- Second quarter 2017 reported diluted
EPS of $1.61 and adjusted1 diluted EPS of
$1.51
- Second quarter 2017 reported net
sales of $1.1 billion, declined 5% and 3% on an as reported and
constant currency basis, respectively, compared to the second
quarter 2016
- Second quarter volume points of 1.4
billion
- Raises FY ’17 reported and adjusted
diluted EPS guidance to a range of $3.80 to $4.20 and $4.30 to
$4.70, respectively; up from the previous ranges of $3.30 to $3.70
and $4.10 to $4.50, respectively
- Since the inception in February 2017
of the board approved share repurchase program, a total of
approximately 4.6 million shares were repurchased, with
approximately 2.5 million shares repurchased during the period of
May 1st, 2017 through July 31st,
2017
Herbalife Ltd. (NYSE: HLF) reports results for the second
quarter ended June 30, 2017.
Rich Goudis, CEO of Herbalife, stated, “With the successful
implementation of tracking consumer retail transactions in the
U.S., we are now entering into a new chapter for the company.
Through technology innovations, and changes in our marketing plan
here in the U.S., we are now collecting millions of customer
receipts each month, and we know this will help our distributors
create more compelling connections with their customers everywhere
and anytime.”
Mr. Goudis continued, “With much of the transition behind us, we
can now pivot back to an acute focus on growth.”
For the second quarter 2017, the company reported net sales of
$1.1 billion which represents a decline of 5% and 3% on an as
reported and constant currency basis, respectively, compared to the
second quarter 2016.
Second quarter volume points of 1.4 billion declined 8%,
compared to the prior year period.
On a reported basis, second quarter 2017 net income was $137.6
million, or $1.61 per diluted share, compared to a second quarter
2016 net loss of $22.92 million, or ($0.282) per diluted share.
Adjusted1 earnings for the second quarter was $1.51 per diluted
share compared to $1.29 per adjusted3 diluted share for the second
quarter of 2016.
For the full year 2017, the company is raising its 2017 reported
and adjusted diluted EPS guidance to a range of $3.80 to $4.20 and
$4.30 to $4.70, respectively; up from the previous ranges of $3.30
to $3.70 and $4.10 to $4.50, respectively.
To support the Company’s increased focus on the worldwide
distributor and customer experience, including the key areas of
innovation and technology and the infrastructure needed to support
them, Dave Pezzullo has been promoted to chief operating officer
(COO). Pezzullo joined Herbalife in 2004, initially serving as the
Company’s Senior Vice President and Chief Accounting Officer and
most recently as Executive Vice President of Worldwide Operations.
He was instrumental in creating world-class organizations in both
finance and operations and led the successful implementation of the
“seed to feed” program which has created a competitive advantage
for the Company.
“Dave and I have a long history and have accomplished major
milestones together at Herbalife including the establishment of
world-class manufacturing facilities, laboratories and quality
control infrastructure, sophisticated supply chain systems, and
R&D centers worldwide that have set the standard in our
industry for product quality,” said Goudis. “Dave is a proven
leader and shares my vision and passion for innovation, and I
couldn’t be more pleased to have him on our leadership team in his
new role as COO.”
Second Quarter 2017 Key
Metrics4
Regional Volume Point Metrics
Volume Points (Mil) Region 2Q
'17 Yr/Yr % Chg North America 284.1 -18 % Asia
Pacific 275.9 -1 % EMEA 283.6 2 % Mexico 228.9 -6 % South &
Central America 137.5 -14 % China 153.9 -14 %
Worldwide Total 1,363.9 -8 %
Regional Net Sales and Foreign Exchange (“FX”) Impact
Region
Reported Net Sales Growth/Decline Growth/Decline
2Q '17 (mil) including FX excluding FX
North America $ 218.4 -18 % -18 % Asia Pacific $ 235.5 0 % -1 %
EMEA $ 224.7 3 % 4 % Mexico $ 115.6 -3 % -1 % South & Central
America $ 110.0 -8 % -9 % China $ 242.7 0 % 5
% Worldwide Total $ 1,146.9 -5 % -3 %
Outlook
Based on current business trends the company’s third quarter
2017 and full year 2017 guidance are as follows:
Three Months Ending Twelve Months Ending September
30, 2017 December 31, 2017
Low
High Low High Volume
Point Growth vs 2016 (7.0 %) (2.0 %) (5.0 %) 0.0 % Net Sales Growth
vs 2016 (5.0 %) 0.0 % (3.0 %) 2.0 %
Diluted EPS (a)
$ 0.48 $ 0.68 $ 3.80 $ 4.20 Adjusted(b) Diluted EPS $ 0.65 $ 0.85 $
4.30 $ 4.70 Cap Ex ($ millions) $ 40.0 $ 50.0 $ 115.0 $ 135.0
Effective Tax Rate (a) 30.0 % 32.0 % 23.5 % 25.5 % Adjusted
Effective Tax Rate (b) 27.5 % 29.5 % 21.5 % 23.5 % Currency
Adjusted Net Sales Growth vs 2016 (5.0 %) 0.0 % (2.7 %) 2.3 %
Currency Adjusted Diluted EPS $ 0.70 $ 0.90 $ 4.50 $ 4.90
(a) Excludes any future potential ongoing
tax effects from the exercise of equity awards that could impact
the company’s tax rate due to the updated stock compensation
accounting standard.
