Herbalife Ltd. (NYSE: HLF) today reported financial results for
the second quarter ended June 30, 2024:
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“Our Q2 Adjusted EBITDA1 is the highest it’s been in seven
quarters. We remain focused on driving shareholder value as the
continued increase in new distributors builds the foundation for
sales growth.” - Michael Johnson, Chairman and CEO
Highlights
Second Quarter 2024
- Net sales of $1.3 billion, down 2.5% vs. Q2 ’23 due to 270
basis points of FX headwinds
- Achieved year-over-year net sales growth on constant currency
basis2, up 0.2%, driven by increases in Latin America, EMEA and
Asia Pacific
- Net income of $4.7 million; adjusted net income1 of $54.8
million
- Adjusted EBITDA1 of $180.0 million exceeds guidance; adjusted
EBITDA1 margin up 120 basis points year-over-year
- Diluted EPS of $0.05; adjusted diluted EPS1 of $0.54
- Restructuring Program expenses, net of tax, $0.33 diluted EPS
headwind; excluded from adjusted results
- Loss on extinguishment of debt, net of tax, $0.07 diluted EPS
headwind; excluded from adjusted results
- Net cash provided by operating activities of $102.5 million;
capital expenditures of approximately $36 million
- Credit Agreement EBITDA1 $208.0 million; total leverage ratio
reduced to 3.5x at June 30
Recent Developments
- Completed sale and sixteen-month leaseback of office building
in Torrance, California in July
Outlook
- Third quarter 2024 guidance provided
- Full-year 2024 guidance revised: net sales reduced, adjusted
EBITDA1 raised, capital expenditures reaffirmed
_________________________ 1 Non-GAAP measure. Refer to
Schedule A – “Reconciliation of Non-GAAP Financial Measures” for a
detailed reconciliation of these measures to the most directly
comparable U.S. GAAP measure for historical periods, as applicable,
and a discussion of why the Company believes these non-GAAP
measures are useful and certain information regarding non-GAAP
guidance.
2 Growth/decline in net sales excluding the effects of foreign
exchange is based on “net sales in local currency,” a non-GAAP
financial measure. Refer to Schedule A – “Reconciliation of
Non-GAAP Financial Measures” for a discussion of why the Company
believes adjusting for the effects of foreign exchange is
useful.
Management Commentary
Herbalife reported second quarter 2024 net sales of $1.3
billion, down 2.5% year-over-year, including 270 basis points of
foreign currency headwinds. On a constant currency basis2, net
sales increased 0.2% year-over-year.
Second quarter gross profit margin improved to 77.9% compared to
77.0% in the second quarter of 2023. On a year-over-year basis,
gross profit margin primarily benefited from approximately 160
basis points of pricing, partially offset by approximately 60 basis
points of input cost inflation, mainly related to increased raw
material costs.
Net income was $4.7 million, with net income margin of 0.4% and
adjusted net income1 of $54.8 million. Adjusted EBITDA1 of $180.0
million includes approximately $11 million of foreign currency
headwinds year-over-year, with adjusted EBITDA1 margin of 14.1%, up
120 basis points year-over-year. Diluted EPS was $0.05, with
adjusted diluted EPS1 of $0.54, which includes a $0.07
year-over-year foreign currency headwind.
Net cash provided by operating activities was $102.5 million and
$116.3 million for the three and six months ended June 30, 2024,
respectively. Capital expenditures were approximately $36 million
and $69 million for the three and six months ended June 30, 2024,
respectively, and capitalized SaaS implementation costs were
approximately $5 million and $10 million, respectively. The Company
expects to incur total capital expenditures of approximately $120
million to $150 million and total capitalized SaaS implementation
costs of approximately $20 million to $25 million for the full year
of 2024.
The Company implemented further actions related to its
Restructuring Program, which was initiated during the first quarter
of 2024 and designed to bring leadership closer to its markets,
streamline the employee structure and accelerate productivity. The
Restructuring Program is expected to deliver annual savings of at
least $80 million beginning in 2025, with at least $50 million now
expected to be achieved in 2024 (up from approximately $40
million). Based on actions through June 30, at least $10 million of
savings were realized during the second quarter of 2024. The
Company expects to incur total program pre-tax expenses of
approximately $70 million (up from at least $60 million) related to
the program, which are primarily related to severance costs and
will be excluded from adjusted results. For the three and six
months ended June 30, 2024, approximately $49 million and $66
million of pre-tax expenses were recognized in SG&A related to
the restructuring. Substantially all actions related to the program
have been completed as of June 30, with the remainder to be
completed by the end of 2024.
