Herbalife (NYSE:HLF)
Historical Stock Chart
2 Years : From May 2011 to May 2013
Herbalife Ltd. (NYSE:HLF) today reported first quarter net sales of
$964.2 million, a 21 percent increase driven by a 24 percent increase in
volume points compared to the prior year period. For the same period,
the company reported net income of $108.2 million, or $0.88 per diluted
share, reflecting an increase of 22 percent and 24 percent respectively
compared to the adjusted first quarter 2011 net income of $88.7 million
and $0.71 per diluted share.
“Our business momentum has continued into 2012, with strong sales
performance from each of our six regions,” said Michael O. Johnson, the
company’s chairman and CEO. “The financial strength of our business
model is once again reflected in our cash flow generation in the
quarter.”
For the quarter ended March 31, 2012, the company generated cash flow
from operations of $120.4 million, an increase of 11 percent compared to
the prior year period, paid dividends of $35.2 million, invested $24.9
million in capital expenditures and repurchased $50.0 million in common
shares outstanding under our share repurchase program.
First Quarter Regional Key Metrics2,3
Regional Volume Point and Average Active Sales Leader Metrics
Volume Points (Mil)
Average Active Sales Leaders
Region
1Q'12
Yr/Yr % Chg
1Q'12
Yr/Yr % Chg
North America
298.4
23
%
62,532
19
%
Asia Pacific
273.8
38
%
55,706
38
%
EMEA
145.9
6
%
41,332
15
%
Mexico
191.4
16
%
52,674
24
%
South & Central America
164.7
32
%
40,614
31
%
China
40.9
25
%
9,531
31
%
Worldwide Total
1,115.1
24
%
252,321
23
%
Updated 2012 Guidance
Guidance for fully diluted 2012 EPS is based on the average daily
exchange rates of the first two weeks of April 2012.
Based on current business trends the company’s second quarter fiscal
2012 and fiscal 2012 guidance is provided below.
Three Months Ending
Twelve Months Ending
June 30, 2012
December 31, 2012
Low
High
Low
High
Volume Point Growth vs 2011
11.5
%
13.5
%
12.0
%
14.0
%
Net Sales Growth vs 2011
9.5
%
11.5
%
12.5
%
14.5
%
Diluted EPS
$
0.91
$
0.95
$
3.58
$
3.74
Cap Ex ($ millions)
$
25.0
$
30.0
$
110.0
$
120.0
Effective Tax Rate
27.0
%
29.0
%
26.5
%
28.5
%
Announces Quarterly Dividend
The company reported today that its board of directors has approved a
dividend of $0.30 per share to shareholders of record effective May 15,
2012, payable on May 30, 2012.
First Quarter Earnings Conference Call
Herbalife senior management will host an investor conference call to
discuss its recent financial results and provide an update on current
business trends on Tuesday, May 1, 2012 at 8 a.m. PST (11 a.m. EST).
The dial-in number for this conference call for domestic callers is
(877) 317-1296 and (706) 634-5671 for international callers (conference
ID 66116502). Live audio of the conference call will be simultaneously
webcast in the investor relations section of the company's website at http://ir.herbalife.com.
An audio replay will be available following the completion of the
conference call in MP3 format or by dialing (855) 859-2056 for
domestic callers or (404) 537-3406 for international callers (conference
ID 66116502). The webcast of the teleconference will be archived and
available on Herbalife's website.
About Herbalife Ltd.
Herbalife
Ltd. (NYSE:HLF) is a global nutrition company that sells
weight-management, nutrition, and personal care products intended to
support a healthy lifestyle. Herbalife products are sold in 81 countries
through a network of independent distributors. The company supports the Herbalife
Family Foundation and its Casa Herbalife program to help bring good
nutrition to children. Herbalife's website contains information about
Herbalife, including financial and other information for investors at http://ir.Herbalife.com.
The company encourages investors to visit its website from time to time,
as information is updated and new information is posted.
FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical fact
are “forward-looking statements” for purposes of federal and
state securities laws, including any projections of earnings, revenue
or other financial items; any statements of the plans, strategies and
objectives of management for future operations; any statements
concerning proposed new services or developments; any statements
regarding future economic conditions or performance; any
statements of belief; and any statements of assumptions
underlying any of the foregoing. Forward-looking statements may include
the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,”
“expect” or “anticipate” and any other similar words.
Although we believe that the expectations reflected in any of our forward-looking
statements are reasonable, actual results could differ materially
from those projected or assumed in any of our forward-looking statements.
