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Avon will continue to use its cash to pay down debt opportunistically
By Devika Patel
Knoxville, Tenn., Jan. 14 – Avon Products, Inc. plans to use cash generated by the business to keep paying down debt.
“We have a revolver we’ve never touched, but we continue, as we generate cash, to put it towards the debt,” vice president of investor relations Amy Greene said at the 21st Annual ICR Conference in Orlando, Fla., on Monday.
“We’ve shown that.
“We’ve paid off some of the debt earlier this year.
“It’s not a hugely capital-intensive business, so with rates being what they are, it makes more sense to pay down debt than to just have it sitting around not really earning anything, so we’ll do that opportunistically, depending on where the bonds are trading and stuff like that,” she said.
Management believes that the company will begin to generate “a lot of cash” in the future, which will be used for share repurchases and dividends eventually.
“Direct selling businesses, when run well, are cash flow machines and, as we turn this company around, which I wholly believe we’re in the process of doing and is doable, this will spin out a lot of cash and as that happens, that gives you the flexibility to do dividends and share repurchases and stuff like that, but that’s in the future,” Greene said.
Avon is a New York-based beauty products company.
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