Visalus has lost 50% of its promoters in North America, 57,000 versus more than 114,000 promoters at the end of the prior year's second quarter.
Ryan Blair, Chief Executive Officer of ViSalus noted that, "We are focused on rebuilding the N.A. Promoter base through new products and incentives. At our national Vitality convention in July, we announced that ViSalus is innovating breakfast with a new patent pending, high protein, high fiber cereal – Vi Crunch™ Protein Super Cereal.
Vi Crunch delivers maximum nutrition without excess sugar, salt or fat. To create breakfast variety, we will also release Vi Crunch Fusions, two nutritious toppings to add to Vi Crunch cereal or to eat as a standalone snack. We are bringing our reputation for flavor and nutrition to the over $12 billion U.S. and Canadian cereal market."
Mr. Blair added, "During the second quarter we brought our Body By Vi Challenge™ to the U.K., our first market outside of North America. The U.K. is one of the most obese nations per capita in the world and our goal is to fight obesity one person at a time, 10 pounds at a time. We have had an excellent response to Promoter enrollment and to the Challenge in the U.K."
GREENWICH, Conn., Aug. 2, 2013 /PRNewswire-FirstCall/ – Blyth, Inc. (NYSE: BTH), a direct to consumer company and leading designer and marketer of health and wellness products, candles and accessories for the home sold through the direct selling and direct marketing channels, today reported sales and earnings for the second quarter of 2013. Net sales for the three months ended June 30, 2013 decreased approximately 32% 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, while Miles Kimball reported a sales improvement.
Commenting on the second quarter sales results, Robert B. Goergen, Chairman and Chief Executive Officer noted, "We continue to see evidence that focusing on direct-to-consumer sales is the right strategy for Blyth and that our investments in technology are a critical underpinning to that strategy. For example, at PartyLite, where we've been selling candles and home decor products profitably for 40 years through the traditional party plan model, our technology investments are helping PartyLite Consultants grow their businesses by making it easier to do business with PartyLite through online shopping, Consultant web sites and direct-to-customer shipping.
Moreover, ViSalus, technology-driven from inception, is a significant business in North America, the results of which demonstrate the importance of diversifying its product portfolio and penetrating the global marketplace. To that end, its upcoming new product releases of Vi Crunch™ Protein Super Cereal and Vi Crunch™ Fusions Flavor Toppings, and its entrance into international markets, which began in April with the U.K., should continue to offer compelling business opportunities for its Promoters."
Reflecting on the year-to-year operating profit decline, Mr. Goergen added, "We are experiencing the cost impact of investments made in ViSalus over the last twelve months combined with the effects of a decline in the number of North American Promoters. Leadership is focused on ensuring that its infrastructure remains in line with sales levels, and we remain committed to the investment spending needed to support continued product diversification and global expansion."
2013 Second Quarter Segment Performance
In the Health & Wellness segment, consisting of ViSalus, second quarter net sales decreased 47% to $101.5 million versus $190.4 million for the same period last year, largely reflecting the effects of reductions in Promoter counts in North America. At the end of the second quarter, qualified independent North American Promoters totaled more than 57,000 versus more than 114,000 Promoters at the end of the prior year's second quarter. International Promoters totaled nearly 4,000, reflecting the entry into the U.K. in April.
Health & Wellness second quarter segment operating profit was $2.8 million this year versus $18.6 million last year. Excluding the EIP charge of $9.6 million last year, and allocated corporate expenses of $2.4 million this year and $3.2 million last year, second quarter operating profit for ViSalus was $5.2 million this year versus $31.4 million in the second quarter of 2012. The decrease in ViSalus's operating profit was due primarily to the sales reduction, the significant increase in infrastructure put in place in 2012 to support the international expansion in Europe, and, to a lesser extent, the initiation of a new management equity plan.
Visalus Top Earners – The est. earnings are as follows:
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