Our future financial condition and results of operations, as well as
any forward-looking statements, are subject to change and to inherent
risks and uncertainties, such as those disclosed or incorporated
by reference in our filings with the Securities and Exchange
Commission. Important factors that could cause our actual
results, performance and achievements, or industry results to
differ materially from estimates or projections contained in our forward-looking
statements include, among others, the following:
• any collateral impact resulting from the ongoing worldwide
financial “crisis,” including the availability of liquidity to us, our
customers and our suppliers or the willingness of our customers to
purchase products in a difficult economic environment;
• our relationship with, and our ability to influence the actions of,
our distributors;
• improper action by our employees or distributors in violation of
applicable law;
• adverse publicity associated with our products or network marketing
organization;
• changing consumer preferences and demands;
• our reliance upon, or the loss or departure of any member of, our
senior management team which could negatively impact our distributor
relations and operating results;
• the competitive nature of our business;
• regulatory matters governing our products, including potential
governmental or regulatory actions concerning the safety or efficacy of
our products and network marketing program, including the direct selling
market in which we operate;
• legal challenges to our network marketing program;
• risks associated with operating internationally and the effect of
economic factors, including foreign exchange, inflation, disruptions or
conflicts with our third party importers, pricing and currency
devaluation risks, especially in countries such as Venezuela;
• uncertainties relating to the application of transfer pricing, duties,
value added taxes, and other tax regulations, and changes thereto;
• uncertainties relating to interpretation and enforcement of
legislation in China governing direct selling;
• our inability to obtain the necessary licenses to expand our direct
selling business in China;
• adverse changes in the Chinese economy, Chinese legal system or
Chinese governmental policies;
• our dependence on increased penetration of existing markets;
• contractual limitations on our ability to expand our business;
• our reliance on our information technology infrastructure and outside
manufacturers;
• the sufficiency of trademarks and other intellectual property rights;
• product concentration;
• changes in tax laws, treaties or regulations, or their interpretation;
• taxation relating to our distributors;
• product liability claims; and
• whether we will purchase any of our shares in the open markets or
otherwise.
We do not undertake any obligation to update or release any revisions
to any forward-looking statements or to report any events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events, except as required by law.
1 See Schedule A – “Reconciliation of Non-GAAP Financial
Measures” for more detail.
2 Supplemental tables that include additional business
metrics can be found at http://www.ir.herbalife.com.
3 Worldwide Average Active Sales Leaders may not equal the
sum of the Average Active Sales Leaders in each region due to the
calculation being an average of Sales Leaders active in a period, not a
summation, and the fact that some sales leaders are active in more than
one region but are counted only once in the worldwide amount.
RESULTS OF OPERATIONS:
Herbalife Ltd.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended
3/31/2012
3/31/2011
North America
$
210,710
$
167,000
Mexico
117,109
103,877
South and Central America
165,470
125,277
EMEA
153,993
153,937
Asia Pacific
259,948
199,303
China
56,945
45,702
Worldwide net sales
964,175
795,096
Cost of Sales
196,144
162,793
Gross Profit
768,031
632,303
Royalty Overrides
317,533
264,377
SGA
296,393
244,526
Operating Income
154,105
123,400
Interest Expense - net
1,373
2,648
Income before income taxes
152,732
120,752
Income Taxes
44,570
32,733
Net Income
108,162
88,019
Basic Shares
116,191
118,206
Diluted Shares
122,373
125,625
Basic EPS
$
0.93
$
0.74
Diluted EPS
$
0.88
$
0.70
Dividends declared per share
$
0.30
$
0.13
Herbalife Ltd.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
Mar 31,
Dec 31,
2012
2011
ASSETS
Current Assets:
Cash & cash equivalents
$
305,861
$
258,775
Receivables, net
106,647
89,660
Inventories
250,541
247,696
Prepaid expenses and other current assets
127,181
117,073
Deferred income taxes
54,754
55,615
Total Current Assets
844,984
768,819
Property, plant and equipment, net
201,380
193,703
Deferred compensation plan assets
23,063
20,511
Deferred financing cost, net
4,516
4,797
Other assets
41,381
41,125
Marketing related intangibles and other intangible assets, net
311,592
311,764
