Herbalife Nutrition Ltd. (NYSE: HLF) today reported financial
results for the second quarter ended June 30, 2022.
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the full release here:
https://www.businesswire.com/news/home/20220801005907/en/
“We are pleased to announce our Q2 performance exceeded our
guidance on both top and bottom lines, and we continue to project a
return to net sales growth in the fourth quarter,” said John
Agwunobi, Chairman and CEO of Herbalife Nutrition.
HIGHLIGHTS
- Second quarter 2022 results exceeded the high-end of our
guidance for Net Sales, Adjusted EBITDA and Adjusted EPS1 2
- Second quarter 2022 net sales of $1.4 billion, a 10.3% decrease
compared to the second quarter 2021. On a constant currency basis3,
net sales declined 5.9% compared to the prior year period.
- Second quarter 2022 reported diluted EPS of $0.88 and adjusted1
diluted EPS of $0.96, compared to second quarter 2021 reported and
adjusted1 4 diluted EPS of $1.31 and $1.55, respectively.
- Second quarter 2022 reported net income of $86.5 million and
adjusted1 EBITDA of $195.4 million.
- During the second quarter, the Company repurchased
approximately 1.1 million shares for a total purchase price of
$30.2 million.
- Reaffirming full year 2022 guidance for net sales and adjusted2
EBITDA. Lowering adjusted2 diluted full year 2022 EPS guidance,
primarily due to unfavorable currency movement.
____________________
1 Adjusted diluted EPS and adjusted EBITDA are non-GAAP
measures. See Schedule A – “Reconciliation of Non-GAAP Financial
Measures” for a detailed reconciliation of these measures to the
most directly comparable GAAP measure, and a discussion of why we
believe these non-GAAP measures are useful. 2 Adjusted diluted EPS
and adjusted EBITDA are non-GAAP measures. See the “Outlook”
discussion below and the related footnotes and Schedule A –
“Reconciliation of Non-GAAP Financial Measures” for additional
information regarding adjusted diluted EPS and adjusted EBITDA
guidance. 3 Growth/decline in net sales excluding the effects of
foreign exchange is based on “net sales in local currency,” a
non-GAAP financial measure. See Schedule A – “Reconciliation of
Non-GAAP Financial Measures” for a discussion of why we believe
adjusting for the effects of foreign exchange is useful. 4 Prior
year adjusted net income, adjusted diluted EPS and adjusted EBITDA
were restated to conform to current year presentation to exclude
expenses related to the transformation program.
MANAGEMENT COMMENTARY
Herbalife Nutrition reported net sales of $1.4 billion for the
second quarter of 2022, a decrease of 10.3% compared to the prior
year. Volume points for the quarter declined 9.1% compared to the
prior year. Both measures were above the Company‘s Q2 guidance
range.
Reported EPS for the second quarter was $0.88 and adjusted1
earnings per diluted share was $0.96, also exceeding the high-end
of the Company‘s guidance range of $0.60 to $0.80. Net income
during the quarter was $86.5 million, resulting in adjusted1 EBITDA
of $195.4 million, well above the Company’s guidance range of $135
to $155 million.
As Herbalife Nutrition’s underlying business trends stabilized
during the remainder of the 2nd quarter compared to April levels,
the Company is reaffirming its outlook for the year on net sales
and adjusted2 EBITDA, but lowering its full year outlook for
adjusted2 diluted EPS, primarily due to unfavorable currency
movement. For the full year, the Company is reaffirming net sales
guidance range of down 10.0% to down 4.0%, with an expected return
to year-over-year net sales growth in the fourth quarter. The
Company is reaffirming full year adjusted2 EBITDA guidance range of
$680 million to $740 million. The Company is lowering full year
adjusted2 EPS guidance to be in the range of $3.25 to $3.75.
The Company has observed that in-person events are energizing
those independent distributors who chose to attend. During the
month of July, the Company hosted two large sales events in the
U.S. and India, with combined in-person attendance of over 40,000.
The Company believes in-person events are one of the best
opportunities to educate, train and motivate our distributors,
particularly those that are new to the business.
As mentioned in our first quarter release, the Company took
incremental pricing actions in most markets in late Q2, on top of
previously implemented price increases during the first quarter to
offset significant increases in input and freight costs. We believe
the top line outperformance in June benefited from increased sales
ahead of the pricing actions in June that would have otherwise been
realized in July. As a result, the initiation of Q3 guidance
includes this impact of pull forward of net sales into Q2.
