LOS ANGELES--(BUSINESS WIRE)-- Herbalife Nutrition Ltd. (NYSE: HLF) today reported financial results for the fourth quarter and full year ended December 31, 2020.

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Herbalife Nutrition Reports Record-Breaking 2020 Net Sales with 14% Growth versus Prior Year; Raises 2021 Net Sales Guidance; Announces New $1.5 Billion Share Repurchase Authorization (Graphic: Business Wire)

“In 2020, we saw our best year ever with record net sales as our distributors met the global demand for better nutrition,” said John Agwunobi, Chairman and CEO of Herbalife Nutrition.

QUARTER AND FULL YEAR HIGHLIGHTS

• Full year 2020 net sales of $5.5 billion increased 13.6% compared to full year 2019, representing the largest annual net sales result in Company history. Three of our six regions: Asia Pacific, EMEA, and North America set annual net sales records.
• Fourth quarter net sales of $1.4 billion increased 15.6% compared to the fourth quarter 2019, representing the largest fourth quarter net sales result in Company history.
• Full year 2020 reported diluted EPS of $2.77 and adjusted¹ earnings of $3.71² per diluted share, each grew by approximately 25% compared to $2.20 and $2.98² per adjusted³ diluted share respectively, for the full year 2019.
• Fourth quarter 2020 reported diluted EPS of $0.59 and adjusted¹ earnings of $0.71⁴ per diluted share, compared to $0.40 and $0.76⁴ respectively, for the fourth quarter 2019.
• China grant income will no longer be excluded from adjusted¹ results. Adjusted results from all prior year periods have been updated in Schedule A to no longer exclude China grant income.
• Raising FY 2021 net sales guidance ranges to 6.0% to 14.0% growth, as well as raising reported and adjusted¹ diluted EPS guidance ranges to $4.05 - $4.55 and $4.25 – $4.75, respectively.
• Company announces board approval of a new three-year $1.5 billion share repurchase program.

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¹ Adjusted diluted EPS is a non-GAAP measure and excludes the impact of: non-cash interest expense and amortization associated with the Company’s convertible notes, expenses related to regulatory inquiries and legal accruals, contingent value rights revaluation, income related to finalization of insurance recoveries, debt issuance costs related to the senior secured credit facility amendment, Mexico VAT assessment, and net expenses related to the COVID-19 pandemic. 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. See the “Outlook” discussion below and the related footnotes for additional information regarding adjusted diluted EPS guidance.
² Full year 2020 results were impacted by China grant income of approximately $14.5 million, or $0.08 per diluted share and expenses related to the China Growth and Impact Investment Program of approximately $13.7 million or $0.08 per diluted share. 2019 results were impacted by China grant income of approximately $31.5 million, or $0.16 per diluted share and expenses related to the China Growth and Impact Investment Program of approximately $19.6 million or $0.10 per diluted share.
³ See Schedule A - “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of adjusted diluted share count to reported diluted share count and a discussion of why the share count has been adjusted for purposes of calculating adjusted diluted EPS for full year 2019.
⁴ Fourth quarter 2020 results were impacted by China grant income of approximately $1.5 million, or $0.01 per diluted share and expenses related to the China Growth and Impact Investment Program of approximately $5.9 million or $0.03 per diluted share. Fourth Quarter 2019 results were impacted by China grant income of approximately $3.8 million, or $0.02 per diluted share and expenses related to the China Growth and Impact Investment Program of approximately $9.1 million or $0.05 per diluted share.

Fourth Quarter and Full Year 2020 Key Metrics

Regional Net Sales and Foreign Exchange (“FX”) Impact

^(a) Venezuela has been generally impacted by significant price increases and erosion in foreign currency exchange rates. Venezuela represents less than 1% of the Company’s consolidated net sales. See Schedule A – “Reconciliation of Non-GAAP Financial Measures” for a discussion of why we believe adjusting for Venezuela is useful.
* Figure not meaningful due to significant foreign currency fluctuations in Venezuela and the price increases implemented as a result thereof that, when considered in isolation, have a disproportionately large impact on the Company’s South and Central American region and consolidated results. Amounts were 31.1% and 16.9% for South & Central America and Worldwide Total, respectively.

^(a) Venezuela has been generally impacted by significant price increases and erosion in foreign currency exchange rates. Venezuela represents less than 1% of the Company’s consolidated net sales. See Schedule A – “Reconciliation of Non-GAAP Financial Measures” for a discussion of why we believe adjusting for Venezuela is useful.
* Figure not meaningful due to significant foreign currency fluctuations in Venezuela and the price increases implemented as a result thereof that, when considered in isolation, have a disproportionately large impact on the Company’s South and Central American region and consolidated results. Amounts were 20.8% and 17.5% for South & Central America and Worldwide Total, respectively.

