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February 14, 2012

U.S. News

Public Direct Sellers Release Financial Results

Five of the direct selling industry’s top public companies—Avon, Primerica, USANA, Nu Skin and Tupperware—recently released financial results for the fourth quarter 2011 and year-ending 2011.

Avon Products, Inc.

Avon reported fourth-quarter and full-year 2011 results.

Andrea Jung, Avon’s Chairman and Chief Executive Officer, said: “Despite a challenging fourth quarter, 2011 revenue was up 4 percent (1 percent in constant dollars) to $11.3 billion. Adjusted operating profit for the year was $1.16 billion and cash from operations was $656 million. While 2012 is a year of transition and we are not planning for margin recovery, our priorities are to improve top-line performance, cost management, and cash generation. Additionally, the company plans to maintain its annual $0.92 dividend in 2012. As previously announced, the company is conducting an operational and financial assessment of the business. We will update investors at the appropriate time after a new CEO is on board.”

Fourth Quarter 2011
Total revenue of $3.0 billion decreased 4 percent, or 1 percent in constant dollars. Total units declined 2 percent, while price/mix was a benefit of 1 percent during the quarter. 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. Latin America’s fourth-quarter 2011 revenue was up 2 percent year over year, or up 6 percent in constant dollars. Fourth-quarter revenue in North America was down 7 percent on both a reported and constant-dollar basis. In Central & Eastern Europe, fourth-quarter 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. Asia Pacific’s fourth-quarter revenue was down 6 percent year over year, or down 7 percent in constant dollars.

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. Total Beauty sales were up 5 percent, or 2 percent on a constant-dollar basis. Active Representatives declined 1 percent and units sold were down by 2 percent. 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.

View the full press release online.


Primerica, Inc.

Primerica continued to perform well in 2011, driven primarily by a 27 percent increase in Term Life net premium revenue on an operating basis and an 18 percent increase in Investment and Savings Product sales compared with 2010.

John Addison, Chairman of Primerica Distribution and Co-Chief Executive Officer, said, “In 2011 we launched innovative incentives, new technology and improved product offerings, including our new TermNow rapid issue life insurance product and the addition of managed accounts to our Investment and Savings Products platform. The initiatives launched at our successful June convention helped drive the 6 percent growth in recruiting and 6 percent growth in life insurance policies issued in 2011 over the prior year. We continue to focus on enhancing our business opportunity with incentives and innovations designed to build distribution and drive long-term sales force and revenue growth.”

Fourth Quarter 2011
Total revenues were $275.9 million in the fourth quarter of 2011 and net income was $41.2 million, or $0.57 per diluted share. Net income in the fourth quarter of 2010 was $52.9 million, or $0.69 per diluted share, including $.10 per diluted share largely related to certain reinsurance recoveries that were excluded from operating results in that period.

Full Year 2011
For the full year 2011, total revenue was $1.1 billion, compared to $1.3 billion for 2010. Net income was $178.3 million, compared with $257.8 million for 2010. Net income for the first quarter of 2010 did not reflect the impact of the Citi reinsurance and reorganization transactions. Adjusted to reflect the impact of these transactions as well as other operating adjustments described below, net operating income was up 10 percent to $177.1 million for 2011, compared with $161.5 million for 2010 reflecting growth in the Term Life business and strong Investment and Savings Products results partially offset by a higher expense base.

View the full press release online.


USANA Health Sciences, Inc.

For USANA, 2011 marked the ninth consecutive year of record sales with $581.9 million, giving the company an earnings-per-share increase of a record $3.26 for the year.

“USANA’s 2011 record top-and-bottom-line results were the result of the significant effort put forth by our management team, employees and Associates around the world to drive financial performance, despite the challenges we faced during the year,” said Chief Executive Officer Dave Wentz. “Our planned market-specific promotions and events in the [fourth] quarter contributed to our strong results and created positive momentum for the business going into 2012.”

Fourth Quarter 2011
Net sales in the fourth quarter of 2011 increased by 6.1 percent to $145.9 million, compared with $137.5 million in the prior-year period. This net sales growth was driven by the company’s Asia Pacific region and was partially offset by a continued decline in net sales in the North America region— 4.2 percent to $57.1 million in the fourth quarter, compared with the fourth quarter of the prior year. Net earnings in the fourth quarter increased by 6.2 percent to $13.2 million, compared with the prior-year period. This increase was due to improved gross profit margins and lower relative selling, general and administrative expenses, which were partially offset by increased associate incentive expense and a higher effective tax rate.

Full Year 2011
For the year ended Dec. 31, 2011, net sales increased by 12.4 percent to $581.9 million, compared with $517.6 million in the prior year. This growth was driven by higher product sales and an increase in the average number of active associates in the Asia Pacific region. Favorable changes in currency exchange rates accounted for $15 million of the overall increase. Net earnings for the year ended Dec. 31, 2011, increased by 11.2 percent to $50.8 million, or $3.26 per share, compared with $2.86 per share in the prior year. This growth in net earnings was driven by higher sales and improved gross profit margins, partially offset by higher Associate incentive expenses, higher selling, general and administrative expenses, due primarily to the inclusion of a full year of China operations and a higher effective tax rate.

View the full press release online.


Nu Skin Enterprises, Inc.

Nu Skin announced record fourth-quarter and annual results.

“We are extremely pleased with our quarterly and 2011 results,” said Truman Hunt, President and Chief Executive Officer. “By all measures, 2011 was a record year. We’re also optimistic that our momentum will continue into 2012 as we roll out our latest product innovations globally. We are pleased with growth in the sales force, particularly in the Greater China and South Asia/Pacific regions, as well as in South Korea.”

Fourth Quarter 2011
Revenue for the quarter was $495.3 million, a 23 percent improvement over the prior year. Earnings per share for the quarter increased 31 percent to $0.76, compared to $0.58 in 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; revenue in the Americas increased 25 percent to $76.9 million, compared to $61.4 million for the prior year; revenue in Greater China improved 66 percent to $110.6 million for the quarter; revenue in South Asia/Pacific was $65.2 million, a 27 percent improvement over the prior year; and revenue in Europe was $38.3 million, an 8 percent decrease over the prior year.

Full Year 2011
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.

View the full press release online.


Tupperware Brands Corporation

Tupperware saw fourth-quarter sales go up 3 percent in U.S. dollars and 7 percent in local currency. Full year sales were up 12 percent in U.S. dollars and 9 percent in local currency.

Rick Goings, Chairman and CEO, commented, “We are a global portfolio of businesses and continue to see strong results from many of our business units demonstrating the benefits of our business model in various economic and political environments.  It is the flexibility of our business model that enables us to react to changes in these environments.  Our emerging markets continued to perform well in the fourth quarter.  They grew 16 percent in local currency and accounted for 58 percent of our total sales for the quarter.  The established markets were down 3 percent in the quarter. We look to 2012 with confidence in the knowledge that the strength of our local management teams around the world, their direct selling expertise and our 2.7 million sales force members will ensure we achieve our growth goals in sales, profitability and cash flow. Our confidence in our future results is further evidenced by our board’s decision today to raise our dividend by 20 percent.”

Fourth Quarter 2011
Fourth-quarter 2011 results showed 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.

Full Year 2011

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. For the same period, the company’s GAAP net income of $218 million decreased 3 percent.

View the full press release online.