- Third quarter 2016 reported diluted
EPS of $1.01 and adjusted1 diluted EPS of $1.21,
which both include a $0.21 negative impact due to currency
fluctuations.
- Third quarter 2016 volume points
increased 6% compared to the third quarter 2015.
- Third quarter 2016 reported net
sales of $1.1 billion increased 2% and 5% on an as reported and
constant currency basis, respectively, compared to the prior year
period.
- Full year 2016 GAAP diluted EPS
guidance in a range of $2.77 to $2.97, an increase from the
previous range of $2.30 to $2.60. Full year 2016
adjusted1 diluted EPS guidance in a range of $4.65 to
$4.85; an increase from the previous range of $4.50 to
$4.80.
- Provides initial full year 2017
volume point guidance range of 2% to 5% growth and initial full
year 2017 GAAP diluted and adjusted1 diluted EPS
guidance in a range of $3.95 to $4.35 and $4.60 to $5.00,
respectively.
Herbalife Ltd. (NYSE: HLF) reported third quarter 2016 volume
growth of 6% and net sales of $1.1 billion, reflecting an increase
of 2%, each compared to the prior year period. Third quarter net
sales, excluding the impact of currency, grew by 5%. On a reported
basis, third quarter 2016 net income was $87.7 million, or $1.01
per diluted share, compared to net income of $93.6 million or $1.09
per diluted share for the third quarter in 2015. Adjusted1 earnings
for the quarter were $1.21 per diluted share compared to $1.262 per
diluted share for the comparable quarter in 2015. Due to currency
fluctuations, third quarter 2016 reported and adjusted1 net income
were each negatively impacted by $17.9 million, and reported
diluted EPS and adjusted1 diluted EPS were each negatively impacted
by $0.21.
For the full year 2016, diluted and adjusted1 diluted EPS
guidance is now in a range of $2.77 to $2.97 and $4.65 to $4.85, an
increase from the previous ranges of $2.30 to $2.60 and $4.50 to
$4.80, respectively.
For the full year 2017, the company is providing initial volume
guidance in the range of 2% to 5% growth and initial full year 2017
GAAP diluted and adjusted1 diluted EPS guidance in the range of
$3.95 to $4.35 and $4.60 to $5.00, respectively, which each include
a $0.15 headwind due to the expected unfavorable impact of currency
fluctuations.
Michael O. Johnson, chairman and CEO of Herbalife, stated, “We
delivered another strong quarter with 6% growth in worldwide volume
and relentless management of expenses which contributed to our
exceeding the high end of third quarter EPS guidance.”
In a separate press release this afternoon, the Company
announced its CEO transition plan that will go into effect in June
of 2017. The press release can be found here
http://ir.Herbalife.com.
Third Quarter and 2016 Key
Metrics3,4
Regional Volume Point and Average Active Sales Leader
Metrics
Volume Points (Mil) Average Active Sales Leaders Region 3Q
'16 Yr/Yr % Chg 3Q '16 Yr/Yr % Chg North America 311.6 9%
81,035 5% Asia Pacific 275.9 7% 76,315 -1% EMEA 252.0 15% 84,125
13% Mexico 234.5 13% 68,380 6% South & Central America 161.1
-15% 56,025 -8% China 153.2 2% 31,719 23% Worldwide Total
1,388.3 6% 383,274 4%
Regional Net Sales and Foreign Exchange (“FX”) Impact
Region Reported Net Sales
3Q '16 (mil)
Growth/Decline
including FX
Growth/Decline
excluding FX
North America $ 241.0 10 % 10 % Asia Pacific $
231.4 3 % 1 % EMEA $ 201.6 10 % 15 % Mexico $ 112.8 -1 % 14 % South
& Central America $ 121.0 -12 % -9 % China $ 214.2
-5 % 1 % Worldwide Total $ 1,122.0 2 %
5 %
Outlook
Based on current business trends the company’s fourth quarter
2016 and full year 2017 guidance are as follows:
Three Months Ending Twelve Months Ending December 31, 2016
December 31, 2016
Low High
Low High Volume Point Growth vs 2015
(1.5%) 2.5% 4.5% 5.5% Net Sales Growth vs 2015 (2.5%) 1.5% 1.0%