As previously disclosed, the Company completed a $1.6 billion
debt refinancing in April, which included $1.2 billion of senior
secured debt and a $400 million senior secured revolving credit
facility. Proceeds from the transactions were used to repay all
amounts outstanding under the 2018 Credit Facility, which were
scheduled to mature in 2025, and redeem $300 million of the $600
million aggregate principal amount of the 2025 Notes. In addition,
the Company separately repurchased approximately $38 million of the
2025 Notes in a private transaction in April. For the three months
ended June 30, 2024, a $10.5 million loss on extinguishment of debt
related to the transactions was recognized in other expense, net
and is excluded from adjusted results.
In July, the Company completed the sale and a sixteen-month
leaseback transaction of its office building in Torrance,
California. The net proceeds from the sale transaction were
approximately $38 million. The Company expects to recognize a gain
of approximately $4 million related to the sale in SG&A in the
third quarter of 2024, which will be excluded from adjusted
results.
“We continue to make significant progress in our initiatives to
enhance profitability,” said John DeSimone, Chief Financial
Officer. “We remain focused on further expanding margins, creating
shareholder value and reducing our total leverage ratio to 3.0x by
the end of 2025.”
Over the past three months, approximately 83,300 attendees from
around the world convened at Extravaganza training events in
Thailand, Colombia, India and the U.S. The Asia Pacific region set
a new attendance record in Bangkok with approximately 24,000
attendees present. India held its first-ever multi-city
Extravaganza with events in both Bangalore and Delhi, collectively
setting a new record with approximately 35,700 attendees.
For the second quarter of 2024, the number of new distributors
joining Herbalife worldwide increased 12% year-over-year and 26% on
a sequential basis, reversing 12 consecutive quarters of
year-over-year declines. The Company believes events such as
Extravaganzas, access to industry-leading entrepreneurial skills
training, as well as the March 2024 launch of the all-new Herbalife
Premier League training and recognition program, which is designed
to encourage recruitment and activity from new distributors, are
driving the positive momentum in new distributor recruiting.
“This is an exciting time at Herbalife and while we have work to
do, there are many good things happening,” said Michael Johnson.
“Our Adjusted EBITDA1 margins are up, we’ve reduced our total
leverage ratio to 3.5x, distributor recruiting is up and
distributors are engaged in building their businesses.”
Second Quarter and Year to Date 2024 Key Metrics
Regional Net Sales and Foreign Exchange
(“FX”) Impact
Reported Net Sales
YoY Growth (Decline)
$ million
Q2 ‘24
Q2 ‘23
including FX
excluding
FX2
North America
$
283.2
$
303.6
(6.7
)%
(6.7
)%
Latin America
211.7
207.0
2.3
%
4.7
%
EMEA
287.8
289.6
(0.6
)%
3.5
%
Asia Pacific
416.7
425.8
(2.1
)%
1.6
%
China
81.7
88.0
(7.2
)%
(4.0
)%
Worldwide
$
1,281.1
$
1,314.0
(2.5
)%
0.2
%
Reported Net Sales
YoY Growth (Decline)
$ million
YTD ‘24
YTD ‘23
including FX
excluding
FX2
North America
$
549.0
$
600.8
(8.6
)%
(8.6
)%
Latin America
425.9
412.5
3.2
%
3.3
%
EMEA
565.7
557.7
1.4
%
4.9
%
Asia Pacific
847.9
839.4
1.0
%
4.2
%
China
156.9
155.7
0.8
%
5.0
%
Worldwide
$
2,545.4
$
2,566.1
(0.8
)%
1.3
%
Regional Volume Point Metrics
Volume Points
in millions
Q2 ‘24
Q2 ‘23
YoY % Chg.
YTD ‘24
YTD ‘23
YoY % Chg.