Regional Volume Point Metrics

Outlook

Following is the Company’s first quarter and full year 2021 guidance based on current business trends:

• With respect to guidance, the Company cannot accurately predict the impact to its share base from any future share repurchases. Accordingly, any impact thereof is excluded from the guidance tables above.
• Guidance is based on the average daily exchange rates during the first three weeks of January 2021.
• Adjusted^(a)(b)(c) diluted EPS guidance for the first quarter 2021 includes a projected currency tailwind of approximately $0.06 per diluted share versus the first quarter of 2020.
• Full year 2021 adjusted^(a)(b)(c) diluted EPS guidance includes a projected currency tailwind of approximately $0.35 per diluted share versus the full year of 2020.

Earnings Conference Call

Herbalife Nutrition senior management will host an investor conference call to discuss its recent financial results and provide an update on current business trends on Wednesday, February 17th, 2021, at 2:30 p.m. PT (5:30 p.m. ET).

The dial-in number for this conference call for domestic callers is (833) 962-1459, and (956) 394-3596 for international callers (conference ID: 1352428). 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: 1352428). The webcast of the teleconference will be archived and available on Herbalife Nutrition's website.

About Herbalife Nutrition Ltd.

Herbalife Nutrition is a global company that has been changing people's lives with great nutrition products and a proven business opportunity for its independent distributors since 1980. The Company offers high-quality, science-backed products, sold in over 90 countries by entrepreneurial distributors who provide one-on-one coaching and a supportive community that inspires their customers to embrace a healthier, more active lifestyle. Through the Company’s global campaign to eradicate hunger, Herbalife Nutrition is also committed to bringing nutrition and education to communities around the world.

For more information, please visit IAmHerbalifeNutrition.com.

Herbalife Nutrition 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. 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, many of which are beyond our control. Additionally, many of these risks and uncertainties are, and may continue to be, amplified by the COVID-19 pandemic. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include the following:

• the potential impacts of the COVID-19 pandemic on us; our Members, customers, and supply chain; and the world economy;
• our ability to attract and retain Members;
• our relationship with, and our ability to influence the actions of, our Members;
• our noncompliance with, or improper action by our employees or Members in violation of, applicable U.S. and foreign laws, rules, and regulations;
• adverse publicity associated with our Company or the direct-selling industry, 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 and industry;
• legal and regulatory matters, including regulatory actions concerning, or legal challenges to, our products or network marketing program and product liability claims;
• the Consent Order entered into with the FTC, the effects thereof and any failure to comply therewith;
• risks associated with operating internationally and in China;
• our dependence on increased penetration of existing markets;
• any material disruption to our business caused by natural disasters, other catastrophic events, acts of war or terrorism, cybersecurity incidents, pandemics and/or other acts by third parties;
• noncompliance by us or our Members with any privacy laws, rules, or regulations or any security breach involving the misappropriation, loss, or other unauthorized use or disclosure of confidential information;
• contractual limitations on our ability to expand or change our direct-selling business model;
• our reliance on our information technology infrastructure and manufacturing facilities and those of our outside manufacturers;
• the sufficiency of our trademarks and other intellectual property;
• product concentration;
• our reliance upon, or the loss or departure of any member of, our senior management team;
• restrictions imposed by covenants in the agreements governing our indebtedness;
• risks related to our convertible notes;
• changes in, and uncertainties relating to, the application of transfer pricing, customs duties, value added taxes, and other tax laws, treaties, and regulations, or their interpretation;
• our incorporation under the laws of the Cayman Islands; 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.

Results of Operations

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 used by 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 impact of foreign currency fluctuations in Venezuela and the price increases the Company implements as a result of the highly inflationary economy in that market can each, when considered in isolation, have a disproportionately large impact to the Company’s consolidated results despite the offsetting nature of these drivers and that net sales in Venezuela, which represent less than 1% of the Company’s consolidated net sales, are not material to our consolidated results. Therefore, in certain instances, the Company believes it is helpful to provide additional information with respect to these factors as reported and excluding the impact of Venezuela to illustrate the disproportionate nature of Venezuela’s individual pricing and foreign exchange impact to the Company’s consolidated results. However, excluding the impact of Venezuela from these measures is not in accordance with U.S. GAAP and should not be considered in isolation or as an alternative to the presentation and discussion thereof calculated in accordance with U.S. GAAP.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210217005919/en/

Media Contact:
Jennifer Butler
VP, Media Relations
213.745.0420

Investor Contact:
Eric Monroe
Senior Director, Investor Relations
213.745.0449

Source: Herbalife Nutrition Ltd.

Released Feb 17, 2021 • 4:10pm EST