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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
February 13, 2025
Herbalife Ltd.
(Exact Name of Registrant as Specified in Charter)
| Cayman Islands |
|
1-32381 |
|
98-0377871 |
|
(State or Other Jurisdiction
of Incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer
Identification No.)
|
|
P.O. Box 309, Ugland House,
Grand Cayman
Cayman
Islands |
|
KY1-1104 |
| (Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code: c/o (213) 745-0500
Not Applicable
(Former Name or Former Address, if Changed Since
Last Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange
on which registered |
| Common Shares, par value $0.0005 per share |
|
HLF |
|
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On February 19, 2025, Herbalife Ltd. (the “Company”) issued
a press release announcing its financial results for its fourth fiscal quarter and fiscal year ended December 31, 2024. A copy of the
press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information contained in this Item 2.02 and Exhibit 99.1 attached
to this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference
into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall
be expressly set forth by specific reference in such a filing.
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Leadership Succession
On February 13, 2025, Stephan Paulo Gratziani,
the Company’s current President, was appointed as the Company’s Chief Executive Officer, effective May 1, 2025 (the “Effective
Date”), succeeding Michael O. Johnson, the Company’s current Chairman and Chief Executive Officer, who will concurrently transition
to serve as the Company’s Executive Chairman. As of the Effective Date, Rob Levy, the Company’s current Managing Director,
International, will succeed Mr. Gratziani to serve as the Company’s President – Worldwide Markets.
Notwithstanding anything in his employment agreement
to the contrary, in connection with his role as Executive Chairman, beginning on the Effective Date, Mr. Johnson will have an annual salary
of $740,741 and a target annual cash incentive equal to 125% of base salary (with a maximum annual cash incentive of 200% of target),
subject to actual performance. In addition, Mr. Johnson will continue to be eligible for an equity incentive award in 2025 having a grant
date fair value equal to $8,000,000 of which $2,666,666 is in connection with 4 months of service as Chief Executive Officer beginning
from January 1, 2025 plus $5,333,334 for 12 months of service from the Effective Date as Executive Chairman (the “Johnson Equity
Awards”). The Johnson Equity Awards will consist of the following: (i) 50% of the value of the Johnson Equity Awards will be
granted in the form of Performance Stock Units that are subject performance-based vesting criteria (“PSUs”), (ii) 25% of the
value of the Johnson Equity Awards will be granted in the form of restricted cash units (“RCUs”) and (iii) 25% of the value
of the Johnson Equity Awards will be granted in the form of Stock Appreciation Rights (“SARs”). Mr. Johnson shall also continue
to be entitled to personal use of private aircraft paid by the Company, subject to an annualized limit of $500,000 based on the incremental
cost to the Company of such use.
The Johnson Equity Awards will vest, subject to
continued service through the applicable vesting date as an employee and/or member of the Board of Directors of the Company (the “Board”),
in two installments, 50% on the first anniversary of the date on which they are granted (the “Grant Date”), and 50% on the
date of the Company’s Annual General Meeting of Shareholders in 2026. The SARs that are granted as part of the Johnson Equity Awards
will remain outstanding for the full ten-year term unless Mr. Johnson’s employment is terminated for “cause” (as defined
in the applicable award agreement). The PSU performance metrics will be the same as those for the Company’s Executive Vice Presidents,
except that the vesting of the PSUs will be subject to achievement of cumulative goals set for fiscal years 2025 and 2026. Notwithstanding
the foregoing, if (i) Mr. Johnson voluntarily resigns as Chief Executive Officer or Executive Chairman, as applicable, prior to the
date of the Company’s Annual General Meeting of Shareholders in 2026, any unvested portion of the Johnson Equity Awards will be
forfeited; (ii) Mr. Johnson is terminated as Chief Executive Officer or Executive Chairman, as applicable, without “cause”
(as defined in the applicable award agreement) or is not re-elected or nominated by the Company for election to the Board, then, subject
to his execution and non-revocation of a general release of claims in favor of the Company, the Johnson Equity Awards shall accelerate
based on the number of days Mr. Johnson was providing continuous service as an employee and/or member of the Board during the vesting
period and, for any PSUs, the Company’s achievement with respect to the applicable performance metric(s); or (iii) Mr. Johnson is
involuntarily terminated from his position as Chief Executive Officer or Executive Chairman, as applicable, within twenty-four (24) months
following a “change in control” (as defined in the Plan), the Johnson Equity Awards will be subject to acceleration as provided
in Section 15(c) of the Company’s Amended and Restated 2023 Stock Incentive Plan, as amended from time to time. Mr. Johnson will
continue to be ineligible to participate in the Herbalife International of America, Inc. Executive Officer Severance Plan.
In connection with his role as Chief Executive
Officer, beginning on the Effective Date, Mr. Gratziani will have an annual salary of $1,100,000, and a target annual cash incentive
equal to 150% of base salary (with a maximum annual cash incentive of 200% of target), subject to actual performance. In addition,
Mr. Gratziani will be eligible for a prorated equity incentive award for 2025 having a grant date fair value equal to $5,600,000
(the “Gratziani Equity Awards”). The Gratziani Equity Awards will consist of the following: (i) 50% of the value of
the Gratziani Equity Awards will be granted in the form of PSUs, (ii) 25% of the value of the Gratziani Equity Awards will be
granted in the form of RCUs and (iii) 25% of the value of the Gratziani Equity Awards will be granted in the form of SARs. The
portions of the Gratziani Equity Awards granted in the form of SARs and RCUs will vest, subject to continued employment with the
Company, in equal annual installments over three years from the date of grant. The portion of the Gratziani Equity Awards granted in
the form of PSUs will vest based on continued employment and the satisfaction of the performance-based vesting criteria on the third
anniversary of the date of grant.
