September 01, 2013
Financial News, September 2013
AL International Inc.
AL International Inc. (YGYI—OTC.BB), a fast-growing, innovative, multidimensional company that offers a wide range of consumer products and services, announced that the company has effectuated its corporate name change to Youngevity International Inc.
In conjunction with the name change, the company also began trading under the ticker symbol “YGYI” within the OTCQX Marketplace. Its recent ticker symbol change and launch of a new corporate website reflect the company’s new name, which is part of a larger rebranding effort intended to more clearly represent Youngevity International’s focus on its commitment to operate as a global consumer products company.
The company’s common stock has been assigned a new CUSIP number of 987537107 in connection with the name change. Outstanding stock certificates are not affected by the name change and do not need to be exchanged.
The OTCQX® Marketplace is the highest market tier of the U.S. Over-the-Counter (OTC) market, providing investors with an objective measure to distinguish the best OTC-traded companies. To qualify for the OTCQX, companies must meet high financial standards, be current in their disclosure, and be sponsored by a professional third-party advisor.
CVSL Inc. (CVSL—OTC.BB) and Agel Enterprises LLC announced that they have signed a letter of intent for CVSL to acquire Agel as part of its growth strategy in the direct selling industry.
Founded in 2005 and based in Utah, Agel offers a line of nutritional gel supplement products in markets around the world, including Europe, North America, Latin America and Asia.
CVSL Chairman John Rochon said that acquiring Agel will allow CVSL to enter the nutritional supplement market as well as the skincare market, while establishing a global presence. He also said CVSL intends for current Agel management to continue in their present roles.
Jeff Higginson, Co-CEO of Agel, said that signing a letter of intent to join CVSL is “a major step forward for Agel’s future.”
Avon Products Inc.
Avon Products Inc. (AVP—NYSE) reported second quarter 2013 results.
For the second quarter of 2013, total revenue of $2.5 billion decreased 2 percent, but increased 2 percent in constant dollars, primarily due to an increase in average order, which partially benefited from inflation in Latin America.
Second quarter 2013 gross margin was 62.7 percent. Adjusted gross margin was 63.3 percent, 40 basis points higher than the prior-year quarter.
Operating profit was $202 million and operating margin was 8.1 percent in the quarter. Operating profit included a $17 million charge associated with the highly inflationary accounting for a 32 percent devaluation of Venezuelan currency, an accrual of $12 million for the offer of settlement relating to the Foreign Corrupt Practices Act investigations and $8 million associated with costs to implement restructuring. Adjusted operating profit was $239 million and adjusted operating margin was 9.5 percent, 300 basis points higher than the second quarter of 2012.
As part of the Avon’s refinancing activities, during the second quarter of 2013, the company prepaid the $500 million principal of its 2014 notes plus a make-whole premium. In connection with this prepayment, the company incurred a loss on extinguishment of debt of $13 million.
Second quarter 2013’s net income from continuing operations was $85 million, or 19 cents per diluted share. Second quarter 2013’s adjusted net income from continuing operations was $127 million, or 29 cents per diluted share.
In July 2013, Avon completed the sale of its Silpada business. Silpada has been classified within discontinued operations for all periods presented. In the second quarter of 2013, the company recorded within discontinued operations a pre-tax charge of $79 million ($50 million net of tax) reflecting the expected loss on sale.
Net cash provided by operating activities was $70 million for the six months ended June 30, 2013, compared with $37 million in the prior-year period, favorably impacted by improved operating profit and lower income tax payments.
Second quarter 2013 revenue in Latin America was $1.25 billion, up 1 percent year over year, or up 7 percent in constant dollars. Q2 revenue in Europe, Middle East and Africa was $678.4 million, up 2 percent, or up 5 percent in constant dollars. North America’s second quarter revenue was $380.3 million, down 12 percent year over year and in constant dollars. Asia Pacific’s revenue was $198.1 million, down 9 percent, or down 10 percent in constant dollars.
In other company news, Avon declared a regular quarterly dividend on its common stock of 6 cents per share, payable Sept. 3, 2013, to shareholders of record on Aug. 15, 2013.
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 sales and earnings for the second quarter of 2013. Net sales for the three months ended June 30, 2013, decreased approximately 32 percent to $211.7 million from $309.5 million for the comparable prior-year period, primarily due to lower sales at ViSalus and, to a lesser extent, at PartyLite.
Blyth’s operating profit for the second quarter was $1.2 million this year, versus $17.8 million last year, largely driven by the decline in sales.
Net loss attributable to Blyth Inc. was $1.4 million for the three months ended June 30, 2013, compared to earnings of $8.0 million in the comparable prior-year period. Diluted Earnings per Share Attributable to Blyth Inc. were a loss of 8 cents for the second quarter, compared to earnings per share of 46 cents in the comparable prior year period.
Net loss attributable to Blyth Inc. common stockholders was $3.2 million for the three months ended June 30, 2013, which includes a downward adjustment of $1.8 million related to dividends paid to the non-controlling interest holders of ViSalus in excess of their allocable share of the income earned by ViSalus. Giving effect to this adjustment, diluted earnings per share attributable to Blyth Inc. common stockholders were a loss of 20 cents for the second quarter, compared to earnings per share of 46 cents in the comparable prior year period.
During the second quarter, the company announced it would redeem for cash all of its outstanding 5.5 percent senior notes due Nov. 1, 2013. As of June 30, 2013, $71.8 million aggregate principal amount of notes remained outstanding. On May 10, 2013, the company completed the sale of $50 million aggregate principal amount of 6.0 percent senior notes due June 2017 and, on July 10, used the proceeds from the sale of these notes, together with available cash, to redeem the outstanding 5.5 percent notes.
