SEC Comment Letter for HERBALIFE LTD. (HLF) (CIK 0001180262) (HLF) — Jun 12, 2017
HERBALIFE LTD. (HLF) (CIK 0001180262)
Date: June 12, 2017 · CIK: 0001180262 · Accession: 0000000000-17-020545
AI Filing Summary & Sentiment
Letter
Mail Stop 3561 June 12, 2017 Via Email Mr. John G. DeS imone Chief Financial Officer Herbalife Ltd. P.O. Box 309GT Ugland House, South Church Street Grand Cayman, Cayman Islands
Re: Herbalife Ltd. Form 10-K for the Year E nded December 31, 2016 Filed February 23, 2017 Form 10 -Q for the Quarter Ended March 31, 2017 Filed May 4, 2017 File No. 1 -32381
Dear Mr. DeS imone :
We have reviewed your filing an d have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances , please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 10 -K for the Year Ended December 31, 2016
Item 6. Selected Financial Data, page 38 Item 7. Management’s Discussion and Analysis Presentation, page 43
1. You disclose that retail sales represent the gross sales amount reflected on your invoices to Me mbers and are based on suggested retail prices. We also understand that this measure does not reflect the actual amounts paid by Members and/or their retail customers. Accordingly, please revise the title and related disclosures, so that this measure is not characterized as a sales or revenue amount. Refer to Item 10(e)(1)(ii)(E) of Regulation S -K.
Mr. John D eSimone Herbalife Ltd. June 12, 2017 Page 2
2. Please disclose why you believe the retail sales measure is useful to investors. Refer to Item 10(e)(1)(i)(C) of Regulation S -K.
Form 10 -Q for the Quarter Ended March 31, 2017
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Volume Points by Geographic Region, page 28
3. Your disclosure in note 1 on page 29 appears to indicate that volume points are recorded prior to your recognition of revenue and that such timing differences are routine. However, i n your results of operations starting on page 33 , you routinely attribute changes in net sales to changes in volume as measured by volume points. Please tell us why it is appropriate to attribute changes in net sales to volume points, when they appear to have a different basis of recognition. In addition, disclose the criteria used for determining the period in which points are included in your volume points measure an d whether or not the same criteria are used for Member qualification and recognition purposes. Refer to Item 303(a) of Regulation S -K and Section III.B.1 of SEC Release No. 33 -8350.
We remind you that the company and its management are responsible for th e accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff.
You may contact Linda Cvrkel at (202) 551 -3813 or me at (202) 551 -3769 with any questions.
Sincerely,
/s/ Rufus Decker
Show Raw Text
Mail Stop 3561 June 12, 2017 Via Email Mr. John G. DeS imone Chief Financial Officer Herbalife Ltd. P.O. Box 309GT Ugland House, South Church Street Grand Cayman, Cayman Islands Re: Herbalife Ltd. Form 10-K for the Year E nded December 31, 2016 Filed February 23, 2017 Form 10 -Q for the Quarter Ended March 31, 2017 Filed May 4, 2017 File No. 1 -32381 Dear Mr. DeS imone : We have reviewed your filing an d have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances , please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10 -K for the Year Ended December 31, 2016 Item 6. Selected Financial Data, page 38 Item 7. Management’s Discussion and Analysis Presentation, page 43 1. You disclose that retail sales represent the gross sales amount reflected on your invoices to Me mbers and are based on suggested retail prices. We also understand that this measure does not reflect the actual amounts paid by Members and/or their retail customers. Accordingly, please revise the title and related disclosures, so that this measure is not characterized as a sales or revenue amount. Refer to Item 10(e)(1)(ii)(E) of Regulation S -K. Mr. John D eSimone Herbalife Ltd. June 12, 2017 Page 2 2. Please disclose why you believe the retail sales measure is useful to investors. Refer to Item 10(e)(1)(i)(C) of Regulation S -K. Form 10 -Q for the Quarter Ended March 31, 2017 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Volume Points by Geographic Region, page 28 3. Your disclosure in note 1 on page 29 appears to indicate that volume points are recorded prior to your recognition of revenue and that such timing differences are routine. However, i n your results of operations starting on page 33 , you routinely attribute changes in net sales to changes in volume as measured by volume points. Please tell us why it is appropriate to attribute changes in net sales to volume points, when they appear to have a different basis of recognition. In addition, disclose the criteria used for determining the period in which points are included in your volume points measure an d whether or not the same criteria are used for Member qualification and recognition purposes. Refer to Item 303(a) of Regulation S -K and Section III.B.1 of SEC Release No. 33 -8350. We remind you that the company and its management are responsible for th e accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact Linda Cvrkel at (202) 551 -3813 or me at (202) 551 -3769 with any questions. Sincerely, /s/ Rufus Decker Rufus Decker Acco unting Branch Chief Office of Beverages, Apparel and Mining