Securities Fraud Class Action Claims Against Avon Arising from Bribery Allegations Dismissed
Oct 31 14
The U.S. District Court for the Southern District of New York dismissed a securities fraud class action brought against arising from alleged misstatements intended to conceal the firm's violation of the Foreign Corrupt Practices Act (FCPA). An institutional investor in Avon Products Inc. sued the company and certain of its officers, alleging violation of 10(b) and 20(a) of the Securities Exchange Act of 1934 arising from misstatements made by the company concerning the firm's compliance with the FCPA. The plaintiffs alleged that the defendants concealed bribes paid to Chinese officials in exchange for a limited license to use direct selling, previously banned in China, to sell its products there. The complaint alleged violations of 10(b) and 20(a) of the Securities Exchange Act of 1934. The defendants moved to dismiss. The district court concluded the complaint failed to adequately plead scienter with respect to statements concerning Avon's compliance programs and internal investigation. In attempting to make a showing that the defendants knew or consciously disregarded the fact that Avon's compliance programs and internal controls were inadequate at the time they made the purportedly misleading statements, the plaintiffs relied on a lawsuit filed by the firm's former Executive Director of Global Ethics. The subject lawsuit, however, was not filed until after the close of the class period. And the court held that at as a result, its allegations did not demonstrate that the defendants were aware that the company’s compliance programs were inadequate at the time the purportedly misleading statements were made.
Avon Products Inc. Reports Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 30, 2014; Provides Capital Expenditure Guidance for the Full Year of 2014
Oct 30 14
Avon Products Inc. reported unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2014. For the quarter, the company reported net sales of $2,059.0 million compared to $2,265.3 million a year ago. Total revenue was $2,138.2 million compared to $2,322.9 million a year ago. Operating profit was $187.9 million compared to $68.2 million a year ago. Income from continuing operations, before taxes was $144.4 million compared to $31.6 million a year ago. Net income attributable to the company was $91.4 million compared to net loss attributable to the company of $5.5 million a year ago. Basic and diluted earnings per share were $0.21 compared to basic and diluted loss per share of $0.01 a year ago. Adjusted operating profit was $197.8 million against $125.0 million a year ago. Adjusted income from continuing operations, before tax was $154.3 million against $88.4 million a year ago. Adjusted diluted EPS from continuing operations was $0.23 against $0.14 a year ago.
For the nine months, the company reported net sales of $6,340.5 million compared to $7,139.2 million a year ago. Total revenue was $6,510.4 million compared to $7,287.8 million a year ago. Operating profit was $230.2 million compared to $444.4 million a year ago. Income from continuing operations, before taxes was $69.1 million compared to $206.2 million a year ago. Net loss attributable to the company was $57.9 million compared to net income attributable to the company of $12.7 million a year ago. Basic and diluted loss per share was $0.13 compared to basic and diluted earnings per share of $0.03 a year ago. Net cash provided by operating activities of continuing operations was $125.8 million compared to $96.3 million a year ago. Capital expenditures were $88.2 million compared to $118.2 million a year ago. Net debt (total debt less cash) at September 30, 2014 was $1.8 billion, up $191 million from the year-end 2013 level, and $172 million lower than at September 30, 2013. Adjusted operating profit was $517.2 million against $571.7 million a year ago. Adjusted income from continuing operations, before tax was $242.3 million against $453.5 million a year ago. Adjusted diluted EPS from continuing operations was $0.55 against $0.68 a year ago.
The company provided capital expenditure guidance for full year 2014. The company expects adjusted operating margin to be up year-over-year. company expects full year capital expenditures will be in the range of $120 million to $140 million. This is a reduction from earlier expectation of $200 million to $230 million. The reduction is probably due to foreign currency.
Avon Products Inc. Declares Quarterly Dividend Payable on December 1, 2014
Oct 30 14
Avon Products Inc. declared a regular quarterly dividend on its common stock of $0.06 per share, payable December 1, 2014, to shareholders of record on November 13, 2014.