Herbalife Ltd. Announces Second Quarter 2009 Results
LOS ANGELES--(BUSINESS WIRE)-- Herbalife Ltd. (NYSE: HLF) today reported second quarter 2009 net sales of $571.8 million, a decrease of 10.6 percent compared to the same period of 2008, solely reflecting the unfavorable impact of currency fluctuations. Excluding the impact from currency fluctuations, local currency year-over-year net sales were flat with the second quarter 2008 results. For the quarter ended June 30, 2009, the company reported net income of $48.3 million, or $0.77 per diluted share, compared to $67.1 million, or $1.01 per diluted share in the second quarter of 2008, reflecting lower net sales and gross profit margins attributable to unfavorable currency fluctuations, coupled with a higher effective tax rate reflecting country mix, partially offset by accretion from the company's share repurchase program. Excluding the impact from adjusting items in the second quarter (1), adjusted net income was $49.3 million, or $0.78 in adjusted diluted earnings per share, reflecting a decrease of 27.4 percent and 24.3 percent, respectively, compared to the same period in 2008.
For the six months ended June 30, 2009, the company produced cash flow from operations of $122.3 million, paid dividends of $24.6 million and invested $27.1 million in capital expenditures, primarily relating to its global roll-out of Oracle. The company's net debt balance (1) at the end of the second quarter was $132.5 million, reflecting an improvement of $68.3 million from December 2008.
"We were very pleased with our revenue results as this quarter represented the most difficult volume point comparison of 2009 due to the second quarter 2008 introduction of our 30th Year Anniversary promotion and it was the last quarter before we passed along the 15 percent VAT in Mexico," said Chairman and Chief Executive Officer Michael O. Johnson. "During the second quarter we experienced sequential growth in volume points from the first quarter in key markets such as the U.S. up 7.7 percent, Mexico up 3.2 percent and China up 57.5 percent. This volume point improvement is a reflection of the outstanding effort of our independent distributors to grow their businesses and the resilience of our business model. We are in a unique position to succeed during economic downturns because we offer an opportunity for part-time or full-time income, and healthy nutrition and weight management products in the midst of a global obesity epidemic. Our message to our distributors is straightforward - have confidence in yourself and our company because there has never been a better time to introduce someone to Herbalife."
During the second quarter 2009 the company added 51,728 new Sales Leaders (2), which is 16.9 percent lower than the same period in 2008. Additionally, total Sales Leaders (2) decreased 5.1 percent to 390,743 in the second quarter of 2009 compared to the same period in 2008, which reflects a slight reduction in retention, 40.3 percent as of the requalification period in 2009 versus 41.0 percent in the 2008 requalification period, coupled with fewer new sales leaders in 2009. During the second quarter 2009, the company's President's Team membership increased 10.3 percent to 1,233 members versus the second quarter of 2008 and the company's prestigious Chairman's Club and China Brand Ambassador membership increased 8.6 percent to 38 members, versus the second quarter of 2008.
1 See Schedule D - "Reconciliation of Non-GAAP Financial
Measures" for more detail
2 Schedule titled "New Sales
Leaders by Region" and "Total Sales Leaders by Region" for more detail
Business Highlights
The company hosted two Extravaganzas during the second quarter, in Brazil and Korea, which were attended by almost 26,000 distributors. Additionally, the North America region hosted a series of Leadership Development Weekends (LDWs) which focus on providing detailed training to qualifying supervisors. These LDWs were held in 12 cities in the U.S., three in Canada, and one in Jamaica. In total, over 9,500 supervisors attended the LDW events. Also in the second quarter, the U.S. hosted a Nutrition Club tour in 19 cities. In total, over 12,300 distributors attended the tour. Product launches during the quarter included Xtra-Cal Advanced and Joint Support Advanced in the U.S., Niteworks, developed by Nobel Laureate Dr. Lou Ignarro, in Mexico, and Personalized Protein Powder in China.
In early July 2009, China's Ministry of Commerce granted five additional licenses for the company to conduct direct-selling business in the provinces of Fujian, Shan'Xi, Sichuan, Hubei, and Shanghai. Licenses for these new provinces are effective immediately, except Shanghai which will be activated upon government review of our service outlets for which the timing remains uncertain. Additionally, the company's license for Beijing, which was granted in July 2008 with the same exception as noted above for Shanghai, is now active. The company now has direct-selling licenses in 11 provinces representing an addressable population of approximately 599 million.
