share of $1.71 in the quarter was 21 cents, or 14 percent, better than 2011 in U.S. dollars, including a negative foreign currency impact of 3 cents. Excluding the impact of foreign exchange on the comparison, adjusted diluted earnings per share was up 24 cents, or 16 percent.

2012 Annual Results

For the year ended Dec. 29, 2012, the company reported sales of $2.6 billion, in line with 2011 in dollars and up 5 percent in local currency. For the year, the company’s GAAP net income of $193.0 million decreased 12 percent, and diluted earnings per share of $3.42, was down 4 percent versus prior year. Excluding certain adjustment items, diluted earnings per share of $4.99 improved 12 percent in dollars compared with 2011, and excluding an unfavorable 36 cent impact on the comparison from foreign exchange rates, improved 22 percent.

The company repurchased in the open market 1.57 million shares for $100 million in the fourth quarter of 2012. Since 2007, the company has repurchased 15.5 million shares for $828 million. The company’s open market repurchase authorization was increased from $1.2 billion to $2.0 billion, and extended two years until Feb. 1, 2017. The company expects to repurchase $100 million worth of shares in the first quarter of 2013 and has included $400 million of repurchases in its full year 2013 outlook.

The company’s board of directors declared the company’s regular quarterly dividend. The dividend declared was 62 cents per share, up 72 percent from the previous quarterly dividend of 36 cents per share. It is payable on April 5, 2013, to shareholders of record as of March 20, 2013. The company also increased its target payout ratio from approximately one-third to 50 percent of trailing diluted earnings per share, excluding items, and continues to expect that its board will consider increasing the quarterly dividend with its declaration in the first quarter of each year.

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 2.8 million.


Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced record fourth quarter results with revenue of $588.2 million, a 19 percent improvement over the prior-year period. Revenue was not materially impacted by foreign currency fluctuations. Earnings per share for the quarter were 97 cents, a 27 percent year-over-year improvement.

Fourth Quarter 2012 Results

Fourth quarter revenue in North Asia was $250.2 million, compared to $204.3 million for the same period in 2011. In Greater China, fourth quarter revenue increased 28 percent to $141.7 million, compared to $110.6 million in the prior-year period. Revenue in South Asia/Pacific was $63.5 million, a 3 percent decline compared to the prior year. Revenue in the Americas improved 4 percent to $80.1 million, compared to $76.9 million in the prior-year period. Sales in the U.S. increased 18 percent when excluding $12.5 million of convention sales to non-U.S. distributors in the fourth quarter of 2011. Revenue in Europe was $52.8 million, a 38 percent improvement over the prior-year period.

The company’s operating margin was 15.1 percent for the quarter, compared to 15.3 percent in the prior year. Operating margin for the year was 15.7 percent, compared to 13.4 percent in 2011, or 15.3 percent when excluding charges related to a Japan customs case in the prior year. Gross margin during the quarter was 83.8 percent, consistent with the prior year.

The company’s cash and short-term investment position at the end of the quarter was $333.4 million. Dividend payments during the quarter were $11.7 million, and the company repurchased $21.9 million of its outstanding shares. During 2012 the company repurchased approximately $200 million of its outstanding shares.

2012 Annual Results

The company reported full year 2012 revenue of $2.17 billion, a 24 percent year-over-year improvement. Annual revenue was negatively impacted 1 percent by foreign currency fluctuations. Earnings per share for the year were $3.52, a 48 percent increase over 2011, or 31 percent when excluding charges related to a Japan customs case in the prior 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.


Primerica Inc.

Primerica Inc. (PRI—NYSE) announced financial results for the fourth quarter and full year ended Dec. 31, 2012. Total revenues were $304.5 million in the fourth quarter of 2012 and net income was $40.3 million, or 67 cents per diluted share. For the full year 2012, total revenues were $1.19 billion and net income was $173.8 million or $2.71 net income per diluted share.

Fourth Quarter 2012 Results

Operating revenues increased by 12 percent to $303.4 million in the fourth quarter of 2012, compared with $271.6 million in the fourth quarter of 2011. Net operating income per diluted share grew 36 percent to 69 cents from 51 cents in the prior year period, with net operating income growing 14 percent to $41.6 million in the fourth quarter of 2012 from $36.7 million in the fourth quarter of 2011.

