Amway Asia Pacific Reports Fourth Quarter and Fiscal 1997 Results.HONG n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. KONG--(BUSINESS WIRE)--Oct. 14, 1997--Amway Asia Pacific Ltd. (NYSE NYSE See: New York Stock Exchange : AAP AAP - Association of American Publishers ; ASX ASX See: Australian Stock Exchange : AMW AMW America's Most Wanted (TV show) AMW Air Mobility Wing AMW Amphibious Warfare AMW Ask Me Why (Beatles song) AMW Angewandte Medienwissenschaft (German: Applied Media Studies) ) reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fiscal year ended August 31, 1997 were $845 million, an increase of 17.9 percent over the comparable period last year. Net income was $104 million, a 27.5 percent increase. Earnings per share for fiscal 1997 were $1.76 compared to $1.37 last year, a 28.5 percent increase. For the three months ended August 31, net sales declined 7.3 percent from the comparable period last year. Net income for the quarter was $18 million, a 21.7 percent decrease, and earnings per share were $.33 compared to $.39 in the fourth quarter of last year, a 15.4 percent decrease. Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Van Andel Andel may refer to:
The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and, in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , we saw the first annual sales increase in over three years. For the year, sponsoring of new distributors increased in all of our markets except Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan ; we are also particularly pleased to see the increased strength in the core distributor force in China and in Australia. Establishment of a strong core distributor force, and the resulting business leadership which emerges, is an essential component of our growth." Mr. Van Andel continued "In the fourth quarter, we saw a number of challenges which we expect will continue into fiscal 1998. Currency devaluations Currency devaluation A deliberate downward adjustment in the official exchange rates established, or pegged, by a government against a specified standard, such as another currency or gold. in Malaysia Malaysia (məlā`zhə), independent federation (2005 est. pop. 23,953,000), 128,430 sq mi (332,633 sq km), Southeast Asia. The official capital and by far the largest city is Kuala Lumpur; Putrajaya is the adminstrative capital. and Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia. and the resulting economic turmoil in Thailand, has deepened since the beginning of the first quarter of fiscal 1998, with a further weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of the currencies
in Malaysia and Thailand and an expansion of the economic difficulties
to Malaysia. This has adversely impacted sales and sponsoring; in
addition, our margins are adversely impacted since the majority of the
goods sold are purchased from Amway Corporation and are paid in U.S.
dollars."
Commenting on China, Mr. Van Andel said "The regulatory environment in China remains uncertain, with an intense focus on the direct selling Direct selling is the marketing of products or services to consumers through sales tactics including presentations, demonstrations, and phone calls. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets, distributors or brokers. industry and a more stringent monitoring of meetings, particularly during September September: see month. and October October: see month. of 1997. The regulatory environment creates a volatility which makes it difficult to predict sales trends. However, a major positive is the receipt, in October 1997, of government approval for Amway China to operate as a direct selling company in all of the locations where we currently operate. Amway China currently operates in 13 provinces, with the potential to eventually reach a total population of 300 million people. This has created a larger geographic area of operations An operational area defined by the joint force commander for land and naval forces. Areas of operation do not typically encompass the entire operational area of the joint force commander, but should be large enough for component commanders to accomplish their missions and protect their , with the attendant ATTENDANT. One who owes a duty or service to another, or in some sort depends upon him. Termes de la Ley, h.t. As to attendant terms, see Powell on Morts. Index, tit. Attendant term; Park on Dower, c. 1 7. opportunities, governmental challenges and higher cost structure." Mr. Van Andel further indicated "While these challenges are significant, and will continue to impact our business in fiscal 1998, the fundamentals of our business are intact. In China, local distributor leadership is continuing to develop. The change during the fourth quarter in our return policy, which placed various limitations on starter kit returns, has led to the development of a more responsible generation of distributors who are more knowledgeable of product features and benefits and are more consumer focused. Distributors who do choose to sign up are now apt to be more committed to establishing a business and building a more serious group of consumers who are aware that the products they purchase are now subject to a revised return policy. Going forward, these limitations are expected to reduce abuses of our return policy. In the Malaysia-Thailand region, our ability to get product to, and to otherwise support, our distributors remains intact. And in the Australia-New Zealand Zealand: see Sjælland, Denmark. region, we believe the recovery commenced in fiscal 1997 will continue." Fourth Quarter and Fiscal 1997 Sales Net