Mr. Gratziani, 56, has served as the Company’s
President since January 2024. Mr. Gratziani previously served as the Company’s Chief Strategy Officer from August 2023 to January
2024. Mr. Gratziani also served on the Company’s Board from April 2023 to August 2023. Prior to becoming an employee of the Company,
Mr. Gratziani served as an independent Herbalife distributor for 32 years. In connection with his prior service as Chief Strategy Officer
and as consideration for suspending the operation of his distributorship under the Company’s marketing plan upon accepting such
position, Mr. Gratziani received $1,000,000 since January 1, 2024 pursuant to the arrangement described in the 2023 Director Compensation
Table in the Company’s definitive proxy statement for the Company’s 2024 General Annual Meeting of Shareholders.
In connection with his role as President, Mr.
Levy will have an annual salary of $640,000 and a target annual cash incentive equal to 80% of base salary (with a maximum annual
cash incentive of 200% of target), subject to actual performance. In addition, Mr. Levy will be eligible for a prorated equity
incentive award for 2025 having a grant date fair value equal to $933,333 (the “Levy Equity Awards”). The Levy Equity
Awards will consist of the following: (i) 50% of the value of the Levy Equity Awards will be granted in the form of PSUs, (ii)
25% of the value of the Levy Equity Awards will be granted in the form of RCUs and (iii) 25% of the value of the Levy Equity Awards
will be granted in the form of SARs. The portions of the Levy Equity Awards granted in the form of SARs and RCUs will vest, subject
to continued employment with the Company, in equal annual installments over three years from the date of grant. The portion of the
Levy Equity Awards granted in the form of PSUs will vest based on continued employment and the satisfaction of the performance-based
vesting criteria on the third anniversary of the date of grant.
Mr. Levy, 66, has served as Managing Director,
International, since May 2024. Prior his role as Managing Director, International, Mr. Levy served as Regional President of the Americas
from July 2023 to May 2024, Executive Vice President, Worldwide Distributor Relations from August 2022 to June 2023, and Executive Vice
President, Worldwide Distributor Affairs & Latin America from December 2019 to August 2022. From May 2018 until December 2019, Mr.
Levy was the Executive Vice President of the Americas and Worldwide Distributor Affairs, from August 2017 to May 2018, the Executive Vice
President of the Americas, and from December 2013 to August 2017, the Executive Vice President of APAC, China, EMEA and Worldwide Sales
and Marketing. Prior to such roles, Mr. Levy held successive roles and responsibilities at the Company over various operations, sales
and distributor-facing functions around the globe, having joined the Company in November 1994. Mr. Levy holds a Bachelor of Arts degree
in economics from Boston University.
Item 7.01. Regulation FD Disclosure.
A copy of the press release announcing the leadership
succession is attached hereto as Exhibit 99.2 and incorporated herein by reference.
The Company intends to reference investor slides
during the Company’s earnings conference call to discuss its financial results for its fourth fiscal quarter and fiscal year ended
December 31, 2024. A copy of the presentation can be accessed in the “News and Events” section on the investor relations section
of the Company’s website at http://ir.herbalife.com under the heading “IR Calendar”.
The information included in this Item 7.01 and
exhibit 99.2 attached to this report shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise
subject to the liabilities of that section and shall not be deemed incorporated by reference into any filing under the Securities
Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
Herbalife Ltd. |
| |
|
|
| February 19, 2025 |
By: |
/s/ HENRY C. WANG
|
| |
|
Name: |
Henry C. Wang |
| |
|
Title: |
Chief Legal Officer and Corporate Secretary |
3
Exhibit 99.1
Herbalife
Reports Q4 Net Sales at High End of Guidance,
Q4 and Full-Year Net Sales Growth Excluding FX Headwinds1;
Q4 Adjusted EBITDA2 Exceeds Guidance
Stephan
Gratziani Appointed CEO; Michael Johnson Named Executive Chairman
LOS
ANGELES, February 19, 2025 – Herbalife Ltd. (NYSE: HLF) today reported financial results for the fourth quarter and year ended
December 31, 2024:
Highlights
| Fourth Quarter 2024 |
|
| |
|
“With
three consecutive |
| ● |
Net sales of $1.2 billion, down 0.6% vs. Q4 ’23 and at high end of guidance range |
quarters
of new |
| |
|
|
distributor |
| |
○ |
Includes 330 basis points of FX headwinds |
growth,
a new incoming |
| |
|
|
CEO
and significantly |
| |
○ |
Up 2.7% year-over-year on constant currency basis1 |
improved
Adjusted |
| |
|
|
EBITDA2
margins, we |
| ● |
Net income of $177.9 million includes non-cash income tax benefits of $147.3 million; adjusted net income2 $36.8 million |
enter
2025 with strong
momentum.” |
| |
|
|
|
| ● |
Adjusted EBITDA2 of $150.0 million exceeds guidance; adjusted EBITDA2 margin up 340 basis points vs. Q4 ’23 |
-
Michael Johnson,
Chairman and CEO |
| |
|
|
| ● |
Diluted EPS of $1.74; adjusted diluted EPS2 $0.36 |
|
| |
|
|
| Full-Year 2024 |
|
| |
|
|
|
| ● |
Net sales of $5.0 billion, down 1.4% vs. 2023 and at high end of guidance range |
| |
|
|
|
| |
○ |
Up 1.2% year-over-year on constant currency basis1 |
| |
|
|
|
| ● |
Adjusted EBITDA2 of $634.8 million exceeds guidance; adjusted EBITDA2 margin up 140 basis points vs. 2023 |
| |
|
|
|
| |
○ |
Credit Agreement EBITDA2 $728.8 million; total leverage ratio reduced to 3.2x at December 31 |
| |
|
|
|
| ● |
Net cash provided by operating activities of $285.4 million; capital expenditures $122.0 million |
| |
|
|
| Outlook |
|
| |
|
|
| ● |
First quarter and full-year 2025 guidance provided |
1
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.
2
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.
Management
Commentary
Herbalife
reported fourth quarter 2024 net sales of $1.2 billion, down 0.6% year-over-year, including
330 basis points of foreign currency headwinds. On a constant currency basis1,
net sales increased 2.7% year-over-year.
