Exhibit 99.1

Herbalife Ltd. Announces Record Third Quarter 2011 Results and Raises 2011 Earnings Guidance

LOS ANGELES--(BUSINESS WIRE)--October 31, 2011-- Herbalife Ltd. (NYSE: HLF) today reported that third quarter net sales increased 30.0 percent and local currency net sales increased 24.1 percent compared to the same time period in 2010. Net income for the quarter of $108.0 million, or $0.87 per diluted share compares to 2010 third quarter adjusted net income and adjusted EPS of $75.7 million and $0.60, respectively.

“Our business has never been stronger,” said Michael O. Johnson, the company’s chairman and CEO. “In the third quarter Herbalife saw the highest volume point growth rate of the past five years as we eclipsed the one-billion volume point mark for the first time in the company’s history.“

For the quarter ended September 30, 2011, the company generated cash flow from operations of $143.0 million, an increase of 42.3 percent compared to the third quarter 2010, paid dividends of $23.5 million, invested $16.9 million in capital expenditures and repurchased $150.0 million in common shares outstanding related to our share repurchase program.

1 See Schedule A – “Reconciliation of Non-GAAP Financial Measures” for more detail.


Third Quarter 2011 Regional Key Metrics 2,3,4

Regional Volume Point and Average Active Sales Leader Metrics

                 
  Volume Points (Mil)   Average Active Sales Leaders
Region   3Q'11   Yr/Yr % Chg   3Q'11   Yr/Yr % Chg
North America 252.9   12.2 % 58,897   15.3 %
Asia Pacific 261.2 36.2 % 51,644 38.5 %
EMEA 132.4 15.8 % 39,227 16.7 %
Mexico 180.6 23.5 % 49,772 25.9 %
South & Central America 149.7 39.5 % 35,993 21.8 %
China   40.3   2.3 %   9,533   26.3 %
Worldwide Total   1017.1   23.4 %   236,191   23.6 %
             
Volume Points (Mil) Average Active Sales Leaders
3Q'11   Yr/Yr % Chg   3Q'11   Yr/Yr % Chg
Emerging Markets 544.5 26.9 % 134,467 26.4 %
Established Markets   472.6   19.5 %   109,339   19.3 %
Worldwide Total   1017.1   23.4 %   236,191   23.6 %

2 “Emerging markets” are defined herein as those countries that the World Bank categorized as having “low” or “medium” GDP per capita, while “Established markets” are defined as those countries categorized by the World Bank as having “high” GDP per capita.

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 sales leaders are active in more than one region but are counted only once in the worldwide amount.


Updated 2011 Guidance

Given the recent volatility in foreign currency exchange rates for many of the company’s key markets, guidance provided is reflective of the average exchange rates for the first four weeks of October. The negative EPS impact included in the guidance as a result of the change in foreign exchange rates since June 30, 2011 is approximately $0.10 - $0.12 per quarter.

Based on current business trends and foreign currency rates, the company’s fourth quarter, fiscal 2011 and fiscal 2012 guidance is provided below.

     
Three Months Ending Twelve Months Ending

December 31, 2011

December 31, 2011

Low   High Low   High
Volume Point Growth vs 2010 17.0 % 19.0 % 19.7 % 20.2 %
Net Sales Growth vs 2010 13.0 % 15.0 % 24.5 % 25.0 %
Diluted EPS $ 0.68 $ 0.72 $ 3.14 $ 3.18
Cap Ex ($ millions) $ 25.0 $ 30.0 $ 85.0 $ 90.0
Effective Tax Rate 28.2 % 29.2 % 27.3 % 28.3 %

2012 Guidance

 
Twelve Months Ending

December 31, 2012

Low   High
Volume Point Growth vs 2011 8.0 % 10.0 %
Net Sales Growth vs 2011 8.0 % 10.0 %
Diluted EPS $ 3.25 $ 3.45
Cap Ex ($ millions) $ 105.0 $ 115.0
Effective Tax Rate 27.0 % 29.0 %

Announces Quarterly Dividend

The company reported today that its board of directors has approved a dividend of $0.20 per share to shareholders of record effective November 14, 2011 payable on November 28, 2011.


Third Quarter Earnings Conference Call

Herbalife Ltd. (NYSE:HLF) 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, 2011 at 8 a.m. PDT (11 a.m. EDT).

