Herbalife Ltd. (NYSE: HLF) (“Herbalife” or “Company”), today
announced updated guidance for the Company’s third quarter 2017
financial results in order to provide shareholders with the most
current information.
On August 21, 2017, the Company announced it had commenced a
"modified Dutch auction" self-tender offer to purchase for cash up
to an aggregate of $600 million of shares of its common
stock, at a per share price not less than $60.00 nor
greater than $68.00. Additionally, for each share tendered,
shareholders will also receive a non-transferable contractual
contingent value right (“CVR”) allowing participants in the tender
offer to receive a contingent cash payment should Herbalife be
acquired in a going-private transaction within two years of the
commencement of the tender offer.
The tender offer is currently scheduled to expire at 5:00 p.m.
New York City time on Thursday, October 5, 2017. In order to assist
shareholders in determining whether to participate in the tender
offer, and if so, how many shares they may wish to tender at prices
between $60.00 and $68.00 per share, the Company is providing
updated financial guidance in this release as well as updated risk
factors and other information in a Form 8-K filed today. This
updated guidance is appropriate in light of the self-tender
offer.
Updated Third Quarter 2017
Guidance
Based upon current information, updated third quarter 2017
guidance is reflected in the following chart:
Three Months Ended September 30, 2017
Low
High
Volume Point Growth vs 2016 (6.0%) (4.8%) Net Sales Growth vs 2016
(3.4%) (1.9%) Diluted EPS $0.63 $0.73 Adjusted(a) Diluted EPS $0.80
$0.90 Cap Ex ($ millions) $18.0 $28.0 Effective Tax Rate 22.5%
24.5% Adjusted Effective Tax Rate (a) 20.0% 22.0% Currency Adjusted
Net Sales Growth vs 2016 (3.1%) (1.6%) Currency Adjusted Diluted
EPS $0.84 $0.94
(a) Adjusted diluted EPS and adjusted
effective tax rate, for the purposes of 2017 guidance, excludes the
impact of expenses relating to challenges to the company’s business
model, the impact of non-cash interest costs associated with the
company’s convertible notes, benefits from China grants, FTC
settlement implementation and expenses related to regulatory
inquiries. See the table below for a reconciliation of adjusted
diluted EPS to diluted EPS calculated in accordance with GAAP.
The following is a reconciliation of
diluted earnings per share guidance, presented in accordance with
U.S. generally accepted accounting principles, to adjusted diluted
earnings per share guidance for certain items.
Three Months Ended September 30, 2017 Diluted
EPS Guidance $0.63 - $0.73 Expenses incurred responding to attacks
on the company's business model (1) 0.02
Non-cash interest expense and amortization
of non-cash issuance costs (2)
0.14 FTC Consent Order Implementation (3) 0.03 Expenses related to
regulatory inquiries (4) 0.03
China grant income (5)
(0.04) Income tax adjustments for above items (6) (0.02) Adjusted
diluted EPS guidance (7) $0.80 - $0.90
(1) Excludes tax impact of $0.5 million
for the three months ending September 30, 2017.
(2) Relates to non-cash expense on our
convertible notes and prepaid forward share repurchase
contract.
(3) Excludes tax impact of $0.8 million
for the three months ending September 30, 2017.
(4) Excludes tax impact of $0.8 million
for the three months ending September 30, 2017.
(5) Excludes tax impact of ($1.2) million
for the three months ending September 30, 2017.
(6) Aggregates the individual tax impacts
of each item as described in greater detail in footnotes 1, 3, 4
and 5 above.
(7) Amounts may not total due to rounding.
The Company is currently in the process of compiling, analyzing
and finalizing the results for the third quarter and the Company's
independent registered public accounting firm has not yet completed
its review of the third quarter results. As such, there can be no
assurance that the final adjusted or GAAP earnings per diluted
share will be within the ranges specified. Herbalife expects to
report its final results for the third quarter of 2017 on November
2, 2017.
About Herbalife
Herbalife Nutrition is a global nutrition company whose purpose
is to make the world healthier and happier. The Company has been on
a mission for nutrition - changing people's lives with great
nutrition products & programs - since 1980. Together with our
Herbalife Nutrition independent distributors, we are committed to
providing solutions to the worldwide problems of poor nutrition and
obesity, an aging population, sky-rocketing public healthcare costs
and a rise in entrepreneurs of all ages. We offer
high-quality, science-backed products, most of which are produced
in Company-operated facilities, one-on-one coaching with an
Herbalife Nutrition independent distributor, and a supportive
community approach that inspires customers to embrace a healthier,
more active lifestyle.
