May 01, 2013
Financial News, May 2013
Avon Products Inc.
Avon Products Inc. (AVP—NYSE) announced that the company has completed refinancing activities, including the completion of a public offering of $1.5 billion in notes. The company also entered into a $1 billion four-year unsecured Revolving Credit Facility Agreement, which replaces the previous $1 billion Revolving Credit Facility Agreement.
In summary, the company has taken or anticipates taking a number of actions to improve the health of its balance sheet. Avon also issued $1.5 billion of unsecured notes generating net proceeds of $1.48 billion (after transaction costs) with maturities of 3, 7, 10 and 30 years.
The company is also repaying $1.9 billion of debt, utilizing $400 million in cash to reduce leverage, and has negotiated covenants to now provide necessary flexibility to support the turnaround.
In other news, Avon released further details of the company’s previously announced $400 million Cost Saving Initiative by 2016.
The latest actions include a global headcount reduction of more than 400 associates across all regions and functions, and the restructuring or closure of certain smaller, underperforming markets, primarily in Europe, Middle East & Africa, including the exit of the Republic of Ireland market. These actions, like those previously announced, are aimed at boosting efficiencies and concentrating resources on high priority markets and activities. The company expects these actions to be largely completed before the end of 2013.
Avon said that total charges related to these actions are expected to be in the range of $35 to $40 million before taxes and that approximately $20 million of that total will be recorded in the first quarter of 2013. The company expects these actions to generate approximately $45 to $50 million in annualized savings, when fully implemented, as part of its $400 million cost savings goal.
Avon, the company for women, is a leading global beauty company, with nearly $11 billion in annual revenue. As one of the world’s largest direct sellers, Avon is sold through more than 6 million active independent Avon Sales Representatives in over 100 countries.
Blyth Inc. (BTH—NYSE), a direct to consumer company and designer and marketer of health and wellness products, candles and accessories for the home, reported earnings for the fourth quarter and full year.
Fourth Quarter 2012 Results
Net sales for the three months ended Dec. 31, 2012 decreased approximately 4 percent to $331.0 million from $345.5 million for the comparable prior year period. Sales growth of ViSalus, as compared to the prior year period, was more than offset by declines at PartyLite and Miles Kimball Company.
Blyth’s operating profit for the fourth quarter was $39.8 million this year versus $34.5 million last year. Net earnings attributable to Blyth Inc. for the fourth quarter were $27.8 million compared to $25.6 million for the prior year. Diluted earnings per share for the fourth quarter were $1.63 this year compared to $1.54 last year.
In December 2012, Blyth increased its ownership in ViSalus from approximately 73 percent to approximately 81 percent at a cost of $60 million. As part of that transaction, Blyth essentially modified its obligation to purchase the remaining 19 percent interest in ViSalus that it did not already own through the issuance by ViSalus of redeemable convertible preferred stock.
This December 2012 transaction necessitated a revaluation of ViSalus. The revaluation resulted in a fair market value of ViSalus which required a non-cash adjustment of $34 million, or $1.99 on a diluted earnings per share basis. As a result, after giving effect to the exchange of redeemable preferred stock in excess of fair value, net earnings attributable to Blyth Inc. common stockholders in the fourth quarter of 2012 is a loss of $6.2 million, or a loss of 36 cents per share.
During the fourth quarter, the company repurchased 411,336 shares, or approximately 2.4 percent of its 17 million shares outstanding. The company has 1.6 million shares remaining in its existing repurchase authorization.
Health & Wellness segment – ViSalus fourth quarter net sales increased 29 percent to $126.6 million versus $98.5 million for the same period last year. Health & Wellness fourth quarter segment operating profit was $8.7 million this year versus $2.7 million last year. Excluding EIP charges this year and last year, and allocated corporate expenses of $2.4 million this year and $1.8 million last year, fourth quarter operating profit for ViSalus was $13.3 million this year versus $16.1 million in the fourth quarter of 2011.
Candles & Home Decor – PartyLite sales were $160.1 million in the fourth quarter, versus $195.5 million for the same period last year, a decline of 18 percent. PartyLite’s European sales during the quarter declined 11 percent in local currency, or 14 percent in U.S. dollars. PartyLite’s U.S. sales declined 34 percent versus the prior year period. At PartyLite Canada, sales declined 24 percent in local currency and 21 percent in U.S. dollars during the quarter.
Fourth quarter operating profit for the Candles & Home Decor segment was $29.9 million versus $28.8 million in last year’s fourth quarter. Excluding restructuring charges this year and last year, and allocated corporate expenses of $1.6 million this year versus $3.6 million last year, PartyLite’s operating profit was $32.5 million this year versus $35.4 million last year.
2012 Annual Results
Blyth’s net sales for the year ended Dec. 31, 2012 increased 34 percent to $1.2 billion versus $900 million for the prior year. Operating profit for the year was $84.6 million this year versus $32.2 million last year.
Commenting on ViSalus’ contribution to this growth, Robert B. Goergen, Chairman of the Board and CEO of Blyth, noted that ViSalus’ full year sales were $624 million versus $230 million in 2011, a 171 percent sales growth.
Net earnings attributable to Blyth Inc. for the full year were $44.0 million compared to $13.8 million for the prior year. Diluted earnings per share attributable to Blyth Inc. were $2.55 this year compared to 83 cents last year.