The company repurchased $98.2 million of common stock in the fourth quarter of 2012. For the full year, 9.5 million shares of common stock were repurchased for $257.3 million, enabling the company to retire 15 percent of the common stock outstanding as of Dec. 31, 2011.

As of Dec. 31, 2012, investments and cash totaled $2.07 billion, compared with $2.18 billion as of Sept. 30, 2012.

2012 Annual Results

For the full year 2012, net operating income increased 12 percent to $174.5 million, compared with $156.0 million for 2011, which when combined with active capital management, resulted in a 32 percent year-over-year increase in diluted operating EPS to $2.72. Results reflect lower invested assets due to $257.3 million of share repurchases during the year and increased interest expense largely related to the redundant reserve financing executed in 2012.

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.


Avon Products Inc.

Avon Products Inc. (AVP—NYSE) reported fourth quarter and full-year 2012 results.

Fourth Quarter 2012 Results

For the fourth quarter 2012 ended Dec. 31, 2012, total revenue of $3.0 billion decreased 1 percent, compared with fourth quarter 2011, but increased 1 percent in constant dollars.

Fourth quarter 2012 gross margin was 59.8 percent. Adjusted Non-GAAP gross margin was 59.9 percent, 130 basis points lower than the prior-year quarter, primarily due to unfavorable mix reflecting actions to flow inventory, mainly in Brazil as well as flowing more unit-driving offers in several key markets.

Operating profit was $11 million in the fourth quarter of 2012 and operating margin was 0.4 percent. Adjusted Non-GAAP operating profit was $277 million and adjusted Non-GAAP operating margin was 9.2 percent, down 20 bps from the fourth quarter of 2011.

Loss from continuing operations in the fourth quarter of 2012 was $161 million, or 37 cents per share. Adjusted Non-GAAP net income from continuing operations was $162 million, or 37 cents per share.

Latin America’s fourth quarter 2012 revenue was $1.33 billion, up 2 percent year over year or up 7 percent in constant dollars. Q4 revenue in Europe, Middle East & Africa was $905.8 million, up 1 percent, or up 2 percent in constant dollars. North America’s fourth quarter revenue was $516.2 million, down 12 percent on both a reported and constant-dollar basis, and Asia Pacific’s revenue was $246.6 million, down 3 percent year over year, or down 6 percent in constant dollars.

During the fourth quarter of 2012, the following items had a significant impact on the financial results: As a result of the weaker-than-expected performance in the fourth quarter of 2012 in the Silpada business and the corresponding lowering of long-term growth estimates for this business, annual impairment assessment of the fair value of goodwill and intangible assets related to the business resulted in a Q4 non-cash pre-tax impairment charge, within operating profit, of $209 million, or 31 cents per share.

In the fourth quarter of 2012, Avon also recorded costs to implement (CTI) restructuring charges, within operating profit, of $58 million pre-tax, or 9 cents per share, most of which relate to the previously announced cost savings initiative.

2012 Annual Results

Total revenue of $10.7 billion decreased 5 percent, or was flat in constant dollars. Operating profit of $315 million decreased 63 percent and operating margin was 2.9 percent, down 470 basis points. Adjusted Non-GAAP operating profit was $693 million, down 40 percent, and adjusted Non-GAAP operating margin was 6.5 percent, down 380 basis points from a year ago.

Full-year loss from continuing operations was $38 million, or 10 cents per share, compared with income of $526 million, or $1.20 per share, last year. Adjusted Non-GAAP income from continuing operations was $373 million, or 85 cents per share, compared with $719 million, or $1.64 per share.

Cash flow from operations was $556 million for the 12 months ended Dec. 31, 2012, $100 million lower than in the same period in 2011, due to lower net income and higher payments associated with CTI restructuring initiatives, which were partially offset by improvements in working capital, lower contributions to the U.S. pension plan, and a payment in 2011 associated with a long-term incentive compensation plan of $36 million.

Avon’s net debt (total debt less cash) as of Dec. 31, 2012, was $2.0 billion, down $77 million from Dec. 31, 2011.

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 and is available in more than 100 countries.


LifeVantage Corp.

LifeVantage Corp. (LFVN—NASDAQ), a company dedicated to helping people achieve healthy living through a combination of a business opportunity and science supported products, including its patented dietary supplement Protandim®, the Nrf2 Synergizer®, reported financial results for the fiscal 2013 second quarter ended Dec. 31, 2012.