Second Quarter 2009 Regional Key Metrics
Volume Increase/ New Increase/ Total Increase/
Points (Decrease) Sales (Decrease) Sales (Decrease)
Region (Mil) (Y/Y) Leaders (Y/Y) Leaders (Y/Y)
North America 200.5 (2.3%) 10,633 (19.0%) 77,212 (3.8%)
Asia Pacific 125.4 13.6% 13,183 16.0% 77,021 8.7%
(excluding China)
EMEA 117.3 (9.1%) 6,704 (21.3%) 61,695 (11.7%)
Mexico 124.3 (18.7%) 6,316 (23.1%) 58,372 (18.3%)
South & Central 98.0 (11.9%) 8,121 (38.1%) 78,652 (7.3%)
America
China 32.8 (1.8%) 6,771 (13.9%) 37,791 10.1%
The North America region reported volume points of 200.5 million in the second quarter of 2009, reflecting a decrease of 2.3 percent versus the same period of 2008. Volume point growth in the U.S., the largest country in the region, decreased 1.9 percent compared to 2008, reflecting an increase in the Spanish speaking market of 0.6 percent and a decrease in the non-Spanish speaking markets of 6.8 percent compared to the second quarter of 2008. New Sales Leaders in the region were 10,633 during the quarter ended June 30, 2009, a decrease of 19.0 percent versus the same period last year. Total Sales Leaders in the region decreased 3.8 percent to 77,212 as of June 30, 2009 versus June 30, 2008.
The Asia Pacific region reported volume points of 125.4 million in the second quarter of 2009, reflecting an increase of 13.6 percent over the same period of 2008. Top markets in this region were Taiwan, with volume point growth of 4.2 percent; Korea, with volume point growth of 48.5 percent; and Malaysia with volume point growth of 44.2 percent, all compared to the same period in 2008. New Sales Leaders in the region were 13,183 during the quarter ended June 30, 2009, an increase of 16.0 percent versus the same period last year. Total Sales Leaders increased 8.7 percent to 77,021 as of June 30, 2009 versus June 30, 2008.
The Europe, Middle East and Africa (EMEA) region reported volume points of 117.3 million in the second quarter of 2009, reflecting a decrease of 9.1 percent versus the same period of 2008. Top markets in this region were Italy, with volume point growth of 7.9 percent and France with a volume point decline of 23.4 percent, both compared to the same period in 2008. New Sales Leaders in the region were 6,704 during the quarter ended June 30, 2009, a decrease of 21.3 percent versus the same period last year. Total Sales Leaders in the region decreased 11.7 percent to 61,695 as of June 30, 2009 versus June 30, 2008.
The Mexico region reported volume points of 124.3 million in the second quarter of 2009, reflecting a decrease of 18.7 percent versus the same period of 2008. During the third quarter of 2008, the company began collecting a Value Added Tax (VAT) from our Mexican distributors that has had a negative impact on our financial results. Distributors in Mexico previously paid zero percent VAT on their purchases for most of our nutrition products. This effective price increase, which impacts approximately 60 percent of our volume points in the Mexican market, adversely affected sales in Nutrition Clubs, which are retail price-sensitive, and as a result has caused volume to decline from pre-VAT levels. We are in the process of challenging this assessment on several fronts; however, as the products continue to be subject to this VAT, we expect year-over-year volume growth to be constrained. New Sales Leaders in the Mexico region were 6,316 during the quarter ended June 30, 2009, or 23.1 percent lower than the same period last year. Total Sales Leaders in the region decreased 18.3 percent to 58,372 as of June 30, 2009 versus June 30, 2008.
The South and Central American region reported volume points of 98.0 million in the second quarter of 2009, reflecting a decrease of 11.9 percent versus the same period of 2008. The top markets in this region were Brazil, with volume point growth of 10.6 percent and Venezuela, with a volume point decline of 28.6 percent, both compared to the same period in 2008. New Sales Leaders in the region were 8,121 during the quarter ended June 30, 2009, or 38.1 percent lower than the same period last year. Total Sales Leaders in the region decreased 7.3 percent to 78,652 as of June 30, 2009 versus June 30, 2008.
