LOS ANGELES -- (Business Wire)
Herbalife Ltd. (NYSE: HLF) (“Herbalife” or “Company”), today announced
updated guidance for the Company’s third quarter 2017 financial results
in order to provide shareholders with the most current information.
On August 21, 2017, the Company announced it had commenced a "modified
Dutch auction" self-tender offer to purchase for cash up to an aggregate
of $600 million of shares of its common stock, at a per share price not
less than $60.00 nor greater than $68.00. Additionally, for each share
tendered, shareholders will also receive a non-transferable contractual
contingent value right (“CVR”) allowing participants in the tender offer
to receive a contingent cash payment should Herbalife be acquired in a
going-private transaction within two years of the commencement of the
tender offer.
The tender offer is currently scheduled to expire at 5:00 p.m. New York
City time on Thursday, October 5, 2017. In order to assist shareholders
in determining whether to participate in the tender offer, and if so,
how many shares they may wish to tender at prices between $60.00 and
$68.00 per share, the Company is providing updated financial guidance in
this release as well as updated risk factors and other information in a
Form 8-K filed today. This updated guidance is appropriate in light of
the self-tender offer.
Updated Third Quarter 2017 Guidance
Based upon current information, updated third quarter 2017 guidance is
reflected in the following chart:
|
|
Three Months Ended
|
| |
September 30, 2017
|
| | Low |
| High |
Volume Point Growth vs 2016
| |
(6.0%)
| |
(4.8%)
|
Net Sales Growth vs 2016
| |
(3.4%)
| |
(1.9%)
|
Diluted EPS
| |
$0.63
| |
$0.73
|
Adjusted(a) Diluted EPS
| |
$0.80
| |
$0.90
|
Cap Ex ($ millions)
| |
$18.0
| |
$28.0
|
Effective Tax Rate
| |
22.5%
| |
24.5%
|
Adjusted Effective Tax Rate (a) | |
20.0%
| |
22.0%
|
Currency Adjusted Net Sales Growth vs 2016
| |
(3.1%)
| |
(1.6%)
|
Currency Adjusted Diluted EPS
| |
$0.84
| |
$0.94
|
| | | |
|
(a) Adjusted diluted EPS and adjusted effective tax
rate, 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, benefits from China grants, FTC
settlement implementation and expenses related to regulatory
inquiries. See the table below for a reconciliation of adjusted
diluted EPS to diluted EPS calculated in accordance with GAAP.
|
|
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 Ended
|
| |
September 30, 2017
|
| |
|
Diluted EPS Guidance
| |
$0.63 - $0.73
|
Expenses incurred responding to attacks on the company's business
model (1) | |
0.02
|
Non-cash interest expense and amortization of non-cash issuance
costs (2) | |
0.14
|
FTC Consent Order Implementation (3) | |
0.03
|
Expenses related to regulatory inquiries (4) | |
0.03
|
China grant income (5) | |
(0.04)
|
Income tax adjustments for above items (6) | |
(0.02)
|
Adjusted diluted EPS guidance (7) | |
$0.80 - $0.90
|
|
|
(1) Excludes tax impact of $0.5 million for the three
months ending September 30, 2017.
|
(2) Relates to non-cash expense on our convertible
notes and prepaid forward share repurchase contract.
|
(3) Excludes tax impact of $0.8 million for the three
months ending September 30, 2017.
|
(4) Excludes tax impact of $0.8 million for the three
months ending September 30, 2017.
|
(5) Excludes tax impact of ($1.2) million for the three
months ending September 30, 2017.
|
(6) Aggregates the individual tax impacts of each item
as described in greater detail in footnotes 1, 3, 4 and 5 above.
|
(7) Amounts may not total due to rounding.
|
|
The Company is currently in the process of compiling, analyzing and
finalizing the results for the third quarter and the Company's
independent registered public accounting firm has not yet completed its
review of the third quarter results. As such, there can be no assurance
that the final adjusted or GAAP earnings per diluted share will be
within the ranges specified. Herbalife expects to report its final
results for the third quarter of 2017 on November 2, 2017.
About Herbalife
Herbalife Nutrition is a global nutrition company whose purpose is to
make the world healthier and happier. The Company has been on a mission
for nutrition - changing people's lives with great nutrition products &
programs - since 1980. Together with our Herbalife Nutrition independent
distributors, we are committed to providing solutions to the worldwide
problems of poor nutrition and obesity, an aging population,
sky-rocketing public healthcare costs and a rise in entrepreneurs of all
ages. We offer high-quality, science-backed products, most of which are
produced in Company-operated facilities, one-on-one coaching with an
Herbalife Nutrition independent distributor, and a supportive community
approach that inspires customers to embrace a healthier, more active
lifestyle.
Our targeted nutrition, weight-management, energy and fitness and
personal care products are available exclusively to and through
dedicated Herbalife Nutrition distributors in more than 90 countries.
Through its corporate social responsibility efforts, Herbalife Nutrition
supports the Herbalife Family Foundation (HFF) and its Casa
Herbalife programs to help bring good nutrition to children in need. The
Company is also proud to sponsor more than 190 world-class athletes,
teams and events around the globe, including Cristiano Ronaldo, the LA
Galaxy, and numerous Olympic teams.
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
approximately $4.5 billion in 2016. To learn more, visit Herbalife.com
or IAmHerbalife.com.
The company also encourages investors to visit its investor relations
website at ir.herbalife.com
as financial and other information is updated and new information is
posted.
Forward-Looking Statements
This release contains "forward-looking statements" within the meaning
of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995.Forward-looking statements include, but are
not limited to, statements regarding the anticipated financial results
for the third quarter 2017, the anticipated expiration date and
consummation of the tender offer, satisfaction of the tender offer
conditions described the Offer to Purchase, as may be amended from time
to time, and the Company’s expectations, hopes or intentions regarding
the future. No assurances can be given that the tender offer will be
consummated, or that the Company will engage in any discussions or
negotiations with any party regarding a possible "going private"
transaction or that any "going private" transaction with respect to the
Company will be consummated. 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 and anti-pyramiding;
-
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;
-
uncertainties relating to the United Kingdom's vote to exit from the
European Union;
-
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171002006531/en/
Contacts:
Herbalife Nutrition
Media: Jennifer Butler
213-745-0420
jenb@herbalife.com
or
Investor
Relations: Eric Monroe
213-745-0449
ericm@herbalife.com
Source: Herbalife Ltd.
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