Full Press Release Details
Ltd. Announces Third Quarter 2015 Results, Raises Adjusted Full Year
Guidance, and Provides Initial 2016 Adjusted Guidance
EPS of $1.28 per diluted share exceeded guidance of $1.00 - $1.10;
reported EPS of $1.09 per diluted share
FY'15 adjusted diluted EPS guidance to a range of $4.65 to $4.75; up
from the previous range of $4.50 to $4.70
worldwide net sales of $1.1 billion, grew 5% in constant currency and
on a reported basis declined 12% due to the unfavorable impact of
currency exchange rates compared to the prior year period
flow from operations of $134.5 million increased 32% compared to prior
2016 volume point guidance range of 2.5% - 5.5% growth
LOS ANGELES--(BUSINESS WIRE)--November 3, 2015--Herbalife Ltd. (NYSE:
HLF) reported third quarter net sales of $1.1 billion. Local currency
net sales grew by 5%, while reported net sales declined 12% primarily
due to the continuing unfavorable impact of currency exchange rates.
Adjusted1 earnings for the quarter were $1.28 per diluted
share compared to $1.45 per diluted share for the same period in 2014.
On a reported basis, third quarter net income was $93.6 million, or
$1.09 per diluted share, compared to $11.2 million, or $0.13 per diluted
share for the same period in 2014. Third quarter 2015 diluted EPS was
negatively impacted by a $0.422 currency fluctuation.
For the quarter ended September 30, 2015, the company generated $134.5
million in net operating cash flow, and invested $17.1 million in
capital expenditures.
For the full year 2015, the company is raising adjusted diluted EPS
guidance to a range of $4.65 to $4.75, from the previous range of $4.50
to $4.70. Currency movement since the company's previous guidance had a
negative $0.14 impact to the current full year 2015 adjusted diluted EPS
For the full year 2016, the company is providing adjusted EPS guidance
of $4.35 - $4.75 per share, which includes a $0.50 headwind due to an
expected unfavorable impact of currency fluctuations.
Michael Johnson, chairman and CEO stated, "The improving trends we
continue to see in both performance and member metrics reinforce our
belief that we are building an Herbalife focused on creating the very
best customer and member experience while delivering long term value for
Johnson continued, "We remain focused on building a brand that is
synonymous with good nutrition. Our members have embraced this concept
and their activity and engagement remains high."
Third Quarter and 2015 Key Metrics3,4
Regional Volume Point and Average Active Sales Leader Metrics
| Volume Points (Mil) | Average Active Sales Leaders | ||||||||
| Region | 3Q'15 | Yr/Yr % Chg | 3Q'15 | Yr/Yr % Chg | |||||
| North America | 285.0 | -6% | 77,066 | 0% | |||||
| Asia Pacific | 258.0 | -15% | 77,130 | 1% | |||||
| EMEA | 219.0 | 10% | 74,741 | 25% | |||||
| Mexico | 207.2 | -5% | 64,640 | -3% | |||||
| South & Central America | 188.7 | -8% | 60,726 | -6% | |||||
| China | 149.8 | 24% | 25,696 | 31% | |||||
| Worldwide Total | 1,307.7 | -3% | 367,557 | 4% |
Regional Net Sales and Foreign Exchange ("FX") Impact
| Region | Reported Net Sales 3Q '15 (mil) | Growth/Decline including FX | Growth/Decline excluding FX | ||||||||
| North America | $ | 219.4 | -2 | % | -1 | % | |||||
| Asia Pacific (ex. China) | $ | 224.6 | -25 | % | -16 | % | |||||
| EMEA | $ | 182.5 | -11 | % | 13 | % | |||||
| Mexico | $ | 113.4 | -21 | % | -1 | % | |||||
| South & Central America | $ | 138.1 | -33 | % | 19 | % | |||||
| China | $ | 224.9 | 24 | % | 27 | % | |||||
| Worldwide Total | $ | 1,102.9 | -12 | % | 5 | % |
_______________________________
| 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 fourth quarter includes an unfavorable impact from
currency exchange rates of approximately $0.27 per diluted share versus
the fourth quarter of 2014.
Full year 2015 guidance includes a currency headwind of approximately
$1.54 per diluted share, including approximately $0.45 from Venezuela
compared to last year. Full year 2015 guidance also includes a $0.14
negative impact from currency compared to guidance provided a quarter
Guidance for full year 2016 includes an expected currency headwind of
approximately $0.50 per diluted share.
Based on current business trends the company's fourth quarter 2015 and
full year 2016 guidance is as follows:
| Three Months Ending | Twelve Months Ending | |||||||
| December 31, 2015 | December 31, 2015 | |||||||
| Low | High | Low | High | |||||
| Volume Point Growth vs 2014 | (1.5%) | 1.5% | (3.5%) | (2.8%) | ||||
| Net Sales Growth vs 2014 | (8.5%) | (5.5%) | (11.1%) | (10.4%) | ||||
| Adjusted Diluted EPS | $0.85 | $0.95 | $4.65 | $4.75 | ||||
| Cap Ex ($ millions) | $30.0 | $40.0 | $80.0 | $90.0 | ||||
| Effective Tax Rate | 27.5% | 29.5% | 29.0% | 30.0% | ||||
| Currency Adjusted (a) Net Sales Growth vs 2014 | 1.6% | 4.6% | 1.0% | 1.7% | ||||
| Currency Adjusted EPS (a) | $1.12 | $1.22 | $6.19 | $6.29 | ||||
| Free Cash Flow ($ millions) (b) | $490.0 | $510.0 | ||||||
| (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. |
| Twelve Months Ending | ||||
| December 31, 2016 | ||||
| Low | High | |||
| Volume Point Growth vs 2015 | 2.5% | 5.5% | ||
| Net Sales Growth vs 2015 | 4.5% | 7.5% | ||
| Adjusted Diluted EPS | $4.35 | $4.75 | ||
| Cap Ex ($ millions) | $115.0 | $145.0 | ||
| Effective Tax Rate | 28.0% | 30.0% | ||
| Currency Adjusted (a) Net Sales Growth vs 2015 | 7.0% | 10.0% | ||
| Currency Adjusted EPS (a) | $4.85 | $5.25 | ||
| Free Cash Flow ($ millions) (b) | ||||
| (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 October. With
respect to Venezuela, the guidance assumes a SIMADI rate of 198 to 1 for
the remainder of 2015, for full-year 2016 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
Third 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, November 3, 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 51095552). 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
51095552). 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