After giving effect to the non-cash adjustment of $1.97, resulting from the exchange of redeemable preferred stock in excess of fair value, the diluted earnings per share attributable to Blyth Inc. common stockholders was 58 cents.
Blyth Inc., headquartered in Greenwich, Conn., is focused on the direct selling and direct marketing channels, primarily utilizing both the network marketing and home party plan methods through PartyLite and ViSalus.
Crius Energy Trust
Crius Energy Trust (KWH-UN.TO—TORONTO) announced its audited financial results for the period from establishment of the Trust to Dec. 31, 2012. The Trust was established on Sept. 7, 2012 and commenced operations on Nov. 13, 2012 with the acquisition of a 26.8 percent ownership interest in Crius Energy, LLC, parent company of direct seller Viridian Energy. All figures in U.S. dollars unless otherwise noted.
The Trust completed its initial public offering on Nov. 13, 2012 for gross proceeds of CAN$100 million through the issuance of 10 million trust units at CAN$10.00 per unit and completed the company interest acquisition for approximately $89.7 million.
The Trust had revenue of $56.3 million for the period from inception to Dec. 31, 2012. Gross margin was $11.9 million or 21.1 percent of revenue for the same period with adjusted EBITDA of $3.5 million or 6.2 percent of revenue. The Trust had a cash balance of $30.3 million and no long-term debt as of Dec. 31, 2012.
The Trust paid its first distribution to unitholders on Jan. 15, 2013 for the initial period from Nov. 13, 2012 to Dec. 31, 2012 in the amount of CAN$0.1326 per unit and paid subsequent monthly distributions of CAN$0.0833 per unit on Feb. 15 and March 15, 2013.
The Trust was established on Sept. 7, 2012 and completed the offering and the acquisition of the company interest on Nov. 13, 2012. Accordingly, the fourth quarter of 2012 reflects operations of the company from the close of the acquisition of the company interest on Nov. 13, 2012 through Dec. 31, 2012.
For the period ending Dec. 31, 2012 revenue was $56.3 million.
Crius Energy Trust has been established to provide investors with a stable and consistent distribution-producing investment through the acquisition of a 26.8 percent ownership interest in Crius Energy LLC, which is one of the largest independent energy retailers operating in the United States, with more than 530,000 residential customer equivalents.
Immunotec Inc. (IMM—TSX VENTURE), a Canadian-based wellness company, released its first quarter 2013 financial results for the three-month period ended Jan. 31, 2013.
Total revenue reached $12.2 million, an increase of 10.3 percent as compared to the same period in the previous year.
Network sales reached $11.2 million, an increase of 12.4 percent as compared to the same period in the previous year.
Adjusted EBITDA improved to $800,000 or 6.8 percent of total revenues, compared to $300,000 or 2.5 percent of total revenues for the same period in the previous year, a significant improvement.
Net profit was $528,000, a significant improvement over a net profit of $6,000 for the same period in the previous year.
Immunotec is a world-class business opportunity supported by unique, scientifically proven products that improve wellness. Headquartered with manufacturing facilities near Montreal, Canada, the company also has distribution capacities to support its commercial activities in Canada and internationally to the United States, Europe, Mexico and the Caribbean.
LifeVantage Corp. (LFVN—NASDAQ), a science-based nutraceutical company with patented dietary supplement Protandim®, the Nrf2 Synergizer®, announced that its board of directors approved a share repurchase program that authorizes the company to utilize up to $5 million to purchase additional shares of its common stock. The company is nearing completion of repurchasing the $5 million under the repurchase program that was previously approved and announced in December 2012.
The newly approved repurchase authorization permits LifeVantage to purchase shares from time to time through a variety of methods, including in the open market, through privately negotiated transactions or other means as determined by the company’s management, in accordance with applicable securities laws.
In addition, the company has begun the process of analyzing the merits of potential methods of reducing the number of outstanding shares. The company is in the process of engaging an investment bank to assist with the analysis. The company will provide additional details about the results of its analysis as appropriate.
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.
Mannatech Inc. ( MTEX—NASDAQ), a developer and provider of nutritional supplements and skincare products based on Real Food Technology® solutions, announced financial results for its fourth quarter and year end 2012.
Fourth Quarter 2012 Results
Fourth quarter net sales for 2012 were $42.3 million, a decrease of 11.7 percent compared to $47.9 million in the fourth quarter of 2011. Net sales for United States and Canada declined 14.4 percent to $20.2 million compared to $23.6 million in the fourth quarter of 2011. International net sales of $22.1 million decreased 9.1 percent compared to $24.3 million in the fourth quarter of 2011.
Net income was $300,000, or 10 cents per diluted share, for the fourth quarter of 2012, compared to net loss of ($7.0 million), or ($2.63) per diluted share, for the fourth quarter of 2011.
2012 Annual Results
Annual net sales for 2012 were $173.4 million, down 13.6 percent from $200.7 million for 2011. The company reported a net loss for 2012 of $1.4 million, compared to a net loss of $20.7 million in 2011. The loss per share was 52 cents in 2012, compared to the loss per share of $7.80 in 2011.
Mannatech Inc. develops high-quality health, weight and fitness, and skincare products that are based on the solid foundation of nutritional science and development standards. Mannatech’s proprietary products are available through independent sales Associates around the globe in 22 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.