CVSL – Projections as Q2 On Deck

August 13, 2015 at 7:11 pm 1 comment

CVSL filed for an extension that allows an extra five days to file for Q2,  This was not a big surprise given the company’s upgrade to national audit firm BDO in the middle of the second quarter.  We are expected to see slight contraction from Q1 levels ex-Kleeneze ops due to distractions related to the Longaberger CEO departure and what would have had to be a really difficult April for that business. Additionally, the second largest division (AGEL) has the double whammy of dealing with significant political and economic upheaval in many of its markets and the potential for some slowdown in sales as reps anticipate new incentives with the rollout of the new skin care line in September, which could some sales that might otherwise have been made in Q2 get pushed forward to September (Q3).  With Kleeneze, we would not be surprised to see some disruption as new policies and procedures following a merger often causes some distraction that can result in lower revenues. While difficult to quantify, out internal expectations targeted low double-digit percentage decline.

Overall, we are expecting CVSL to report revenues in the $30m range, reflecting a sequential revenue decline in the single digit range. While this might usually be expected to cause a decline in the stock price, we believe that investors who are closely watching the CVSL story unfold will recognize the unique issues that came to a head in Q2 and will expect a challenging top and bottom line picture for the Q. We think the more important thing to watch for in this report is management commentary on Q3 to date and expectations for the remainder of CY2015. While there are obviously going to be some unknowns with a turnaround situation like Longaberger, a new product line with Agel and the many unknowns with the recently acquired Kleeneze ops, anecdotal evidence suggests that we may see some fairly positive commentary that will allow us to adjust our top and bottom line expectations to reflect a turn in CVSL’s fortunes going forward.  Regardless, CVSL stock is still significantly undervalued vs. where we expect the stock to trade over the remainder of the year.

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Entry filed under: Uncategorized.

CVSL Update and the Open Letter to John Rochon on Seeking Alpha CVSL Q2 Report Blows Away Estimates & Q3 Looking Strong

1 Comment Add your own

  • 1. Tim  |  August 14, 2015 at 1:06 am

    Wow 35M for the qtr and great improvements all around. Stock should zoom to $2.

    Reply

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