The Company continues to innovate with local product
development, which resulted in approximately 60 new SKU launches
during the second quarter, and over 20 so far during the third
quarter. The Company believes ongoing investments in its business
and products will help drive performance and ultimately create
meaningful shareholder value.
The Company announced new leadership promotions to ensure the
Company is best supporting its independent distributors and
unleashing the potential and power of the regional teams. John
DeSimone will become Executive Vice Chair of the Company. Mr.
DeSimone’s vast experience and unmatched knowledge of the Company
will enable him to work on transformative growth initiatives that
are central to the Company’s future.
Additionally, the Company has created three new regional
presidents: Stephen Conchie will be Regional President of APAC and
China, Edi Hienrich will be Regional President of EMEA and India,
and Frank Lamberti will be Regional President of the Americas.
These individuals have proven to be effective leaders and their new
titles reflect the importance of their roles.
“Net sales growth remains our top priority, so we are encouraged
to see that compared to April, our key performance indicators have
stabilized. We are pleased to see our cost control measures are
beginning to generate sequential margin improvement. With
significant pricing actions implemented in June, the Company will
closely monitor any demand elasticity impact as well as the effect
of the broader macroeconomic conditions on the performance of the
business. Additionally, I am inspired by the leadership and
enthusiasm I have witnessed from our distributors at the in-person
events I attended,” said CEO John Agwunobi.
Second Quarter 2022 Key Metrics
Regional Net Sales and Foreign Exchange (“FX”) Impact
Region
Reported Net Sales
2Q’22 (mil)
Growth/Decline
including FX
vs. 2Q’21
Growth/Decline
excluding FX
vs. 2Q’21 (a) 3
Asia Pacific
$
450.7
15.0%
20.6%
North America
$
343.5
(16.5%)
(16.4%)
EMEA
$
289.0
(21.4%)
(10.3%)
Mexico
$
123.9
4.3%
4.3%
China
$
103.7
(41.0%)
(39.7%)
South & Central America
$
81.9
(5.6%)
(2.9%)
Worldwide Total
$
1,392.7
(10.3%)
(5.9%)
(a) Growth/decline in net sales excluding the effects of foreign
exchange is based on “net sales in local currency,” a non-GAAP
financial measure. See Schedule A – “Reconciliation of Non-GAAP
Financial Measures” for a discussion of why we believe adjusting
for the effects of foreign exchange is useful.
Regional Volume Point Metrics
Volume Points
Region
2Q’22 (mil)
Yr/Yr % Chg
Asia Pacific
579.5
18.3%
North America
397.2
(21.4%)
EMEA
354.9
(20.3%)
Mexico
205.6
(4.2%)
China
69.8
(34.5%)
South and Central America
105.3
(13.0%)
Worldwide Total
1,712.3
(9.1%)
Outlook
Following is the Company’s third quarter and updated full year
2022 guidance based on current business and macroeconomic
trends:
Three Months Ending
Twelve Months Ending
September 30, 2022
December 31, 2022
Low
High
Low
High
Volume Point Growth (Decline) vs 2021
(14.0%)
(8.0%)
(12.5%)
(6.5%)
Net Sales Growth (Decline) vs 2021
(9.0%)
(3.0%)
(10.0%)
(4.0%)
Adjusted Diluted EPS (a) (b)
$0.70
$0.95
$3.25
$3.75
Adjusted EBITDA ($ millions) (b)
$160
$180
$680
$740
Cap Ex ($ millions)
-
-
$175
$225
Currency Fluctuation in
Guidance
- Guidance is based on the average daily exchange rates for the
first two weeks of July 2022.
- For the third quarter 2022, net sales guidance includes a
projected currency headwind of approximately 550bps, adjusted(a)(b)
diluted EPS guidance includes a projected currency headwind of
approximately $0.19 per diluted share, and adjusted(a)(b) EBITDA
guidance includes a projected currency headwind of approximately
$24 million, all versus the third quarter of 2021.
- For the full year 2022, net sales guidance includes a projected
currency headwind of approximately 440bps, adjusted(a)(b) diluted
EPS guidance includes a projected currency headwind of
approximately $0.55 per diluted share, and adjusted(a)(b) EBITDA
guidance includes a projected currency headwind of approximately
$72 million, all versus the full year 2021.
