HLF 8-K

Herbalife Ltd. (HLF)

8-K 2023-05-02 For: 2023-04-26

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Added on April 08, 2026

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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)

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

	For	Against	Abstain	Broker Non-votes
Michael O. Johnson	74,724,077	1,120,324	36,900	8,061,544
Richard H. Carmona	75,089,856	752,965	38,480	8,061,544
Celine Del Genes	75,377,989	459,297	44,015	8,061,544
Stephan Paulo Gratziani	75,519,872	323,286	38,143	8,061,544
Kevin M. Jones	75,179,807	656,712	44,782	8,061,544
Sophie L’Hélias	75,459,804	377,492	44,005	8,061,544
Alan W. LeFevre	75,380,982	458,533	41,786	8,061,544
Juan Miguel Mendoza	75,314,263	529,822	37,216	8,061,544
Don Mulligan	75,186,226	649,276	45,799	8,061,544
Maria Otero	74,830,492	1,007,570	43,239	8,061,544

For		Against			Abstain			Broker Non-votes
68,148,486		7,695,289			37,526			8,061,544

1 year		2 years			3 years			Abstain			Broker Non-votes
64,052,233		10,915,848			900,338			12,882			8,061,544

HLF 8-K

Herbalife Reports First Quarter 2023 Results

Contacts

99.1	Press Release issued by Herbalife Ltd. on May 2, 2023.

104	Cover Page Interactive Data File – The cover page from the Company’s Current Report on Form 8-K filed on May 2, 2023 is formatted in Inline XBRL (included as Exhibit 101).

	Herbalife Ltd.

May 2, 2023	By:	/s/ HENRY C. WANG
		Name:	Henry C. Wang
		Title:	EVP, General Counsel and Corporate Secretary

Region	Reported Net Sales 1Q’23 (mil)		Growth/Decline including FX vs. 1Q’22	Growth/Decline excluding FX vs. 1Q’22¹
Asia Pacific	$	413.6	1.4%	8.5%
North America		297.2	(8.9%)	(8.7%)
EMEA		268.1	(9.1%)	(2.8%)
Latin America^(a)		205.5	2.1%	0.1%
China		67.7	(35.9%)	(30.8%)
Worldwide Total	$	1,252.1	(6.3%)	(2.6%)


^(a) During the third quarter of 2022, the Company combined its Mexico and South and Central America regions into one geographic region now named Latin America. Historical information has been reclassified to conform with the current period geographic presentation.

	Volume Points
Region	1Q'23 (mil)	YoY % Chg.
Asia Pacific	505.2	(2.6%)
North America	314.5	(22.0%)
EMEA	314.3	(19.8%)
Latin America^(a)	271.4	(15.1%)
China	48.6	(27.4%)
Worldwide Total	1,454.0	(14.5%)

Herbalife Ltd. and Subsidiaries
Condensed Consolidated Statements of Income
(In millions, except per share amounts)


	Three Months Ended
	3/31/2023			3/31/2022
	(unaudited)
North America	$	297.2		$	326.2
EMEA		268.1			295.0
Asia Pacific		413.6			407.7
Latin America		205.5			201.3
China		67.7			105.6
Worldwide Net Sales		1,252.1			1,335.8
Cost of Sales		298.6			307.1
Gross Profit		953.5			1,028.7
Royalty Overrides		416.0			433.8
Selling, General, and Administrative Expenses		475.9			454.9
Other Operating Income⁽¹⁾		(8.9	)		(13.1	)
Operating Income		70.5			153.1
Interest Expense, net		39.4			29.7
Income Before Income Taxes		31.1			123.4
Income Taxes		1.8			25.2
Net Income	$	29.3		$	98.2

Weighted-Average Shares Outstanding:
Basic		98.5			99.9
Diluted		100.2			101.7

Earnings Per Share:
Basic	$	0.30		$	0.98
Diluted	$	0.29		$	0.96



(1) Other Operating Income for the three months ended March 31, 2023 and March 31, 2022 relates to certain China government grant income.