Fourth
quarter gross profit margin improved to 77.8% compared to 76.3% in the fourth quarter of 2023. On a year-over-year basis, gross profit
margin primarily benefited from approximately 80 basis points of pricing, approximately 30 basis points of favorable input costs, mainly
related to manufacturing efficiencies, approximately 30 basis points from lower inventory write-downs and approximately 20 basis points
of favorable foreign currency, partially offset by approximately 20 basis points of unfavorable sales mix.
Fourth
quarter net income was $177.9 million, with net income margin of 14.7% and adjusted net income2 of $36.8 million. Net income
includes $147.3 million of non-cash net deferred income tax benefits related to changes the Company initiated to its corporate entity
structure during the fourth quarter of 2024, including intra-entity transfers of intellectual property to one of its European subsidiaries.
These non-cash net deferred income tax benefits are excluded from the adjusted results. Adjusted EBITDA2 of $150.0 million
includes approximately $12 million of foreign currency headwinds year-over-year, with adjusted EBITDA2 margin of 12.4%, up
340 basis points versus the fourth quarter of 2023. Diluted EPS was $1.74 and includes $1.44 favorable impact related to the non-cash
deferred income tax benefits recognized in the quarter. Adjusted diluted EPS2 was $0.36, which includes a $0.07 year-over-year
foreign currency headwind.
For
full-year 2024, net sales were $5.0 billion, down 1.4% year-over-year, including 260 basis points of foreign currency headwinds. On a
constant currency basis1, net sales increased 1.2% year-over-year.
Full-year
2024 net income was $254.3 million, with net income margin of 5.1% and adjusted net income2 of $198.9 million. Net income
includes $147.3 million of non-cash net deferred income tax benefits related to changes the Company initiated to its corporate entity
structure during the fourth quarter of 2024, which are excluded from the adjusted results. Adjusted EBITDA2 of $634.8 million
includes approximately $42 million of foreign currency headwinds year-over-year, with adjusted EBITDA2 margin of 12.7%, up
140 basis points versus 2023. Diluted EPS was $2.50 and includes $1.45 favorable impact related to the non-cash deferred income tax benefits
recognized in the fourth quarter. Adjusted diluted EPS2 was $1.96, which includes a $0.28 year-over-year foreign currency
headwind.
Net
cash provided by operating activities was $69.6 million and $285.4 million for the three and twelve months ended December 31, 2024, respectively.
Capital expenditures were $25.7 million and $122.0 million for the three and twelve months ended December 31, 2024, respectively, and
capitalized SaaS implementation costs were approximately $3 million and $16 million, respectively. The Company expects to incur total
capitalized SaaS implementation costs of approximately $25 million to $30 million for the full year of 2025, which are not included in
capital expenditures.
During
the first quarter of 2024, the Company initiated a Restructuring Program designed to bring leadership closer to its markets, streamline
the employee structure and accelerate productivity. Substantially all actions related to the program were completed as of June 30. The
Restructuring Program is expected to deliver annual savings of at least $80 million beginning in 2025, with at least $20 million and
at least $50 million of savings realized during the three and twelve months ended December 31, 2024, respectively. The Company expects
to incur total program pre-tax expenses of approximately $74 million (up from approximately $70 million) related to the program, which
are primarily related to severance costs. For the three and twelve months ended December 31, 2024, approximately $1 million and $69 million,
respectively, of pre-tax expenses were recognized in SG&A related to the restructuring and are excluded from the adjusted results.
On
February 11, 2025, and consistent with its capital allocation priorities, the Company redeemed $65.0 million aggregate principal amount
of the 7.875% Senior Notes due 2025 (“2025 Notes”) for an aggregate purchase price of $67.3 million, which included $2.3
million of accrued and unpaid interest. Following the redemption, the outstanding principal balance of the 2025 Notes is $197.3 million
and remains due in September 2025.
“2024
was a transformative year for Herbalife,” said John DeSimone, Chief Financial Officer. “Our strong margin improvement and
progress in paying down debt have positioned us to deliver long-term shareholder value.”
Distributor
trends remain strong and reflect greater engagement globally. For the fourth quarter, the number of new distributors joining Herbalife
worldwide increased 22% year-over-year – marking the Company’s third consecutive quarter of year-over-year growth. Overall
event attendance at the Company’s Extravaganza training events across the globe was greater in 2024 than in 2023, further reflecting
the demand and value these in-person events provide for development and networking. In 2025, the Company expects to host multi-city and
multi-day events in select regions to accommodate the increased demand. The Company believes these events and other initiatives have
supported an increase in sales leader retention. For the twelve-month requalification period ending January 2025, approximately 70.3%
of the distributor sales leaders, excluding China, requalified to retain their status, up from 68.3% for the same period a year ago.
These
positive trends continued into the new year as the Company began its global rollout of the Diamond Development Mastermind Program, an
ongoing training and accountability program led by President Stephan Gratziani and supported by network marketing industry leader and
coach, Eric Worre. In January, a kickoff event was held for the Asia Pacific region, with approximately 400 distributors attending the
in-person session in Korea and nearly 2,600 distributors attending virtually or via the live streamed event from 13 other locations across
the region. This weekend, the program will be expanded to the Mexico market, with approximately 2,000 attendees expected, with
additional markets to follow throughout the year.
In
February, the Company celebrated its 45th anniversary of changing people’s lives through science-backed nutrition products
and a business opportunity. In March, the Company will host Herbalife Honors in Los Angeles, California, with approximately 3,000 distributor
leaders from around the world expected to attend the annual leadership training and recognition event.
CEO
Transition
As
announced in a separate press release today, the Board of Directors have appointed Stephan Gratziani as Chief Executive Officer. Mr.
Gratziani succeeds Michael Johnson who will transition to the role of Executive Chairman. In addition, Rob Levy has been appointed to
President, Worldwide Markets. All appointments are effective as of May 1, 2025.
