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rbalife Ltd. (HLF—NYSE) reported fourth-quarter 2008 net sales of $512.9 million, a decrease of 11.3 percent compared to the same period of 2007. Net sales performance in the quarter was negatively impacted by unprecedented currency fluctuations that reducewd net sales by 856 basis points, resulting in a local currency year-over-year sales decline of 2.7 percent. For the quarter-ended Dec. 31, 2008, the company reported net income of $33.7 million, or 53 cents per diluted share, compared to $53.8 million, or 77 cents per diluted share in the fourth quarter of 2007, reflecting a lower contribution margin due to net sales declines; higher selling, general and administrative expenses, partially offset by a lower effective tax rate; and accretion from our share repurchase program. Excluding the impact from adjusting items in both periods, adjusted net income was $43.4 million, or 69 cents in adjusted diluted earnings per share, reflecting a decrease of 21.3 percent and 12.7 percent, respectively, compared to 2007.
For the year-ended Dec. 31, 2008, the company reported record net sales of $2.4 billion, an increase of 9.9 percent, compared to the same period of 2007, and record net income of $221.2 million, or $3.36 per diluted share, compared to $191.5 million, or $2.63 per diluted share in 2007. Excluding the impact from adjusting items in both periods, adjusted net income was $232.1 million, or $3.53 in adjusted diluted earnings per share, an increase of 18 percent and 30.3 percent, respectively, compared
to 2007.
“Our business has the potential to thrive during economic downturns because we offer an opportunity for part- or full-time income along with an attractively priced product,” said Herbalife Chairman and CEO Michael O. Johnson. “Our message to distributors is straightforward—there has never been a better time to introduce someone to Herbalife.”
Herbalife is a global network marketing company that sells nutritional supplements, and weight-management and personal-care products intended to support a healthy lifestyle. Herbalife products are sold in 70 countries through a network of more than 1.9 million independent distributors.
Avon Products Inc. (AVP—NYSE) reported fourth-quarter 2008 earnings per share of 54 cents, up 80 percent year over year, bringing full-year 2008 earnings per share to $2.04, 69 percent ahead of the prior year.
Fourth-quarter 2008 total revenue of $2.8 billion was 9 percent lower than 2007’s fourth quarter, as the impact of a substantial shift in many foreign-currency exchange rates more than offset local-currency revenue growth of 2 percent year over year. For full-year 2008, Avon reported that total revenue grew 8 percent (5 percent in local currency), to a record $10.7 billion.
Fourth-quarter 2008 operating profit was $372 million, up 66 percent, from $225 million in the prior-year quarter, and full-year 2008 operating profit was $1.3 billion, up 53 percent from 2007’s level. Results of both 2008 periods benefited from significantly lower costs associated with the company’s restructuring program and product line simplification (PLS) initiative.
“After nine months of strong sales performance, the significant negative impact of foreign exchange and the depressed economy hurt our fourth-quarter revenue performance,” said Andrea Jung, Chairman and CEO of Avon. “It is prudent to assume these pressures will continue for the foreseeable future, and we, therefore, anticipate that 2009 will be a challenging year.
“We are fortunate to be facing these challenging times from a position of financial strength,” Jung continued. “We have a solid balance sheet, an operating model that generates healthy cash flow and a continued commitment to our dividend. This strong foundation, coupled with the continuing execution of our turnaround strategies and the competitive advantages of our direct selling business model, gives us confidence to look past 2009’s challenges and continue our focus on long-term sustainable, profitable growth.”
Avon, the company for women, is a leading global beauty company, with more than $10 billion in annual revenue. As the world’s largest direct seller, Avon markets to women in more than 100 countries through more than 5.5 million independent Avon sales representatives.
Tupperware Brands Corporation (TUP—NYSE) reported fourth-quarter and full-year 2008 sales and profit. Net sales for fourth-quarter 2008 were $521.7 million, down from $576.9 million in 2007. Diluted GAAP earnings per share of $1.06 for the fourth quarter of 2008, including positive 16 cents from items impacting comparability.
“We were pleased to hold our own in the fourth quarter in light of the difficult external environment,” said Chairman and CEO Rick Goings. “We ended the quarter with a 7 percent advantage in our total salesforce, and we had 2 percent more in average active sellers during the quarter. We were pleased to be able to reduce our outstanding debt in 2008, while continuing to support our 88 cent per share annual dividend, which reflected the strong cash flow that our business generates.”
Full-year sales grew 8 percent in local currency (9 percent reported) to $2.2 billion. Full-year GAAP diluted earnings per share were $2.56, and diluted earnings per share, excluding items impacting comparability, were $2.69. Full-year 2007 GAAP diluted earnings per share were $1.87 and, excluding items impacting comparability, were $2.25, indicating a 20 percent increase in 2008. Total and active salesforces were up 7 percent for the year.
Tupperware Brands Corporation is a portfolio of global direct selling companies, selling premium innovative products across multiple brands and categories through an independent salesforce of 2.2 million.
USANA Health Sciences Inc. (USNA—NASDAQ) announced final financial results for the fiscal fourth-quarter and full-year ended Jan. 3, 2009. The financial results presented here include comparisons to financial results for 2007.
Net sales for the fourth quarter of 2008 increased by 2.1 percent to a record $111.1 million, compared with $108.7 million in the fourth quarter of the prior year. Net sales growth for the 14-week fourth quarter of 2008 resulted from a 12.5 percent increase in the number of active associates, compared with the fourth quarter of the prior year. Dramatic changes in currencies during the fourth quarter, driven by the strengthening U.S. dollar, reduced net sales by approximately $10 million, compared with the fourth quarter of the prior year.