(b) Adjusted diluted EPS and adjusted
effective tax rate, for the purposes of 2017 guidance, excludes the
impact of expenses relating to challenges to the company’s business
model, the impact of non-cash interest costs associated with the
company’s convertible notes, benefits from future potential China
grants, FTC settlement implementation and expenses related to
regulatory inquiries. See Schedule A – “Reconciliation of Non-GAAP
Financial Measures” for a detailed reconciliation of adjusted
diluted EPS to diluted EPS calculated in accordance with GAAP and a
discussion of why the company believe these non-GAAP measures are
useful.
With respect to guidance, the company cannot accurately predict
the impact to its share base from any future repurchases in 2017
that may be made under its share repurchase program and therefore
the guidance table above excludes any impact thereof to EPS.
Guidance is based on the average daily exchange rates during the
first two weeks of July.
Adjusted1 diluted EPS guidance for the third quarter 2017
includes a projected currency headwind of approximately $0.05 per
diluted share versus the third quarter of 2016.
Full year 2017 adjusted1 diluted EPS guidance includes a
projected currency headwind of approximately $0.20 per diluted
share, compared to 2016, which is consistent with the headwind
included in the updated guidance the company provided on June 4,
2017.
Second Quarter 2017 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, August 1, 2017, at 2:30 p.m.
PT (5:30 p.m. ET).
The dial-in number for this conference call for domestic callers
is (877) 317-1296, and (262) 320-2006 for international callers
(conference ID 34074913). 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 34074913). The webcast of the teleconference will be
archived and available on Herbalife’s website.
About Herbalife Ltd.
Herbalife is a global nutrition company that has been changing
people’s lives with great products since 1980. Our nutrition,
weight-management, energy and fitness and personal care products
are available exclusively to and through dedicated Herbalife
Independent Members in more than 90 countries. We are committed to
fighting the worldwide problems of poor nutrition and obesity by
offering high-quality products, one-on-one coaching with an
Herbalife Member and a community that inspires customers to live a
healthy, active life.
We support the Herbalife Family Foundation (HFF) and
its Casa Herbalife programs to help bring good nutrition
to children in need. We also sponsor more than 190 world-class
athletes, teams and events around the globe,
including Cristiano Ronaldo, the LA Galaxy and
champions in many other sports.
The company has over 8,000 employees worldwide, and its shares
are traded on the New York Stock Exchange (NYSE: HLF)
with net sales of approximately $4.5 billion in 2016. To
learn more, visit Herbalife.com or IAmHerbalife.com.
The Herbalife Investor Relations website at
http://ir.herbalife.com contains a significant amount of financial
and other information about the company. The company encourages
investors to visit its website from time to time, as information is
updated and new information is posted.