The China region reported volume points of 32.8 million in the second quarter of 2009, reflecting a decrease of 1.8 percent over the same period of 2008. The company is currently licensed for direct sales in 11 provinces. New Sales Employees in China were 6,771 during the quarter ended June 30, 2009, a decrease of 13.9 percent versus the same period last year. Total Sales Employees increased 10.1 percent to 37,791 as of June 30, 2009 versus June, 2008.
Third Quarter 2009 and Full Year 2009 Guidance
The company's third quarter 2009 diluted earnings per share guidance range is $0.66 to $0.69 (3) (4) (5) on a volume point growth of zero percent to one percent and a net sales decline of four percent to six percent compared to the same period in 2008, respectively, and an effective tax rate range of 31 percent to 32 percent. Assuming constant currency levels from the third quarter of 2008, the company's net sales growth range would be two percent to four percent and its diluted earnings per share range would be $0.86 to $0.89. The company's third quarter 2009 capital expenditures are expected to be in the range of $15 to $18 million.
Despite the stronger than expected volume points and earnings in the second quarter, the company is maintaining a cautious outlook for 2009 guidance reflecting current trends in volume point growth, assuming spot foreign currency rates as of late June 2009 for the balance of the year, higher cost of goods in the third quarter reflecting currency fluctuations over the past several months, coupled with a higher share base reflecting the dilutive nature of stock options due to current share price levels. Therefore, the company's new full year diluted earnings per share guidance of $2.97 to $3.03 (3) (4) (5) on volume point growth of zero to one percent and net sales decline of four percent to five percent compared to 2008, respectively, along with an effective tax rate range of 31 to 32 percent. Assuming constant currency levels from 2008, the company's net sales growth range would be two percent to four percent and its diluted earnings per share range would be $3.79 to $3.85. Full year 2009 capital expenditures are expected in the range of $55 million to $60 million.
3 Excludes the potential impact of expenses relating to the
company's December 2008 restructuring
4 Excludes the
accretion/dilution impact should the company elect to repurchase shares
under its share repurchase program.
5 Excludes the
potential impact of repatriating dollars from Venezuela at an exchange
rate which differs from the official exchange rate
Second Quarter Earnings Conference Call
Herbalife's senior management team will host an investor conference call to discuss its second quarter 2009 financial results and provide an update on current business trends on Tuesday, August 4 at 8 a.m. PDT (11 a.m. EDT).
The dial-in number for this conference call for domestic callers is (866) 219-5268 and (703) 639-1120 for international callers. Live audio of the conference call will be simultaneously webcast in the Investor Relations section of the company's Web site at http://ir.herbalife.com.
An audio replay will be available following the completion of the conference call in MP3 format or by dialing (866) 837-8032 (domestic callers) and (703) 925-2474 (international callers) and entering access code 336024. The webcast of the teleconference will be archived and available on Herbalife's Web site.
About Herbalife Ltd.
Herbalife Ltd. (NYSE:HLF) is a global network marketing company that sells weight-management, nutrition, and personal care products intended to support a healthy lifestyle. Herbalife products are sold in 70 countries through a network of approximately 1.9 million independent distributors. The company supports the Herbalife Family Foundation and its Casa Herbalife program to help bring good nutrition to children. Herbalife's Web site contains a significant amount of information about Herbalife, including financial and other information for investors at http://ir.herbalife.com. The company encourages investors to visit its Web site from time to time, as information is updated and new information is posted.
Disclosure Regarding Forward-Looking Statements
This document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words "may," "will," "estimate," "intend," "continue," "believe," "expect" or "anticipate" and any other similar words.
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
distributors;
-- adverse publicity associated with our products or network marketing
organization;
-- uncertainties relating to interpretation and enforcement of recently
enacted 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, Chinese legal system or Chinese
governmental policies;
-- improper action by our employees or international distributors in
violation of applicable law;
-- changing consumer preferences and demands;
-- 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;
-- risks associated with operating internationally, including foreign
exchange and devaluation risks;
-- 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 on our management team;
-- 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 distributors;
-- product liability claims;
-- any collateral impact resulting from the ongoing worldwide financial
"crisis," including the availability of liquidity to us, our customers
and our suppliers or the willingness of our customers to purchase
products in a recessionary economic environment; and
-- whether we will purchase any of our shares in the open markets or
otherwise.