2.0% Diluted EPS $0.90 $1.10 $2.77 $2.97 Adjusted(a) Diluted EPS
$0.80 $1.00 $4.65 $4.85 Cap Ex ($ millions) $33.0 $43.0 $145.0
$155.0 Effective Tax Rate 25.0% 28.0% 28.0% 30.0% Adjusted
Effective Tax Rate 27.5% 30.5% 28.5% 30.5% Currency Adjusted(b) Net
Sales Growth vs 2015 (0.5%) 3.5% 6.3% 7.3% Currency Adjusted(b)
Diluted EPS $0.92 $1.12 $5.61 $5.81 Twelve Months Ending
December 31, 2017
Low High Volume Point
Growth vs 2016 2.0% 5.0% Net Sales Growth vs 2016 3.5% 6.5% Diluted
EPS (c) $3.95 $4.35 Adjusted(a) Diluted EPS $4.60 $5.00 Cap Ex ($
millions) $130.0 $160.0 Effective Tax Rate (c) 27.5% 29.5% Currency
Adjusted Net Sales Growth vs 2016 3.9% 6.9% Currency Adjusted
Diluted EPS $4.75 $5.15
(a) Adjusted net income and adjusted diluted EPS are both
non-GAAP measure and, for the purposes of 2016 results and
guidance, exclude the impact of expenses relating to challenges to
the company’s business model, regulatory inquiries, expenses
related to the recovery of re-audit expenses, award amount in
connection with the re-audit, the impact of non-cash interest costs
associated with the company’s convertible notes, regulatory
settlements, costs related to the FTC settlement implementation and
China grant income. Adjusted diluted EPS, for the purposes of 2017
guidance, excludes the impact of expenses relating to challenges to
the company’s business model, the impact of non-cash interest costs
associated with the company’s convertible notes and costs related
to the FTC settlement implementation. See Schedule A –
“Reconciliation of Non-GAAP Financial Measures” for a detailed
reconciliation of adjusted net income to net income calculated in
accordance with GAAP and a reconciliation of adjusted diluted EPS
to diluted EPS calculated in accordance with GAAP and a discussion
of why we believe these non-GAAP measures are useful.(b) Excludes
the impact of Venezuela price increases tied to FX rate
movements(c) Excludes any ongoing tax effects from the exercise of
equity awards that could impact our tax rate beginning fiscal year
2017 due to a recently issued stock compensation accounting
standard.
Forward guidance is based on the average daily exchange rates of
the first two weeks of October.
Adjusted1 diluted EPS guidance for the fourth quarter 2016
includes a projected currency headwind of approximately $0.12 per
diluted share versus the fourth quarter of 2015.
Full year 2016 adjusted1 diluted EPS guidance includes a
projected currency headwind of approximately $0.96 per diluted
share, compared to 2015, which is $0.06 higher than the headwind
included in the guidance the company provided a quarter ago.
Full year 2017 adjusted1 diluted EPS guidance includes a
projected currency headwind of approximately $0.15 per diluted
share, compared to 2016.
The Herbalife Investor Relations 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.
Third Quarter 2016 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 1, 2016, 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 82701587). 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 82701587). The webcast of the teleconference will be
archived and available on Herbalife's website.
About Herbalife Ltd.
Herbalife is a global nutrition company that has been changing
people's lives with great products since 1980. Our nutrition,
weight-management, energy and fitness and personal care products
are available exclusively to and through dedicated Herbalife
Independent Members in more than 90 countries. We are committed to
fighting the worldwide problems of poor nutrition and obesity by
offering high-quality products, one-on-one coaching with an
Herbalife Member and a community that inspires customers to live a
healthy, active life.
