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Blyth, Inc. Reports 4th Quarter And 2013 Sales And Earnings
PR Newswire
GREENWICH, Conn. , March 14, 2014
GREENWICH, Conn. , March 14, 2014 /PRNewswire/ -- Blyth, Inc. (NYSE: BTH), a direct to consumer company and leading designer and marketer of candles and accessories for the home, as well as health & wellness products sold through the direct selling and direct marketing channels, today reported sales and earnings for the fourth quarter of 2013.
2013 Fourth Quarter Performance
Net sales for the three months ended December 31, 2013 decreased approximately 21% to $261.2 million from $331.0 million for the comparable prior year period, primarily due to lower sales at ViSalus.
Commenting on the fourth quarter results, Robert B. Goergen, Jr. , Chief Executive Officer noted, "Our 4(th) quarter results were impacted largely by ViSalus's lower level of promoters versus prior year. However, the ViSalus management team has developed a series of new programs intended to grow our promoter count, and improve our ongoing retention efforts in North America , as well as enact cost reductions within ViSalus's operations. Moreover, ViSalus has initiated its international expansion, entering the UK in 2013, and has invested in product development and support for entering five new markets in 2014. Obesity is a universal issue and ViSalus offers weight management products and supplements to help promote a healthy lifestyle that can benefit a global audience."
Mr. Goergen noted further that, "Within PartyLite, favorable consultant trends in many of our European markets indicate that our product offering together with our customer programs are having the desired impact as we seek growth internationally. PartyLite has created innovative party themes such as Clearly Creative(TM) DIY (Decorate It Yourself), where guests have a hands-on experience with our versatile and unique products, which drives both bookings and show attendance."
Mr. Goergen continued, "Silver Star Brands' management continues to execute profit improvement programs successfully, driving growth in operating profit in both the fourth quarter and full year."
Blyth's operating profit for the fourth quarter was $22.6 million this year versus $39.8 million last year, largely driven by the decline in sales. Last year included a pre-tax ViSalus Equity Incentive Plan (EIP) charge of $2.2 million and pre-tax PartyLite restructuring charges of $1.0 million . Excluding the impact of these charges, Blyth's operating profit of $22.6 million in 2013's fourth quarter compares to an operating profit of $43.0 million in the year- earlier period.
Net Income Attributable to Blyth, Inc. was $9.7 million for the three months ended December 31, 2013 compared to $27.8 million in the comparable prior year period. Diluted Earnings per Share Attributable to Blyth, Inc. were $0.60 for the three months ended December 31, 2013 compared to $1.63 in the comparable prior year period. The prior year's Diluted Earnings per Share Attributable to Blyth, Inc. includes a ViSalus EIP charge of $0.06 per share, PartyLite restructuring charge of $0.04 per share, impairment of Midwest-CBK note receivable charge of $0.06 per share and a gain of $0.36 per share from discontinued operations. Excluding these unusual items, normalized Diluted Earnings per Share Attributable to Blyth, Inc. for the fourth quarter 2013 of $ 0.60 compared to $1.42 in last year's fourth quarter.
Net Income Attributable to Blyth, Inc. Common Stockholders was $8.8 million in this year's fourth quarter compared to a loss of $6.2 million last year. This year's results include a charge of $0.9 million , or $0.06 per share, for accretion to redemption value for ViSalus redeemable preferred stock. Last year's results included a downward adjustment of $34.0 million , or $1.99 per share, related to the redemption of redeemable preferred stock in excess of earnings after allocating attributable losses. Giving effect to these adjustments, Diluted Earnings per Share Attributable to Blyth, Inc. Common Stockholders were $0.54 for the three months ended December 31, 2013 compared to a loss of $0.36 per share in the comparable prior year period.