RESULTS OF OPERATIONS:
Herbalife Ltd.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Quarter Ended Six Months Ended
6/30/2009 6/30/2008 6/30/2009 6/30/2008
North America $ 138,389 $ 133,234 $ 261,464 $ 251,825
Mexico 66,352 102,763 125,591 196,330
South and Central America 85,404 98,630 160,668 204,702
EMEA 126,575 159,856 249,888 317,869
Asia Pacific 114,539 106,417 228,483 210,095
China 40,546 38,800 67,394 63,316
Worldwide net sales 571,805 639,700 1,093,488 1,244,137
Cost of Sales 122,442 128,049 224,842 245,715
Gross Profit 449,363 511,651 868,646 998,422
Royalty Overrides 186,750 215,300 362,282 428,020
SGA 190,794 203,113 372,252 387,513
Operating Income 71,819 93,238 134,112 182,889
Interest Expense - net 1,338 3,167 3,050 6,957
Income before income taxes 70,481 90,071 131,062 175,932
Income Taxes 22,228 22,991 41,267 46,485
Net Income 48,253 67,080 89,795 129,447
Basic Shares 61,642 64,282 61,583 64,301
Diluted Shares 62,929 66,110 62,413 66,559
Basic EPS $ 0.78 $ 1.04 $ 1.46 $ 2.01
Diluted EPS $ 0.77 $ 1.01 $ 1.44 $ 1.94
Dividends declared per share $ 0.20 $ 0.20 $ 0.40 $ 0.40
Herbalife Ltd.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
Jun 30, Dec 31,
2009 2008
ASSETS
Current Assets:
Cash & cash equivalents $ 181,436 $ 150,847
Receivables, net 78,711 70,002
Inventory, net 125,870 134,392
Prepaid expenses and other current assets 89,540 89,214
Deferred income taxes 42,003 40,313
Total Current Assets 517,560 484,768
Property and equipment, net 173,365 175,492
Deferred compensation plan assets 16,006 15,754
Deferred financing cost, net 1,746 1,989
Marketing related intangibles 310,060 310,060
Goodwill 110,677 110,677
Other assets 23,170 22,578
Total Assets $ 1,152,584 $ 1,121,318
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 43,125 $ 41,084
Royalty Overrides 128,916 130,369
Accrued compensation 44,668 60,629
Accrued expenses 106,979 104,795
Current portion of long term debt 13,387 15,117
Advance sales deposits 30,260 12,603
Income taxes payable 26,323 37,302
Total Current Liabilities 393,658 401,899
Non-current liabilities
Long-term debt, net of current portion 300,578 336,514
Deferred compensation 14,535 13,979
Deferred income taxes 103,549 103,675
Other non-current liabilities 24,290 23,520
Total Liabilities 836,610 879,587
Contingencies
Shareholders' equity:
Common shares 122 123
Additional paid in capital 207,385 197,715
Accumulated other comprehensive loss (28,418 ) (28,614 )
Retained earnings 136,885 72,507
Total Shareholders' Equity 315,974 241,731
Total Liabilities and Shareholders' Equity $ 1,152,584 $ 1,121,318
Herbalife Ltd.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
6/30/2009 6/30/2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 89,795 $ 129,447
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 29,686 22,244
Deficiency (Excess) tax benefits from share-based 982 (12,878 )
payment arrangements
Share based compensation expenses 10,024 8,721
Amortization of discount and deferred financing 244 238
costs
Deferred income taxes (1,657 ) 586
Unrealized foreign exchange transaction loss 2,545 (2,876 )
(gain)
Other 154 737
Changes in operating assets and liabilities:
Receivables (4,938 ) (12,719 )
Inventories 12,022 3,166
Prepaid expenses and other current assets 971 (24,109 )
Other assets (679 ) (591 )
Accounts payable 1,202 6,280
Royalty overrides (3,622 ) (2,821 )
Accrued expenses and accrued compensation (19,587 ) (4,949 )
Advance sales deposits 17,164 15,702
Income taxes payable (12,599 ) (4,314 )
Deferred compensation plan liability 557 4
NET CASH PROVIDED BY OPERATING ACTIVITIES 122,264 121,868
