Full Press Release Details
Ltd. Announces First Quarter 2015 Results and Raises Full Year Guidance
EPS of $1.29 per diluted share exceeded guidance and reported EPS of
$0.92 per diluted share increased 24% compared to $0.74 per diluted
share in the first quarter a year ago.
net sales of $1.1 billion declined 12% due to the unfavorable impact
of currency exchange rates; net sales excluding currency impact grew
4% compared to the prior year period.
FY'15 adjusted diluted EPS guidance to a range of $4.30 to $4.60.
LOS ANGELES--(BUSINESS WIRE)--May 5, 2015--Herbalife Ltd. (NYSE: HLF)
today reported first quarter net sales of $1.1 billion. While local
currency net sales grew by 4%, reported net sales declined 12% primarily
due to the unfavorable impact of currency exchange rates. Adjusted1 earnings
for the quarter were $1.29 per diluted share compared to $1.50 per
diluted share for the same period in 2014. On a reported basis, the
company announced first quarter net income of $78.2 million, or $0.92
per diluted share, compared to $74.6 million, or $0.74 per diluted share
for the same period in 2014. First quarter 2015 diluted EPS was
negatively impacted by a $0.442 currency headwind.
First quarter 2015 reported net income was negatively impacted by $36.3
million in pre-tax charges, or $0.30 per diluted share after tax,
related to the devaluation of the Venezuelan Bolivar. During the first
quarter, the company remeasured its Bolivar-denominated monetary assets
and liabilities at the SIMADI rate.
For the quarter that ended March 31, 2015, the company generated $161.1
million net operating cash flow, and invested $15.4 million in capital
Michael Johnson, chairman and CEO stated, "Our performance this quarter
was above our expectations and has resulted in us increasing our full
year 2015 guidance."
Johnson continued, "As reflected in our record sales leader retention
results, we remain confident that we are building a stable foundation
for volume and sales growth, driving long-term shareholder value
creation, and providing an even better experience for our millions of
Members and our customers throughout the world."
1 See Schedule A - "Reconciliation of
Non-GAAP Financial Measures" for more detail.
Excludes the impact of Venezuela price increases tied to FX rate
First Quarter and 2015 Key Metrics3,4
Regional Volume Point and Average Active Sales Leader Metrics
| Volume Points (Mil) | Average Active Sales Leaders | |||||||||
| Region | 1Q'15 | Yr/Yr % Chg | 1Q'15 | Yr/Yr % Chg | ||||||
| North America | 297.8 | -11 | % | 77,480 | 4 | % | ||||
| Asia Pacific | 265.9 | -12 | % | 74,767 | 4 | % | ||||
| EMEA | 228.4 | 13 | % | 69,256 | 28 | % | ||||
| Mexico | 203.4 | -8 | % | 65,340 | 3 | % | ||||
| South & Central America | 210.5 | -8 | % | 62,971 | 2 | % | ||||
| China | 113.7 | 25 | % | 20,277 | 22 | % | ||||
| Worldwide Total | 1,319.7 | -4 | % | 357,465 | 8 | % |
Regional Net Sales and FX Impact
| Region | Reported Net Sales 1Q '15 (mil) | Growth/Decline including FX | Growth/Decline excluding FX | ||||
| North America | $ | 226.7 | -9% | -8% | |||
| Asia Pacific (ex. China) | $ | 242.8 | -13% | -10% | |||
| EMEA | $ | 186.4 | -12% | 14% | |||
| Mexico | $ | 123.6 | -13% | -2% | |||
| South & Central America | $ | 161.7 | -34% | 16% | |||
| China | $ | 164.2 | 21% | 23% | |||
| Worldwide Total | $ | 1,105.4 | -12% | 4% |
3 Supplemental tables that include
additional business metrics can be found at http://www.ir.herbalife.com.
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.
Guidance for the second quarter includes an unfavorable impact from
currency exchange rates of approximately $0.40 per diluted share,
inclusive of approximately $0.14 resulting from Venezuela. Full year
2015 guidance includes a currency headwind of approximately $1.26 per
diluted share, including approximately $0.45 from Venezuela.
Based on current business trends the company's second quarter 2015 and
full year 2015 guidance is as follows:
| Three Months Ending | Twelve Months Ending | |||||||||
| June 30, 2015 | December 31, 2015 | |||||||||
| Low | High | Low | High | |||||||
| Volume Point Growth vs 2014 | (7.5%) | (4.5%) | (4.0%) | (1.0%) | ||||||
| Net Sales Growth vs 2014 | (13.5%) | (10.5%) | (9.5%) | (6.5%) | ||||||
| Adjusted Diluted EPS | $1.05 | $1.15 | $4.30 | $4.60 | ||||||
| Cap Ex ($ millions) | $20.0 | $30.0 | $120.0 | $140.0 | ||||||
| Effective Tax Rate | 28.0% | 30.0% | 28.0% | 30.0% | ||||||
| Currency Adjusted (a) Net Sales Growth vs 2014 | (3.0%) | 0.0% | (0.5%) | 2.5% | ||||||
| Currency Adjusted EPS (a) | $1.45 | $1.55 | $5.55 | $5.85 | ||||||
| Free Cash Flow ($ millions) (b) | $440.0 | $470.0 | ||||||||
| (a) Excludes the impact of Venezuela price increases tied to FX rate movements. | ||||||||||
| (b) Free Cash Flow equals Cash Flow from operations less Capital Expenditures. |
Guidance excludes the impact of legal and advisory services and expenses
relating to challenges to the company's business model, including
expenses related to an FTC Civil Investigative Demand or CID, the impact
of non-cash interest costs associated with the company's Convertible
Notes and the expenses incurred related to the effort to recover costs
related to the re-audits that occurred in 2013. Forward guidance is
based on the average daily exchange rates of the first two weeks of
April. With respect to Venezuela, the guidance assumes a SIMADI rate of
192 to 1 for the remainder of 2015 and excludes the potential impact of
the recent and any future devaluation of the Venezuelan Bolivar and
future repatriation, if any, of existing cash balances in Venezuela.
First Quarter 2015 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 5, 2015 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 (706) 634-5671 for international callers (conference
ID 18313228). 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 18313228). The webcast of the teleconference will be archived and
available on Herbalife's website.
About Herbalife Ltd.
Herbalife Ltd. (NYSE:HLF) is a 35-year-old 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 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
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