The summary reconciliation of unaudited Generally Accepted Accounting Principles (GAAP) earnings and earnings per share to Non-GAAP earnings and earnings per share presented in the attached table and the discussion of segment operating profit excluding certain items are included as additional references to assist investors in analyzing the Company's performance and should be considered in addition to, not as a substitute for, measures of financial performance prepared in accordance with GAAP. In presenting comparable results, the Company discloses non-GAAP financial measures when it believes such measures will be useful to investors in evaluating the Company's underlying business performance. Management internally reviews the results of the Company excluding the impact of certain items as it believes that these non-GAAP financial measures are useful for evaluating the Company's core operating results and facilitating comparison across reporting periods.
2013 Fourth Quarter Segment Performance
In Candles & Home Decor, PartyLite sales were $154.5 million in the fourth quarter versus $160.1 million for the same period last year, a decline of 4%. Worldwide, active independent sales consultants totaled approximately 52,000 at the end of 2013 compared to over 54,000 at the end of 2012. PartyLite's European sales during the quarter decreased 1% in U.S. dollars, or a 5% decline in local currency. PartyLite's European active independent sales consultants totaled over 30,000 at the end of the fourth quarter both this year and last year. PartyLite's North American sales, comprised of the U.S. and Canada , declined 12% versus the prior year period. Active North American independent sales consultants totaled approximately 17,000 at the end of the fourth quarter versus over 19,000 at the end of last year.
Fourth quarter operating profit for the Candles & Home Decor segment was $27.7 million versus $29.9 million in last year's fourth quarter. Excluding allocated corporate expenses and other of $1.6 million this year and last year, as well as a restructuring charge last year of $1.0 million , PartyLite's operating profit was $29.3 million this year versus $32.5 million last year, driven by higher promotional expenses in Europe and lower sales.
Commenting on the performance of the Candles & Home Decor segment, Robert B. Goergen, Jr. , Chief Executive Officer of Blyth and President, PartyLite Worldwide said, "We are beginning to see some positive trends in consultant count, one of our key indicators, despite the worldwide 4% year-over-year decline that was driven by North America . PartyLite's European consultant count was unchanged in the fourth quarter versus last year, the second quarter in a row where consultant base has held steady year-over year. In addition, in Australia , year-over-year consultant count increased 35% in the fourth quarter, driving continued sales growth."
Mr. Goergen continued, "We have several compelling initiatives to grow the top line. We recently announced a collaboration with Jonathan Adler on an exclusive line of candles, fragrances and home decor, which will be available in our Fall/ Holiday 2014 collection. We also introduced Brighter World(TM) by PartyLite, premium soy candles featuring rare fragrance ingredients that are carefully harvested to benefit the local community where they are grown. And, in the area of flameless fragrance, we introduced SmartScents by PartyLite(TM), highly fragranced sticks with decorative holders that will deliver scent for up to 30 days. In addition, we are seeing evidence in North America that on-line consultant sales have grown, offering consultants a new avenue for growing their businesses while providing the consumer with another way to buy PartyLite products."
In the Health & Wellness segment, ViSalus's fourth quarter net sales were $ 62.9 million versus $126.6 million for the same period last year, a decline of 50%, largely reflecting the reduced promoter base in North America . At the end of the fourth quarter, qualified independent North American promoters totaled approximately 35,000 versus 76,000 promoters at the end of the prior year's fourth quarter. International promoters totaled nearly 2,500 at the end of 2013, reflecting the entry into the U.K. in April. Health & Wellness fourth quarter segment operating loss was $7.7 million this year versus operating profit of $8.7 million last year. Excluding allocated corporate expenses of $ 2.4 million both this year and last year, and the EIP charge of $2.2 million last year, fourth quarter operating loss for ViSalus was $5.3 million this year versus $13.3 million operating profit in the fourth quarter of 2012. The decrease in ViSalus's operating profit was due primarily to the sales reduction and costs associated with its global expansion initiatives.
Ryan Blair , Chief Executive Officer of ViSalus noted that, "In North America , our core market, we have launched additional products, programs and incentives to retain and motivate customers and promoters. In addition, we have identified several million dollars of savings to right-size the business and free up capital for investment in international expansion and new product development. By the end of 2014, we will have invested over $13 million to open six new markets, including the UK , which we entered in 2013, and Germany and Austria , which we launched during the first quarter."
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