For the fiscal quarter ended Dec. 31, 2012, the company reported record net revenue of $53.4 million, compared to $25.3 million for the same period in fiscal 2012, an increase of 111 percent. On a sequential quarter basis, net revenue increased from $52.9 million reported for the company’s 2013 first fiscal quarter ended Sept. 30, 2012.

Gross profit for the second fiscal quarter increased to $38.8 million, compared to $21.6 million for the same period last year, delivering a gross margin of 72.5 percent, compared to 85.4 percent in the prior-year period. Adjusted gross profit, excluding one-time product recall costs, for the quarter ended Dec. 31, 2012, was $44.6 million, delivering an adjusted gross margin of 83.6 percent, compared to $21.6 million and 85.4 percent for the prior-year quarter.

Operating income was $487,000 for the second fiscal quarter, compared to $4.3 million in the same period last year. Adjusted operating income, excluding one-time recall related costs, was $6.4 million for the second fiscal quarter, compared to $4.3 million in the same period last year. Adjusted operating income margin was 12.0 percent in the second fiscal quarter, compared to 16.9 percent in the same period last year and 13.1 percent in the first fiscal quarter of 2013. The company expects its operating income margin to improve during the second half of fiscal 2013.

Net income for the second quarter of fiscal year 2013 was $209,000, or zero cents per diluted share, which includes $5.9 million of one-time costs related to the voluntary product recall. This compares to net income in the second quarter of fiscal year 2012 of $8.8 million, or 5 cents per diluted share, which included a tax benefit of $1.3 million and a favorable change in fair value of derivative warrant liabilities of $3.1 million. Adjusted net income, excluding one-time costs, for the quarter ended Dec. 31, 2012, was $3.8 million, or 3 cents per diluted share.

The company’s cash and cash equivalents at Dec. 31, 2012, were $28.5 million, compared to $24.6 million at the end of fiscal 2012. The company generated $5.4 million of cash flow from operations in the second quarter of fiscal year 2013, compared to $4.7 million for the same period last year.

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.


Immunotec Inc.

Immunotec Inc. (IMM—TORONTO-V), a Canadian based company in the wellness industry, released its year end 2012 financial results for the period ended Oct. 31, 2012.

Total revenue reached CAN$49.2 million, an increase of 15 percent as compared to the previous year. Network sales reached CAN$44.2 million, an increase of 18 percent as compared to the same period in the previous year.

Selected expenses, defined as administrative, marketing and selling, quality and development expenses amounted to CAN$11.9 million and measured favorably, as a percentage of total revenues, by improving to 24 percent, compared to 28 percent of total revenues last year.

Adjusted EBITDA improved to CAN$1.9 million or 3.8 percent of total revenues, compared to CAN$600,000 or 1.4 percent of total revenues over last year, a major improvement.

Net profit of CAN$125,000 was a significant improvement over last year (net loss of CAN$1.4 million).

The board of directors has also approved a modification to the company’s stock option plan, whereby it removed the two-month hold period, which applied to shares issued following the exercise of options under such a plan.

Immunotec is a business opportunity supported by unique scientifically proven products that improve wellness. Headquartered with manufacturing facilities near Montreal, the company also has distribution capacities to support its commercial activities in Canada and internationally to the United States, Europe, Mexico and the Caribbean.


Natural Health Trends Corp.

Natural Health Trends Corp. (NHTC—OTC.BB) provided a preliminary outlook for its fourth quarter financial results, the period ended Dec. 31, 2012. The company expects to announce final, audited results this month.

The company estimates revenue for the quarter to be $8.2 million. The company also estimates that its deferred revenue, consisting of unshipped product and unamortized enrollment fees, at Dec. 31, 2012, was roughly unchanged from Sept. 30, 2012. In the fourth quarter of 2011, revenue was $8.2 million, with deferred revenue of $967,000 at Dec. 31, 2011, and $1.5 million at Sept. 30, 2011.

For the year ended Dec. 31, 2012, estimated revenue is $37.6 million, a 20 percent increase over the comparable period in the prior year.

These results are preliminary and have not been reviewed by the company’s independent accountants.

Natural Health Trends Corp. is an international direct selling and e-commerce company marketing premium-quality personal-care products through its subsidiaries throughout Asia, North America and Europe.


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.