North America
272.5
313.4
(13.1
)%
536.7
627.9
(14.5
)%
Latin America(a)
253.2
258.5
(2.1
)%
508.5
529.9
(4.0
)%
EMEA
299.2
331.2
(9.7
)%
597.9
645.5
(7.4
)%
Asia Pacific
520.2
530.5
(1.9
)%
1,048.6
1,035.7
1.2
%
China
61.5
62.6
(1.8
)%
116.3
111.2
4.6
%
Worldwide(b)
1,406.6
1,496.2
(6.0
)%
2,808.0
2,950.2
(4.8
)%
Note: During Q2 ‘24, most markets within the Latin America
region, excluding Mexico, implemented a 5% price reduction and
Volume Point adjustments to enhance the competitiveness of product
pricing, aiming to stimulate incremental volume growth and increase
Members’ ability to promote business opportunities. Refer to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2024 for additional details.
(a)
Excluding the Volume Point adjustments
noted above, the year-over-year percentage change for Q2 ’24 and
YTD ‘24 would have been a decrease of 3.5% and 4.8%,
respectively.
(b)
Excluding the Volume Point adjustments
noted above, the year-over-year percentage change for Q2 ’24 and
YTD ‘24 would have been a decrease of 6.2% and 5.0%,
respectively.
Outlook
Third Quarter 2024 Guidance
$ million
Q3 ‘24 Guidance
Q3 ‘23 Results
Net Sales
(4.5)% to 0% YoY
1,281.3
Adjusted EBITDA1
125 – 155
163.3
Capital Expenditures
35 – 45
31.1
Full-Year 2024 Guidance – Revised
$ million
FY ‘24 Guidance
REVISED
FY ‘24 Guidance
(as of May 1 ’24)
FY ‘23 Results
Net Sales
(3.5)% to +1.5% YoY
Reduced
0% to +5% YoY
5,062.4
Adjusted EBITDA1
560 – 600
Raised
550 – 590
570.6
Capital Expenditures
120 – 150
Reaffirmed
120 – 150
135.0
Earnings Webcast and Conference Call
Herbalife’s senior management team will host a live audio
webcast and conference call to discuss its second quarter 2024
financial results on Wednesday, July 31, 2024, at 5:30 p.m. ET
(2:30 p.m. PT).
The live audio webcast will be available at the following link:
https://edge.media-server.com/mmc/p/ebzt6ttw.
Participants joining via the conference call may obtain the
dial-in information and personal PIN to access the call by
registering at the following link:
https://register.vevent.com/register/BI912a2bd326f64fcfb80efc4f2f34d208.
Senior management also plans to reference slides during the
webcast and call, which will be available under the Investor
Relations section of Herbalife’s website at
https://ir.herbalife.com, where financial and other information is
posted from time to time. The live webcast will also be available
at the same website, along with a replay of the webcast following
the completion of the event and for 12 months thereafter.
About Herbalife Ltd.
Herbalife (NYSE: HLF) is a premier health and wellness company,
community and platform that has been changing people's lives with
great nutrition products and a business opportunity for its
independent distributors since 1980. The Company offers
science-backed products to consumers in more than 90 markets
through entrepreneurial distributors who provide one-on-one
coaching and a supportive community that inspires their customers
to embrace a healthier, more active lifestyle to live their best
life.
For more information, visit https://ir.herbalife.com.
Forward-Looking Statements
This release 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, including for future operations, capital
expenditures, or share repurchases; any statements concerning
proposed new products, services, or developments; any statements
regarding future economic conditions or performance; any statements
of belief or expectation; and any statements of assumptions
underlying any of the foregoing or other future events.
Forward-looking statements may include, among others, the words
“may,” “will,” “estimate,” “intend,” “continue,” “believe,”
“expect,” “anticipate” or any other similar words.
Although we believe that the expectations reflected in any of
our forward-looking statements are reasonable, actual results or
outcomes 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. 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 current global economic conditions,
including inflation, 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 and evolving industry
standards, including with respect to climate change,
sustainability, and other environmental, social, and governance, or
ESG, matters;
- 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 Federal Trade
Commission, or FTC, the effects thereof and any failure to comply
therewith;
- risks associated with operating internationally and in
China;
- our ability to execute our growth and other strategic
initiatives, including implementation of our restructuring
initiatives, and increased penetration of our existing
markets;
- any material disruption to our business caused by natural
disasters, other catastrophic events, acts of war or terrorism,
including the war in Ukraine, cybersecurity incidents, pandemics,
and/or other acts by third parties;
- our ability to adequately source ingredients, packaging
materials, and other raw materials and manufacture and distribute
our products;
- our reliance on our information technology infrastructure;
- 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;
- 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, income tax, 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.