We support the Herbalife Family Foundation (HFF) and
its Casa Herbalife programs to help bring good nutrition
to children in need. We also sponsor more than 190 world-class
athletes, teams and events around the globe,
including Cristiano Ronaldo, the LA Galaxy and
champions in many other sports.
The company has over 8,000 employees worldwide, and its shares
are traded on the New York Stock Exchange (NYSE: HLF)
with net sales of $4.5 billion in 2015. To learn more,
visit Herbalife.com or IAmHerbalife.com.
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, our Members;
- improper action by our employees or
Members in violation of applicable law;
- adverse publicity associated with our
products or network marketing organization, including our ability
to comfort the marketplace and regulators regarding our compliance
with applicable laws;
- changing consumer preferences and
demands;
- 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;
- the consent order entered into with the
FTC, the effects thereof and any failure to comply therewith;
- 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
interpretation and enforcement of legislation in China governing
direct selling;
- our inability to obtain the necessary
licenses to expand our direct selling business in China;
- adverse changes in the Chinese
economy;
- 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;
- our reliance upon, or the loss or
departure of any member of, our senior management team which could
negatively impact our Member relations and operating results;
- U.S. and foreign laws and regulations
applicable to our international operations;
- restrictions imposed by covenants in
our credit facility;
- uncertainties relating to the
application of transfer pricing, duties, value added taxes, and
other tax regulations, and changes thereto;
- changes in tax laws, treaties or
regulations, or their interpretation;
- taxation relating to our Members;
- product liability claims;
- our incorporation under the laws of the
Cayman Islands;
- 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.
1 Adjusted net income and adjusted diluted EPS are both non-GAAP
measure and, for the purposes of 2016 results and guidance, exclude
the impact of expenses relating to challenges to the company’s
business model, regulatory inquiries, expenses related to the
recovery of re-audit expenses, award amount in connection with the
re-audit, the impact of non-cash interest costs associated with the
company’s convertible notes, regulatory settlements, costs related
to the FTC settlement implementation and China grant income.
Adjusted diluted EPS, for the purposes of 2017 guidance, excludes
the impact of expenses relating to challenges to the company’s
business model, the impact of non-cash interest costs associated
with the company’s convertible notes and costs related to the FTC
settlement implementation. See Schedule A – “Reconciliation of
Non-GAAP Financial Measures” for a detailed reconciliation of
adjusted net income to net income calculated in accordance with
GAAP and a reconciliation of adjusted diluted EPS to diluted EPS
calculated in accordance with GAAP and a discussion of why we
believe these non-GAAP measures are useful.2 Prior year amounts
have been updated for comparative purposes to adjust for China
grant income recognized in 2015. See Schedule A – “Reconciliation
of Non-GAAP Financial Measures” for a detailed reconciliation of
adjusted net income to net income calculated in accordance with
GAAP and a reconciliation of adjusted diluted EPS to diluted EPS
calculated in accordance with GAAP and a discussion of why we
believe these non-GAAP measures are useful.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
are active in more than one region but are counted only once in the
worldwide amount.