Our targeted nutrition, weight-management, energy and fitness
and personal care products are available exclusively to and
through dedicated Herbalife Nutrition distributors in more than 90
countries.
Through its corporate social responsibility efforts, Herbalife
Nutrition supports the Herbalife Family Foundation (HFF)
and its Casa Herbalife programs to help bring good
nutrition to children in need. The Company is also proud to sponsor
more than 190 world-class athletes, teams and events around the
globe, including Cristiano Ronaldo, the LA Galaxy, and
numerous Olympic teams.
The company has over 8,000 employees worldwide, and its shares
are traded on the New York Stock Exchange (NYSE: HLF)
with net sales of approximately $4.5 billion in 2016. To
learn more, visit Herbalife.com or IAmHerbalife.com.
The company also encourages investors to visit its investor
relations website at ir.herbalife.com as financial and other
information is updated and new information is posted.
Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include,
but are not limited to, statements regarding the anticipated
financial results for the third quarter 2017, the anticipated
expiration date and consummation of the tender offer, satisfaction
of the tender offer conditions described the Offer to Purchase, as
may be amended from time to time, and the Company’s expectations,
hopes or intentions regarding the future. No assurances can be
given that the tender offer will be consummated, or that the
Company will engage in any discussions or negotiations with any
party regarding a possible "going private" transaction or that any
"going private" transaction with respect to the Company will be
consummated. Although we believe that the expectations reflected in
any of our forward-looking statements are reasonable, actual
results could differ materially from those projected or assumed in
any of our forward-looking statements. Our future financial
condition and results of operations, as well as any forward-looking
statements, are subject to change and to inherent risks and
uncertainties, such as those disclosed or incorporated by reference
in our filings with the Securities and Exchange Commission.
Important factors that could cause our actual results, performance
and achievements, or industry results to differ materially from
estimates or projections contained in our forward-looking
statements include, among others, the following:
- our relationship with, and our ability
to influence the actions of, our Members;
- improper action by our employees or
Members in violation of applicable law;
- adverse publicity associated with our
products or network marketing organization, including our ability
to comfort the marketplace and regulators regarding our compliance
with applicable laws;
- changing consumer preferences and
demands;
- the competitive nature of our
business;
- regulatory matters governing our
products, including potential governmental or regulatory actions
concerning the safety or efficacy of our products and network
marketing program, including the direct selling market in which we
operate;
- legal challenges to our network
marketing program;
- the consent order entered into with the
FTC, the effects thereof and any failure to comply therewith;
- risks associated with operating
internationally and the effect of economic factors, including
foreign exchange, inflation, disruptions or conflicts with our
third party importers, pricing and currency devaluation risks,
especially in countries such as Venezuela;
- uncertainties relating to
interpretation and enforcement of legislation in China governing
direct selling and anti-pyramiding;
- our inability to obtain the necessary
licenses to expand our direct selling business in China;
- adverse changes in the Chinese
economy;
- our dependence on increased penetration
of existing markets;
- contractual limitations on our ability
to expand our business;
- our reliance on our information
technology infrastructure and outside manufacturers;
- the sufficiency of trademarks and other
intellectual property rights;
- product concentration;
- our reliance upon, or the loss or
departure of any member of, our senior management team which could
negatively impact our Member relations and operating results;
- U.S. and foreign laws and regulations
applicable to our international operations;
- uncertainties relating to the United
Kingdom's vote to exit from the European Union;
- restrictions imposed by covenants in
our credit facility;
- uncertainties relating to the
application of transfer pricing, duties, value added taxes, and
other tax regulations, and changes thereto;
- changes in tax laws, treaties or
regulations, or their interpretation;
- taxation relating to our Members;
- product liability claims;
- our incorporation under the laws of the
Cayman Islands;
- whether we will purchase any of our
shares in the open markets or otherwise; and
- share price volatility related to,
among other things, speculative trading and certain traders
shorting our common shares.
We do not undertake any obligation to update or release any
revisions to any forward-looking statement or to report any events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events, except as required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20171002006531/en/
Herbalife NutritionMedia: Jennifer
Butler213-745-0420jenb@herbalife.comorInvestor Relations: Eric
Monroe213-745-0449ericm@herbalife.com
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