Goodwill
105,490
105,490
Total Assets
$
1,532,406
$
1,446,209
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$
69,591
$
57,095
Royalty overrides
201,242
197,756
Accrued compensation
58,951
76,435
Accrued expenses
159,818
152,744
Current portion of long term debt
3,733
1,542
Advance sales deposits
41,589
31,702
Income taxes payable
30,912
31,415
Total Current Liabilities
565,836
548,689
Non-current liabilities
Long-term debt, net of current portion
228,055
202,079
Deferred compensation plan liability
27,133
23,702
Deferred income taxes
68,953
72,348
Other non-current liabilities
37,665
39,203
Total Liabilities
927,642
886,021
Commitments and Contingencies
Shareholders' equity:
Common shares
117
116
Additional paid in capital
302,310
291,950
Accumulated other comprehensive loss
(28,312
)
(37,809
)
Retained earnings
330,649
305,931
Total Shareholders' Equity
604,764
560,188
Total Liabilities and Shareholders' Equity
$
1,532,406
$
1,446,209
Herbalife Ltd.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year Ended
3/31/2012
3/31/2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$
108,162
$
88,019
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
18,590
18,562
Excess tax benefits from share-based payment arrangements
(20,675
)
(6,343
)
Share based compensation expenses
7,227
5,604
Amortization of discount and deferred financing costs
286
149
Deferred income taxes
(597
)
470
Unrealized foreign exchange transaction loss (gain)
(3,868
)
1,383
Write-off of deferred financing costs
-
914
Other
391
751
Changes in operating assets and liabilities:
Receivables
(14,759
)
(20,493
)
Inventories
9,742
4,184
Prepaid expenses and other current assets
(4,029
)
(13,582
)
Other assets
(905
)
(251
)
Accounts payable
11,496
8,861
Royalty overrides
(2,302
)
7,340
Accrued expenses and accrued compensation
(17,373
)
(21,122
)
Advance sales deposits
9,062
20,998
Income taxes
16,489
9,494
Deferred compensation plan liability
3,431
3,030
NET CASH PROVIDED BY OPERATING ACTIVITIES
120,368
107,968
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
(24,691
)
(28,325
)
Proceeds from sale of property, plant and equipment
15
2
Deferred compensation plan assets
(2,552
)
(197
)
NET CASH USED IN INVESTING ACTIVITIES
(27,228
)
(28,520
)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid
(35,172
)
(14,819
)
Borrowings from long-term debt
114,560
289,700
Principal payments on long-term debt
(86,402
)
(284,924
)
Deferred financing costs
-
(5,516
)
Share repurchases
(72,942
)
(8,965
)
Excess tax benefits from share-based payment arrangements
20,675
6,343
Proceeds from exercise of stock options and sale of stock under
employee stock purchase plan
7,128
1,689
NET CASH USED IN FINANCING ACTIVITIES
(52,153
)
(16,492
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
6,099
7,260
NET CHANGE IN CASH AND CASH EQUIVALENTS
47,086
70,216
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
258,775
190,550
CASH AND CASH EQUIVALENTS, END OF YEAR
305,861
260,766
CASH PAID DURING THE YEAR
Interest paid
$
2,477
$
2,093
Income taxes paid
$
29,958
$
21,874
SUPPLEMENTAL INFORMATION
SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited), (Dollars in Thousand, Except Per Share Data)
In addition to its reported results, the Company has included in the
tables below adjusted results that the Securities and Exchange
Commission defines as “non-GAAP financial measures.” Management
believes that such non-GAAP financial measures, when read in conjunction
with the Company’s reported results, can provide useful supplemental
information for investors in analyzing period to period comparisons of
the Company’s results. However, non-GAAP financial measures should not
be considered substitute for, nor superior to, financial results and
measures determined or calculated in accordance with GAAP.
The following is a reconciliation of net income, presented and
reported in accordance with U.S. generally accepted accounting
principles, to net income adjusted for certain items:
Three Months Ended
3/31/2012
3/31/2011
Net income, as reported
$
108,162
$
88,019
Write-off of unamortized deferred financing cost
from debt refinancing (net of $214 tax benefit)
-
700
Net income, as adjusted
$
108,162
$
88,719
The following is a reconciliation of diluted earnings per share,
presented and reported in accordance with U.S. generally accepted
accounting principles, to diluted earnings per share adjusted for
certain items:
Three Months Ended
3/31/2012
3/31/2011
Diluted earnings per share, as reported
$
0.88
$
0.70
Write-off of unamortized deferred financing cost
from debt refinancing
-
0.01
Diluted earnings per share, as adjusted
$
0.88
$
0.71
The following is a reconciliation of total long-term debt to net debt:
3/31/2012
12/31/2011
Total long-term debt (current and long-term portion)
$
231,788
$
203,621
Less: Cash and cash equivalents
305,861
258,775
Net debt
$
(74,073
)
$
(55,154
)
|
