Herbalife Ltd. (NYSE: HLF) today reported fourth quarter net sales of
$1.3 billion, reflecting an increase of 20 percent compared to the same
period in 2012, on volume point growth of 13 percent. Net income for the
quarter was $123.5 million, or $1.15 per diluted share. On an adjusted
basis, adjusted1 net income for the quarter was $137.2
million, or $1.28 per diluted share, as compared to 2012 fourth quarter
net income3 of $112.2 million and EPS of $1.00.
For the twelve months ended December 31, 2013, the company reported
record net sales of $4.8 billion, an 18 percent increase, on 13 percent
growth in volume compared to 2012. For the same period, the company
reported net income of $527.5 million, or $4.91 per diluted share. On an
adjusted basis, adjusted1 net income of $577.4 million, or
$5.37 per diluted share, reflected increases of 24 percent and 36
percent respectively, over 2012 net income3 of $464.0 million
and EPS of $3.94.
"Herbalife delivered another year of record financial performance
achieved through the consistent execution of key strategies to expand
daily consumption of our products," said Michael O. Johnson, Herbalife's
chairman and CEO. "The global obesity epidemic continues to expand
around the world, having an adverse impact on community health. Our
independent Members are uniquely positioned, with education, coaching,
and nutritious, industry-leading products to help their customers live
For the year ended December 31, 2013, Herbalife generated cash flow from
operations of $772.9 million, an increase of 36 percent compared to
2012; paid dividends of $123.1 million; invested $162.5 million in
capital expenditures; and repurchased $297.4 million in common shares
outstanding under our previous share repurchase program.
Herbalife recently announced that the Board of Directors approved an
increase in its share repurchase authorization to $1.5 billion.
Following repurchases made in connection with the company's recent
financing transaction on February 7, 2014, the remaining authorized
capacity under the repurchase program is $814 million.
Fourth Quarter and Fiscal 2013 Key Metrics4,5
Regional Volume Point and Average Active Sales Leader Metrics
2013 Annual Sales Leader Requalification
By the end of January of each year, sales leaders are required to
re-qualify to retain their sales leader status. A record number of sales
leaders were retained in 2013. The overall pool of sales leaders needing
to re-qualify increased by approximately 10% compared to the prior year
and we retained 10% more of them than in the prior year. While size of
the group needing to re-qualify increased for the year, our overall
retention rate remained fairly constant at 51.8%.
2014 First Quarter and Full Year Guidance
Forward guidance excludes the impact of expenses (primarily for legal
and advisory services) relating to the company's response to information
put into the marketplace by a short seller, which information the
company believes to be inaccurate and misleading, and the impact of
non-cash interest costs associated with the company's Convertible Notes.
Forward guidance is based on the average daily exchange rates of the
first two weeks of January. Included in the guidance is the use of the
GAAP rate for Venezuela of 6.3 to 1 for January results and 10 to 1 for
the balance of the year and excludes the potential impact of future
devaluation of the Venezuelan bolivar and any future repatriation of
existing cash balances in Venezuela.
Announces Quarterly Dividend
Herbalife reported today that its Board of Directors has approved a
dividend of $0.30 per share to shareholders of record March 4, 2014,
payable on March 18, 2014.
Fourth Quarter and Fiscal 2013 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 Wednesday, February 19, 2013 at 8 a.m. PST (11 a.m.
The dial-in number for this conference call for domestic callers is
(877) 317-1296 and (706) 634-5671 for international callers (conference
ID 31194371). 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 31194371). 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 more than 90
countries to and through a network of independent members. The Company
supports the Herbalife Family Foundation and its Casa Herbalife program
to help bring good nutrition to children. Herbalife's website 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 See Schedule A - "Reconciliation of Non-GAAP Financial
Measures" for more detail.
2 Adjusted diluted EPS excludes non-cash interest expense
associated with the company's Convertible Notes.
3 There were no non-GAAP adjustments reported against the
company's 2012 fourth quarter or full-year U.S. GAAP results.
4 Supplemental tables that include additional business
metrics can be found at http://www.ir.herbalife.com.
5 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.
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:
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:
Adjustments to reconcile net income to net cash provided by
Proceeds from exercise of stock options and sale of stock under
employee stock purchase plan
SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(unaudited
and unreviewed), (dollars in thousands, 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.
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:
Venezuela devaluation impact (net of ($1,442) and $5,354 tax
benefit for the three and twelve months ended December 31, 2013,
Expenses incurred responding to attacks on the Company's business
model (net of $1,372 and $4,613 tax benefit for the three and
twelve months ended December 31, 2013, respectively)(1)
Expenses incurred for the re-audit of 2010 to 2012 financial
statements due to resignation of KPMG (net of $2,524 and $4,853
tax benefit for the three and twelve months ended December 31,
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
(1) The income tax impact of the non-GAAP adjustments
is based on items affecting the Company's 2013 full year GAAP
effective tax rate. Adjustments to items unrelated to these
non-GAAP adjustments have had an effect on the income tax impact
of the non-GAAP adjustments in periods subsequent to the
underlying non-GAAP adjustments.
(2) The amount for the three months ended December 31,
2013 relates to the change in tax benefit, as explained in note 1,
for the Venezuela devaluation that was recorded in the first
The following is a reconciliation of total long-term debt to net debt:
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