RESULTS OF OPERATIONS:
Herbalife Ltd. and Subsidiaries Condensed Consolidated Statements
of Income (In millions, except per share amounts) (Unaudited)
Three Months Ended
Nine Months Ended
9/30/2016
9/30/2015 9/30/2016
9/30/2015 North
America $ 241.0 $ 219.4 $ 753.5 $ 676.1 Mexico 112.8 113.4 341.8
366.2 South and Central America 121.0 138.1 367.9 433.3 EMEA 201.6
182.5 619.0 562.7 Asia Pacific 231.4 224.6 687.1 706.5 China
214.2 224.9 674.1 625.8
Worldwide Net Sales 1,122.0 1,102.9 3,443.4 3,370.6 Cost of
Sales (1) 209.1 206.9 658.5
651.6 Gross Profit 912.9 896.0 2,784.9 2,719.0
Royalty Overrides 320.3 304.7 968.9 946.4 Selling, General and
Administrative Expenses (2) 441.3 433.1 1,545.2 1,335.0 Other
Operating Income (3) (0.2 ) (3.4 ) (29.1 )
(3.4 ) Operating Income 151.5 161.6 299.9 441.0 Interest
Expense, net 22.1 24.1 70.1 69.3 Other Expense, net (4) -
- - 2.3 Income
Before Income Taxes 129.4 137.5 229.8 369.4 Income Taxes
41.7 43.9 69.2 114.8
Net Income $ 87.7 $ 93.6 $ 160.6 $
254.6 Weighted Average Shares Outstanding: Basic 83.1
82.6 83.0 82.5 Diluted 86.4 85.7 86.1 85.1 Earnings Per
Share: Basic $ 1.06 $ 1.13 $ 1.94 $ 3.09
Diluted $ 1.01 $ 1.09 $ 1.87 $ 2.99
(1) Cost of Sales includes $0.2 million and $1.9 million of
inventory write downs related to Venezuela for the three and nine
months ended September 30, 2015, respectively.(2) Selling, General
and Administrative Expenses includes $203 million related to
regulatory settlements for the nine months ended September 30, 2016
and $32.9 million pre-tax unfavorable impact related to the
remeasurement of Venezuela Bolivar-denominated assets and
liabilities at the SIMADI rate for the nine months ended September
30, 2015.(3) Other Operating Income relates to certain China grant
income.(4) Other Expense, net relates to the impairment of
investments in Bolivar-denominated bonds for the nine months ended
September 30, 2015.
Herbalife Ltd. and Subsidiaries Condensed Consolidated Balance
Sheets (In millions) (Unaudited) Sep 30, Dec 31,
2016 2015
ASSETS Current Assets: Cash & cash equivalents $ 788.3 $ 889.8
Receivables, net 87.9 69.9 Inventories 371.7 332.0 Prepaid expenses
and other current assets 198.0 161.1 Deferred income tax assets
113.5 113.5 Total Current Assets
1,559.4 1,566.3 Property, net 376.2 339.2 Deferred
compensation plan assets 30.2 29.3 Other assets 162.2 141.1
Marketing related intangibles and other intangible assets, net
310.1 310.2 Goodwill 94.5 91.8 Total
Assets $ 2,532.6 $ 2,477.9 LIABILITIES
AND SHAREHOLDERS' EQUITY (DEFICIT) Current Liabilities: Accounts
payable $ 86.4 $ 71.1 Royalty overrides 261.5 249.9 Accrued
compensation 126.9 128.8 Accrued expenses 239.3 228.7 Current
portion of long-term debt 425.3 229.5 Advance sales deposits 85.0
63.8 Income taxes payable 38.9 52.6
Total Current Liabilities 1,263.3 1,024.4 Non-current
liabilities Long-term debt, net of current portion 1,017.6 1,392.5
Deferred compensation plan liability 48.9 43.6 Deferred income tax
liabilities 2.6 0.4 Other non-current liabilities 76.5
70.5 Total Liabilities 2,408.9 2,531.4
Contingencies Shareholders' equity (deficit): Common shares
0.1 0.1 Paid-in capital in excess of par value 462.6 438.2
Accumulated other comprehensive loss (173.3 ) (165.5 ) Accumulated
deficit (165.7 ) (326.3 ) Total Shareholders' Equity
(Deficit) 123.7 (53.5 ) Total
Liabilities and Shareholders' Equity (Deficit) $ 2,532.6 $
2,477.9 Herbalife Ltd. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (In millions) (Unaudited)
Nine Months Ended
9/30/2016
9/30/2015 CASH FLOWS FROM
OPERATING ACTIVITIES Net income $ 160.6 $ 254.6 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 72.6 72.6 Excess tax benefits from
share-based payment arrangements (5.1 ) (1.5 ) Share-based
compensation expenses 30.3 34.2 Non-cash interest expense 42.0 39.8
Deferred income taxes (38.4 ) (1.5 ) Inventory write-downs 16.7