Herbalife Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)

	Mar 31,			Dec 31,
	2023			2022
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	454.2		$	508.0
Receivables, net		85.1			70.6
Inventories		545.1			580.7
Prepaid expenses and other current assets		237.8			196.8
Total Current Assets		1,322.2			1,356.1

Property, plant and equipment, net		479.9			486.3
Operating lease right-of-use assets		202.0			207.1
Marketing-related intangibles and other intangible assets, net		315.2			315.7
Goodwill		94.0			93.2
Other assets		274.3			273.6
Total Assets	$	2,687.6		$	2,732.0


LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable	$	67.9		$	89.8
Royalty overrides		317.4			343.3
Current portion of long-term debt		293.7			29.5
Other current liabilities		548.2			514.0
Total Current Liabilities		1,227.2			976.6

Non-current liabilities:
Long-term debt, net of current portion		2,335.4			2,662.5
Non-current operating lease liabilities		186.5			192.4
Other non-current liabilities		161.3			166.4
Total Liabilities		3,910.4			3,997.9

Commitments and Contingencies

Shareholders' deficit:
Common shares		0.1			0.1
Paid-in capital in excess of par value		191.3			188.7
Accumulated other comprehensive loss		(239.0	)		(250.2	)
Accumulated deficit		(1,175.2	)		(1,204.5	)
Total Shareholders' Deficit		(1,222.8	)		(1,265.9	)

Total Liabilities and Shareholders' Deficit	$	2,687.6		$	2,732.0

Herbalife Ltd. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)

	Three Months Ended
	3/31/2023		3/31/2022
CASH FLOWS FROM OPERATING ACTIVITIES:	(unaudited)
Net income	$	29.3	$	98.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		27.6		29.2
Share-based compensation expenses		10.8		12.4
Non-cash interest expense		1.7		1.7
Deferred income taxes		8.8		5.9
Inventory write-downs		11.5		10.9
Foreign exchange transaction loss		3.2		2.4
Other		2.4		(3.8)
Changes in operating assets and liabilities:
Receivables		(13.8)		(16.7)
Inventories		35.8		(7.9)
Prepaid expenses and other current assets		(35.7)		(28.8)
Accounts payable		(24.1)		(2.3)
Royalty overrides		(31.7)		42.8
Other current liabilities		28.9		(22.3)
Other		(8.5)		8.8
NET CASH PROVIDED BY OPERATING ACTIVITIES		46.2		130.5

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(30.3)		(41.3)
Other		0.1		0.1
NET CASH USED IN INVESTING ACTIVITIES		(30.2)		(41.2)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from senior secured credit facility		71.0		82.0
Principal payments on senior secured credit facility and other debt		(138.4)		(89.3)
Debt issuance costs		(0.3)		-
Share repurchases		(8.7)		(116.2)
Other		0.4		1.1
NET CASH USED IN FINANCING ACTIVITIES		(76.0)		(122.4)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		5.5		1.3
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(54.5)		(31.8)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD		516.3		610.4
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	461.8	$	578.6

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
	3/31/2023			3/31/2022
	(in millions)

Net income, as reported	$	29.3		$	98.2
Net expenses related to COVID-19 pandemic^{(1) (2)}		-			1.7
Expenses related to Transformation Program ^{(1) (2)}		27.3			1.6
Digital technology program costs ^{(1) (2)}		3.5			-
Income tax adjustments for above items^{(1) (2)}		(6.2	)		(0.6	)
Net income, as adjusted ⁽³⁾	$	53.9		$	101.0

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
	3/31/2023			3/31/2022
	(per share)

Diluted earnings per share, as reported	$	0.29		$	0.96
Net expenses related to COVID-19 pandemic ^{(1) (2)}		-			0.02
Expenses related to Transformation Program^{(1) (2)}		0.27			0.02
Digital technology program costs^{(1) (2)}		0.03			-
Income tax adjustments for above items^{(1) (2)}		(0.06	)		(0.01	)
Adjusted diluted earnings per share⁽³⁾	$	0.54		$	0.99

⁽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
	3/31/2023			3/31/2022
	(in millions)

Net expenses related to COVID-19 pandemic		-			(0.3	)
Expenses related to Transformation Program		(6.0	)		(0.2	)
Digital technology program costs		(0.2	)		-
Total income tax adjustments⁽³⁾	$	(6.2	)	$	(0.6	)


	Three Months Ended
	3/31/2023			3/31/2022
	(per share)

Net expenses related to COVID-19 pandemic		-			(0.01	)
Expenses related to Transformation Program		(0.06	)		-
Digital technology program costs		-			-
Total income tax adjustments⁽³⁾	$	(0.06	)	$	(0.01	)


⁽³⁾ Amounts may not total due to rounding.