Additional factors and uncertainties that could cause actual
results or outcomes to differ materially from our forward-looking
statements are set forth in the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 2024, filed with the
Securities and Exchange Commission on July 31, 2024, including
under the heading “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and in our Condensed
Consolidated Financial Statements and the related Notes included
therein, and Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, filed with the Securities and Exchange
Commission on February 14, 2024, including under the headings “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and in our Consolidated
Financial Statements and the related Notes included therein. In
addition, historical, current, and forward-looking
sustainability-related statements may be based on standards for
measuring progress that are still developing, internal controls and
processes that continue to evolve, and assumptions that are subject
to change in the future.
Forward-looking statements made in this release speak only as of
the date hereof. 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
Herbalife Ltd. and Subsidiaries Condensed Consolidated
Statements of Income (in millions, except per share amounts)
Three Months Ended June 30, Six Months
Ended June 30,
2024
2023
2024
2023
(unaudited)
North America
$
283.2
$
303.6
$
549.0
$
600.8
Latin America
211.7
207.0
425.9
412.5
EMEA
287.8
289.6
565.7
557.7
Asia Pacific
416.7
425.8
847.9
839.4
China
81.7
88.0
156.9
155.7
Worldwide Net sales
1,281.1
1,314.0
2,545.4
2,566.1
Cost of sales
283.1
301.6
568.1
600.2
Gross profit
998.0
1,012.4
1,977.3
1,965.9
Royalty overrides
415.3
429.7
830.5
845.7
Selling, general, and administrative expenses
502.3
460.5
994.5
936.4
Other operating income (1)
-
(1.2
)
-
(10.1
)
Operating income
80.4
123.4
152.3
193.9
Interest expense, net
57.7
38.4
95.6
77.8
Other expense, net (2)
10.5
-
10.5
-
Income before income taxes
12.2
85.0
46.2
116.1
Income taxes
7.5
25.1
17.2
26.9
Net income
$
4.7
$
59.9
$
29.0
$
89.2
Weighted-average shares outstanding: Basic
100.6
99.1
100.1
98.8
Diluted
101.7
99.5
101.2
99.8
Earnings per share: Basic
$
0.05
$
0.60
$
0.29
$
0.90
Diluted
$
0.05
$
0.60
$
0.29
$
0.89
(1) Other operating income for the three
and six months ended June 30, 2023 relates to certain China
government grant income
(2) Other expense, net for the three and six months ended June 30,
2024 relates to loss on extinguishment of 2018 Credit Facility, as
well as partial redemption and private repurchase of 2025 Notes
Herbalife Ltd. and Subsidiaries Condensed
Consolidated Balance Sheets (in millions)
June
30, December 31,
2024
2023
(unaudited) ASSETS Current Assets: Cash and cash equivalents
$
374.0
$
575.2
Receivables, net
82.8
81.2
Inventories
480.7
505.2
Prepaid expenses and other current assets
276.3
237.7
Total Current Assets
1,213.8
1,399.3
Property, plant and equipment, net
468.2
506.5
Operating lease right-of-use assets
188.3
185.8
Marketing-related intangibles and other intangible assets, net
313.1
314.0
Goodwill
91.5
95.4
Other assets
327.3
308.4
Total Assets
$
2,602.2
$
2,809.4
LIABILITIES AND SHAREHOLDERS' DEFICIT Current Liabilities:
Accounts payable
$
81.3
$
84.0
Royalty overrides
316.5
343.4
Current portion of long-term debt
21.7
309.5
Other current liabilities
556.7
540.7
Total Current Liabilities
976.2
1,277.6
Non-current liabilities: Long-term debt, net of current
portion
2,321.0
2,252.9
Non-current operating lease liabilities
173.3
167.6
Other non-current liabilities
168.9
171.6
Total Liabilities
3,639.4
3,869.7
Commitments and Contingencies Shareholders' deficit:
Common shares
0.1
0.1
Paid-in capital in excess of par value
253.4
233.9
Accumulated other comprehensive loss
(257.4
)
(232.0
)
Accumulated deficit
(1,033.3
)
(1,062.3
)
Total Shareholders' Deficit
(1,037.2
)
(1,060.3
)
Total Liabilities and Shareholders' Deficit
$
