Blyth, Inc. Reports 1st Quarter 2015 Sales and Earnings
Sales for the quarter were negatively impacted by the strengthening U.S. Dollar, particularly against the euro.
Blyth, Inc, a direct-to-consumer company and leading designer and marketer of candles and accessories for the home and health, wellness and beauty products, household convenience items and personalized gifts sold through the direct selling and direct marketing channels, today reported sales and earnings for the first quarter of 2015.
Net sales for the three months endedMarch 31, 2015decreased approximately 12% to$103.7 millionfrom$118.2 millionfor the comparable prior year period. Sales for the quarter were negatively impacted by the strengthening U.S. Dollar, particularly against the euro, by approximately 9%, or$10.7 million.
Commenting on the first quarter results,Robert B. Goergen, Jr., Chief Executive Officer noted, «While our Catalog & Internet segment sales gained over the prior year period, our Candles & Home Decor segment sales were negatively affected by the increasing strength of the U.S. dollar versus the euro, as well as the lower number of independent sales Consultants. Absent the adverse currency impact, we experienced year-over-year sales growth in all of our emerging markets as well as in several of our mature markets, includingGermany,Austria, the U.K. andAustralia.»
Mr. Goergen also noted, «As the global economy remains uneven and the strong dollar mutes our global profit contribution, our operating profit was anticipated to decline versus last year; thus, we initiated ambitious restructuring and gross margin improvement programs that should benefit profitability going forward. In the first quarter we announced the successful migration of all candle production to ourBatavia, Illinoisfacility, which we anticipate will result in annualized savings of$8.0 million. We also announced that theGreenwichcorporate headquarters will be relocated toPlymouth, MA, and occupy space in a building owned by PartyLite. The one-time costs of the move of our headquarters, to be incurred in 2015, including severance, outplacement and relocation expenses, will be approximately$2.1 million.»
Turning to Blyth’s Catalog & Internet business, Silver Star Brands, Mr. Goergen said, «The first quarter increase in revenue is promising. The Native Remedies® brand of herbal dietary supplements and homeopathic products, acquired in early 2015, is integrating seamlessly into our existing business. In addition to growing our health, wellness and beauty segment, we are creating opportunities for our home decor business. Our Exposures® brand recently announced a partnership with celebrity event stylistDavid Tuteraon a chic collection of home decor.»
Blyth’s operating loss for the first quarter was$9.1 millionthis year versus$0.1 millionlast year. During the first quarter, the Company recorded restructuring and impairment charges of$2.5 millionat PartyLite’s manufacturing plant inCumbria, U.K.related to the consolidation of candle production into one Global Center of Manufacturing Excellence, inBatavia, Illinois.
The Company also recorded charges of$0.6 millionfor the integration of Native Remedies, a brand acquired during the first quarter under the Silver Star Brands umbrella. Excluding these charges, first quarter operating loss this year was$6.0 millionversus$0.1 millionlast year. A stronger U.S. dollar negatively impacted the operating loss for the first quarter by approximately$1.0 million.
Net Loss Attributable to Blyth, Inc. was$12.5 millionfor the three months endedMarch 31, 2015compared to a loss of$2.8 millionin the prior year period. Diluted Net Earnings per Share Attributable to Blyth, Inc. were a loss of$0.77per share for the three months endedMarch 31, 2015compared to$0.17per share in the prior year period. During the respective first quarters, the Company recorded the following after-tax charges per share:
- Charges of$0.10related to the aforementioned restructuring and impairment at PartyLite’s U.K. manufacturing plant this year,
- charges of$0.03this year for the integration of Native Remedies,
- expenses of$0.04this year for fees associated with the modification of Senior Notes, including accelerated amortization of previously deferred transaction costs and a redemption premium, and
- a loss from discontinued operations for ViSalus of$0.13last year.
Normalized earnings from continuing operations were a loss of$9.7 million, or$0.60per share, in this year’s first quarter versus a loss of$0.7 million, or$0.04per share, in the comparable period last year .