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 )
Herbalife (NYSE:HLF)
Historical Stock Chart
From Aug 2024 to Sep 2024
Herbalife (NYSE:HLF)
Historical Stock Chart
From Sep 2023 to Sep 2024