2,602.2
$
2,809.4
Herbalife Ltd. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (in millions)
Six Months Ended June 30,
2024
2023
(unaudited) Cash flows from operating activities: Net income
$
29.0
$
89.2
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
61.8
56.7
Share-based compensation expenses
23.7
22.0
Non-cash interest expense
5.6
3.6
Deferred income taxes
(27.5
)
(8.4
)
Inventory write-downs
11.4
16.9
Foreign exchange transaction loss (gain)
4.5
1.0
Loss on extinguishment of debt
10.5
-
Other
2.8
3.4
Changes in operating assets and liabilities: Receivables
(5.1
)
(16.6
)
Inventories
(6.6
)
50.7
Prepaid expenses and other current assets
(6.4
)
(17.5
)
Accounts payable
(3.5
)
(0.8
)
Royalty overrides
(19.2
)
(21.3
)
Other current liabilities
41.2
15.3
Other
(5.9
)
(12.4
)
Net cash provided by operating activities
116.3
181.8
Cash flows from investing activities: Purchases of property,
plant and equipment
(69.2
)
(68.6
)
Other
0.2
0.1
Net cash used in investing activities
(69.0
)
(68.5
)
Cash flows from financing activities: Borrowings from senior
secured credit facility and other debt
961.7
71.0
Principal payments on senior secured credit facility and other debt
(1,413.8
)
(146.7
)
Repayment of convertible senior notes
(197.0
)
-
Proceeeds from senior secured notes, net of discount
778.4
-
Repayment of senior notes
(344.3
)
-
Debt issuance costs
(20.9
)
(1.8
)
Share repurchases
(5.7
)
(9.4
)
Other
1.4
1.6
Net cash used in financing activities
(240.2
)
(85.3
)
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash
(13.3
)
3.0
Net change in cash, cash equivalents, and restricted cash
(206.2
)
31.0
Cash, cash equivalents, and restricted cash, beginning of period
595.5
516.3
Cash, cash equivalents, and restricted cash, end of period
$
389.3
$
547.3
Supplemental Information
SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)
Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA and
Credit Agreement EBITDA
In addition to its reported results calculated in accordance
with U.S. GAAP, the Company has included in this release adjusted
net income, adjusted diluted EPS, adjusted EBITDA and credit
agreement EBITDA, performance measures that the Securities and
Exchange Commission defines as “non-GAAP financial measures.”
Adjusted net income, adjusted diluted EPS, adjusted EBITDA and
credit agreement EBITDA exclude the impact of certain unusual or
non-recurring items such as expenses related to restructuring
initiatives, expenses related to the digital technology program,
gains or losses from extinguishment of debt and Korea tax
settlement, as further detailed in the reconciliations below.
Adjusted EBITDA margin represents adjusted EBITDA divided by net
sales. Credit agreement EBITDA represents EBITDA adjusted for
certain items permitted under our senior secured credit
facilities.
Management believes that such non-GAAP performance measures,
when read in conjunction with the Company’s reported results,
calculated in accordance with U.S. 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 results
under U.S. 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 definitions and calculations as set forth in the
tables below of adjusted net income, adjusted diluted EPS, adjusted
EBITDA and credit agreement EBITDA 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 U.S. GAAP.
The Company does not provide a reconciliation of forward-looking
adjusted EBITDA guidance to net income, the comparable U.S. GAAP
measure, because, due to the unpredictable or unknown nature of
certain significant items, such as income tax expenses or benefits,
loss contingencies, and any gains or losses in connection with
refinancing transactions, we cannot reconcile this non-GAAP
projection without unreasonable efforts. We expect the variability
of these items, which are necessary for a presentation of the
reconciliation, could have a significant impact on our reported
U.S. GAAP financial results.
