Full Press Release Details
Ltd. Announces Second Quarter 2015 Results and Raises Full Year Guidance
EPS of $1.24 per diluted share exceeded guidance of $1.05 - $1.15;
reported EPS of $0.97 per diluted share
FY'15 adjusted diluted EPS guidance to a range of $4.50 to $4.70; up
from previous range of $4.30 to $4.60
worldwide net sales of $1.2 billion declined 11% due to unfavorable
impact of currency exchange rates; net sales excluding currency impact
grew 1% compared to prior year period
flow from operations of $197.6 million increased 26% compared to prior
LOS ANGELES--(BUSINESS WIRE)--August 5, 2015--Herbalife Ltd. (NYSE: HLF)
reported second quarter net sales of $1.2 billion. Local currency net
sales grew by 1%, while reported net sales declined 11% primarily due to
the continuing unfavorable impact of currency exchange rates. Adjusted1
earnings for the quarter were $1.24 per diluted share compared to
$1.55 per diluted share for the same period in 2014. On a reported
basis, second quarter net income was $82.8 million, or $0.97 per diluted
share, compared to $119.5 million, or $1.31 per diluted share for the
same period in 2014. Second quarter 2015 diluted EPS was negatively
impacted by a $0.412 currency fluctuation.
For the quarter ended June 30, 2015, the company generated $197.6
million in net operating cash flow, and invested $16.2 million in
capital expenditures.
The company is raising its adjusted diluted EPS guidance for the year to
a range of $4.50 to $4.70, from the previous range of $4.30 to $4.60.
Michael Johnson, chairman and CEO, stated, "The second quarter continued
the improving trends we saw in the previous quarter in terms of sales
volumes and key sales leader metrics, and we believe we will see these
positive trends continue through the second half of the year."
Johnson continued, "Our Members around the world are more excited and
engaged than ever as we invest in innovative new products and enhance
our marketing and infrastructure to support their businesses and ensure
we are putting customers first in all we do. We continue to see what we
believe is the positive impact of the changes we implemented and remain
confident that we are creating an even stronger platform for sustainable
growth that will deliver long-term value for our shareholders."
Second Quarter and 2015 Key Metrics3,4
Regional Volume Point and Average Active Sales Leader Metrics
| Volume Points (Mil) | Average Active Sales Leaders | |||||||
| Region | 2Q'15 | Yr/Yr % Chg | 2Q'15 | Yr/Yr % Chg | ||||
| North America | 305.4 | -9% | 75,856 | 0% | ||||
| Asia Pacific | 271.2 | -15% | 75,051 | 0% | ||||
| EMEA | 228.3 | 4% | 71,221 | 26% | ||||
| Mexico | 219.9 | -5% | 64,600 | 0% | ||||
| South & Central America | 173.1 | -16% | 57,868 | -7% | ||||
| China | 164.0 | 38% | 23,906 | 28% | ||||
| Worldwide Total | 1,361.9 | -5% | 356,357 | 5% |
Regional Net Sales and Foreign Exchange ("FX") Impact
| Reported Net Sales | Growth/Decline | Growth/Decline | |||||
| Region | 2Q '15 (mil) | including FX | excluding FX | ||||
| North America | $ | 230.0 | -8% | -8% | |||
| Asia Pacific (ex. China) | $ | 239.1 | -22% | -17% | |||
| EMEA | $ | 193.8 | -15% | 8% | |||
| Mexico | $ | 129.2 | -13% | 2% | |||
| South & Central America | $ | 133.5 | -34% | 0% | |||
| China | $ | 236.7 | 39% | 39% | |||
| Worldwide Total | $ | 1,162.3 | -11% | 1% |
| ____________________ |
| 1 See Schedule A - "Reconciliation of Non-GAAP Financial Measures" for more detail. |
| 2 Excludes the impact of Venezuela price increases tied to foreign exchange rate movements. |
| 3 Supplemental tables that include additional business metrics can be found at http://www.ir.herbalife.com . |
| 4 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 third quarter includes an unfavorable impact from
currency exchange rates of approximately $0.40 per diluted share,
inclusive of approximately $0.13 resulting from Venezuela. Full year
2015 guidance includes a currency headwind of approximately $1.40 per
diluted share, including approximately $0.45 from Venezuela.
Based on current business trends the company's third quarter 2015 and
full year 2015 guidance is as follows:
| Three Months Ending | Twelve Months Ending | ||||||||
| September 30, 2015 | December 31, 2015 | ||||||||
| Low | High | Low | High | ||||||
| Volume Point Growth vs 2014 | (4.0%) | (1.0%) | (4.0%) | (1.0%) | |||||
| Net Sales Growth vs 2014 | (10.0%) | (7.0%) | (9.5%) | (6.5%) | |||||
| Adjusted Diluted EPS | $1.00 | $1.10 | $4.50 | $4.70 | |||||
| Cap Ex ($ millions) | $40.0 | $50.0 | $110.0 | $130.0 | |||||
| Effective Tax Rate | 28.5% | 30.5% | 28.0% | 30.0% | |||||
| Currency Adjusted (a) Net Sales Growth vs 2014 | 1.0% | 4.0% | 0.5% | 3.5% | |||||
| Currency Adjusted EPS (a) | $1.40 | $1.50 | $5.90 | $6.10 | |||||
| Free Cash Flow ($ millions) (b) | $470.0 | $490.0 | |||||||
| (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 regulatory inquiries, 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 July. With
respect to Venezuela, the guidance assumes a SIMADI rate of 198 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.
Second 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 Wednesday, August 5, 2015 at 2:30 p.m. PT (5:30 p.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 74088923). 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
74088923). 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
This earnings 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,