“For
both the fourth quarter and full year, we delivered net sales growth on a constant currency basis1,” said Michael Johnson.
“Our 2024 results reflect the resilience of Herbalife, our distributors and our communities. I am excited and confident in the
future of Herbalife under the experienced and visionary leadership of Stephan Gratziani.”
| Fourth Quarter and Full-Year 2024 Key Metrics |
Regional
Net Sales and Foreign Exchange (“FX”) Impact
| | |
Reported
Net Sales | | |
YoY
Growth (Decline) | |
$
million | |
Q4 ‘24 | | |
Q4 ‘23 | | |
including
FX | | |
excluding
FX1 | |
| North America | |
$ | 245.0 | | |
$ | 252.8 | | |
| (3.1 | )% | |
| (3.0 | )% |
| Latin America | |
| 199.5 | | |
| 196.4 | | |
| 1.6 | % | |
| 15.5 | % |
| EMEA | |
| 257.2 | | |
| 250.1 | | |
| 2.8 | % | |
| 5.6 | % |
| Asia Pacific | |
| 439.8 | | |
| 433.5 | | |
| 1.5 | % | |
| 3.0 | % |
| China | |
| 65.9 | | |
| 82.2 | | |
| (19.8 | )% | |
| (20.3 | )% |
| Worldwide | |
$ | 1,207.4 | | |
$ | 1,215.0 | | |
| (0.6 | )% | |
| 2.7 | % |
| | |
Reported
Net Sales | | |
YoY
Growth (Decline) | |
$
million | |
FY ‘24 | | |
FY ‘23 | | |
including
FX | | |
excluding
FX1 | |
| North America | |
$ | 1,054.4 | | |
$ | 1,131.4 | | |
| (6.8 | )% | |
| (6.8 | )% |
| Latin America | |
| 832.5 | | |
| 820.9 | | |
| 1.4 | % | |
| 7.8 | % |
| EMEA | |
| 1,084.8 | | |
| 1,068.8 | | |
| 1.5 | % | |
| 4.4 | % |
| Asia Pacific | |
| 1,723.8 | | |
| 1,713.9 | | |
| 0.6 | % | |
| 3.0 | % |
| China | |
| 297.6 | | |
| 327.4 | | |
| (9.1 | )% | |
| (7.5 | )% |
| Worldwide | |
$ | 4,993.1 | | |
$ | 5,062.4 | | |
| (1.4 | )% | |
| 1.2 | % |
Regional
Volume Point Metrics
| | |
Volume
Points | |
| in millions | |
Q4 ‘24 | | |
Q4 ‘23 | | |
YoY %
Chg. | | |
FY ‘24 | | |
FY ‘23 | | |
YoY %
Chg. | |
| North America(a) | |
| 239.5 | | |
| 250.6 | | |
| (4.4 | )% | |
| 1,029.5 | | |
| 1,160.9 | | |
| (11.3 | )% |
| Latin America(b) | |
| 264.8 | | |
| 239.4 | | |
| 10.6 | % | |
| 1,035.8 | | |
| 1,028.0 | | |
| 0.8 | % |
| EMEA | |
| 269.2 | | |
| 279.5 | | |
| (3.7 | )% | |
| 1,136.2 | | |
| 1,222.9 | | |
| (7.1 | )% |
| Asia Pacific | |
| 548.9 | | |
| 552.3 | | |
| (0.6 | )% | |
| 2,145.3 | | |
| 2,151.5 | | |
| (0.3 | )% |
| China | |
| 49.4 | | |
| 60.1 | | |
| (17.8 | )% | |
| 222.1 | | |
| 237.6 | | |
| (6.5 | )% |
| Worldwide(c) | |
| 1,371.8 | | |
| 1,381.9 | | |
| (0.7 | )% | |
| 5,568.9 | | |
| 5,800.9 | | |
| (4.0 | )% |
Note: During Q2 ‘24, most markets within the Latin America region,
excluding Mexico, implemented a 5% price reduction and Volume Point adjustments for most products to enhance the competitiveness of product
pricing and aiming to stimulate incremental volume growth.
During Q4 ‘24, the U.S. and Puerto Rico markets within the North
America region, implemented Volume Point adjustments for most products for strategic reasons.
Refer to the Company's Annual Report on Form 10-K for the year ended
December 31, 2024, for additional details.
| (a) | Excluding North America related Volume Point adjustments noted above, the year-over-year percentage change for Q4 ‘24 and FY
‘24 would have been a decrease of 6.1% and 11.7%, respectively. |
| (b) | Excluding Latin America related Volume Point adjustments noted above, the year-over-year percentage change for Q4 ‘24 and FY
‘24 would have been an increase of 8.6% and decrease of 0.6%, respectively. |
| (c) | Excluding the Volume Point adjustments noted above, the year-over-year percentage change for Q4 ‘24 and FY ‘24 would have
been a decrease of 1.4% and 4.3%, respectively. |
First Quarter 2025 Guidance
|
$ million |
Q1 ‘25 Guidance |
Q1 ‘24 Results |
| Net sales |
(5.5)% to (1.5)% YoY |
1,264.3 |
| Net sales at constant currency(a) |
0% to +4% YoY |
|
| Adjusted EBITDA2 |
140 – 150 |
138.3 |
| Adjusted EBITDA2 at constant currency(a) |
158 – 168 |
|
| Capital expenditures |
30 – 40 |
32.9 |
Full-Year 2025 Guidance
|
$ million |
FY ‘25 Guidance |
FY ‘24 Results |
| Net sales |
(3)% to +3% YoY |
4,993.1 |
| Net sales at constant currency(a) |
+1% to +7% YoY |
|
| Adjusted EBITDA2 |
600 – 640 |
634.8 |
| Adjusted EBITDA2 at constant currency(a) |
670 – 710 |
|
| Capital expenditures |
100 – 130 |
122.0 |
| (a) | Non-GAAP Measure. Net sales and adjusted EBITDA2 at constant currency represent projections using U.S. Dollars at Q1 ‘24
and FY ‘24 average FX rates, respectively, and adjusting for other FX related impacts. Refer to Schedule A – “Reconciliation
of Non-GAAP Financial Measures” for a discussion of non-GAAP guidance and why the Company believes adjusting for the effects of
foreign exchange is useful. |
Guidance Assumptions
| · | Net sales and adjusted EBITDA2 use the average daily exchange rates for the first three weeks of January 2025 to translate
local currency projections for all of 2025 |
| · | Outlook does not include any potential impact of incremental tariffs |
|
Earnings Webcast and
Conference Call
|
Herbalife’s senior management team will host a live audio webcast
and conference call to discuss its fourth quarter and full-year 2024 financial results on Wednesday, February 19, 2025, 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/mssckczw.
