CVSL Revenue Increases 45.2% To $35.7 Million In Second Quarter
CVSL Inc. [NYSE MKT: CVSL] today announced financial results for its second quarter of 2015.
Revenue for the quarter was $35.7 million, up from $24.6 million in the second quarter last year, an increase of 45.2%. Operating loss was $2.5 million, compared to a loss of $4.1 million in last year’s second quarter, an improvement of 39.0%.
“We are very pleased with our second quarter results. The quarter clearly demonstrated the effectiveness of our strategy of buying companies at favorable prices and then applying our expertise to strengthen them and increase cash flow,” said John Rochon Jr., Vice Chairman of CVSL.
“These results compare favorably to our reported and pro forma first quarter numbers, and to the same period last year. With our cost management efforts now operating on all cylinders, we feel very good about the progress we are making on all fronts as we enter the second half of 2015. We believe these results show that our strategy is working,” Mr. Rochon said.
“While we continue to focus on improving the profitability of the companies we own, we intend to be opportunistic about potential acquisitions,” he noted.
“Underlining our strategy is our understanding the uniqueness of this direct-to-consumer sector, which is built on motivation and incentives in support of the independent sales forces. Our team knows this sector very well. We realize that our true ‘product’ is economic opportunity for the men and women in our independent sales forces,” added Mr. Rochon. “We believe this understanding and expertise will enable us to fully leverage our platform of multiple brands in the direct-to-consumer sector for profitable growth.”
Financial Highlights
Total revenue for the second quarter was $35.7 million, compared to $24.6 million in the same quarter a year ago, an increase of $11.1 million, or 45.2%, primarily due to the impact of a full quarter of CVSL’s acquisition of Kleeneze at the end of March.
Gross profit increased to $21.8 million, compared to $13.5 million in the same quarter last year, an increase of $8.3 million, or 61.5% compared to the same quarter last year.
Gross profit margins increased to 61.0% of total revenue, compared to 54.9% of total revenue in the same quarter a year ago. The increase in gross profit margins was primarily a result of less discounting at The Longaberger Company and the lack of discounting at Kleeneze that reduced program costs and discounts as a percentage of revenue.
Operating losses decreased by $1.6 million in the quarter compared to the same period in 2014, from $4.1 million to $2.5 million, an improvement of 39.0%. This was primarily due to an improvement in both the program costs and discounts and SG&A expense.
Operating margins improved to (6.9)% from (16.7)% compared to the same period last year.
For the first six months of 2015, revenue was $55.0 million compared to $51.3 million in the same period last year, an increase of $3.7 million, or 7.2%.
For the first six months, gross profit increased from $27.2 million to $33.4 million, an increase of $6.2 million compared with the same period in 2014. Gross profit margins increased to 60.8% compared to 53.0% for the same six months last year. Gross profit was partially offset by higher operating expenses, specifically in commissions and incentives expense.
Operating losses for the first six months remained flat compared with the same period last year. Operating margins improved to (12.2)% from (13.4)% compared to the same six-month period last year.
“These results represent a positive trend toward improved operating margins as we continue to strengthen the portfolio businesses and gain additional cost efficiencies from eliminating redundant overhead. As we’ve said, our goal is to find operating synergies among our companies and to constantly leverage those synergies. This is having a positive effect on our results,” said Mr. Rochon.