______________________________________________________
1 Adjusted net income and adjusted diluted EPS are both non-GAAP
measures and, for the purposes of reported results, exclude the
impact of expenses relating to challenges to the company’s business
model, the impact of non-cash interest costs associated with the
company’s convertible notes, expenses relating to FTC settlement
implementation, recovery of re-audit expenses, China grant income,
expenses related to regulatory inquiries, and regulatory
settlements. Adjusted diluted EPS, for the purposes of guidance,
excludes the impact of expenses relating to challenges to the
company’s business model, the impact of non-cash interest costs
associated with the company’s convertible notes, benefits from
future potential China grants, FTC settlement implementation and
expenses related to regulatory inquiries. See Schedule A –
“Reconciliation of Non-GAAP Financial Measures” for a detailed
reconciliation of adjusted net income to net income calculated in
accordance with GAAP and a reconciliation of adjusted diluted EPS
to diluted EPS calculated in accordance with GAAP and a discussion
of why we believe these non-GAAP measures are useful.
2 Includes the impact of $203 million related to regulatory
settlements in the second quarter 2016.
3 See Schedule A - “Reconciliation of Non-GAAP Financial
Measures” for a reconciliation of adjusted diluted share count to
reported diluted share count and a discussion of why the share
count has been adjusted for purposes of calculating adjusted
diluted EPS for the second quarter of 2016.
4 Supplemental tables that include Average Active Sales Leader
and additional business metrics can be found at
http://www.ir.herbalife.com.
FORWARD-LOOKING STATEMENTS
This release contains “forward-looking statements” within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. 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:
- our relationship with, and our ability
to influence the actions of, our Members;
- improper action by our employees or
Members in violation of applicable law;
- adverse publicity associated with our
products or network marketing organization, including our ability
to comfort the marketplace and regulators regarding our compliance
with applicable laws;
- changing consumer preferences and
demands;
- 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 markets in which we
operate;
- legal challenges to our network
marketing program;
- the consent order entered into with the
FTC, the effects thereof and any failure to comply therewith;
- 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
interpretation and enforcement of legislation in China governing
direct selling and anti-pyramiding;
- our inability to obtain the necessary
licenses to expand our direct selling business in China;
- adverse changes in the Chinese
economy;
- 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;
- our reliance upon, or the loss or
departure of any member of, our senior management team which could
negatively impact our Member relations and operating results;
- U.S. and foreign laws and regulations
applicable to our international operations;
- uncertainties relating to the United
Kingdom’s vote to exit from the European Union;
- restrictions imposed by covenants in
our credit facility;
- uncertainties relating to the
application of transfer pricing, duties, value added taxes, and
other tax regulations, and changes thereto;
- changes in tax laws, treaties or
regulations, or their interpretation;
- taxation relating to our Members;
- product liability claims;
- our incorporation under the laws of the
Cayman Islands;
- whether we will purchase any of our
shares in the open markets or otherwise; and
- share price volatility related to,
among other things, speculative trading and certain traders
shorting our common shares.
We do not undertake any obligation to update or release any
revisions to any forward-looking statement or to report any events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events, except as required by law.
RESULTS OF OPERATIONS:
Herbalife Ltd. and Subsidiaries Condensed Consolidated
Statements of Income (In millions, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
6/30/2017
6/30/2016 6/30/2017
6/30/2016 North America $ 218.4 $ 266.5 $ 448.2
$ 512.5 Mexico 115.6 119.3 220.4 229.0 South and Central America
110.0 119.9 232.4 246.9 EMEA 224.7 219.0 434.5 417.4 Asia Pacific
235.5 234.6 455.3 455.7 China 242.7 242.5
458.2 459.9 Worldwide Net Sales
1,146.9 1,201.8 2,249.0 2,321.4 Cost of Sales 218.8
236.3 423.4 449.4 Gross
Profit 928.1 965.5 1,825.6 1,872.0 Royalty Overrides 318.9 336.7
634.0 648.6 Selling, General and Administrative Expenses 443.2
676.8 881.8 1,103.9
Other Operating Income (1)
(38.9 ) (28.1 ) (38.9 ) (28.9 )
Operating Income (Loss) 204.9 (19.9 ) 348.7 148.4 Interest Expense,
net 37.9 23.1 68.1
48.0 Income (Loss) Before Income Taxes 167.0 (43.0 ) 280.6
100.4 Income Taxes (2) 29.4 (20.1 )
57.8 27.5 Net Income (Loss) $ 137.6 $
(22.9 ) $ 222.8 $ 72.9 Weighted Average Shares
Outstanding: Basic 81.4 83.0 82.3 82.9 Diluted 85.3 83.0 86.0 85.9
Earnings (Loss) Per Share: Basic $ 1.69 $ (0.28 ) $
2.71 $ 0.88 Diluted $ 1.61 $ (0.28 ) $ 2.59
$ 0.85
(1) Other Operating Income relates to
certain China grant income.