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/BI34b011f4acb546d392c732dd054eb4c4.
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.
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.
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
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, unfavorable foreign exchange rate fluctuations,
and tariffs or retaliatory tariffs, 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 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; |
| ● | 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 Annual Report on Form 10-K for the
fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on February 19, 2025, 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.
Herbalife
Ltd. and Subsidiaries
Condensed
Consolidated Statements of Income
(in
millions, except per share amounts)
| | |
Three Months Ended December 31, | | |
Year Ended
December 31, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
(unaudited) | | |
| | |
| |
| Net sales | |
$ | 1,207.4 | | |
$ | 1,215.0 | | |
$ | 4,993.1 | | |
$ | 5,062.4 | |
| Cost of sales | |
| 267.5 | | |
| 287.6 | | |
| 1,104.3 | | |
| 1,191.0 | |
| Gross profit | |
| 939.9 | | |
| 927.4 | | |
| 3,888.8 | | |
| 3,871.4 | |
| Royalty overrides | |
| 397.0 | | |
| 397.4 | | |
| 1,633.0 | | |
| 1,659.2 | |
| Selling, general, and administrative expenses | |
| 436.9 | | |
| 474.3 | | |
| 1,875.4 | | |
| 1,866.0 | |
| Other
operating income (1) | |
| (0.5 | ) | |
| (0.1 | ) | |
| (5.5 | ) | |
| (10.2 | ) |
| Operating income | |
| 106.5 | | |
| 55.8 | | |
| 385.9 | | |
| 356.4 | |
| Interest expense, net | |
| 53.9 | | |
| 38.1 | | |
| 206.0 | | |
| 154.4 | |
| Other
expense (income), net (2) | |
| - | | |
| - | | |
| 10.5 | | |
| (1.0 | ) |
| Income before income taxes | |
| 52.6 | | |
| 17.7 | | |
| 169.4 | | |
| 203.0 | |
| Income taxes | |
| (125.3 | ) | |
| 7.5 | | |
| (84.9 | ) | |
| 60.8 | |
| Net income | |
$ | 177.9 | | |
$ | 10.2 | | |
$ | 254.3 | | |
$ | 142.2 | |
| | |
| | | |
| | | |
| | | |
| | |
| Earnings per share: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
$ | 1.76 | | |
$ | 0.10 | | |
$ | 2.53 | | |
$ | 1.44 | |
| Diluted | |
$ | 1.74 | | |
$ | 0.10 | | |
$ | 2.50 | | |
$ | 1.42 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted-average shares outstanding: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 101.1 | | |
| 99.3 | | |
| 100.6 | | |
| 99.0 | |
| Diluted | |
| 102.0 | | |
| 100.7 | | |
| 101.6 | | |
| 100.2 | |
(1)
Other operating income for the three and twelve months ended December 31, 2024 and 2023 relates to certain China government grant income.
(2)
Other expense, net for the year ended December 31, 2024 relates to loss on extinguishment of 2018 Credit Facility, as well as partial
redemption and private repurchase of 2025 Notes. Other income, net for the year ended December 31, 2023 relates to gain on extinguishment
of a portion of 2024 Convertible Notes.
Herbalife
Ltd. and Subsidiaries
Condensed
Consolidated Balance Sheets
(in
millions)
| | |
December 31, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| ASSETS | |
| | |
| |
| Current Assets: | |
| | |
| |
| Cash
and cash equivalents | |
$ | 415.3 | | |
$ | 575.2 | |
| Receivables,
net | |
| 68.9 | | |
| 81.2 | |
| Inventories | |
| 475.4 | | |
| 505.2 | |
| Prepaid
expenses and other current assets | |
| 184.1 | | |
| 237.7 | |
| Total
Current Assets | |
| 1,143.7 | | |
| 1,399.3 | |
| | |
| | | |
| | |
| Property,
plant and equipment, net | |
| 460.2 | | |
| 506.5 | |
| Operating
lease right-of-use assets | |
| 185.7 | | |
| 185.8 | |
| Marketing-related
intangibles and other intangible assets, net | |
| 312.3 | | |
| 314.0 | |
| Goodwill | |
| 87.7 | | |
| 95.4 | |
| Deferred
income tax assets | |
| 398.6 | | |
| 179.3 | |
| Other
assets | |
| 139.9 | | |
| 129.1 | |
| Total
Assets | |
$ | 2,728.1 | | |
$ | 2,809.4 | |
| | |
| | | |
| | |
| LIABILITIES
AND SHAREHOLDERS' DEFICIT | |
| | | |
| | |
| Current
Liabilities: | |
| | | |
| | |
| Accounts
payable | |
$ | 70.0 | | |
$ | 84.0 | |
| Royalty
overrides | |
| 334.1 | | |
| 343.4 | |
| Current
portion of long-term debt | |
| 283.5 | | |
| 309.5 | |
| Other
current liabilities | |
| 542.8 | | |
| 540.7 | |
| Total
Current Liabilities | |
| 1,230.4 | | |
| 1,277.6 | |
| | |
| | | |
| | |
| Non-current
liabilities: | |
| | | |
| | |
| Long-term
debt, net of current portion | |
| 1,976.6 | | |
| 2,252.9 | |
| Non-current
operating lease liabilities | |
| 169.5 | | |
| 167.6 | |
| Other
non-current liabilities | |
| 152.7 | | |
| 171.6 | |
| Total
Liabilities | |
| 3,529.2 | | |
| 3,869.7 | |
| | |
| | | |
| | |
| Commitments
and Contingencies | |
| | | |
| | |
| | |
| | | |
| | |
| Shareholders'