sales for the fourth quarter were $184 million, a decrease of 7.3 percent. For the fiscal year, net sales were $845 million, an increase of 17.9 percent from $717 million in fiscal 1996. Greater China In China, net sales were $28 million in the quarter and $178 million for the year. For the fourth quarter, net sales declined 13 percent due to the difficult regulatory environment in China, the revision of the return policy and the major geographic expansion which primarily occurred in the fourth quarter and diverted di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. the focus of the distributor leadership away from their existing business development efforts. Net sales in China more than doubled for the year as a result of Amway China's successful presence in 20 cities since the beginning of the fiscal year and the greatly expanded distributor base. The core distributor force in China increased to 80,000 renewed distributors, compared to 24,000 last year. The Chinese government Ever since Republic of China founded in January 1st, 1912, China has had several regional and national governments. List
said of conduct not conforming with professional ethics. practices in the industry. As the recertification process continued, the business environment became one where distributors and potential distributors awaited a·wait v. a·wait·ed, a·wait·ing, a·waits v.tr. 1. a. To wait for. See Synonyms at expect. b. the outcome of the review, which hindered sponsoring activities. Sales and recruiting were negatively impacted due to this regulatory climate regulatory climate The extent to which a regulated firm or industry is permitted to earn an adequate return on the stockholders' investment. This term is nearly always used in reference to utilities, which are required to obtain approval for rate changes. as well as the tightening of the Company's return policies in China to minimize abuses. A high rate of starter kit returns contributed to the decline in China net sales and sponsoring during the fourth quarter. Starter kits, which include a number of Amway products, represented approximately 40 percent of China's sales for the quarter and the year. A variety of concurrent factors contributed to the high rate of starter kit returns. Under the original money-back guarantee, distributors could return their kits for a full refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies for one year after the date of purchase, even after use of the products in the kits. Effective June June: see month. 1, the Company refined its return policy for products and starter kits purchased after that date to eliminate the refund for empty containers, reduce the refund for the return of used products, including products in the starter kits, and add a handling charge for all returns. The new policy created some confusion as some distributors incorrectly assumed the Company would discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: its money-back guarantee entirely. This was particularly significant in the fourth quarter because of the resignation of a large number of the distributors who had signed up during the fourth quarter of fiscal 1996; these distributors, unsure of their interest in maintaining their Amway business, refocused on the prior policy allowing starter kit returns within one year of purchase. During April and May, the Company also announced the 33 cities where Amway China was now authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: to operate. This resulted in a higher resignation rate from those distributors wishing to establish a business in cities not included in that announcement. In the Greater China region, net sales for the fourth quarter were $72 million, a 13.0 percent decrease. For the fiscal year, net sales were $377 million, an increase of 27.5 percent compared to last year. These results were driven by China's sales both for the fourth quarter and the fiscal year. Taiwan and Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. continued to experience net sales declines due to the absence of the local distributor leadership who are focused on building their businesses in China. As a result, the core distributor force for Taiwan and Hong Kong declined for the year. Malaysia-Thailand In the Malaysia-Thailand region, net sales for the fourth quarter were $73 million, a 9.3 percent decrease. Net sales for the fiscal year were $317 million, an increase of 13.5 percent over last year. The fourth quarter of this year was adversely impacted by the declining value of the Thai baht “Tical” redirects here. For the album, see Tical (album). The baht (Thai: บาท, symbol ฿, ISO 4217 code THB) is the currency of Thailand. and the resulting pressures in the local economy in Thailand as well as, to a lesser extent, the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Malaysian ringgit The ringgit (unofficially known as the Malaysian dollar), is the currency of Malaysia. It is divided into 100 sen (cents) and its currency code is MYR (Malaysian Ringgit). . Without the impact of exchange, sales for the region would have been level for the fourth quarter and up approximately 17 percent for the year. The comparative results also were negatively impacted by an exceptionally strong second half of last year, when Malaysia celebrated its twentieth anniversary during the third quarter and Thailand recorded a 45 percent sales increase in the fourth quarter. For fiscal 1997, the core distributor force was 258,000, a 22 percent increase. This is the second consecutive year in which the region increased its core distributor force by over 20 