(2) Includes the impact of excess tax
benefit recognized under ASU 2016-09 of $21.4 million and $25.7
million for the three months and six months ended June 30, 2017,
respectively.
Herbalife Ltd. and Subsidiaries Condensed
Consolidated Balance Sheets (In millions) (Unaudited)
Jun 30, Dec 31,
2017 2016
ASSETS Current Assets: Cash and cash equivalents $ 1,624.1 $ 844.0
Receivables, net 89.7 70.3 Inventories 378.6 371.3 Prepaid expenses
and other current assets 177.0 176.9
Total Current Assets 2,269.4 1,462.5 Property, plant and
equipment, net 374.0 378.0 Marketing related intangibles and other
intangible assets, net 310.1 310.1 Goodwill 94.6 89.9 Other assets
361.9 324.9 Total Assets $ 3,410.0
$ 2,565.4 LIABILITIES AND SHAREHOLDERS'
EQUITY Current Liabilities: Accounts payable $ 89.5 $ 66.0 Royalty
overrides 247.9 261.2 Current portion of long-term debt 100.3 9.5
Other current liabilities 425.1 454.8
Total Current Liabilities 862.8 791.5 Non-current
liabilities Long-term debt, net of current portion 2,188.1 1,438.4
Other non-current liabilities 159.1 139.2
Total Liabilities 3,210.0 2,369.1 Contingencies
Shareholders' equity: Common shares 0.1 0.1 Paid-in capital
in excess of par value 442.7 467.6 Accumulated other comprehensive
loss (188.4 ) (205.1 ) Retained earnings (accumulated deficit)
186.1 (66.3 ) Treasury stock (240.5 ) - Total
Shareholders' Equity 200.0 196.3
Total Liabilities and Shareholders' Equity $ 3,410.0
$ 2,565.4 Herbalife Ltd. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (In millions)
(Unaudited)
Six Months Ended
6/30/2017
6/30/2016 CASH FLOWS FROM OPERATING ACTIVITIES Net
income $ 222.8 $ 72.9 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 48.6 47.9 Share-based compensation expenses 22.7 20.5
Non-cash interest expense 29.5 28.7 Deferred income taxes 0.7 (21.2
) Inventory write-downs 11.2 11.2 Foreign exchange transaction loss
(gain) 0.9 (2.9 ) Other (3.3 ) (1.1 ) Changes in operating assets
and liabilities: Receivables (17.8 ) (20.4 ) Inventories 5.2 (0.2 )
Prepaid expenses and other current assets 6.0 (14.7 ) Accounts
payable 10.3 17.4 Royalty overrides (23.3 ) (1.4 ) Other current
liabilities (48.7 ) 236.4 Other 12.3 (5.1 )
NET CASH PROVIDED BY OPERATING ACTIVITIES 277.1
368.0 CASH FLOWS FROM INVESTING ACTIVITIES Purchases
of property, plant and equipment (45.9 ) (86.9 ) Other (1.6
) 4.5 NET CASH USED IN INVESTING ACTIVITIES
(47.5 ) (82.4 ) CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from senior secured credit facility, net of discount
1,274.0 - Principal payments on senior secured credit facility and
other debt (441.3 ) (229.7 ) Debt issuance costs (22.6 ) - Share
repurchases (273.6 ) (4.5 ) Other 1.0 0.7
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
537.5 (233.5 ) EFFECT OF EXCHANGE RATE CHANGES ON
CASH 13.0 (5.2 ) NET CHANGE IN CASH AND CASH
EQUIVALENTS 780.1 46.9 CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 844.0 889.8 CASH AND CASH
EQUIVALENTS, END OF PERIOD $ 1,624.1 $ 936.7
SUPPLEMENTAL INFORMATION
SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited and unreviewed), (All tables provide Dollars in
millions, except per Share Data)
In addition to its reported results and guidance calculated in
accordance with GAAP, the company has included in this release
adjusted net income and adjusted diluted EPS, performance measures
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 or forecasted results, in each case calculated in
accordance with GAAP, can provide useful supplemental information
for investors because they facilitate a period to period
comparative assessment of the company’s operating performance
relative to its performance based on reported or forecasted results
under GAAP, while isolating the effects of some items that vary
from period to period without any correlation to core operating
performance and eliminate certain charges that management believes
