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October 01, 2014

Financial News

Financial News, October 2014

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Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced second quarter revenue of $650.0 million, a 3 percent decline over the prior-year period. Revenue was negatively impacted 2 percent by foreign currency fluctuations. Earnings per share for the quarter were 32 cents, versus $1.22 in the prior-year period and were impacted by a $50 million write-down of Mainland China inventory, and a $25 million charge due to a transition to the SICAD II exchange rate in Venezuela. Excluding these items, earnings per share would have been $1.13 per share for the second quarter.

The company recently restated its consolidated financial statements for the quarter ended March 31, 2014, to include a $21 million charge to Other Income (Expense) to reflect a hyperinflationary adjustment for Venezuela, and $7 million of income related to a tax rebate for the company’s China headquarters. These changes, net of tax, negatively impacted net income for the three-month period ended March 31, 2014, by approximately $9.4 million, but had no effect on cash flow.

In Greater China, second quarter revenue declined 12 percent to $229.9 million, compared to $261.2 million in the prior-year period. The region’s results were negatively impacted 1 percent by foreign currency fluctuations.

Second quarter revenue in North Asia increased 1 percent to $196.0 million, compared to $194.8 million for the same period in 2013. The region’s results were positively impacted 4 percent by foreign currency fluctuations.

Revenue in the Americas improved 8 percent to $89.9 million, compared to $83.4 million in the prior-year period. The region’s results were negatively impacted 11 percent by foreign currency fluctuations.

Revenue in South Asia/Pacific was $81.7 million, a 5 percent decline compared to the prior year. The region’s results were negatively impacted 7 percent by foreign currency fluctuations.

Revenue in the EMEA region was $52.6 million, a 14 percent improvement over the prior-year period. The region’s results were negatively impacted 1 percent by foreign currency fluctuations.

The company’s operating margin was 8.4 percent for the quarter, compared to 17.1 percent in the second quarter of 2013. Gross margin during the quarter was 76.0 percent, versus 83.4 percent in the prior-year period. Operating and gross margins were negatively impacted due to the China inventory charge.

Cash and current investments at the end of the quarter were $233.7 million. Dividend payments during the quarter were $20.4 million.

Nu Skin also announced its board of directors has declared a quarterly dividend of 35 cents per share, payable on Sept. 26, 2014, to stockholders of record on Sept. 12, 2014.


Primerica Inc.

Primerica Inc. (PRI—NYSE) announced financial results for the quarter ended June 30, 2014. Total revenue was $331.1 million in the second quarter of 2014 and net income was $49.3 million, or 89 cents per diluted share.

In the second quarter operating revenue increased by 10 percent to $330.3 million and net operating income increased by 18 percent to $48.7 million compared with $300.0 million and $41.2 million, respectively, in the year-ago quarter. Net operating income per diluted share increased 25 percent to 88 cents and ROAE was 16.3 percent on an operating basis in the second quarter of 2014.

In conjunction with the company’s plan to repurchase $150 million in shares of Primerica common stock in 2014, it completed a redundant reserve financing transaction on July 31, 2014.

During the second quarter the company repurchased $21.9 million, or 480,902 shares of Primerica common stock for a total of $35.0 million, or 763,902 shares repurchased year-to-date.

As of June 30, 2014, investments and cash totaled $2.04 billion compared with $2.01 billion as of March 31, 2014. The company’s invested asset portfolio had a net unrealized gain of $138.5 million (net of unrealized losses of $5.6 million) at June 30, 2014, up from $113.2 million at March 31, 2014.

The Board of Directors of Primerica Inc. also approved a quarterly dividend of 12 cents per share for the second quarter of 2014. The dividend was payable on Sept. 16, 2014, to stockholders of record as of Aug. 20, 2014.


Nature’s Sunshine Products Inc.

Nature’s Sunshine Products Inc. (NATR—NASDAQ) reported its financial results for the second quarter ended June 30, 2014, and declared a quarterly cash dividend of 10 cents per share.

For the second quarter of 2014, net sales revenue increased 0.7 percent to $94.3 million, compared to $93.7 million in the second quarter of 2013. In local currencies, net sales revenue increased by 1.1 percent.

Operating income decreased 25.6 percent to $5.8 million, compared to $7.8 million in the second quarter of 2013. Normalizing for one-time transaction expenses, operating income would have been $7.7 million, or 8.2 percent as a percent of net sales.

Adjusted EBITDA decreased 18.0 percent to $7.9 million, compared to $9.7 million in the second quarter of 2013. Normalizing for one-time transaction expenses, adjusted EBITDA would have been $9.8 million.

Net income was $3.2 million, or 20 cents per diluted common share, compared to $6.1 million, or 38 cents per diluted common share in the second quarter of 2013. Normalizing for one-time transaction expenses, net income would have been $4.4 million, or 27 cents per diluted share.

Cash and cash equivalents as of June 30, 2014, were $68.6 million, compared to $77.2 million as of Dec. 31, 2013. Shareholders’ equity as of June 30, 2014, was $118.2 million, compared to $105.3 million as of Dec. 31, 2013.

In NSP Americas, Asia Pacific and Europe net sales revenue decreased 8.3 percent to $49.0 million, compared to $53.4 million in the second quarter of 2013. In local currencies, net sales revenue decreased by 5.4 percent compared to the second quarter of 2013.

In NSP Russia, Central and Eastern Europe net sales revenue decreased 14.3 percent to $12.8 million, compared to $15.0 million in the second quarter of 2013, primarily impacted by the escalation of political unrest in Ukraine and the weakness of its currencies.