deficit: | |
| | | |
| | |
| Common shares | |
| 0.1 | | |
| 0.1 | |
| Paid-in capital in
excess of par value | |
| 278.2 | | |
| 233.9 | |
| Accumulated
other comprehensive loss | |
| (271.4 | ) | |
| (232.0 | ) |
| Accumulated
deficit | |
| (808.0 | ) | |
| (1,062.3 | ) |
| Total
Shareholders' Deficit | |
| (801.1 | ) | |
| (1,060.3 | ) |
| Total
Liabilities and Shareholders' Deficit | |
$ | 2,728.1 | | |
$ | 2,809.4 | |
Herbalife
Ltd. and Subsidiaries
Condensed
Consolidated Statements of Cash Flows
(in
millions)
| | |
Year Ended
December 31, | |
| | |
2024 | | |
2023 | |
| Cash flows from
operating activities: | |
| | |
| |
| Net
income | |
$ | 254.3 | | |
$ | 142.2 | |
| Adjustments
to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
| Depreciation
and amortization | |
| 121.4 | | |
| 113.3 | |
| Share-based
compensation expenses | |
| 50.0 | | |
| 48.0 | |
| Non-cash
interest expense | |
| 13.4 | | |
| 7.4 | |
| Deferred
income taxes | |
| (229.6 | ) | |
| (41.1 | ) |
| Inventory
write-downs | |
| 18.9 | | |
| 28.5 | |
| Foreign
exchange transaction loss | |
| 7.6 | | |
| 6.0 | |
| Loss
(gain) on extinguishment of debt | |
| 10.5 | | |
| (1.0 | ) |
| Other | |
| 6.4 | | |
| 6.5 | |
| Changes
in operating assets and liabilities: | |
| | | |
| | |
| Receivables | |
| 5.9 | | |
| (12.6 | ) |
| Inventories | |
| (30.4 | ) | |
| 57.5 | |
| Prepaid
expenses and other current assets | |
| 43.1 | | |
| (13.8 | ) |
| Accounts
payable | |
| (14.6 | ) | |
| (7.4 | ) |
| Royalty
overrides | |
| 11.1 | | |
| (6.5 | ) |
| Other
current liabilities | |
| 40.4 | | |
| 23.8 | |
| Other | |
| (23.0 | ) | |
| 6.7 | |
| Net
cash provided by operating activities | |
| 285.4 | | |
| 357.5 | |
| | |
| | | |
| | |
| Cash
flows from investing activities: | |
| | | |
| | |
| Purchases
of property, plant and equipment | |
| (122.0 | ) | |
| (135.0 | ) |
| Proceeds
from sale and leaseback transaction, net of related expenses | |
| 37.9 | | |
| - | |
| Other | |
| (0.5 | ) | |
| 0.2 | |
| Net
cash used in investing activities | |
| (84.6 | ) | |
| (134.8 | ) |
| | |
| | | |
| | |
| Cash
flows from financing activities: | |
| | | |
| | |
| Borrowings
from senior secured credit facility and other debt, net of discount | |
| 1,394.4 | | |
| 215.2 | |
| Principal
payments on senior secured credit facility and other debt | |
| (1,937.0 | ) | |
| (289.6 | ) |
| Repayment
of convertible senior notes | |
| (197.0 | ) | |
| (64.3 | ) |
| Proceeds
from senior secured notes, net of discount | |
| 778.4 | | |
| - | |
| Repayment
of senior notes | |
| (344.3 | ) | |
| - | |
| Debt
issuance costs | |
| (24.0 | ) | |
| (1.8 | ) |
| Share repurchases | |
| (8.3 | ) | |
| (11.0 | ) |
| Other | |
| 2.5 | | |
| 3.2 | |
| Net
cash used in financing activities | |
| (335.3 | ) | |
| (148.3 | ) |
| Effect
of exchange rate changes on cash, cash equivalents, and restricted cash | |
| (22.9 | ) | |
| 4.8 | |
| Net
change in cash, cash equivalents, and restricted cash | |
| (157.4 | ) | |
| 79.2 | |
| Cash,
cash equivalents, and restricted cash, beginning of period | |
| 595.5 | | |
| 516.3 | |
| Cash,
cash equivalents, and restricted cash, end of period | |
$ | 438.1 | | |
$ | 595.5 | |
| | |
| | | |
| | |
| Cash
paid during the year: | |
| | | |
| | |
| Interest
paid | |
$ | 194.4 | | |
$ | 159.1 | |
| Income
taxes paid | |
$ | 146.5 | | |
$ | 133.1 | |
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 sale of property, gains or losses from extinguishment of debt and certain tax expenses and benefits,
as further detailed in the reconciliations below. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales. Credit agreement
EBITDA represents EBITDA adjusted for 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 or constant currency 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
these non-GAAP projections 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 December 31, | | |
Year
Ended December 31, | |
| $ million | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Net income | |
$ | 177.9 | | |
$ | 10.2 | | |
$ | 254.3 | | |
$ | 142.2 | |
| Expenses
related to Restructuring Program (1) (2) | |
| 0.9 | | |
| - | | |
| 69.1 | | |
| - | |
| Expenses
related to Transformation Program (1) (2) | |
| 4.0 | | |
| 12.2 | | |
| 13.4 | | |
| 54.2 | |
| Digital
technology program costs (1) (2) | |
| 4.6 | | |
| 9.5 | | |
| 26.7 | | |
| 32.1 | |
| Gain
on sale of property (1) (2) | |
| - | | |
| - | | |
| (4.0 | ) | |
| - | |
| Korea
tax settlement (1) (2) | |
| - | | |
| - | | |
| - | | |
| 8.6 | |
| Loss
(gain) on extinguishment of debt (1) (2) | |
| - | | |
| - | | |
| 10.5 | | |
| (1.0 | ) |
| Income
tax adjustments for above items (1) (2) | |
| (3.3 | ) | |
