LOS ANGELES— Herbalife Ltd. (NYSE:HLF) released the financial results for its first quarter of 2010 (1Q10), ended March 31, 2010, reporting record sales and income and plans to expand its current share repurchase authorization. 1Q10 net sales increased 18.6 percent to $618.6 million, while adjusted net income was $61.5 million, or $0.98 in adjusted diluted earnings per share, an increase of 46.7 percent and 44.1 percent, respectively, compared to 1Q09. The adjusted results exclude a $9.7 million negative impact to net income due to implementation of a highly-inflationary accounting in Venezuela.
Net income for 1Q10 was $51.9 million, compared to $41.5 million for 1Q09. The company generated cash flow from operations of $87.4 million in the quarter, paid dividends of $12.1 million, invested $11.6 million in capital expenditures and repurchased $28.0 million in common stock.
In addition to reporting on the fiscal results, Herbalife also noted its Board of Directors authorized a $700 million expansion to the existing $300 million share repurchase authorization program, bringing the total amount of Herbalife stock which the company may repurchase up to $1 billion over a five-year period expiring on Dec. 31, 2014. The company has utilized approximately $100 million already, bringing the total remaining under the combined authorization to approximately $900 million.
John DeSimone, CFO, said, “We have a unique business model which continues to generate significant and consistent free cash flow. This additional authorization speaks to our Board’s belief that Herbalife shares remain under-appreciated and under-valued in the marketplace and the company’s commitment to utilize a meaningful portion of our excess free cash flow to return value to investors.” Since 2007, the company has returned $600 million to shareholders through the repurchase of 16 million shares.