Currency Fluctuation
Our international operations have provided and will continue to
provide a significant portion of our total net sales. As a result,
total net sales will continue to be affected by fluctuations in the
U.S. dollar against foreign currencies. In order to provide a
framework for assessing how our underlying businesses performed
excluding the effect of foreign currency fluctuations, in addition
to comparing the percent change in net sales from one period to
another in U.S. dollars, we also compare the percent change in net
sales from one period to another period using “net sales in local
currency.” Net sales in local currency is not a measure presented
in accordance with U.S. GAAP. Net sales in local currency removes
from net sales in U.S. dollars the impact of changes in exchange
rates between the U.S. dollar and the local currencies of our
foreign subsidiaries, by translating the current period net sales
into U.S. dollars using the same foreign currency exchange rates
that were used to translate the net sales for the previous
comparable period. We believe presenting net sales in local
currency is useful to investors because it allows a meaningful
comparison of net sales of our foreign operations from period to
period. However, net sales in local currency should not be
considered in isolation or as an alternative to net sales in U.S.
dollar measures that reflect current period exchange rates, or to
other financial measures calculated and presented in accordance
with U.S. GAAP.
The following is a reconciliation of net income to adjusted net
income:
Three Months Ended June 30, Six Months Ended June 30,
$ million
2024
2023
2024
2023
Net income
$
4.7
$
59.9
$
29.0
$
89.2
Expenses related to Restructuring Program (1) (2)
48.8
-
65.5
-
Expenses related to Transformation Program (1) (2)
3.5
10.1
9.4
37.4
Digital technology program costs (1) (2)
6.0
7.0
17.0
10.5
Loss on extinguishment of debt (1) (2)
10.5
-
10.5
-
Income tax adjustments for above items (1) (2)
(18.7
)
(3.0
)
(27.3
)
(9.2
)
Adjusted net income
$
54.8
$
74.0
$
104.1
$
127.9
The following is a reconciliation of diluted earnings per share
to adjusted diluted earnings per share:
Three Months Ended June 30, Six Months Ended June 30,
$ per share
2024
2023
2024
2023
Diluted earnings per share
$
0.05
$
0.60
$
0.29
$
0.89
Expenses related to Restructuring Program (1) (2)
0.48
-
0.65
-
Expenses related to Transformation Program (1) (2)
0.03
0.10
0.09
0.37
Digital technology program costs (1) (2)
0.06
0.07
0.17
0.11
Loss on extinguishment of debt (1) (2)
0.10
-
0.10
-
Income tax adjustments for above items (1) (2)
(0.18
)
(0.03
)
(0.27
)
(0.09
)
Adjusted diluted earnings per share
$
0.54
$
0.74
$
1.03
$
1.28
The following is a reconciliation of net income to EBITDA,
adjusted EBITDA and Credit Agreement EBITDA and Credit Agreement
total leverage ratio:
Three Months Ended TTM $ million
Jun 30 '23
Sep 30 '23 Dec 31 '23 Mar 31 '24 Jun 30
'24 Jun 30 '24 Net sales
$
1,314.0
$
1,281.3
$
1,215.0
$
1,264.3
$
1,281.1
$
5,041.7
Net income
$
59.9
$
42.8
$
10.2
$
24.3
$
4.7
$
82.0
Interest expense, net
38.4
38.5
38.1
37.9
57.7
172.2
Income taxes
25.1
26.4
7.5
9.7
7.5
51.1
Depreciation and amortization
29.1
28.4
28.2
29.2
32.6
118.4
EBITDA
152.5
136.1
84.0
101.1
102.5
423.7
Amortization of SaaS implementation costs
-
2.9
3.1
3.6
8.7
18.3
Expenses related to Restructuring Program
-
-
-
16.7
48.8
65.5
Expenses related to Transformation Program
10.1
4.6
12.2
5.9
3.5
26.2
Digital technology program costs
