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Herbalife Nutrition Reports Record-Breaking Quarterly Volume Point Results and Provides Initial Full Year 2020 Guidance

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Herbalife Nutrition Ltd. (NYSE:HLF) today reported financial results for the third quarter ended September 30, 2019.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191029006012/en/

Third Quarter 2019 Earnings Infographic (Graphic: Business Wire)

Third Quarter 2019 Earnings Infographic (Graphic: Business Wire)

"The momentum we've built in our business throughout 2019 continued in the third quarter with record-breaking volume point results. We believe this momentum will continue long into the future with the appointment of John Agwunobi as our CEO and John DeSimone as President, effective March of next year. We are confident Dr. Agwunobi's unique background and John DeSimone's extraordinary knowledge of our business will create an outstanding team and take Herbalife Nutrition to new heights," said Michael Johnson, Chairman and CEO of Herbalife Nutrition.

QUARTER HIGHLIGHTS

  • Reported net sales of $1.2 billion increased 0.1% compared to the third quarter 2018. Excluding China, net sales increased 6.1% compared to the prior year period.
  • Volume points of 1.5 billion increased 2.3% compared to the third quarter 2018, representing the largest quarterly volume point result in Company history. Excluding China, volume points increased 5.2% compared to the prior year period.1
  • Third quarter reported diluted EPS of $0.58 and adjusted2 earnings of $0.73 per diluted share, both of which were negatively impacted by expenses of approximately $5.8 million or $0.03 per diluted share, related to the China Growth and Impact Investment Program.
  • Updating FY 2019 volume point guidance to a range of 2.1% - 3.4% growth, net sales guidance to a range of (1.2%) – 0.1%, as well as reported and adjusted2, 3 diluted EPS guidance to a range of $2.20 - $2.40 and $2.56 – $2.76, respectively.
  • Initiating FY 2020 volume point and net sales guidance range of 1.0% - 7.0% and 1.0% - 7.0% growth, respectively, which includes an approximate 250 bps currency headwind.
  • In a separate press release this afternoon, the Company announced its CEO transition plan that goes into effect March 2020.

______________________________

1 Excluding adjustments to volume point values in 2018, the year over year change would have been an increase of 2.1% and an increase of 5.0% excluding China. See Regional Volume Point Metrics below.

2 Adjusted diluted EPS is a non-GAAP measure and excludes the impact of: non-cash interest expense and amortization of non-cash issuance costs associated with the Company's convertible notes, China grant income, impacts relating to contingent value rights revaluation, impact related to finalization of insurance recoveries, expenses related to regulatory inquiries and legal accrual, and Mexico VAT Assessment. See Schedule A – "Reconciliation of Non-GAAP Financial Measures" for a detailed reconciliation of adjusted net income to net income calculated in accordance with GAAP and a reconciliation of adjusted diluted EPS to diluted EPS calculated in accordance with GAAP and a discussion of why we believe these non-GAAP measures are useful.

3 See Schedule A - "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of adjusted diluted share count to reported diluted share count and a discussion of why the share count has been adjusted for purposes of calculating adjusted diluted EPS for the year to date periods of 2018 and 2019, and full year 2019 guidance.

Third Quarter 2019 Key Metrics4

Regional Volume Point Metrics

 

Volume Points

Region

3Q '19 (mil)

Yr/Yr % Chg

Asia Pacific

406.6

17.3%

North America

330.8

7.0%

EMEA

315.2

4.0%

Mexico

216.4

(7.1%)

China

142.4

(19.5%)

South and Central America

130.1

(5.9%)

Worldwide Total (a)

1,541.5

2.3%

Worldwide Total excl. China (a)

1,399.1

5.2%

(a) During 2018, the Company adjusted volume point values for certain products in North America and South & Central America. Excluding these adjustments, the worldwide total year over year change in volume points would have been an increase of 2.1% for the third quarter and an increase of 5.0% for the third quarter excluding China. Adjustments to Volume Points during 2019 were not material.

Regional Net Sales and Foreign Exchange ("FX") Impact

Region

Reported

Net Sales

3Q'19 (mil)

Growth/Decline

including FX

vs. 3Q ‘18

Growth/Decline

excluding FX

vs. 3Q ‘18

Asia Pacific

$

324.5

18.3

%

18.6

%

North America

$

257.1

7.1

%

7.2

%

EMEA

$

242.3

2.7

%

6.4

%

Mexico

$

116.5

(3.9

%)

(1.5

%)

China

$

208.7

(21.7

%)

(19.3

%)

South & Central America (a)

$

95.4

(9.1

%)

*

Worldwide Total

$

1,244.5

0.1

%

*

Worldwide Total excl. China

$

1,035.8

6.1

%

*

South & Central America excl. Venezuela (a)

$

95.0

(6.1

%)

(1.0

%)

Worldwide Total excl Venezuela (a)

$

1,244.1

0.4

%

2.4

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