Soft Asian Markets Dent Herbalife Sales

Soft Asian Markets Dent Herbalife Sales

LOS ANGELES--Herbalife International (NASDAQ:HERBA) posted slightly depressed results for its fourth quarter and fiscal year ended Dec. 31, due mostly to weakened markets in Japan and South Korea, as well as the lingering effects of the failed attempt to take the company private a year ago.

For the quarter, net sales decreased to $226.2 million from $264.5 million sold in the same period the year prior, while gross margin held relatively steady around 45 percent of sales. Operating expenses rose about two percent of sales, and net income declined to $7.5 million or $.26 per share from $17.5 million or $.61 per share earned in the comparable 1999 quarter.

For the year, net sales dipped to $944.1 million from $956.2 million the previous year, while gross margin held tight around 45 percent of sales. Operating expenses jumped eight percent, including $9.5 million in one-time charges related to the April 2000 halt to the privatization of the company proposed by the late founder Mark Hughes. Net income dropped to $36.9 million or $1.28 per share from $56.9 million or $1.99 per share earned the year prior.

The company noted that weak sales in Japan and South Korea were the result of a difficult economy and increased competition in those markets. Management stated it is taking a "back to basics" approach to improve those situations, including expanded communication, training and reward initiatives. Despite declined sales in Asian markets, sales to the Americas rose 3.5 percent, and sales to Europe inched up by just under one percent.