22.3 Foreign exchange transaction gain (1.4 ) (11.9 ) Foreign
exchange loss and other charges relating to Venezuela 4.4 37.2
Other (8.2 ) 8.9 Changes in operating assets and liabilities:
Receivables (14.6 ) (25.1 ) Inventories (56.7 ) (3.2 ) Prepaid
expenses and other current assets 7.0 0.4 Other assets (1.9 ) (16.8
) Accounts payable 17.5 18.3 Royalty overrides 14.1 5.6 Accrued
expenses and accrued compensation 11.9 61.7 Advance sales deposits
21.2 23.3 Income taxes (24.8 ) (26.6 ) Deferred compensation plan
liability 2.7 0.9 NET CASH PROVIDED BY
OPERATING ACTIVITIES 249.9 493.2 CASH
FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and
equipment (111.9 ) (57.5 ) Other 4.4 6.2
NET CASH USED IN INVESTING ACTIVITIES (107.5 )
(51.3 ) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on
senior secured credit facility and other debt (233.0 ) (202.6 )
Issuance costs relating to long-term debt - (6.2 ) Share
repurchases (12.5 ) (10.7 ) Excess tax benefits from share-based
payment arrangements 5.1 1.5 Other (0.9 ) 0.1
NET CASH USED IN FINANCING ACTIVITIES (241.3 ) (217.9
) EFFECT OF EXCHANGE RATE CHANGES ON CASH (2.6 )
(56.2 ) NET CHANGE IN CASH AND CASH EQUIVALENTS (101.5 ) 167.8 CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD 889.8
645.4 CASH AND CASH EQUIVALENTS, END OF PERIOD $
788.3 $ 813.2
SUPPLEMENTAL INFORMATION
SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited and unreviewed), (All tables provide Dollars in
millions, Except per Share Data)
In addition to its reported results and guidance calculated in
accordance with GAAP, the company has included in this release
adjusted net income and adjusted diluted EPS, performance measures
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 or forecasted results, in each case calculated in
accordance with GAAP, can provide useful supplemental information
for investors because they facilitate a period to period
comparative assessment of the company’s operating performance
relative to its performance based on reported or forecasted results
under GAAP, while isolating the effects of some items that vary
from period to period without any correlation to core operating
performance and eliminate certain charges that management believes
do not reflect the company’s operations and underlying operational
performance. The company’s definition of adjusted net income and
adjusted diluted earnings per share may not be comparable to
similarly titled measures of other companies because other
companies may not calculate them in the same manner as the company
does and should not be viewed in isolation from nor as alternatives
to net income or diluted EPS calculated in accordance with
GAAP.
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:
Three Months Ended Nine Months Ended
9/30/2016 9/30/2015 9/30/2016
9/30/2015 (in millions) Net (loss)
income, as reported $ 87.7 $ 93.6 $ 160.6 $ 254.6 Remeasurement,
impairment losses and other charges relating to Venezuela (1)(2) -
1.2 - 38.2 Expenses incurred responding to attacks on the company's
business model (1) (3) 3.1 3.6 10.7 15.0 Expenses related to
Regulatory inquiries (1) (4) 3.8 7.6 13.9 16.8 Expenses incurred
for the recovery of re-audit expenses (1) (5) 0.2 0.7 3.5 1.2
Foreign exchange loss (gain) from Euro/USD exposure on intercompany
balances (1) (6) - - - (7.4 ) Non-cash interest expense and
amortization of non-cash issuance costs (1) (7) 11.3 10.9 33.6 31.9
Regulatory settlements (1) (8) - - 203.0 - China grant income (1)
(9) (13) (0.2 ) (3.4 ) (29.1 ) (3.4 ) Expenses related to the
implementation of the FTC Consent Order (1) (10) 5.3 - 5.3 -
Recovery of defective manufacturing equipment previously impaired
(1) (11) - (3.1 ) - (3.1 ) Income tax adjustments for above items
(1) (12) (6.5 ) (3.4 ) (69.9 ) (21.6 )
Net income, as adjusted (13)(14) $ 104.7 $ 107.7 $
331.5 $ 322.1
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
certain items.