percent. Australia-New Zealand In the Australia-New Zealand region, net sales for the fourth quarter were $40 million, a 10.2 percent increase. For the fiscal year, net sales were $151 million, an increase of 6.6 percent over last year. In local currency, sales increased 16 percent for the fourth quarter and 6 percent for the year. The positive results reflect, in part, the effects of the region's increased sponsoring and larger core distributor force which grew 24 percent in Australia in fiscal 1997. Starter kits and catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. sales represented a significant proportion of the growth in the region for both the quarter and the year. Product Lines Personal Care recorded the strongest category increase in sales for the fourth quarter and the fiscal year, primarily due to the high proportion of Personal Care products in China, including the introduction of Artistry art·ist·ry n. 1. Artistic ability: a sculptor of great artistry. 2. Artistic quality or craft: the artistry of a poem. products to be test marketed in the China market during the third quarter. Sales of the Water Treatment System and replacement parts increased during the year in Thailand and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , while the Nutrition & Wellness category showed strength in Malaysia and Hong Kong. Starter kits represented 11 percent of the Company's total sales for the fiscal year. Pricing For the Company as a whole, price increases did not have a material effect on net sales for the fourth quarter and fiscal 1997. Currency Net sales in the fourth quarter were negatively impacted by approximately 5.5 percent due to fluctuations in exchange rates, primarily in Thailand. For the full year, fluctuations in foreign currency did not have a material effect on the sales results. Core Distributor Force At the end of fiscal 1997, the total size of the core distributor force, defined as independent distributors who have renewed their distributorships within the past twelve months, was 667,000 distributors, an increase of 20 percent over the level last year. The increase primarily reflects the inclusion of additional renewed distributors in China as well as strong increases in Malaysia, Thailand and Australia. New distributor sponsoring increased for the fiscal year in all of the Company's markets except Taiwan. Gross Profit For the fourth quarter, the gross profit percentage was 61.4 percent compared to 61.6 percent in the same period last year. The fourth quarter decline in the gross profit percentage is primarily due to the decreased relative contributions from China and Thailand, which were partially offset by improved margin performance in Malaysia due to that market's relatively smaller proportion of lower margin catalog sales during fiscal 1997. For the fiscal year, gross profit as a percent of sales increased to 62.9 percent from 62.4 percent last year principally due to the increased proportion of sales from China. Operating Margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and Operating Income Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , including distributor incentives, increased as a percent of sales during the fourth quarter to 47.4 percent from 42.1 percent last year primarily due to higher distribution expenses in China from the recent geographic expansion and the expenses of supporting a larger core distributor force in that market. For the full year, operating expenses increased to 45.4 percent from 44.7 percent last year, reflecting higher distribution and selling and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. in China. For the fourth quarter, operating margin declined to 14.1 percent of sales from 19.5 percent last year primarily due to the lack of absorption of the higher operating expenses in China at the lower level of sales. The decline in the translated value of operating income in Thailand also contributed to the margin contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction . For the full year, operating margin was 17.6 percent and was relatively level with the prior year. The Malaysia-Thailand region contributed more than one-half of the Company's operating income for the fourth quarter and the fiscal year. Other Income In the fourth quarter of fiscal 1997, the Company's China affiliate received a nontaxable adj. 1. Not subject to taxation; - of goods imported into a country or sold at retail outlets; as, most laws imposing sales taxes make food nontaxable s>. Opposite of taxable nt>. Adj. 1. VAT VAT See: Value-added tax VAT See value-added tax (VAT). refund of $6.5 million which is included in other income and is partially offset by foreign currency exchange losses in Malaysia and Thailand and a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of certain other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. . Taxes The effective tax rate in the fourth quarter decreased to 28.5 percent from 41.6 percent in the fourth quarter last year primarily due to the nontaxable VAT refund recorded in the fourth quarter of fiscal 1997 and certain previously disclosed one-time adjustments which were included in the fiscal 1996 tax expense. For the full year, the effective tax rate decreased to 31.1 percent from 37.9 percent last year due to the results in China, which represented a higher proportion of the earnings of the Company for fiscal 1997; China's earnings currently are not taxed. Minority Interest On August 30, 1996, the Company's 59.2 percent equity interest in Amway Malaysia was reduced to 51.0 percent to comply with governmental policies