The dial-in number for this conference call for domestic callers is (877) 317-1296 and (706) 634-5671 for international callers (conference ID 15135181). 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 15135181). The webcast of the teleconference will be archived and available on Herbalife's website.

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 78 countries through a network of approximately 2.5 million 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 information about Herbalife, including financial and other information 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.


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:

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 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;

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;

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; and

whether we will purchase any of our shares in the open markets or otherwise.

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.


 
Herbalife Ltd.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
               
Quarter Ended Nine Months Ended
9/30/2011  

9/30/2010 (3)

9/30/2011  

9/30/2010 (3)

 
North America $ 180,735 $ 155,532 $ 532,894 $ 473,228
Mexico 112,979 83,498 330,738 236,265
South and Central America 143,659 95,030 399,066 269,156
EMEA 147,670 121,221 463,624 387,598
Asia Pacific 255,169 181,555 691,575 494,418
China   55,006   51,595   152,071   135,205
Worldwide net sales 895,218 688,431 2,569,968 1,995,870
Cost of Sales   175,308   133,265   509,124   410,298

(1)

Gross Profit 719,910 555,166 2,060,844 1,585,572
Royalty Overrides 290,842 224,061 844,451 656,160
SGA   277,721   230,150   788,472   648,143

(1)

Operating Income 151,347 100,955 427,921 281,269
Interest Expense - net   345   2,192   3,848   6,291
Income before income taxes 151,002 98,763 424,073 274,978
Income Taxes   42,980   19,879   116,852   62,048

(1)

Net Income   108,022   78,884   307,221   212,930
 
Basic Shares (2) 116,975 118,442 118,059 119,286
Diluted Shares (2) 124,275 125,613 125,889 126,216
 
Basic EPS (2) $ 0.92 $ 0.67 $ 2.60 $ 1.79
Diluted EPS (2) $ 0.87 $ 0.63 $ 2.44 $ 1.69
 
Dividends declared per share $ 0.20 $ 0.13 $ 0.53 $ 0.33
                 
 

(1) Includes impact of items related to adoption of highly-inflationary accounting in Venezuela that are further discussed in Schedule A – "Reconciliation of Non-GAAP Financial Measures”.

(2) All share count and per share amounts have been adjusted to reflect the two-for-one stock split.

(3) During the second quarter of 2011, the Company changed its method of accounting for share-based compensation tax benefits. Prior periods have been adjusted to reflect this change. See Note 2 of the quarterly report on Form 10-Q for the quarter ended September 30, 2011.

 


Herbalife Ltd.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
  Sep 30,   Dec 31,
2011

2010 (1)

 
ASSETS
Current Assets:
Cash & cash equivalents $ 261,521 $ 190,550
Receivables, net 112,475 85,612
Inventories 222,501 182,467
Prepaid expenses and other current assets 93,715 93,963
Deferred income taxes   43,662     42,994  
Total Current Assets 733,874 595,586
 
Property and equipment, net 182,772 177,427
Deferred compensation plan assets 19,063 18,536
Deferred financing cost, net 5,091 998
Other assets 29,833 25,880
Marketing related intangibles and other and other intangible assets, net 311,935 310,894
Goodwill   105,488     102,899  
Total Assets $ 1,388,056   $ 1,232,220  
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 61,857 $ 43,784
Royalty Overrides 190,697 162,141
Accrued compensation 69,646 69,376
Accrued expenses 145,150 141,867
Current portion of long term debt 1,762 3,120
Advance sales deposits 60,129 35,145
Income taxes payable   21,304     15,383  
Total Current Liabilities 550,545 470,816
 
Non-current liabilities
Long-term debt, net of current portion 220,298 175,046
Deferred compensation 22,290 20,167
Deferred income taxes 55,844 55,572
Other non-current liabilities   22,600     23,407  
Total Liabilities 871,577 745,008
 
Contingencies
 
Shareholders' equity:
Common shares 116 118
Additional paid in capital 280,515 248,693
Accumulated other comprehensive loss (36,012 ) (27,285 )
Retained earnings   271,860     265,686  
Total Shareholders' Equity   516,479     487,212  
   
Total Liabilities and Shareholders' Equity $ 1,388,056   $ 1,232,220  
         
 

(1) During the second quarter of 2011, the Company changed its method of accounting for share-based compensation tax benefits. Prior periods have been adjusted to reflect this change. See Note 2 of the quarterly report on Form 10-Q for the quarter ended September 30, 2011.