do not reflect the company’s operations and underlying operational
performance. The company’s definition of adjusted net income and
adjusted diluted earnings per share may not be comparable to
similarly titled measures used by other companies because other
companies may not calculate them in the same manner as the company
does and should not be viewed in isolation from nor as alternatives
to net income or diluted EPS 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 Six Months Ended 6/30/2017
6/30/2016 6/30/2017 6/30/2016 (in million) Net
income (loss), as reported $ 137.6 $ (22.9 ) $ 222.8 $ 72.9
Expenses incurred responding to attacks on the company's business
model (1) (2) 1.6 4.6 3.1 7.5 Expenses related to regulatory
inquiries (1) (2) 2.9 2.5 6.7 10.1 Expenses incurred for the
recovery of re-audit expenses (1) (2) - 1.9 - 3.3 Non-cash interest
expense and amortization of non-cash issuance costs (1) (2) (3)
11.8 11.2 23.5 22.2 China grant income (1) (2) (38.9 ) (28.1 )
(38.9 ) (28.9 ) FTC Consent Order implementation (1) (2) (4) 5.2 -
13.7 - Regulatory settlements (1) (2) - 203.0 - 203.0
Income tax adjustments for above items (1)
(2)
8.9 (60.9 ) 5.4 (63.4 )
Net income, as adjusted (5)
$ 129.1 $ 111.2 $ 236.3 $ 226.8
The following table is a reconciliation of diluted shares
outstanding, presented and reported in accordance with GAAP, to
diluted shares outstanding, adjusted for the impact of outstanding
equity awards. Outstanding equity awards were excluded from the
number of reported diluted outstanding shares for the second
quarter of 2016 because the company reported a net loss for the
second quarter of 2016 and their inclusion would be anti-dilutive.
However, because the company’s adjusted net income for the second
quarter of 2016, as calculated in the table above, was positive,
inclusion of outstanding equity awards would not be anti-dilutive.
Therefore, the company has adjusted the diluted shares outstanding
for the second quarter of 2016 to include equity awards as set
forth below so the calculation of adjusted diluted EPS is not
overstated for the second quarter of 2016 and such number is
comparable to adjusted diluted EPS for the prior year period.
Three Months Ended Six Months
Ended 6/30/2017 6/30/2016 6/30/2017 6/30/2016 (in millions)
Diluted shares outstanding, as reported 85.3 83.0 86.0 85.9
Potential dilutive effect of outstanding equity grants - 3.2 - -
Diluted shares outstanding, as adjusted 85.3 86.2 86.0 85.9
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 Six Months
Ended 6/30/2017 6/30/2016 6/30/2017 6/30/2016 (per share)
Diluted earnings (loss) per share, as reported $ 1.61 $ (0.28 ) $
2.59 $ 0.85 Expenses incurred responding to attacks on the
company's business model (1) (2) 0.02 0.05 0.04 0.09 Expenses
related to regulatory inquiries (1) (2) 0.03 0.03 0.08 0.12
Expenses incurred for the recovery of re-audit expenses (1) (2) -
0.02 - 0.04 Non-cash interest expense and amortization of non-cash
issuance costs (1) (2) (3) 0.14 0.13 0.27 0.26 China grant income
(1) (2) (0.46 ) (0.33 ) (0.45 ) (0.34 ) FTC Consent Order
implementation (1) (2) (4) 0.06 - 0.16 - Regulatory settlements (1)
(2) - 2.36 2.36
Income tax adjustments for above items (1)
(2)
0.10 (0.71 ) 0.06 (0.74 )
Diluted earnings per share, as adjusted (5) $ 1.51 $ 1.29
$ 2.75 $ 2.64 (1) Based on interim
income tax reporting rules, these expenses are not considered
discrete items. As a result, the company's full year effective tax
rate is impacted by these items. When applying the full year
effective tax rate to year-to-date income, the company's
year-to-date tax provision recorded with respect to these non-GAAP
adjustments is different from the forecasted full-year tax
provision impact of these items. As a consequence, adjustments to
the year-to-date and quarterly tax impacts will be recorded as the
adjusted full year effective tax rate is applied to income in
