Herbalife(HLF)2024-10-30 20:18Financial Performance - Third quarter 2024 net sales were $1.2 billion, down 3.2% year-over-year, with a 290 basis points impact from foreign exchange[1]. - Adjusted EBITDA for the third quarter was $166.5 million, exceeding guidance, with an adjusted EBITDA margin of 13.4%, up 70 basis points year-over-year[3]. - Net income for the third quarter was $47.4 million, with diluted EPS of $0.46 and adjusted diluted EPS of $0.57[6]. - Worldwide net sales for the nine months ended September 30, 2024, were $3,785.7 million, a decrease of 1.6% compared to $3,847.4 million for the same period in 2023[28]. - Net income for the nine months ended September 30, 2024, was $76.4 million, down from $132.0 million for the same period in 2023, representing a decline of 42.2%[28]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $484.8 million, compared to $461.8 million for the same period in 2023, indicating an increase of approximately 5.8%[43]. - The company reported a net income margin of 2.0% and an adjusted EBITDA margin of 12.8% for the nine months ended September 30, 2024[43]. Guidance and Projections - The company raised its full-year 2024 adjusted EBITDA guidance to a range of $590 million to $620 million, up from the previous range of $560 million to $600 million[18]. - Fourth quarter 2024 guidance for net sales is projected to decline between 3.0% to 1.0% year-over-year[17]. Cost Management and Restructuring - The restructuring program initiated in Q1 2024 is expected to deliver annual savings of at least $80 million starting in 2025, with $50 million expected to be realized in 2024[8]. - The company incurred restructuring program expenses of $68.2 million for the nine months ended September 30, 2024, compared to no expenses in the same period of 2023[43]. Assets and Liabilities - Total current assets as of September 30, 2024, were $1,244.6 million, down from $1,399.3 million as of December 31, 2023[30]. - Total liabilities as of September 30, 2024, were $3,607.7 million, a decrease from $3,869.7 million as of December 31, 2023[30]. - Total debt as of September 30, 2024, was $2,337.5 million, with a total leverage ratio of 3.3x[42]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2024, was $215.8 million, compared to $261.4 million for the same period in 2023[32]. - Net cash used in investing activities for the nine months ended September 30, 2024, was $59.0 million, an improvement from $99.6 million for the same period in 2023[32]. - Cash, cash equivalents, and restricted cash at the end of the period on September 30, 2024, were $417.9 million, down from $516.0 million at the end of the same period in 2023[32]. Market and Operational Insights - The number of new distributors joining Herbalife increased by 14% year-over-year, marking the second consecutive quarter of improvement[10]. - The company is facing risks related to global economic conditions, including inflation, which could impact its operations and financial performance[24]. - The company plans to continue executing its growth strategies and initiatives to enhance market penetration in existing markets[24]. Other Financial Metrics - Gross profit margin improved to 78.3% in Q3 2024, compared to 76.3% in Q3 2023, benefiting from pricing and favorable input costs[5]. - Interest expense for the nine months ended September 30, 2024, was $152.1 million, compared to $116.3 million for the same period in 2023, reflecting an increase of approximately 30.8%[43]. - Share-based compensation expenses for the nine months ended September 30, 2024, were $36.7 million, compared to $35.7 million for the same period in 2023[43].