Synergy WorldWide net sales revenue increased 28.5 percent to $32.5 million, compared to $25.3 million in the second quarter of 2013. In local currencies, net sales revenue increased by 23.9 percent compared to the second quarter of 2013, driven by increased sales in South Korea and Japan.

As previously reported, Nature’s Sunshine Products and Shanghai Fosun Pharmaceutical (Group) Co., Ltd., a leading health care company in the People’s Republic of China, signed definitive agreements with respect to the formation of a China joint venture.

The company’s board of directors also approved a quarterly cash dividend of 10 cents per share, payable on Aug. 29, 2014, to shareholders of record as of the close of business on Aug. 18, 2014.


Medifast Inc.

Medifast Inc. (MED—NYSE) reported financial results for the second quarter ended June 30, 2014.

For the second quarter, Medifast net revenue decreased 17 percent to $80.9 million from net revenue of $97.1 million in the second quarter of 2013. Revenue in the direct sales channel, Take Shape For Life, decreased 12 percent to $54.1 million in the second quarter of 2014 compared to $61.4 million in the same period last year.

Operating income was $7.4 million, or 9.2 percent as a percent of net revenue, compared to $10.6 million or 11.0 percent as a percent of net revenue in the second quarter of 2013. Net income was $5.7 million, or 44 cents per diluted share compared to net income of $7.1 million, or 51 cents per diluted share for the second quarter of 2013.

Gross profit for the second quarter of 2014 decreased 17 percent to $60.4 million, compared to $72.9 million in the second quarter of 2013. The company’s gross profit margin decreased 50 basis points to 74.6 percent in the second quarter versus 75.1 percent in the second quarter of 2013.

The company’s balance sheet remains strong with stockholders’ equity of $97.5 million and working capital of approximately $66.2 million as of June 30, 2014. Cash, cash equivalents and investment securities for the second quarter of 2014 increased $0.8 million to $68.6 million compared to $67.8 million at Dec. 31, 2013. The company repurchased 451,000 shares of common stock for $14.2 million during the second quarter as part of its current share repurchase authorization. The company remains free of interest bearing debt.


Mannatech Inc.

Mannatech Inc. (MTEX—NASDAQ) announced financial results for its second quarter ended June 30, 2014.

Second quarter net sales for 2014 were $46.3 million, an increase of 3.4 percent as compared to $44.8 million in the second quarter of 2013. Net sales increased 2.2 percent in constant dollars. Net loss was $0.7 million, or 26 cents per diluted share, for the second quarter 2014, as compared to net income of $0.8 million, or 30 cents per diluted share, for the second quarter 2013.

The company took charges to the inventory allowance of $0.8 million during the second quarter of 2014, which reduced gross profit margin to 79.0 percent as compared to 80.6 percent in the second quarter of 2013. The company generated operating cash flow of $7.4 million for the first six months of 2014 as compared to $5.3 million for the same period in 2013.

For the three months ended June 30, 2014, Asia/Pacific net sales increased by $1.5 million, or 7.5 percent, to $21.4 million, as compared to $19.9 million for the same period in 2013.

For the three months ended June 30, 2014, EMEA net sales increased by $0.4 million, or 11.1 percent, to $4.0 million, as compared to $3.6 million for the same period in 2013. In constant dollars, net sales would have increased 16.7 percent to $4.2 million.

North American net sales decreased by $0.4 million, or 1.9 percent, to $20.9 million, as compared to $21.3 million for the same period in 2013.


Crius Energy Trust

Crius Energy Trust (KWH-UN.TO—TORONTO) announced its financial results for the three month period ended June 30, 2014. All figures in U.S. dollars unless otherwise noted.

Revenue was $134.0 million, a 17.6 percent increase over $113.9 million. Gross margin was $33.7 million, representing 25.2 percent of revenue, compared to $27.6 million, representing 24.2 percent of revenue. Adjusted EBITDA was $13.2 million, representing 9.9 percent of revenue compared to $10.1 million, representing 8.9 percent of revenue.

Distributions paid in the quarter of $7.9 million, representing a payout ratio of 67.5 percent based on the adjusted EBITDA, compared to $9.5 million and 110.5 percent. This represents the company’s strongest performance since its IPO in November 2012.

Total cash and availability was $46.1 million, consisting of $10.8 million of cash and cash equivalents and $35.3 million of credit facility availability. This compares to $32.1 million consisting of $18.5 million of cash and cash equivalents and $13.6 million of credit facility availability.

The Trust acquired a portfolio of approximately 38,000 electric and natural gas customers together with other assets from Superior Plus Energy Services for an aggregate purchase price of approximately $3.8 million.

The Trust also acquired a portfolio of approximately 16,000 electric customers from HOP Energy LLC for an aggregate purchase price of approximately $1.5 million.


Youngevity International Inc.

Youngevity International Inc. (YGYI—OTC.QX) reported financial results for the second quarter of 2014.

For the three months ended June 30, 2014, the company reported net revenue of $32.7 million, compared to $20.9 million for the same period in 2013, an increase of 56.6 percent. The increase in revenue is attributed primarily to the increase in product offerings as well as the number of distributors and customers. Also, $3.8 million in additional revenues were derived from the acquisition of several companies over the last year.

Gross profit for the second quarter ended June 30, 2014, increased to $18.9 million, compared to $12.7 million for the same period last year, an increase of 49.2 percent.

Net income for the three months ended June 30, 2014, decreased to $544,000 as compared to a net income of $662,000 for the same period last year. Adjusted EBITDA was $2.0 million for the three months ended June 30, 2014, compared to $1.7 million in the same period for the prior year.


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