Three Months Ended Nine Months Ended 9/30/2016
9/30/2015 9/30/2016
9/30/2015 Diluted (loss)
earnings per share, as reported $ 1.01 $ 1.09 $ 1.87 $ 2.99
Remeasurement, impairment losses and other charges relating to
Venezuela (1)(2) - 0.01 - 0.45 Expenses incurred responding to
attacks on the company's business model (1) (3) 0.04 0.04 0.12 0.18
Expenses related to Regulatory inquiries (1) (4) 0.04 0.09 0.16
0.20 Expenses incurred for the recovery of re-audit expenses (1)
(5) - 0.01 0.04 0.01 Foreign exchange loss (gain) from Euro/USD
exposure on intercompany balances (1) (6) - - - (0.09 ) Non-cash
interest expense and amortization of non-cash issuance costs (1)
(7) 0.13 0.13 0.39 0.37 Regulatory settlements (1) (8) - - 2.36 -
China grant income (1) (9) (13) - (0.04 ) (0.34 ) (0.04 ) Expenses
related to the implementation of the FTC Consent Order (1) (10)
0.06 - 0.06 - Recovery of defective manufacturing equipment
previously impaired (1) (11) - (0.04 ) - (0.04 ) Income tax
adjustments for above items (1) (12) (0.07 ) (0.04 )
(0.81 ) (0.25 ) Diluted earnings per share, as
adjusted (13)(14) $ 1.21 $ 1.26 $ 3.85 $ 3.78
(1) Based on interim income tax reporting rules, these expenses
are not considered discrete items. As a result, the company's full
year effective tax rate is impacted by these items. When applying
the full year effective tax rate to year-to-date income, the
company's year-to-date tax provision recorded with respect to these
non-GAAP adjustments is different from the forecasted full-year tax
provision impact of these items. As a consequence, adjustments to
the year-to-date and quarterly tax impacts will be recorded as the
adjusted full year effective tax rate is applied to income in
subsequent periods. Additionally, adjustments to items unrelated to
these non-GAAP adjustments may have an effect on the income tax
impact of these non-GAAP adjustments in subsequent periods. The
company plans to update the income tax impact of these items in
subsequent interim reporting periods.(2) Excludes tax impact of
$0.9 million and $13.1 million for the three and nine months ended
Sept. 30, 2015, respectively.(3) Excludes tax impact of $1.0
million and $0.8 million for the three months ended Sept. 30, 2016
and 2015, respectively; and $2.9 million and $4.5 million for the
nine months ended Sept. 30, 2016 and 2015, respectively.(4)
Excludes tax impact of $1.6 million and $3.0 million for the three
months ended Sept. 30, 2016 and 2015, respectively; and $5.3
million and $6.4 million for the nine months ended Sept. 30, 2016
and 2015, respectively.(5) Excludes tax impact of ($0.1) million
and $0.3 million for the three months ended Sept. 30, 2016 and
2015, respectively; and $1.0 million and $0.4 million for the nine
months ended Sept 30, 2016 and 2015, respectively.(6) Excludes tax
impact of $0.8 million and $0.2 million for the three and nine
months ended Sept. 30, 2015, respectively.(7) Relates to non-cash
expense on our convertible notes and prepaid forward share
repurchase contract. Excludes tax impact of ($0.5) million and
($0.4) million for the three months ended Sept. 30, 2016 and 2015,
respectively; and ($1.8) million and ($0.9) million for the nine
months ended Sept. 30, 2016 and 2015, respectively.(8) Excludes tax
impact of $2.2 million and $68.7 million for the three and nine
months ended Sept. 30, 2016, respectively.(9) Excludes tax impact
of ($8.4) million for the nine months ended Sept. 30, 2016 and
($1.0) million for both the three and nine months ended Sept. 30,
2015.(10) Excludes tax impact of $2.2 million for both the three
and nine months ended Sept. 30, 2016.(11) Excludes tax impact of
($1.1) million for both the three and nine months ended Sept. 30,
2015.(12) Aggregates the individual tax impacts of each item as
described in greater detail in footnotes 2-11 above. Amounts may
not total due to rounding.(13) Prior year amounts have been updated
for comparative purposes to adjust for China grant income
recognized in 2015.(14) Amounts may not total due to rounding.