- Net sales, adjusted(a)(b) diluted EPS, and adjusted(a)(b)
EBITDA represent projections translated into US dollars at currency
rates equal to the average rates used to translate 2021 third
quarter and full year net sales, diluted EPS, and adjusted EBITDA
and adjusted for items such as hedging gains/losses to be directly
comparable to 2021 values. See our Company’s Form 10-K for the year
ended December 31, 2021 and Schedule A – “Reconciliation of
Non-GAAP Financial Measures” for a discussion of why we believe
adjusting for the effects of foreign exchange is useful.
Share Repurchase in Guidance
- With respect to guidance, the Company has assumed $50 million
in share repurchases will be completed during the fourth
quarter.
- During the third quarter, the Company will reallocate $50
million to strategically pay down a portion of its outstanding debt
and is no longer guiding for any share repurchases to be completed
during the quarter. Share repurchases may still be executed
opportunistically during the third quarter.
(a) Excludes the following items that cannot be accurately
predicted: any future potential ongoing tax effects from the
exercise or vesting of equity awards that could impact the
Company's tax rate due to the stock compensation accounting
standard, as well as any future potential dilution from the
Company’s convertible notes due in 2024. (b) Adjusted diluted EPS
and adjusted EBITDA guidance are non-GAAP measures and exclude
potential charges or gains that may be recorded during the
applicable period, such as, among other things, loss contingencies,
gain/loss on debt extinguishments and refinancing, tax charges
relating to tax law changes, net expenses related to the COVID-19
pandemic, and other unanticipated charges and events. The Company
does not provide reconciliations of forward-looking non-GAAP
Adjusted diluted EPS and adjusted EBITDA guidance to net income,
the comparable GAAP measure, because the impact and timing of these
potential charges and gains cannot be determined without
unreasonable efforts due to their inherent historical variability,
complexity, and unpredictability. These items, which are necessary
for a presentation of the reconciliation to GAAP, could have a
potentially significant impact on the Company’s GAAP results.
Earnings Conference Call
Herbalife Nutrition senior management will host an investor
conference call to discuss its recent financial results and provide
an update on current business trends on Tuesday, August 2nd, 2022,
at 2:30 p.m. PT (5:30 p.m. ET).
Participants will need to register to receive dial-in
information to the call, and may do so by visiting the investor
relations section of the Company’s website at
http://ir.herbalife.com. Additionally, live audio of the conference
call will be simultaneously webcast at
https://edge.media-server.com/mmc/p/bvzrmiar. Senior management
also plans to reference slides during the call, which will also be
available on the investor relation’s section of the Company’s
website.
An audio replay will be available following the completion of
the conference call, and the webcast of the teleconference will be
archived and available on the Company’s investor relations
site.
About Herbalife Nutrition Ltd.
Herbalife Nutrition (NYSE: HLF) is a global nutrition company
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 95
markets by entrepreneurial distributors who provide one-on-one
coaching and a supportive community that inspires their customers
to embrace a healthier, more active lifestyle. Through the
Company’s commitment to nourish people, communities and our planet,
Herbalife Nutrition pledges to achieve 50 million positive impacts
– tangible acts of good – by 2030, its 50th anniversary.
For more information, please visit
IAmHerbalifeNutrition.com.
Herbalife Nutrition also encourages investors to visit its
investor relations website at ir.herbalife.com as financial and
other information is posted.
Forward-Looking Statements
This release contains “forward-looking statements” within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Although we believe that the
expectations reflected in any of our forward-looking statements are
reasonable, actual results 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. Additionally, many of these risks and
uncertainties are, and may continue to be, amplified by the
COVID-19 pandemic. Important factors that could cause our actual
results, performance and achievements, or industry results to
differ materially from estimates or projections contained in or
implied by our forward-looking statements include the
following:
- the potential impacts of the COVID-19 pandemic and 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 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 transformation program
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.