In the Health & Wellness segment, consisting of ViSalus, second quarter net sales decreased 47 percent to $101.5 million, versus $190.4 million for the same period last year. Health & Wellness second quarter segment operating profit was $2.8 million this year versus $18.6 million last year.
In Candles & Home Decor, consisting of PartyLite, sales were $77.8 million in the second quarter, versus $87.9 million for the same period last year, a decline of 12 percent. Second quarter operating loss for the Candles & Home Decor segment was $0.3 million, versus profit of $1.7 million in last year’s second quarter.
Educational Development Corp.
Educational Development Corp. (EDUC—NASDAQ) reported results for the fiscal fourth quarter and the full year ended Feb. 28, 2013, along with their quarterly cash dividend.
For the fiscal year 2013, the company reported net revenue of $25.5 million, a decrease of $785,800 when compared to $26.3 million for the previous year, and net earnings of $802,900, compared to $1.4 million. Earnings per share were 20 cents, compared to 36 cents the previous year on a fully diluted basis.
For the fourth quarter 2013, the company announced net revenues of $5.6 million, compared to $5.9 million for the same period last year. As a result of year-end inventory and accrual adjustments of approximately $375,000, the company reported a 2013 fourth quarter net loss of $211,200, compared with net earnings of $269,600 for the 2012 fourth quarter.
Herbalife Ltd. (HLF—NYSE), a global nutrition company, reported second quarter net sales of $1.2 billion, reflecting an increase of 18 percent compared to the same time period in 2012, on volume point growth of 14 percent. Adjusted net income for the quarter of $150.7 million, or $1.41 per diluted share, compared to the second quarter 2012 net income of $132.0 million and EPS of $1.09, respectively. On an as-reported basis, second quarter 2013 EPS of $1.34 increased 23 percent, compared to the $1.09 reported in the comparable quarter last year.
For the quarter ended June 30, 2013, the company generated cash flow from operations of $213.8 million, an increase of 56 percent compared to 2012; paid dividends of $30.9 million; and invested $31.3 million in capital expenditures.
For the second quarter, revenue in North America was $247,564, up 10 percent compared to $224,661 a year ago. In Mexico revenue was $145,638 up 18 percent compared to $119,449 in 2012. Q2 revenue in South and Central America was $222,362, up 31 percent compared to $152,583. In the EMEA, revenue was $186,286, up 13 percent compared to $161,635 the previous year. In Asia Pacific revenue was $299,240, up 0.9 percent compared to $296,548. China’s revenue was $118,149, up 35 percent compared to $77,072.
In other company news, Herbalife reported that its board of directors has approved a dividend of 30 cents per share to shareholders of record Aug.13, 2013, payable on Aug. 27, 2013.
Tupperware Brands Corp.
Tupperware Brands Corp. (TUP—NYSE), a portfolio of global direct selling companies, selling innovative, premium products across multiple brands and categories, announced second quarter 2013 operating results.
Second quarter 2013 net sales were $688 million. Emerging markets, accounting for 65 percent of sales, achieved a 14 percent increase in local currency, driven by large populations, penetration of unserved and underserved consumers and emerging middle classes.
GAAP net income was $76 million, versus $13 million in the prior year. 2012 included $76.9 million of pre-tax, non-cash impairment charges to write down purchase accounting intangibles, as well as $7.5 million pre-tax gain from the sale of a previously idled manufacturing facility.
The company returned $133 million to shareholders through a dividend payout of $33 million and the repurchase of 1.23 million shares for $100 million. Since 2007, 18 million shares have been repurchased for $1 billion, with $1 billion left under an authorization that runs until February 2017.
Sales in Europe were up 3 percent versus last year reported and in local currency. Sales in Asia Pacific were up 13 percent reported and 16 percent in local currency, driven by the emerging markets up 20 percent in local currency. North America sales were up 11 percent reported, 8 percent in local currency, and reflected Tupperware Mexico sales up 12 percent.
Sales for Beauty North America were down 5 percent reported and down 10 percent in local currency. BeautiControl sales were down 26 percent. Sales in South America were up 18 percent reported and 22 percent in local currency, primarily as a result of continued growth in Brazil that was up 32 percent in local currency.
USANA Health Sciences Inc.
USANA Health Sciences Inc. (USNA—NYSE), a developer and manufacturer of high-quality nutritional, personal-care, and weight-management products, announced record financial results for its fiscal second quarter ended June 29, 2013.
For the second quarter of 2013, net sales increased by 17.5 percent to $189.1 million, compared with $160.9 million in the prior-year period. This growth in net sales was driven by increases in both the company’s Asia Pacific and North America/Europe regions.
Net earnings for the second quarter increased to $24.2 million, an improvement of 44.6 percent, compared with the prior-year period. Earnings per share for the quarter increased by 55.0 percent to $1.72, compared with $1.11 in the second quarter of the prior year. Total diluted common shares outstanding as of June 29, 2013, were 14.1 million, compared with 15.1 million as of June 30, 2012.
Net sales in Asia Pacific increased by 24.3 percent to $122.4 million, compared with $98.4 million for the second quarter of the prior year. This improvement was due to strong sales growth in the Greater China and Southeast Asia Pacific regions.
Net sales in North America/Europe increased by 6.9 percent to $66.8 million, compared with $62.5 million in the prior-year period. The company generated double-digit sales growth in Mexico and moderate sales growth in the United States, Canada, and France.
The company ended the quarter with $96.1 million in cash and cash equivalents. For the second quarter, cash generated from operations totaled $27 million.
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