| (3.3 | ) | |
| (23.8 | ) | |
| (14.3 | ) |
| Deferred
income tax benefits, net, from corporate entity reorganization | |
| (147.3 | ) | |
| - | | |
| (147.3 | ) | |
| - | |
| Adjusted
net income | |
$ | 36.8 | | |
$ | 28.6 | | |
$ | 198.9 | | |
$ | 221.8 | |
The following
is a reconciliation of diluted earnings per share to adjusted diluted earnings per share:
| | |
Three Months Ended December 31, | | |
Year
Ended December 31, | |
| $
per share | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Diluted
earnings per share | |
$ | 1.74 | | |
$ | 0.10 | | |
$ | 2.50 | | |
$ | 1.42 | |
| Expenses
related to Restructuring Program (1) (2) | |
| 0.01 | | |
| - | | |
| 0.68 | | |
| - | |
| Expenses
related to Transformation Program (1) (2) | |
| 0.04 | | |
| 0.12 | | |
| 0.13 | | |
| 0.54 | |
| Digital
technology program costs (1) (2) | |
| 0.05 | | |
| 0.09 | | |
| 0.26 | | |
| 0.32 | |
| Gain
on sale of property (1) (2) | |
| - | | |
| - | | |
| (0.04 | ) | |
| - | |
| Korea
tax settlement (1) (2) | |
| - | | |
| - | | |
| - | | |
| 0.09 | |
| Loss
(gain) on extinguishment of debt (1) (2) | |
| - | | |
| - | | |
| 0.10 | | |
| (0.01 | ) |
| Income
tax adjustments for above items (1) (2) | |
| (0.03 | ) | |
| (0.03 | ) | |
| (0.23 | ) | |
| (0.14 | ) |
| Deferred
income tax benefits, net, from corporate entity reorganization | |
| (1.44 | ) | |
| - | | |
| (1.45 | ) | |
| - | |
| Adjusted
diluted earnings per share (5) | |
$ | 0.36 | | |
$ | 0.28 | | |
$ | 1.96 | | |
$ | 2.21 | |
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 | | |
Year Ended December 31, | |
|
| $
million | |
Dec
31 '23 | | |
Mar
31 '24 | | |
Jun
30 '24 | | |
Sep
30 '24 | | |
Dec
31 '24 | | |
2024 | | |
2023 | |
|
| Net
sales | |
$ | 1,215.0 | | |
$ | 1,264.3 | | |
$ | 1,281.1 | | |
$ | 1,240.3 | | |
$ | 1,207.4 | | |
$ | 4,993.1 | | |
$ | 5,062.4 | |
|
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
|
| Net
income | |
$ | 10.2 | | |
$ | 24.3 | | |
$ | 4.7 | | |
$ | 47.4 | | |
$ | 177.9 | | |
$ | 254.3 | | |
$ | 142.2 | |
|
| Interest
expense, net | |
| 38.1 | | |
| 37.9 | | |
| 57.7 | | |
| 56.5 | | |
| 53.9 | | |
| 206.0 | | |
| 154.4 | |
|
| Income
taxes | |
| 7.5 | | |
| 9.7 | | |
| 7.5 | | |
| 23.2 | | |
| (125.3 | ) | |
| (84.9 | ) | |
| 60.8 | |
|
| Depreciation
and amortization | |
| 28.2 | | |
| 29.2 | | |
| 32.6 | | |
| 30.6 | | |
| 29.0 | | |
| 121.4 | | |
| 113.3 | |
|
| EBITDA | |
| 84.0 | | |
| 101.1 | | |
| 102.5 | | |
| 157.7 | | |
| 135.5 | | |
| 496.8 | | |
| 470.7 | |
|
| Amortization
of SaaS implementation costs | |
| 3.1 | | |
| 3.6 | | |
| 8.7 | | |
| 5.0 | | |
| 5.0 | | |
| 22.3 | | |
| 6.0 | |
|
| Expenses
related to Restructuring Program | |
| - | | |
| 16.7 | | |
| 48.8 | | |
| 2.7 | | |
| 0.9 | | |
| 69.1 | | |
| - | |
|
| Expenses
related to Transformation Program | |
| 12.2 | | |
| 5.9 | | |
| 3.5 | | |
| - | | |
| 4.0 | | |
| 13.4 | | |
| 54.2 | |
|
| Digital
technology program costs | |
| 9.5 | | |
| 11.0 | | |
| 6.0 | | |
| 5.1 | | |
| 4.6 | | |
| 26.7 | | |
| 32.1 | |
|
| Gain
on sale of property | |
| - | | |
| - | | |
| - | | |
| (4.0 | ) | |
| - | | |
| (4.0 | ) | |
| - | |
|
| Korea
tax settlement | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 8.6 | |
|
| Loss
(gain) on extinguishment of debt | |
| - | | |
| - | | |
| 10.5 | | |
| - | | |
| - | | |
| 10.5 | | |
| (1.0 | ) |
|
| Adjusted
EBITDA | |
| 108.8 | | |
| 138.3 | | |
| 180.0 | | |
| 166.5 | | |
| 150.0 | | |
| 634.8 | | |
| 570.6 | |
|
| Interest
income | |
| 3.2 | | |
| 3.7 | | |
| 2.8 | | |
| 2.8 | | |
| 3.0 | | |
| 12.3 | | |
| 11.5 | |
|
| Inventory
write-downs | |
| 6.6 | | |
| 4.7 | | |
| 6.7 | | |
| 5.6 | | |
| 1.9 | | |
| 18.9 | | |
| 28.5 | |
|
| Share-based
compensation expenses | |
| 12.3 | | |
| 11.9 | | |
| 11.8 | | |
| 13.0 | | |
| 13.3 | | |
| 50.0 | | |
| 48.0 | |
|
| Other
expenses (3) | |
| 11.8 | | |
| 0.9 | | |
| 6.7 | | |
| 9.3 | | |
| (4.1 | ) | |
| 12.8 | | |
| 11.5 | |
|
| Credit
Agreement EBITDA | |
$ | 142.7 | | |
$ | 159.5 | | |
$ | 208.0 | | |
$ | 197.2 | | |
$ | 164.1 | | |
$ | 728.8 | | |
$ | 670.1 | |
|
| Credit
Agreement Total Debt (4) | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | 2,332.7 | | |
$ | 2,581.1 | |
|
| Credit
Agreement Total Leverage Ratio | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 3.2x | | |
| 3.9x | |
|
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
|
| Net
income margin | |
| 0.8 | % | |
| 1.9 | % | |
| 0.4 | % | |
| 3.8 | % | |
| 14.7 | % | |
| 5.1 | % | |
| 2.8 | % |
|
| Adjusted
EBITDA margin | |
| 9.0 | % | |
| 10.9 | % | |
| 14.1 | % | |
| 13.4 | % | |
| 12.4 | % | |
| 12.7 | % | |
| 11.3 | % |
|
(1) Based on interim income tax reporting rules, these (income)/expense items 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 December