Earnings per share during the fourth quarter, before a one-time adjustment, decreased 15.2 percent to 56 cents per share, compared with 66 cents per share in the fourth quarter of 2007. This decrease was due primarily to the impact of currency changes during the quarter. After a one-time adjustment of about 27 cents, earnings per share decreased to 29 cents, a 56.1 percent decrease compared with the fourth quarter of the prior year.
For the full year of 2008, net sales were $429.0 million, an increase of 1.4 percent, compared with $423.1 million for the full year of 2007. This increase was the result of growth in the number of active associates, primarily in East Asia, which was partially offset by decreased sales in the United States, Canada and some markets in Southeast Asia-Pacific.
Earnings per share from continuing operations for the full year of 2008 decreased 30.2 percent to $1.85, compared with $2.65 in 2007. Excluding the one-time adjustment, earnings per share for 2008 were $2.12. This decrease was primarily due to higher overall operating costs. During 2008, the company repurchased approximately 1.1 million shares for a total of $39.9 million.
USANA develops and manufactures high-quality nutritional, personal-care and weight-management products that are sold directly to preferred customers and associates worldwide.
Pre-Paid Legal Services Inc. (PPD—NYSE) announced results for the fourth-quarter and year-ended Dec. 31, 2008.
Net income for the fourth quarter of 2008 increased 26 percent to $14.7 million from $11.7 million for the prior year’s fourth quarter due to a fourth-quarter 2007 charge of $2.9 million relating to income taxes. Diluted earnings per share for the 2008 fourth quarter increased 38 percent to $1.27 per share from 92 cents per share for the prior year’s comparable quarter due to an increase in net incomeof 26 percent and a decrease of 9 percent in the weighted average outstanding shares. Membership revenues in the fourth quarter of 2008 increased slightly to $109.0 million compared to $108.9 million for the same period last year.
For the full year 2008, net revenue was $464.5 million, up 1.6 percent from 2007. Net income for the full year of 2008 increased 18 percent to $60.2 million from $51.2 million for 2007. Diluted earnings per share for 2008 increased 30 percent to $5.04 per share from $3.88 per share for the prior year due to increased net income of 18 percent and a 10 percent decrease in the weighted average number of outstanding shares. Membership revenues for 2008 were up 2 percent to $436.8 million from $427.4 million for the prior year, marking the 16th consecutive year of increased membership revenue.
The company’s board of directors has authorized an additional repurchase of 1 million shares. Pre-Paid Legal expects to continue stock purchases as the company has funds available.
No time limit has been set for completion of the additional share repurchases.
Pre-Paid Legal Services® Inc. offers legal-service benefits plans provided through a network of more than 50 independent law firms across the United States and Canada.
RBC Life Sciences Inc. (RBCL—OTC Bulletin Board) announced that 2008 net sales increased 13 percent year over year as the company continued its domestic and international growth.
The company reported net sales of $30.4 million for the year-ended Dec. 31, 2008, compared to $27 million during the same period in 2007. It also reported net earnings of $1.62 million, or 7 cents per diluted share, in 2008 compared to net earnings of $1.69 million, or 8 cents per diluted share, in 2007.
“In 2008, RBC Life Sciences continued the surge in growth that the company witnessed in 2007, when the firm produced record-setting earnings,” said President and CEO John W. Price. “Sales generated by our international licensees grew 18 percent year over year, while sales generated by our medical products brand, MPM Medical Inc., grew 41 percent during that time. This growth is occurring at the same time that we are beginning to see good gains in our domestic, independent salesforce.”
RBC Life Sciences develops, manufactures and markets high-quality nutritional supplements and personal-care products to
a growing population of consumers seeking wellness and a healthy lifestyle.
Relív International Inc. (RELV—NasdaqGS) reported its fourth-quarter and full-year 2008 earnings. Net sales for the quarter were $22.1 million, compared to net sales of $24.6 million in the fourth quarter of 2007. Net income for the fourth quarter of 2008 was $250,000, or 2 cents per diluted share, compared to net income of $697,000, or 4 cents per diluted share, in the 2007 fourth quarter.
During the fourth quarter of 2008, U.S. net sales totaled $19.4 million, down 8.0 percent from the 2007 fourth quarter. International sales, or sales outside of the United States, dropped to $2.7 million in the quarter, compared to $3.5 million in the prior-year quarter. Foreign-currency exchange fluctuations accounted for approximately half of the reported sales decline.
Net sales for the full year of 2008 equaled $98.2 million, down 11.6 percent from 2007 net sales. Sales outside of the United States rose 0.8 percent to $12.8 million. U.S. sales for 2008, however, declined 13.2 percent to $85.4 million.
Net income for 2008 was $2.9 million, or 19 cents per diluted share, down from $5.0 million, or 31 cents per diluted share, in 2007. The 2008 results reflect one-time charges of 5 cents per diluted share from the investment losses and related tax consequences, which occurred primarily in the fourth quarter. Excluding the one-time charges, diluted earnings per share would have been 24 cents.
“We are pleased by the increase in operating income in the fourth quarter, which we achieved by reducing and controlling costs throughout the company,” said Robert L. Montgomery, President, Chairman and CEO of Relív. “A successful U.S. national conference generated great excitement among our distributor force. The combination of sponsorship and excitement makes me optimistic as I look forward in 2009.”
Relív International Inc., based in Chesterfield, Mo., is a developer, manufacturer and marketer of a proprietary line of nutritional supplements. Relív sells its products through an international network marketing system of approximately 67,340 independent distributors.
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.