in Malaysia. This change reduced net income for the fourth quarter and the fiscal year by approximately $600,000 and $2.4 million, respectively. Earnings Per Share The Company purchased 3,681,657 shares of its common stock as a result of its issuer tender offer which concluded on May 23, 1997. The lower share balance throughout the fourth quarter of fiscal 1997 reduced the weighted average number of shares outstanding. As a result, earnings per share were favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted for the fourth quarter and, to a lesser degree, for the fiscal year. First Quarter and Fiscal 1998 Outlook The difficult events of the fourth quarter have deepened since the beginning of the first quarter of fiscal 1998 and the Company expects the business trends of the latter part of fiscal 1997 will continue at least through the first quarter of fiscal 1998. The currency turmoil in Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. has worsened. In Thailand, the overall currency devaluation since July 1 has exceeded 36 percent and has resulted in a degree of economic paralysis paralysis or palsy (pôl`zē), complete loss or impairment of the ability to use voluntary muscles, usually as the result of a disorder of the nervous system. . In Malaysia, the currency has devalued de·val·ue also de·val·u·ate v. de·val·ued also de·valu·at·ed, de·val·u·ing also de·val·u·at·ing, de·val·ues also de·val·u·ates v.tr. 1. To lessen or cancel the value of. an additional 10 percent since the start of the fiscal year and, while this has not had the devastating dev·as·tate tr.v. dev·as·tat·ed, dev·as·tat·ing, dev·as·tates 1. To lay waste; destroy. 2. To overwhelm; confound; stun: was devastated by the rude remark. effect on the local economy that has occurred in Thailand, the government is considering actions to respond to the financial situation, some of which could affect Amway Malaysia. These events impact the Company in several ways. The reduction in the overall level of economic activities in Thailand adversely affects sales and sponsoring. The translation of net sales into U.S. dollars further reduces reported net sales results and the devaluation of local currency relative to the U.S. dollar substantially impacts the gross margin of both Malaysia and Thailand since the purchase of products are principally from Amway Corporation and are paid in U.S. dollars. In China, the intense scrutiny of direct selling companies continues as the government tries to eliminate unethical direct selling companies. While the successful completion of its recertification will help the Company, this governmental scrutiny creates a mood of uncertainty which negatively impacts sales and sponsoring. In addition, the Company expects the high rate of starter kit returns to continue through the third quarter of fiscal 1998. Since the revised return policy applies only to sales after June 1, 1997, the old one-year return policy remains applicable for sales prior to that date. Starter kits are expected to continue to represent a significant portion of China's total sales and, since sales are reported net of returns, the rate of sales kit returns is expected to negatively impact China's sales results. The geographic expansion which was completed in the fourth quarter of fiscal 1997, while positioning the Company well for longer term growth, continues to spread the still emerging distributor leadership in China over a wider area. In addition, the expansion requires the Company to bear the costs of a larger infrastructure which, when combined with weaker sales and higher returns, results in substantially reduced margins. As a result of primarily these factors, the Company expects net sales and income to decline significantly in the first quarter of fiscal 1998 compared to the first quarter of last year. Margins are expected to be particularly adversely impacted both because the Malaysia-Thailand region was historically the Company's most profitable region and because the Company is unable to fully absorb China's cost structure, resulting in an inability to receive the maximum advantage of China's tax holiday. Effective September 1, 1997, Amway Corporation raised its dollar cost-plus base prices for products purchased by the Company's affiliates by approximately 3.8 percent. Approximately 68 percent of the Company's cost of goods represents products purchased from Amway. In addition, Amway Corporation has instituted charges to all of its affiliates for certain administrative support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services . For the Company, these services include support for information and telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. systems, external and governmental affairs and support for the expanded China market. Affiliate support charges are expected to reduce operating margin by approximately one-half of one percentage point. At August 31, 1997, the Company had 56,441,960 shares of common stock outstanding, including the share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. discussed earlier. This will result in a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. per share comparison in the first nine months of fiscal 1998. Results in fiscal 1998 after the first quarter are principally dependent upon the severity of the economic impact of the financial turmoil in Southeast Asia and the regulatory environment in China, both of which are outside of the Company's control. Operationally, the Company anticipates that business conditions will improve in the second half of fiscal 1998. These operational aspects