7.0
12.1
9.5
11.0
6.0
38.6
(Gain) loss on extinguishment of debt
-
(1.0
)
-
-
10.5
9.5
Korea tax settlement
-
8.6
-
-
-
8.6
Adjusted EBITDA
$
169.6
$
163.3
$
108.8
$
138.3
$
180.0
$
590.4
Adjusted EBITDA margin
12.9
%
12.7
%
9.0
%
10.9
%
14.1
%
11.7
%
Interest income
2.7
3.2
3.2
3.7
2.8
12.9
Inventory write-downs
5.4
5.0
6.6
4.7
6.7
23.0
Share-based compensation expenses
11.2
13.7
12.3
11.9
11.8
49.7
Other expenses (3)
(1.2
)
(3.8
)
11.8
0.9
6.7
15.6
Credit Agreement EBITDA
$
187.7
$
181.4
$
142.7
$
159.5
$
208.0
$
691.6
Credit Agreement Total Debt (4)
$
2,422.5
Credit Agreement Total Leverage Ratio 3.5x
The following is a reconciliation of net income to EBITDA,
adjusted EBITDA and Credit Agreement EBITDA and Credit Agreement
total leverage ratio:
Six Months Ended June 30, Year Ended Dec 31, $
million
2024
2023
2023
Net sales
$
2,545.4
$
2,566.1
$
5,062.4
Net income
$
29.0
$
89.2
$
142.2
Interest expense, net
95.6
77.8
154.4
Income taxes
17.2
26.9
60.8
Depreciation and amortization
61.8
56.7
113.3
EBITDA
203.6
250.6
470.7
Amortization of SaaS implementation costs
12.3
-
6.0
Expenses related to Restructuring Program
65.5
-
-
Expenses related to Transformation Program
9.4
37.4
54.2
Digital technology program costs
17.0
10.5
32.1
(Gain) loss on extinguishment of debt
10.5
-
(1.0
)
Korea tax settlement
-
-
8.6
Adjusted EBITDA
$
318.3
$
298.5
$
570.6
Adjusted EBITDA margin
12.5
%
11.6
%
11.3
%
Interest income
6.5
5.1
11.5
Inventory write-downs
11.4
16.9
28.5
Share-based compensation expenses
23.7
22.0
48.0
Other expenses (3)
7.6
3.5
11.5
Credit Agreement EBITDA
$
367.5
$
346.0
$
670.1
Credit Agreement Total Debt (4)
$
2,581.1
Credit Agreement Total Leverage Ratio 3.9x (1) Based on
interim income tax reporting rules, these expenses are not
considered discrete items. The tax effect of the adjustments
between our U.S. GAAP and non-GAAP results takes into account the
tax treatment and related tax rate(s) that apply to each adjustment
in the applicable tax jurisdiction(s). (2) Excludes tax
(benefit)/expense as follows:
Three Months Ended June 30,
Six Months Ended June 30, $ million
2024
2023
2024
2023
Expenses related to Restructuring Program
$
(15.7
)
$
-
$
(20.2
)
$
-
Expenses related to Transformation Program
(0.5
)
(2.5
)
(2.5
)
(8.5
)
Digital technology program costs
0.1
(0.5
)
(2.0
)
(0.7
)
Loss on extinguishment of debt
(2.6
)
-
(2.6
)
-
Total income tax adjustments
$
(18.7
)
$
(3.0
)
$
(27.3
)
$
(9.2
)
Three Months Ended June 30, Six
Months Ended June 30, $ per share
2024
2023
2024
2023
Expenses related to Restructuring Program
$
(0.15
)
$
-
$
(0.20
)
$
-
Expenses related to Transformation Program
-
(0.02
)
(0.02
)
(0.09
)
Digital technology program costs
-
(0.01
)
(0.02
)
(0.01
)
Loss on extinguishment of debt
(0.03
)
-
(0.03
)
-
Total income tax adjustments (5)
$
(0.18
)
$
(0.03
)
$
(0.27
)
$
(0.09
)
(3) Other expenses include certain non-cash items such as
bad debt expense, unrealized foreign currency gains and losses, and
other gains and losses (4) Represents the outstanding
principal amount of total debt as of the respective period end
(5) Amounts may not total due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730118998/en/
Media Contact: Thien Ho Vice President, Global Corporate
Communications thienh@herbalife.com
Investor Contact: Erin Banyas Vice President, Head of
Investor Relations erinba@herbalife.com
Grafico Azioni Herbalife (NYSE:HLF)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Herbalife (NYSE:HLF)
Storico
Da Feb 2024 a Feb 2025