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property (26,801 ) (37,590 )
Proceeds from sale of property 60 27
Deferred compensation plan assets (252 ) 263
NET CASH USED IN INVESTING ACTIVITIES (26,993 ) (37,300 )
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (24,617 ) (25,586 )
Borrowings from long-term debt 59,000 40,000
Principal payments on long-term debt (97,009 ) (61,603 )
Share repurchases (972 ) (94,193 )
(Deficiency) Excess tax benefits from share-based (982 ) 12,878
payment arrangements
Proceeds from exercise of stock options and sale 791 15,609
of stock under employee stock purchase plan
NET CASH USED IN FINANCING ACTIVITIES (63,789 ) (112,895 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH (893 ) 3,306
NET CHANGE IN CASH AND CASH EQUIVALENTS 30,589 (25,021 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 150,847 187,407
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 181,436 $ 162,386
CASH PAID DURING THE PERIOD
Interest paid $ 6,560 $ 9,535
Income taxes paid $ 54,473 $ 46,501
NON CASH ACTIVITIES
Assets acquired under capital leases and other $ 327 $ 27,295
long-term debt
Herbalife Ltd
New Sales Leaders by Region
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2009 2008 % Change 2009 2008 % Change
North America 10,633 13,129 (19.0)% 18,526 22,139 (16.3)%
Mexico 6,316 8,212 (23.1)% 10,667 15,567 (31.5)%
South & Central America 8,121 13,128 (38.1)% 15,836 25,908 (38.9)%
EMEA 6,704 8,522 (21.3)% 11,940 15,055 (20.7)%
Asia Pacific (excluding 13,183 11,367 16.0% 23,920 20,144 18.7%
China)
Total New Supervisors 44,957 54,358 (17.3)% 80,889 98,813 (18.1)%
New China Sales 6,771 7,867 (13.9)% 11,098 12,217 (9.2)%
Employees
Worldwide Total New 51,728 62,225 (16.9)% 91,987 111,030 (17.2)%
Sales Leaders (1)
Herbalife Ltd
Total Sales Leaders by Region
(Unaudited)
As of June 30,
2009 2008 % Change
North America 77,212 80,277 (3.8 )%
Mexico 58,372 71,464 (18.3 )%
South & Central America 78,652 84,830 (7.3 )%
EMEA 61,695 69,832 (11.7 )%
Asia Pacific (excluding China) 77,021 70,885 8.7 %
Total Supervisors 352,952 377,288 (6.5 )%
China Sales Employees 37,791 34,326 10.1 %
Worldwide Total Sales Leaders (1) 390,743 411,614 (5.1 )%
Note: (1) - We refer to supervisors who qualified in 69 countries under
our traditional marketing plan plus China sales employees collectively as
'Sales Leaders'.
Herbalife Ltd
Volume Points by Region
(Unaudited, In thousands)
Three Months Ended June 30, Six Months Ended June 30,
2009 2008 % Change 2009 2008 % Change
North America 200,457 205,315 (2.4)% 386,955 383,418 0.9%
Mexico 124,270 152,848 (18.7)% 244,660 300,939 (18.7)%
South & Central 97,968 111,124 (11.8)% 200,542 230,001 (12.8)%
America
EMEA 117,346 128,960 (9.0)% 241,442 266,064 (9.3)%
Asia Pacific 125,410 110,413 13.6% 270,408 216,728 24.8%
(excluding China)
China 32,802 33,410 (1.8)% 53,634 54,092 (0.8)%
Worldwide 698,253 742,070 (5.9)% 1,397,641 1,451,242 (3.7)%
SUPPLEMENTAL INFORMATION
SCHEDULE A: FINANCIAL GUIDANCE
2009 Guidance
For the Three Months Ending September 30, 2009 and Twelve Months Ending
December 31, 2009
Three Months Ending Twelve Months Ending
September 30, 2009 December 31, 2009
Low High Low High
Volume point growth vs. 2008 0% 1% 0% 1%
Net sales growth vs. 2008 (6%) (4%) (5%) (4%)
EPS (1) (2) (3) $0.66 $0.69 $2.97 $3.03
Cap Ex ($ millions) $15.0 $18.0 $55.0 $60.0
Effective Tax Rate 31.0% 32.0% 31.0% 32.0%
(1) Excludes the potential impact of expenses relating to the company's
December 2008 restructuring.
(2) Excludes any accretion/dilution impact should the company elect to
repurchase shares under its share repurchase program.