include an aggressive new product introduction schedule which is planned for the second half of the year and, during fiscal 1998, additional sales incentives Noun 1. sales incentive - remuneration offered to a salesperson for exceeding some predetermined sales goal bonus, incentive - an additional payment (or other remuneration) to employees as a means of increasing output for distributors to be introduced in each of the Company's markets, such as the Millennium Growth Award, a three year program which enables the Company's distributor leadership to develop and manage for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. development of their networks. In addition, the Company continues with plans to build a manufacturing plant in China, near Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. , which will increase the Company's ability to offer a wider range of products in that market. Finally, as the revised return policy in China becomes generally more well known, a more committed distributor base is expected to develop, along with a more serious group of consumers. This should result in a more normalized level of sales and sponsoring; and, as China's sales increase, margins will improve since the Company has already put into place the infrastructure needed to support the wider base of operations Noun 1. base of operations - installation from which a military force initiates operations; "the attack wiped out our forward bases" base air base, air station - a base for military aircraft army base - a large base of operations for an army . Risks and Uncertainties in Forward Looking Statements The statements contained in this release that are not historical facts are forward looking statements. These forward looking statements involve risks and uncertainties with respect to the Company's markets. With respect to operations in China in fiscal 1998, these risks and uncertainties include: (i) the possibility of governmental action in China which would substantially restrict the Company's ability to test market certain of its current product lines or introduce additional products for test marketing in China, (ii) adverse regulatory developments in China which would impact the Company's ability to operate under its Sales Plan and (iii) the ability of the Company to achieve sufficient local manufacturing levels to maintain its tax holiday in China. Over the longer term, the Company's operations in China also will be subject to the following risks and uncertainties: (iv) the ability of the Company to complete the expansion of its manufacturing facility in Guangzhou and to construct a new manufacturing plant in Shanghai and (v) the ability of the Company to effectively manage transition issues associated with the expansion of its operations to additional cities in China China is a geographical area encompassing multiple territories, under two states. You may be looking for:
In addition, the forward looking statements contained herein are subject to other risks and uncertainties with respect to the Company's markets, which could cause results to differ materially such as, without limitation, further devaluation of the Thai baht and the Malaysian ringgit, the occurrence of adverse currency volatility in other countries in which the Company operates, especially Taiwan, government restrictions on imports or pricing in Malaysia, the extent and pace of new distributor leadership development in Taiwan (to replace those leaders from Taiwan operating in China), the possibility of adverse publicity in the Company's markets, adverse government regulations or government action in the Company's markets and a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of the Company's positive relationship with its distributor leadership. The Company Headquartered in Hong Kong, Amway Asia Pacific Ltd. is the exclusive distribution vehicle for Amway Corporation in Australia, Brunei, People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China, Macau, Malaysia, New Zealand, Taiwan and Thailand. Amway Asia Pacific Ltd. is one of the largest direct selling companies in the region, based on sales of Amway consumer products offered through a core distributor force of approximately 667,000 independent distributors at August 31, 1997. Amway Asia Pacific Ltd. is listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (AAP) and the Australian Stock Exchange Australian Stock Exchange (ASX) Australia's major securities market, formed when the six state stock exchanges (Adelaide, Brisbane, Hobart, Melbourne, Perth, and Sydney stock exchanges) were merged in 1987. (AMW). -0-
Amway Asia Pacific Limited
Net Sales by Country
(U.S. dollars in millions)
Fourth Quarter ended % Change
August 31, August 31, from Prior
1997 1996 Year
Country
China $ 28.4 $ 32.7 (13.2)
Hong Kong/Macau 7.4 8.8 (16.0)
Taiwan 35.6 40.6 (12.2)
71.5 82.1 (13.0)
Malaysia/Brunei(1) 32.4 30.6 5.9
Thailand 40.1 49.4 (18.8)
72.5 80.0 (9.3)
Australia 32.6 29.0 12.3
New Zealand 7.2 7.2 1.3
39.9 36.2 10.2
Total Net Sales $ 183.8 $ 198.3 (7.3)
Fiscal Year ended % Change
August 31, August 31, from Prior
1997 1996 Year
China $ 178.0 $ 62.9 182.9
Hong Kong/Macau 34.4 38.5 (10.4)
Taiwan 164.8 194.5 (15.3)
377.2 295.9 27.5
Malaysia/Brunei(1) 135.2 111.5 21.3
Thailand 181.6 167.6 8.3
316.8 279.1 13.5
Australia 121.8 116.1 4.9
New Zealand 29.3 25.7 14.2
151.1 141.8 6.6
Total Net Sales $ 845.2 $ 716.8 17.9
Note: Hong Kong is now part of China and is included in the above
schedule for comparative purposes. Beginning in fiscal 1998, Hong Kong
will be included with China and will not be separately presented.