         
Herbalife Ltd.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Nine Months Ended
9/30/2011  

9/30/2010 (1)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 307,221 $ 212,930
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 54,440 51,755
Excess tax benefits from share-based payment arrangements (24,030 ) (6,572 )
Share-based compensation expenses 17,244 16,870
Amortization of discount and deferred financing costs 721 374
Deferred income taxes (7,000 ) (16,989 )
Unrealized foreign exchange transaction loss (gain) 8,324 (7,536 )
Write-off of deferred financing costs 914
Foreign exchange loss from adoption of highly inflationary accounting in Venezuela 15,131
Other 1,383 2,911
Changes in operating assets and liabilities:
Receivables (31,834 ) (13,965 )
Inventories (51,649 ) (32,921 )
Prepaid expenses and other current assets (3,733 ) 5,744
Other assets (4,742 ) (2,328 )
Accounts payable 19,484 12,852
Royalty overrides 33,851 3,601
Accrued expenses and accrued compensation 7,579 11,622
Advance sales deposits 27,416 32,399
Income taxes payable 35,914 (16,955 )
Deferred compensation plan liability   2,123     2,198  
NET CASH PROVIDED BY OPERATING ACTIVITIES   393,626     271,121  
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property (61,514 ) (42,199 )
Proceeds from sale of property 213 64
Deferred compensation plan assets   (527 )   (371 )
NET CASH USED IN INVESTING ACTIVITIES   (61,828 )   (42,506 )
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (62,177 ) (38,934 )
Borrowings from long-term debt 791,700 338,000
Principal payments on long-term debt (747,896 ) (379,465 )
Deferred financing costs (5,728 )
Share repurchases (268,795 ) (106,163 )
Excess tax benefits from share-based payment arrangements 24,030 6,572
Proceeds from exercise of stock options and sale of stock under employee stock purchase plan   15,947     11,521  
NET CASH USED IN FINANCING ACTIVITIES   (252,919 )   (168,469 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH   (7,908 )   (17,457 )
NET CHANGE IN CASH AND CASH EQUIVALENTS 70,971 42,689
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   190,550     150,801  
CASH AND CASH EQUIVALENTS, END OF PERIOD   261,521     193,490  
CASH PAID DURING THE PERIOD
Interest paid $ 6,457   $ 7,195  
Income taxes paid $ 88,079   $ 84,120  
         
 

(1) During the second quarter of 2011, the Company changed its method of accounting for share-based compensation tax benefits. Prior periods have been adjusted to reflect this change. See Note 2 of the quarterly report on Form 10-Q for the quarter ended September 30, 2011.


SUPPLEMENTAL INFORMATION

SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(unaudited), (Dollars in Thousand, 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 investor in analyzing period to period comparisons of the Company’s results.

The following is a reconciliation of net income and diluted earnings per share, presented and reported in accordance with U.S. generally accepted accounting principles, to net income adjusted for certain items:

                 
Herbalife Ltd.
Supplemental Schedule
Non-GAAP Financial Measures
(In thousands, except per share amount)
(Unaudited)
               
Quarter Ended 9/30/2011
Reported     Adjusted

(GAAP)

Adjustment (Non-GAAP)
Net Sales 895,218 895,218
Cost of Sales   175,308     175,308
Gross Profit 719,910 - 719,910
Royalty Overrides 290,842 290,842
SGA   277,721     277,721
Operating Income 151,347 - 151,347
Interest Expense - net   345     345
Income before income taxes 151,002 - 151,002
Income Taxes   42,980     42,980
Net Income   108,022   -     108,022
 
Diluted EPS $ 0.87 $ -   $ 0.87
 
                 
 
 
 
 
                 
Herbalife Ltd.
Supplemental Schedule
Non-GAAP Financial Measures
(In thousands, except per share amount)
(Unaudited)
             
Quarter Ended 9/30/2010
Reported Adjusting Adjusted

(GAAP) (2)

Items   (Non-GAAP)
Net Sales $ 688,431 $ 688,431
Cost of Sales   133,265     133,265
Gross Profit 555,166 - 555,166
Royalty Overrides 224,061 224,061
SGA   230,150     230,150
Operating Income 100,955 - 100,955
Interest Expense - net   2,192     2,192
Income before income taxes 98,763 - 98,763
Income Taxes   19,879   3,228  

(3)

  23,107
Net Income $ 78,884   (3,228 ) $ 75,656
 
Diluted EPS (1) $ 0.63 $ (0.03 ) $ 0.60
 
                 
 
(1) Diluted EPS has been adjusted to reflect the two-for-one stock split.