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 Nutrition Ltd. and Subsidiaries Condensed Consolidated
Statements of Income (In millions, except per share amounts)
Three Months Ended Six Months Ended
6/30/2022 6/30/2021 6/30/2022
6/30/2021 (unaudited) North America
$
343.5
$
411.3
$
669.7
$
771.8
EMEA
289.0
367.7
584.0
721.9
Asia Pacific
450.7
391.9
858.4
795.3
Mexico
123.9
118.8
242.3
237.0
China
103.7
175.8
209.3
345.1
South and Central America
81.9
86.8
164.8
182.8
Worldwide Net Sales
1,392.7
1,552.3
2,728.5
3,053.9
Cost of Sales
315.8
323.2
622.9
637.5
Gross Profit
1,076.9
1,229.1
2,105.6
2,416.4
Royalty Overrides
452.9
485.8
886.7
959.8
Selling, General, and Administrative Expenses
470.0
505.9
924.9
1,012.6
Other Operating Income (1)
(1.8
)
(0.5
)
(14.9
)
(16.4
)
Operating Income
155.8
237.9
308.9
460.4
Interest Expense, net
31.7
36.8
61.4
74.3
Other expense, net (2)
-
24.6
-
24.6
Income Before Income Taxes
124.1
176.5
247.5
361.5
Income Taxes
37.6
32.3
62.8
69.9
Net Income
$
86.5
$
144.2
$
184.7
$
291.6
Weighted-Average Shares Outstanding: Basic
98.2
108.0
99.1
108.2
Diluted
98.7
110.2
100.2
110.7
Earnings Per Share: Basic
$
0.88
$
1.33
$
1.86
$
2.70
Diluted
$
0.88
$
1.31
$
1.84
$
2.63
(1) Other Operating Income for the three and six
months ended June 30, 2022 and June 30, 2021 relates to certain
China government grant income. (2) Other Expense, net for the three
and six months ended June 30, 2021 relates to loss on the
extinguishment of the 2026 Notes. Herbalife Nutrition Ltd. and
Subsidiaries Condensed Consolidated Balance Sheets (In millions)
Jun 30,
Dec 31,
2022
2021
ASSETS Current Assets: Cash and cash
equivalents
$
581.4
$
601.5
Receivables, net
83.4
66.9
Inventories
554.3
575.7
Prepaid expenses and other current assets
210.9
187.7
Total Current Assets
1,430.0
1,431.8
Property, plant and equipment, net
465.7
442.1
Operating lease right-of-use assets
212.4
220.0
Marketing-related intangibles and other intangible assets, net
316.5
317.3
Goodwill
91.9
95.4
Other assets
286.0
313.2
Total Assets
$
2,802.5
$
2,819.8
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities: Accounts payable
$
100.8
$
92.0
Royalty overrides
348.0
363.2
Current portion of long-term debt
29.4
29.4
Other current liabilities
576.1
595.8
Total Current Liabilities
1,054.3
1,080.4
Non-current liabilities: Long-term debt, net
of current portion
2,780.8
2,733.2
Non-current operating lease liabilities
196.2
201.2
Other non-current liabilities
186.6
196.5
Total Liabilities
4,217.9
4,211.3
Commitments and Contingencies
Shareholders' deficit: Common shares
0.1
0.1
Paid-in capital in excess of par value
185.8
318.1
Accumulated other comprehensive loss
(243.1
)
(211.8
)
Accumulated deficit
(1,029.3
)
(1,169.0
)
Treasury stock
(328.9
)
(328.9
)
Total Shareholders' Deficit
(1,415.4
)
(1,391.5
)
Total Liabilities and Shareholders' Deficit
$
2,802.5
$
2,819.8
Herbalife Nutrition Ltd. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (In millions) Six
Months Ended
6/30/2022
6/30/2021
CASH FLOWS FROM OPERATING ACTIVITIES: Net income
$
184.7
$
291.6
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
58.6
53.5
Share-based compensation expenses
26.1
27.9
Non-cash interest expense
3.3
14.4
Deferred income taxes
7.6
7.3
Inventory write-downs
16.6
13.2
Foreign exchange transaction (gain) loss
(0.7
)
9.4
Loss on extinguishment of debt
-
24.6
Other
(8.7
)
(0.2
)
Changes in operating assets and liabilities: Receivables
(19.3
)
(25.5
)
Inventories
(15.3
)
(57.0
)
Prepaid expenses and other current assets
(23.0
)
(29.6
)
Accounts payable
10.2
16.8
Royalty overrides
(9.5
)
(7.0
)
Other current liabilities
(13.4
)
(53.8
)
Other
12.1
1.3
NET CASH PROVIDED BY OPERATING ACTIVITIES
229.3
286.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(75.9
)
(68.4
)
Other
0.1
-
NET CASH USED IN INVESTING ACTIVITIES
(75.8
)
(68.4
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from senior secured credit facility, net of discount
159.0
345.0
Principal payments on senior secured credit facility and other debt
(173.7
)