(1) Brunei was acquired on April 30, 1996 and is immaterial to the
comparative results.
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Operating Income By Region
For the Years ended August 31, 1997 and 1996
(U.S. dollars in thousands)
1997 1996
Greater China(1) $ 50.5 $ 35.4
Malaysia-Thailand(2) 83.7 72.4
Australia-New Zealand 16.7 19.7
Corporate and miscellaneous (2.3) (.4)
Total operating income $ 148.6 $ 127.1
(1) Includes China, Hong Kong, Macau, Taiwan.
(2) Includes Brunei.
Note: Information on operating income for the regions and the core
distributor force by market is provided annually in the annual report
and SEC Form 20-F.
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Amway Asia Pacific Ltd.
Condensed Consolidated Balance Sheet Data
August 31, 1997 and 1996
(U.S. dollars in thousands)
August 31, 1997 August 31, 1996
Cash and cash equivalents $207,915 $360,682
Short-term investments 48,613 34,758
Inventories 106,227 82,107
Total current assets 409,663 513,513
Total assets $520,143 $617,391
Current liabilities 223,186 197,543
Long-term debt, less
current maturities 26 16,308
Total liabilities $224,291 $214,143
Minority interests 43,368 39,032
Total shareholders'
equity $252,484 $364,216
Core Distributor Force
For the Years ended August 31, 1997 and 1996
1997 1996
China 80,000 24,000
Hong Kong/Macau 45,000 52,000
Taiwan 178,000 179,000
303,000 255,000
Malaysia/Brunei 115,000 95,000
Thailand 143,000 117,000
258,000 212,000
Australia 88,000 71,000
New Zealand 18,000 17,000
106,000 88,000
Total 667,000 555,000
The core distributor force consists of independent distributors who
have renewed their distributorships during the past fiscal year.
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Amway Asia Pacific Ltd.
Unaudited Consolidated Statements of Income
Three Months ended August 31, 1997 and 1996
(U.S. dollars and shares in thousands, except per share amounts)
Fourth Quarter
(Unaudited)
1997 1996 % Change
Net sales $183,840 $198,308 (7.3)
Cost of sales 70,929 76,190 (6.9)
112,911 122,118 (7.5)
Operating expenses:
Distributor incentives 46,801 49,021 (4.5)
Distribution expenses 13,688 10,989 24.6
Selling & administrative
expenses 26,578 23,433 13.4
Total operating expenses 87,067 83,443 4.3
Operating income 25,844 38,675 (33.2)
Other income, net 6,016 5,927 1.5
Income before taxes &
minority interest 31,860 44,602 (28.6)
Income taxes 10,017 18,535 (46.0)
Income before minority
interest 21,843 26,067 16.2
Minority interest in net
income of consolidated
subsidiaries 3,434 2,560 34.1
Net income $ 18,409 $ 23,507 (21.7)
Earnings per share $ .33 $ .39 (15.4)
Weighted average number
of shares outstanding 56,500 60,095 --
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Amway Asia Pacific Ltd.
Unaudited Consolidated Statements of Income
Fiscal Years ended August 31, 1997 and 1996
(U.S. dollars and shares in thousands, except per share amounts)
1997 1996 % Change
Net sales $845,166 $716,757 17.9
Cost of sales 313,287 269,377 16.3
531,879 447,380 18.9
Operating expenses:
Distributor incentives 219,111 186,092 17.7
Distribution expenses 49,662 40,777 21.8
Selling & administrative
expenses 114,523 93,367 22.7
Total operating expenses 383,296 320,236 19.7
Operating income 148,583 127,144 16.9
Other income, net 24,707 19,781 24.9
Income before taxes &
minority interest 173,290 146,925 17.9
Income taxes 54,909 55,709 (1.4)
Income before minority
interest 118,381 91,216 29.8
Minority interest in net
income of consolidated
subsidiaries 14,350 8,983 59.7
Net income $104,031 $ 82,233 26.5
Earnings per share $ 1.76 $ 1.37 28.5
Weighted average number
of shares outstanding 59,176 60,097
CONTACT: Amway Asia Pacific Limited Holly A. Clemente, 616/787-8688 |
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