(2) During the second quarter of 2011, the Company changed its method of accounting for share-based compensation tax benefits. Prior periods have been adjusted to reflect this change.

See Note 2 of the quarterly report on Form 10-Q for the quarter ended September 30, 2011.
(3) Tax benefit from an international tax audit settlement.

 
Herbalife Ltd.
Supplemental Schedule
Non-GAAP Financial Measures
(In thousands, except per share amount)
(Unaudited)
           
Nine Months Ended 9/30/2011

 

 

 

Reported
(GAAP)

Adjustment

Adjusted
(Non-GAAP)

Net Sales 2,569,968 2,569,968
Cost of Sales   509,124     509,124
Gross Profit 2,060,844 - 2,060,844
Royalty Overrides 844,451 844,451
SGA   788,472     788,472
Operating Income 427,921 - 427,921
Interest Expense - net   3,848   (914 )

(1)

  2,934
Income before income taxes 424,073 914 424,987
Income Taxes   116,852   214  

(1)

  117,066
Net Income   307,221   700     307,921
 
Diluted EPS $ 2.44 $ 0.01   $ 2.45
 
             
 

(1) Write-off of unamortized deferred financing costs resulting from the debt refinancing arrangement in March 2011.

 

 
             
Herbalife Ltd.
Supplemental Schedule
Non-GAAP Financial Measures
(In thousands, except per share amount)
(Unaudited)
           
Nine Months Ended 9/30/2010

Reported

Adjusting Adjusted

(GAAP) (5)

Items (Non-GAAP)
Net Sales $ 1,995,870 $ 1,995,870
Cost of Sales   410,298 $ (12,715 )

(1)

  397,583
Gross Profit 1,585,572 12,715 1,598,287
Royalty Overrides 656,160 656,160
SGA   648,143   (11,390 )

(2)

  636,753
Operating Income 281,269 24,105 305,374
Interest Expense - net   6,291     6,291
Income before income taxes 274,978 24,105 299,083
Income Taxes   62,048   17,680  

(3)

  79,728
Net Income $ 212,930 $ 6,425   $ 219,355
 

Diluted EPS (4)

$ 1.69 $ 0.05   $ 1.74
 
           
 

(1) Incremental U.S. dollar costs of 2009 imports in Venezuela which were recorded at the unfavorable parallel market exchange rate and were not devalued based on 2010 exchange rates but rather recorded at their historical dollar costs as products were sold

(2) Includes $15,131 foreign exchange loss related to remeasurement of Venezuela's monetary assets and liabilities resulting from adoption of highly inflationary accounting and $3,741 foreign exchange gain resulting from receipt of U.S. dollar approved by CADIVI at the official exchange rate relating to 2009 product importations which were previously registered with CADIVI

(3) Includes $14,452 favorable income taxes related to Venezuela becoming highly inflationary economy and $3,228 tax benefit from an international income tax audit settlement.

(4) Diluted EPS has been adjusted to reflect the two-for-one stock split.

(5) During the second quarter of 2011, the Company changed its method of accounting for share-based compensation tax benefits. Prior periods have been adjusted to reflect this change. See Note 2 of the quarterly report on Form 10-Q for the quarter ended September 30, 2011.

 

 

 

 

The following is a reconciliation of total long-term debt to net debt:

   
9/30/2011 12/31/2010
 

Total long-term debt (current and long-term portion)

$ 222,060 $ 178,166
Less: Cash and cash equivalents   261,521     190,550  
Net debt   $ (39,461 )   $ (12,384 )

CONTACT:
Herbalife Ltd.
Media Contact:
Barbara Henderson
SVP, Worldwide Corp. Comm.
213.745.0517
Investor Contact:
Amy Greene
VP, Investor Relations
213.745.0474