subsequent periods. Additionally, adjustments to items unrelated to
these non-GAAP adjustments may have an effect on the income tax
impact of these non-GAAP adjustments in subsequent periods. The
company plans to update the income tax impact of these items in
subsequent interim reporting periods. (2) Excludes tax
(benefit)/expense as follows: Three Months Ended
Six Months Ended 6/30/2017 6/30/2016 6/30/2017
6/30/2016 (in millions) Expenses incurred responding
to attacks on the company's business model $ (0.4 ) $ (1.3 ) $ (0.8
) $ (1.9 ) Expenses related to regulatory inquiries (0.9 ) (0.9 )
(2.2 ) (3.7 ) Expenses incurred for the recovery of re-audit
expenses - (0.6 ) - (1.1 ) Non-cash interest expense and
amortization of non-cash issuance costs 0.8 0.1 1.8 1.3 China grant
income 11.1 8.2 11.1 8.4 FTC Consent Order Implementation (1.7 ) -
(4.5 ) - Regulatory settlements - (66.5 )
- (66.5 ) Total income tax adjustments (5) $
8.9 $ (60.9 ) $ 5.4 $ (63.4 ) Three
Months Ended Six Months Ended 6/30/2017 6/30/2016 6/30/2017
6/30/2016 (per share) Expenses incurred responding to
attacks on the company's business model $ - $ (0.01 ) $ (0.01 ) $
(0.02 ) Expenses related to regulatory inquiries (0.01 ) (0.01 )
(0.03 ) (0.04 ) Expenses incurred for the recovery of re-audit
expenses - (0.01 ) - (0.01 ) Non-cash interest expense and
amortization of non-cash issuance costs 0.01 - 0.02 0.02 China
grant income 0.13 0.09 0.13 0.10 FTC Consent Order Implementation
(0.02 ) - (0.05 ) - Regulatory settlements -
(0.77 ) - (0.77 ) Total income tax adjustments
(5) $ 0.10 $ (0.71 ) $ 0.06 $ (0.74 ) (3)
Relates to non-cash expense on our convertible notes and prepaid
forward share repurchase contract. (4) Includes $3.0 million of
product discounts related to preferred member conversions for the
six months ended June 30, 2017. (5) Amounts may not total due to
rounding.
The following is a reconciliation of diluted earnings per share
guidance, presented in accordance with U.S. generally accepted
accounting principles, to adjusted diluted earnings per share
guidance for certain items.
Three Months Ending Twelve Months Ending September
30, 2017 December 31, 2017 Diluted EPS Guidance (1)
$0.48 - $0.68 $3.80 - $4.20 Expenses incurred responding to attacks
on the company's business model (2) 0.02 0.08 Non-cash interest
expense and amortization of non-cash issuance costs (3) 0.14 0.55
FTC Consent Order Implementation (4) (5) - 0.16 Expenses related to
regulatory inquiries (6) 0.03 0.12 China grant income (7) - (0.45)
Income tax adjustments for above items (8) (0.02) 0.03 Adjusted
diluted EPS guidance (9) $0.65 - $0.85 $4.30 - $4.70
(1) Excludes any impact of ongoing tax
effects from exercise of equity awards and share repurchases that
took place after July 31, 2017
(2) Excludes tax impact of $0.5 million
and $1.8 million for the three months ending September 30, 2017 and
the twelve months ending December 31, 2017, respectively.
(3) Relates to non-cash expense on our
convertible notes and prepaid forward share repurchase
contract.
(4) Excludes tax impact of $4.5 million
for the twelve months ending December 31, 2017.
(5) Includes $3.0 million of product
discounts related to preferred member conversions for the twelve
months ending December 31, 2017.
(6) Excludes tax impact of $0.8 million
and $3.5 million for the three months ending September 30, 2017 and
the twelve months ending December 31, 2017, respectively.
(7) Excludes tax impact of $11.1 million
for the twelve months ending December 31, 2017.
(8) Aggregates the individual tax impacts of each item as described
in greater detail in footnotes 2, 4, 6 and 7 above. (9) Amounts may
not total due to rounding.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170801006659/en/
Herbalife Ltd.Media Contact:Jennifer ButlerVP, Media
Relations213.745.0420orInvestor Contact:Alan QuanVP, Investor
Relations213.745.0541
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