The following is a reconciliation of diluted earnings per share
guidance, presented in accordance with U.S. generally accepted
accounting principles, to adjusted diluted earnings per share
guidance for certain items.
Three Months Ending Twelve Months Ending December 31,
2016 December 31, 2016 Diluted EPS Guidance $0.90 -
$1.10 $2.77 - $2.97 Expenses incurred responding to attacks on the
company's business model (1) 0.04 0.16 Expenses related to
Regulatory inquiries (2) - 0.16 Expenses incurred for the recovery
of re-audit fees (3) 0.02 0.06 Award amount in connection with the
re-audit (4) (0.34) (0.34) Non-cash interest expense and
amortization of non-cash issuance costs (5) 0.13 0.52 Regulatory
settlements (6) - 2.35 China Grant Income (7) - (0.34) Expenses
related to the implementation of the FTC order (8) 0.05 0.11 Income
tax adjustments for above items (9) 0.00 (0.80) Adjusted Diluted
EPS Guidance (10) $0.80 - $1.00 $4.65 - $4.85
(1) Excludes tax impact of $0.9 million and $3.9 million for the
three and twelve months ended December 31, 2016, respectively.(2)
Excludes tax impact of $3.8 million for the twelve months ending
December 31, 2016.(3) Excludes tax impact of $0.5 million and $1.5
million for the three and twelve months ended December 31, 2016,
respectively.(4) This includes the amount awarded to the Company
for approximately $30 million in connection with the re-audit of
the Company’s 2010 to 2012 financial statements. Excludes tax
impact of $4.5 million for both the three and twelve months ended
December 31, 2016.(5) Relates to non-cash expense on our
convertible notes and prepaid forward share repurchase contract.
Excludes tax impact of $1.8 million for the three months ended
December 31, 2016.(6) Excludes tax impact of $0.5 million and $69.2
million for the three and twelve months ending December 31, 2016,
respectively.(7) Excludes tax impact of $0.0 million and ($8.4)
million for the three and twelve months ending December 31, 2016,
respectively.(8) Excludes tax impact of $1.4 million and $3.7
million for the three and twelve months ending December 31, 2016,
respectively.(9) Aggregates the individual tax impacts of each item
as described in greater detail in footnotes 1-8 above.(10) Amounts
may not total due to rounding.
The following is a reconciliation of diluted earnings per share
guidance, presented in accordance with U.S. generally accepted
accounting principles, to adjusted diluted earnings per share
guidance for certain items.
Twelve Months Ending December 31, 2017 Diluted EPS
Guidance (1) $3.95 - $4.35 Expenses incurred responding to attacks
on the company's business model (2) 0.06 Non-cash interest expense
and amortization of non-cash issuance costs (3) 0.50 Expenses
related to the implementation of the FTC order (4) 0.12 Income tax
adjustments for above items (5)
(0.05)
Adjusted Diluted EPS Guidance (6) $4.60 - $5.00
(1) Excludes the potential ongoing tax effects from the exercise
of equity awards that will impact our tax rate beginning fiscal
year 2017 due to a recently issued Stock Compensation accounting
standard.(2) Excludes tax impact of $1.5 million for the twelve
months ending December 31, 2017.(3) Relates to non-cash expense on
our convertible notes and prepaid forward share repurchase
contract.(4) Excludes tax impact of $3.0 million for the twelve
months ending December 31, 2017.(5) Aggregates the individual
tax impacts of each item as described in greater detail in
footnotes 2 and 4 above.(6) Amounts may not total due to
rounding.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161101006776/en/
Herbalife Ltd.Media Contact:Jennifer ButlerVP, Media
Relations213.745.0420orInvestor Contact:Alan QuanVP, Investor
Relations213.745.0541
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