(205.5
)
Proceeds from senior notes
-
600.0
Repayment of senior notes
-
(420.7
)
Debt issuance costs
-
(7.4
)
Share repurchases
(146.5
)
(733.2
)
Other
2.2
2.0
NET CASH USED IN FINANCING ACTIVITIES
(159.0
)
(419.8
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND
RESTRICTED CASH
(15.0
)
(6.4
)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
(20.5
)
(207.7
)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD
610.4
1,054.0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD
$
589.9
$
846.3
Supplemental Information
SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited and unreviewed), (All tables provide Dollars in
millions, except per Share Data)
Adjusted Net Income, Adjusted Diluted EPS and Adjusted
EBITDA
In addition to its reported results and guidance calculated in
accordance with GAAP, the Company has included in this release
adjusted net income, adjusted diluted EPS and adjusted EBITDA,
performance measures that the Securities and Exchange Commission
defines as “non-GAAP financial measures.” Adjusted net income,
adjusted diluted EPS and adjusted EBITDA exclude the impact of
certain unusual or non-recurring items such as non-cash interest
expense and amortization associated with the Company’s convertible
notes, expenses related to regulatory inquiries and legal accruals,
debt issuance costs and losses on extinguishment of debt, expenses
related to COVID-19 pandemic, non-income tax items, and expenses
related to transformation program, as further detailed in the
reconciliations below. Prior year adjusted net income, adjusted
diluted EPS and adjusted EBITDA were restated to conform to current
year presentation to exclude expenses related to the transformation
program.
Management believes that such non-GAAP financial measures, when
read in conjunction with the Company’s reported results, calculated
in accordance with GAAP, can provide useful supplemental
information for investors because they facilitate a period to
period comparative assessment of the Company’s operating
performance relative to its performance based on reported results
under GAAP, while isolating the effects of some items that vary
from period to period without any correlation to core operating
performance and eliminate certain charges that management believes
do not reflect the Company’s operations and underlying operational
performance. The Company’s definition and calculation as set forth
in the tables below of adjusted net income, adjusted diluted EPS
and adjusted 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 GAAP. The Company does
not provide reconciliations of forward-looking non-GAAP adjusted
diluted EPS and adjusted EBITDA guidance to net income, the
comparable GAAP measure, because the impact and timing of the
potential charges and gains cannot be determined without
unreasonable efforts due to the inherent historical variability,
complexity, and unpredictability. These items, which are necessary
for a presentation of a reconciliation to GAAP, could have a
potentially significant impact on the Company’s GAAP 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 U.S. GAAP financial
measure. 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 measures 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, presented and
reported in accordance with U.S. generally accepted accounting
principles, to net income adjusted for certain items:
Three Months Ended Six Months Ended 6/30/2022
6/30/2021 6/30/2022 6/30/2021 (in millions)
Net income, as reported
$
86.5
$
144.2
$
184.7
$
291.6
Non-cash interest expense and amortization of non-cash issuance
costs (1) (2) (3)
-
5.9
-
11.6
Debt issuance costs related to the senior secured credit facility
amendment (1) (2) (4)
-
-
-
1.1
Net expenses related to COVID-19 pandemic (1) (2)
1.6
4.5
3.3
9.3
Expenses related to transformation program (1) (2)
3.2
3.7
4.8
3.7
Russia-Ukraine conflict charges (1) (2)
5.4
-
5.4
-
Loss on extinguishment of debt (1) (2) (5)
-
24.6
-
24.6
Non-income tax items, net (1) (2) (6)
-
(7.4
)
-
(7.4
)