(3) Excludes the potential impact of repatriating dollars from Venezuela
at an exchange rate that differs from the official exchange rate.
SCHEDULE B: NET SALES OF TOP 10 COUNTRIES
(In Millions)
Q2 2009 Q2 2008
FX FX
Currency Benefit Currency Benefit
Reported Adjusted (Loss) Reported Adjusted (Loss)
1 USA $134.2 $134.2 $0.0 1 USA $127.7 $127.7 $0.0
2 Mexico $66.4 $84.8 ($18.4) 2 Mexico $102.8 $98.5 $4.3
3 China $40.5 $39.8 $0.7 3 China $38.8 $35.2 $3.6
4 Brazil $36.4 $45.6 ($9.2) 4 Brazil $38.5 $32.1 $6.4
5 Taiwan $35.5 $38.6 ($3.1) 5 Italy $32.7 $28.2 $4.5
6 Italy $31.0 $35.5 ($4.5) 6 Taiwan $32.5 $29.9 $2.6
7 Korea $24.8 $31.3 ($6.5) 7 Venezuela $24.9 $24.9 $0.0
8 Venezuela $21.0 $21.0 $0.0 8 Korea $20.3 $22.2 ($1.9)
9 Malaysia $14.5 $16.2 ($1.7) 9 Japan $17.6 $15.1 $2.5
10 Japan $11.2 $12.9 ($1.7) 10 France $16.1 $13.9 $2.2
Total of $415.5 $459.9 ($44.4) Total of $451.9 $427.7 $24.2
Top 10 Top 10
TOTAL NET $571.8 $639.7 ($67.9) TOTAL NET $639.7 $599.5 $40.2
SALES SALES
Note: Currency adjusted net sales use the prior year foreign currency rates to adjust
current year reported net sales figures.
SCHEDULE C: VOLUME POINTS FOR TOP 10 COUNTRIES
(In Millions)
Q2 2009 Q2 2008
1 USA 194.3 1 USA 198.1
2 Mexico 124.3 2 Mexico 152.8
3 Brazil 41.6 3 Taiwan 38.2
4 Taiwan 39.9 4 Brazil 37.6
5 China 32.8 5 China 33.4
6 Korea 32.4 6 Italy 24.4
7 Italy 26.3 7 Korea 21.8
8 Venezuela 15.3 8 Venezuela 21.4
9 Malaysia 14.3 9 Japan 12.3
10 France 8.9 10 Peru 12.0
Total of Top 10 530.1 Total of Top 10 552.0
TOTAL VOLUME POINTS 698.3 TOTAL VOLUME POINTS 742.1
SCHEDULE D: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
(Dollars in Thousands, Except Per Share Data)
In addition to its reported results, the Company has included in the tables
below adjusted results 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
results, can provide useful supplemental information for investors analyzing
period to period comparisons of the Company's results.
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 Six Months Ended
6/30/2009 6/30/2008 6/30/2009 6/30/2008
Net income, as reported $48,253 $67,080 $89,795 $129,447
Restructuring Expenses associated
with realignment for growth - 859 405 1,071
initiative (1)
Tax expense resulting from an
international income tax audit 1,091 - 1,091 -
settlement
Net income, as adjusted $49,344 $67,939 $91,291 $130,518
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 Six Months Ended
6/30/2009 6/30/2008 6/30/2009 6/30/2008
Diluted earnings per share, as $0.77 $1.01 $1.44 $1.94
reported
Restructuring Expenses associated
with realignment for growth - 0.02 0.01 0.02
initiative (1)
Tax expense resulting from an
international income tax audit 0.02 - 0.02 -
settlement
Diluted earnings per share, as $0.78 $1.03 $1.46 $1.96
adjusted (2)
The following is a reconciliation of total long-term debt to net debt:
6/30/2009 12/31/2008
Total long-term debt (current and long-term portion) $ 313,965 $ 351,631
Less: Cash and cash equivalents 181,436 150,847
Net debt $ 132,529 $ 200,784
The restructuring charge adjustments reflect items that although they, or
(1) similar items, might recur are of a nature and magnitude that identifying
them separately provides investors with a greater ability to project the
Company's future performance.
(2) Amounts may not total due to rounding
Source: Herbalife Ltd.
Released Aug 3, 2009 • 4:10pm EDT