Herbalife Ltd. Announces Preliminary Fourth Quarter and Full-Year 2013 Financial Results
03 Februar 2014 - 12:25PM
Business Wire
Herbalife Ltd. (NYSE:HLF) today provided a preview of
anticipated results for its fourth quarter and fiscal year ended
December 31, 2013. The company reported preliminary, unaudited
results that include the following:
- Volume Points for full year and fourth
quarter 2013 are expected to increase approximately 13.1% and
12.7%, respectively, compared to the prior year periods.
- Net sales for full year and fourth
quarter 2013 are expected to increase approximately 18.5% and
19.8%, respectively, compared to the prior year periods.
- Fourth quarter adjusted1 diluted EPS is
expected to be in a range of $1.26 to $1.30. Fourth quarter as
reported diluted EPS is expected to be in a range of $1.13 to
$1.17, as compared to prior year fourth quarter as reported diluted
EPS of $1.00. There were no non-GAAP adjustments reported against
the company’s 2012 fourth quarter U.S. GAAP results.
- Full year adjusted1 diluted EPS is
expected to be in a range of $5.35 to $5.39. Full year as reported
diluted EPS is expected to be in a range of $4.89 to $4.93, as
compared to prior full year as reported diluted EPS of $3.94. There
were no non-GAAP adjustments reported against the company’s 2012
full year U.S. GAAP results.
Herbalife also announced the following:
- The company expects to report full year
financial results on February 18, 2014.
- The company’s 2014 full year Volume
Point growth and adjusted2 EPS guidance of 6.5% to 8.5% and $5.45
to $5.65, respectively, remains unchanged, despite approximately
$0.10 adverse foreign currency exchange rate impact compared to
prior guidance.
- First quarter 2014 adjusted2 EPS is
expected to be in a range of $1.24 to $1.28 despite an
approximately $0.20 adverse foreign currency exchange rate impact
compared to the prior year’s results.
- The company's board of directors has
increased the existing share repurchase authorization to an
available balance of $1.5 billion.3 The company's former share
repurchase authorization of $1 billion had an available balance of
$653 million.
- The company expects to begin
repurchasing shares of Herbalife common stock.
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 over 90 countries through and to a network of
independent distributors. 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 Herbalife for investors 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.
1 Fourth quarter and full year 2013 adjusted diluted EPS
excludes the impact, net of taxes, of the February 2013 devaluation
of the Venezuelan bolivar; expenses (primarily for legal and
advisory services) relating to the company’s response to
information put into the marketplace by a short seller, which the
company believes to be inaccurate and misleading; and expenses
incurred in connection with the re-audit of 2010-2012 financial
statements resulting from KPMG LLP’s resignation. See Schedule A –
“Reconciliation of Non-GAAP Financial Measures” for more
detail.
2 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 the recently announced financing transaction and
any subsequent share repurchase activity. 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.
3 Our financial statement filings with the Securities and
Exchange Commission present our consolidated results. Herbalife
Ltd. is incorporated in the Cayman Islands. Under Cayman Islands
law, our ability to pay dividends and repurchase shares of our
common stock is determined by the amount of distributable reserves
evident from the balance sheet of our parent company. Our current
distributable reserves exceed our current share repurchase
authorization.
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 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:
- potential differences between the
final, audited results that have not been determined as of the date
of this release and the preliminary unaudited results disclosed in
this release;
- any collateral impact resulting from
the ongoing worldwide financial environment, including the
availability of liquidity to us, our customers and our suppliers or
the willingness of our customers to purchase products in a
difficult economic environment;
- our relationship with, and our ability
to influence the actions of, our distributors;
- improper action by our employees or
distributors in violation of applicable law;
- adverse publicity associated with our
products or network marketing organization, including our ability
to comfort the marketplace, regulators and other third parties
regarding our compliance with applicable laws;
- changing consumer preferences and
demands;
- our reliance upon, or the loss or
departure of any member of, our senior management team which could
negatively impact our distributor relations and operating
results;
- 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 market in which we
operate;
- legal challenges to our network
marketing program;
- 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 the
application of transfer pricing, duties, value added taxes, and
other tax regulations, and changes thereto;
- uncertainties relating to
interpretation and enforcement of legislation in China governing
direct selling;
- uncertainties relating to the
interpretation, enforcement or amendment of legislation in India
governing direct selling;
- our inability to obtain the necessary
licenses to expand our direct selling business in China;
- adverse changes in the Chinese economy,
Chinese legal system or Chinese governmental policies;
- 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;
- changes in tax laws, treaties or
regulations, or their interpretation;
- taxation relating to our
distributors;
- product liability claims;
- 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.
SUPPLEMENTAL INFORMATION
SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(unaudited and unreviewed)
In addition to its anticipated results, the company has
included in this release "adjusted diluted EPS" (earnings per
share), a measure the Securities and Exchange Commission defines as
a "non-GAAP financial measure." Management believes that this
non-GAAP financial measure, when read in conjunction with the
company's as-reported expected results, can provide useful
supplemental information for investors when comparing
period-to-period results. However, non-GAAP financial measures such
as adjusted diluted EPS should not be considered a substitute for,
nor superior to, financial results and measures determined or
calculated in accordance with GAAP.
The following is a reconciliation of as-reported preliminary
diluted EPS, presented and reported in accordance with U.S.
generally accepted accounting principles, to adjusted preliminary
diluted EPS:
($ in thousands except
for earnings per share) Three Months
Ended Twelve Months Ended
12/31/13
12/31/13 12/31/12
12/31/13 12/31/13
12/31/12
Low High
Low
High
(Preliminary)
(Preliminary)
Diluted earnings per share, as reported
$ 1.13 $
1.17 $ 1.00
$ 4.89 $
4.93 $ 3.94
Venezuela devaluation impact (net of
($1,442) and $5,354 tax benefit for the three and twelve months
ended December 31, 2013, respectively) (1)(2)
0.01
0.01
- 0.09
0.09 -
Expenses incurred responding to attacks on the Company's
business model (net of $1,455 and $4,696 tax benefit for the three
and twelve months ended December 31, 2013,
respectively)(1)
0.04 0.04
- 0.23
0.23
- Expenses incurred for the re-audit of 2010 to 2012
financial statements due to resignation of KPMG (net of $2,422 and
$4,750 tax benefit for the three and twelve months ended December
31, 2013)(1)
0.07 0.07
- 0.14
0.14
-
Diluted earnings per share, as
adjusted(3)
$ 1.26
$ 1.30 $ 1.00
$ 5.35
$ 5.39 $ 3.94
(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 quarter (3) Amounts may not total due to
rounding.
Media Contact:Herbalife Ltd.Barbara
HendersonSVP, Worldwide Corp. Comm.213.745.0517orInvestor Contact:Herbalife Ltd.Amy GreeneVP,
Investor Relations213.745.0474
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