Income tax adjustments for above items (1) (2)
(1.9
)
(4.8
)
(2.4
)
(6.0
)
Net income, as adjusted (7)
$
94.8
$
170.7
$
195.8
$
328.5
The following is a reconciliation of diluted earnings
per share, presented and reported in accordance with U.S. generally
accepted accounting principles, to diluted earnings per share
adjusted for certain items. Three Months Ended
Six Months Ended 6/30/2022 6/30/2021 6/30/2022 6/30/2021
(per share) Diluted earnings per share, as
reported
$
0.88
$
1.31
$
1.84
$
2.63
Non-cash interest expense and amortization of non-cash issuance
costs (1) (2) (3)
-
0.05
-
0.10
Debt issuance costs related to the senior secured credit facility
amendment (1) (2) (4)
-
-
-
0.01
Net expenses related to COVID-19 pandemic (1) (2)
0.02
0.04
0.03
0.08
Expenses related to transformation program (1) (2)
0.03
0.03
0.05
0.03
Russia-Ukraine conflict charges (1) (2)
0.05
-
0.05
-
Loss on extinguishment of debt (1) (2) (5)
-
0.22
-
0.22
Non-income tax items, net (1) (2) (6)
-
(0.07
)
-
(0.07
)
Income tax adjustments for above items (1) (2)
(0.02
)
(0.04
)
(0.02
)
(0.05
)
Adjusted diluted earnings per share (7)
$
0.96
$
1.55
$
1.96
$
2.97
The following is a reconciliation of net income,
presented and reported in accordance with U.S. generally accepted
accounting principles, to EBITDA and adjusted EBITDA:
Three Months Ended Six Months Ended 6/30/2022
6/30/2021 6/30/2022 6/30/2021 (in millions)
Net income, as reported
$
86.5
$
144.2
$
184.7
$
291.6
Interest Expense, net
31.7
36.8
61.4
74.3
Income Taxes
37.6
32.3
62.8
69.9
Depreciation and amortization
29.4
27.1
58.6
53.5
EBITDA
$
185.2
$
240.4
$
367.5
$
489.3
Net expenses related to COVID-19 pandemic (1) (2)
1.6
4.5
3.3
9.3
Expenses related to transformation program (1) (2)
3.2
3.7
4.8
3.7
Russia-Ukraine conflict charges (1) (2)
5.4
-
5.4
-
Loss on extinguishment of debt (1) (2) (5)
-
24.6
-
24.6
Non-income tax items, net (1) (2) (6)
-
(7.4
)
-
(7.4
)
Adjusted EBITDA
$
195.4
$
265.8
$
381.0
$
519.5
(1) Based on interim income tax reporting rules,
these expenses are not considered discrete items. The tax effect of
the adjustments between our 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 Six
Months Ended 6/30/2022 6/30/2021 6/30/2022 6/30/2021
(in millions) Non-cash interest expense and amortization of
non-cash issuance costs
$
-
$
0.1
$
-
0.2
Debt issuance costs related to the senior secured credit facility
amendment
-
-
-
(0.2
)
Net expenses related to COVID-19 pandemic
(0.4
)
(0.8
)
(0.7
)
(1.9
)
Expenses related to transformation program
(0.3
)
(0.5
)
(0.5
)
(0.5
)
Russia-Ukraine conflict charges
(1.2
)
-
(1.2
)
-
Loss on extinguishment of debt
-
(5.3
)
(5.3
)
Non-income tax items, net
-
1.7
-
1.7
Total income tax adjustments (7)
$
(1.9
)
$
(4.8
)
$
(2.4
)
$
(6.0
)
Three Months Ended Six Months
Ended 6/30/2022 6/30/2021 6/30/2022 6/30/2021 (per
share) Non-cash interest expense and amortization of
non-cash issuance costs
-
$
-
-
-
Debt issuance costs related to the senior secured credit facility
amendment
-
-
-
-
Net expenses related to COVID-19 pandemic
-
(0.01
)
(0.01
)
(0.02
)
Expenses related to transformation program
-
-
-
-
Russia-Ukraine conflict charges
(0.01
)
-
(0.01
)
-
Loss on extinguishment of debt
-
(0.05
)
-
(0.05
)
Non-income tax items, net
-
0.02
-
0.02
Total income tax adjustments (7)
$
(0.02
)
$
(0.04
)
$
(0.02
)
$
(0.05
)
(3) Relates to non-cash expense on the Company's
2.625% convertible senior notes due 2024. (4) Relates to costs
incurred in the amendment of the senior secured credit facility as
described in the Company's Form 10-Q for the three months ended
June 30, 2022. (5) Relates to the loss on the extinguishment of the
senior notes due 2026. (6) Relates to certain non-income tax
assessments, recoveries and credits. (7) Amounts may not total due
to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220801005907/en/
Media Contact: Gary Kishner Senior Director, Media Relations
213.745.0456
Investor Contact: Eric Monroe Senior Director, Investor
Relations 213.745.0449
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