31, | | |
Year
Ended December 31, | |
| $ million | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Expenses
related to Restructuring Program | |
$ | (2.6 | ) | |
$ | - | | |
$ | (17.5 | ) | |
$ | - | |
| Expenses
related to Transformation Program | |
| (1.2 | ) | |
| (2.3 | ) | |
| (3.1 | ) | |
| (10.6 | ) |
| Digital
technology program costs | |
| 0.7 | | |
| (1.2 | ) | |
| (1.8 | ) | |
| (2.6 | ) |
| Gain on
sale of property | |
| - | | |
| - | | |
| 0.9 | | |
| - | |
| Korea tax
settlement | |
| - | | |
| 0.3 | | |
| - | | |
| (1.1 | ) |
| Loss
(gain) on extinguishment of debt | |
| (0.2 | ) | |
| (0.1 | ) | |
| (2.3 | ) | |
| - | |
| Total income
tax adjustments | |
$ | (3.3 | ) | |
$ | (3.3 | ) | |
$ | (23.8 | ) | |
$ | (14.3 | ) |
| | |
Three Months Ended December
31, | | |
Year
Ended December 31, | |
| $ per share | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Expenses
related to Restructuring Program | |
$ | (0.03 | ) | |
$ | - | | |
$ | (0.17 | ) | |
$ | - | |
| Expenses
related to Transformation Program | |
| (0.01 | ) | |
| (0.02 | ) | |
| (0.03 | ) | |
| (0.11 | ) |
| Digital
technology program costs | |
| 0.01 | | |
| (0.01 | ) | |
| (0.02 | ) | |
| (0.03 | ) |
| Gain on
sale of property | |
| - | | |
| - | | |
| 0.01 | | |
| - | |
| Korea tax
settlement | |
| - | | |
| - | | |
| - | | |
| (0.01 | ) |
| Loss
(gain) on extinguishment of debt | |
| - | | |
| - | | |
| (0.02 | ) | |
| - | |
| Total
income tax adjustments (5) | |
$ | (0.03 | ) | |
$ | (0.03 | ) | |
$ | (0.23 | ) | |
$ | (0.14 | ) |
(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
Exhibit
99.2
Herbalife
Appoints Stephan Gratziani as Chief Executive Officer
Current
CEO Michael Johnson Transitions to Executive Chairman
LOS
ANGELES – February 19, 2025 – Herbalife Ltd. (NYSE: HLF) today announced its Board of Directors has appointed President,
Stephan Gratziani as Chief Executive Officer (CEO) effective May 1, 2025. Michael Johnson, current CEO and Chairman of the Board, will
transition to Executive Chairman.
As
a former Herbalife independent distributor, Mr. Gratziani built and grew his international business into one of the top global distributorships.
For 32 years, he directly navigated and led his organization through changes in technology, business models, changing consumer trends,
and industry competition. Since joining Herbalife as the Chief Strategy Officer in August 2023 and President since January 2024, Mr.
Gratziani has led key initiatives to transform the business and shift its trajectory.
“Stephan
came into the company and his impact was immediate,” said Michael Johnson, Chairman and CEO. “As a proven leader, Stephan
is the right CEO at the right time to keep our company at the forefront of direct selling and solidify our position as a leader in the
health and wellness industry.”
“As
the world’s largest active and lifestyle nutrition brand, the impact we have made in the world is truly incredible,” said
Mr. Gratziani. “Our scale and reach globally puts us in a unique position to become one of the world’s most important health
and wellness platforms. Our belief in our business model and the value, service, and opportunity it provides is stronger than ever.”
Mr.
Gratziani’s vision for the company’s future will merge Herbalife’s strong distributor network with cutting-edge health
and wellness technology, modernize the business, and redefine direct selling.
As
part of the planned leadership transition, Herbalife Managing Director of International Markets, Rob Levy, will take on the role of President,
Worldwide Markets, also effective May 1, 2025. Mr. Levy has held several senior leadership roles and has led every region during his
30-year tenure with Herbalife. In his current role, Mr. Levy is responsible for all business, strategy, sales, and marketing functions
across 43 markets internationally as well as international expansion. All Regional Managing Directors will report to Mr. Levy.
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.
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
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, unfavorable
foreign exchange rate fluctuations, and tariffs or retaliatory tariffs, 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 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; |
| ● | 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange
Commission on February 19, 2025, 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.
3
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Grafico Azioni Herbalife (NYSE:HLF)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Herbalife (NYSE:HLF)
Storico
Da Feb 2024 a Feb 2025
