Herbalife Announces Record 1Q Sales
LOS ANGELES--(BUSINESS WIRE)--May 3, 2006--Herbalife Ltd. (NYSE:HLF) today reported record first-quarter net sales of $455.8 million, an increase of 22.5 percent compared to the same period of 2005. The company's regions, the Americas and Asia Pacific, achieved net sales growth of 59.4 percent and 13.3 percent, respectively, versus the first quarter of 2005 and were partially offset by net sales declines in Europe and Japan, which decreased 2.2 percent and 17.3 percent, respectively. The company's chief executive officer, Michael O. Johnson, said, "We carried strong sales momentum into the first quarter of 2006 reflecting the successful promotions in 2005 and the enthusiasm and unity we see within our distributor organization."
During the first quarter of 2006, new distributor supervisors increased 34.1 percent versus the first quarter of 2005. The company's high-level Presidents Team increased 13.1 percent to 879 members during the quarter, compared to 2005. Additionally, in the first quarter, one distributor attained the prestigious level of Chairman's Club, bringing the total of this exclusive group to 28.
Financial Performance
For the quarter ended March 31, 2006, the company reported record net income of $38.7 million, or $0.53 per diluted share, compared to $13.3 million, or $0.19 per diluted share in 2005. Higher than expected revenue growth partially offset by an increase in expenses associated with the execution of the company's strategic initiatives, contributed to a 32 basis point improvement in operating income as a percentage of net sales during the first quarter. Excluding the impact of a $3.7 million tax benefit resulting from an international income tax audit settlement in the first quarter of 2006, and $14.2 million of recapitalization expenses incurred in the first quarter of 2005 associated with the $110.0 million claw-back of the company's 9 1/2 percent notes, first quarter 2006 net income increased 27.3 percent to $35.0 million, or $0.48 per diluted share compared to $0.38 in 2005.
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