Good morning, and thank you for joining the First Quarter 2014 Earnings Conference Call for Herbalife LTD. On the call today is Michael Johnson, the company's Chairman and CEO; the company's President, Des Walsh; John DeSimone, the company's CFO; and Brett Chapman, the company's Chief Legal Officer. I would now like to turn the call over to Brett Chapman to read the company's Safe Harbor language.

Before we begin, as a reminder, during this conference call comments may be made that include some forward-looking statements. These statements involve risk and uncertainty and, as you know, actual results may differ materially from those discussed or anticipated. We encourage you to refer to yesterday's earnings release and our SEC filings for a complete discussion of risks associated with these forward-looking statements and our business. In addition, during this call, certain financial performance measures may be discussed that differ from comparable measures contained in our financial statements, prepared in accordance with U.S. generally accepted accounting principles referred to by the Securities and Exchange Commission as non-GAAP financial measures. We believe these non-GAAP financial measures assist management and investors in evaluating and preparing period-to-period results of operations in a more meaningful and consistent manner. Please refer to the investor relations section of our website, Herbalife.com, to find our press release for this quarter, which contains a reconciliation of these measures. Additionally, when management makes reference to volume during this conference call, they are referring to volume points. I'll now turn the call over to Michael.

Thank you, Brett. Good morning, everyone, and welcome to our first quarter 2014 earnings call. As these record results show, Herbalife's business is stronger than ever, which reflects broad consumer demand for our weight loss and nutrition product. Some notable results in the quarter include net sales of $1.3 billion, which were 12% above last year's first quarter, and a volume increase of 9%. Net sales of our U.S. business increased to 8% this quarter with March being the largest sales month in U.S. history. In fact, in the U.S. alone a record 83,000 new members joined the company in the first quarter. Additionally, the activity level of our 72,000 U.S. sales leaders as measured by average sales leaders with volume increased 11% in the quarter. Our adjusted first quarter EPS $1.50 increased 18% compared to the prior year period. Our first quarter global results reflected 11% increase in the average active sales leaders and 24% increase in the number of new members. We generated $190 million in cash from operation and invested almost $50 million in capital expenditures to support the growth in our business and our Seed to Feed program, the highlight of what is our Herbalife innovation in manufacturing facility in Winston-Salem, North Carolina, where we will create more than 500 new jobs and ultimately ship American made products over 50 countries. We have also increased our adjusted 2014 EPS guidance to a range of $6.10 to $6.30 which reflects our expectation that we will continue our positive momentum and continued share buyback to 2014. With our 18th consecutive record quarter and 85,000 new members in the United States this last quarter alone, what is the recipe in this wonderful success? First, it's our outstanding product. We are consumption-driven company with real products, real demand and our…

Thank you, Michael. By all measures we have demonstrated solid performance in the first quarter of 2014. Our results mark our 18th consecutive quarter of double-digit top line growth with 12 percent growth over the same period in 2013. We expect our strong business momentum in the first quarter of 2014 to continue throughout the year and it is being driven by our members' engagement with their customers and their ongoing dedication to Herbalife's mission for nutrition. Five of our six regions posted volume point growth and local net sales growth, while average active sales leaders with volume point increased in every region over last year's first quarter. This exceptional growth exemplifies the unstoppable dedication of our sales leaders to provide their customers with the advice, support and nutrition product they need to achieve their health and wellness goal. The adoption of regionalization and city-by-city initiatives over the last few years have helped built a firm foundation for united leadership, systemized training and the sharing of daily consumption best business practices among members. The strong momentum we see at the start of 2014 proves the sustainable nature of this strategy and thereby the significant potential ahead of it. Our members are off to a strong start in 2014 despite media noise they are focused on what they do best executing on their mission to make low calorie effective nutrition available to consumers every day. Now, let me provide some regional highlights and color on our key region. The North American region had another impressive quarter. It posted 12% in net sales growth and 9% volume point growth, each compared to the same period prior year. Average active sales leaders with volume points increased 9% and new members increased 20%, compared to first quarter of last year. During the quarter, the…

Thank you, Des. First, I'll review the company's first quarter 2014 reported and adjusted results and I'll provide updated information on the second quarter and full year 2014 guidance and finally I'll discuss our share repurchase strategy. For the first quarter, the company reported record net sales of $1.3 billion representing an increase of 12.4% against the first quarter of 2013. Local currency net sales for the period increased 16.9% with an unfavorable FX impact of 4.5% as compared to the same period last year. Since Des has already provided significant regional detail around our line point and net sales results, I'll now turn to margins. Our gross profit margin for the first quarter improved by approximately 20 basis points versus the first quarter of 2013 primarily a result of price increases and foreign currency fluctuations partially offset by the unfavorable impact of higher inventory write-downs and other costs. On a sequential basis, gross profit margins were essentially flat compared to the fourth quarter. Before moving to SG&A and operating margin, note that our first quarter reported include four specific items that we consider to be outside the normal range of operations what we believe will be useful to investors when analyzing period to period comparisons of our results. We have, therefore, excluded these expenses from our adjusted non-GAAP first quarter financials. They are as follows: expenses related to the impact of a new Venezuelan exchange rate. As of March 31, 2014, the company has changed to remeasurement rate for its business in Venezuela. The official is 6.3 bolivars to a dollar. The new CCAD1 rate of 10.7 has changed consistent with what we believe is done by many U.S. companies with businesses in Venezuela and which resulted in a pretax charge of $89.3 million, $86.1 million of which is…

(Operator Instructions) And your first question comes from Rommel Dionisio with Wedbush Securities.

Hi, Rommel.

Well, thank you. Yeah. Thanks. Good morning. Just a couple of follow-up questions on China. You obviously are posting some very strong growth there. Could you just give us an update, first of all, in terms of how many regions you have got regional approvals for what the addressable market is, I think you have got most of the country by now? But -- and second, given the strong growth that you have posted in that market, if there is going to be some requirements to boost your production capacity there as well? Thanks.

Yeah. Hi, Rommel. Good morning. This is Des. So on the currency, we have licenses in 26 provinces and that covers obviously all of the major metropolitan areas a vast majority of the country. We obviously are very pleased with the growth we are seeing in China. And we certainly have an aggressive program in place to identify additional manufacturing opportunities in order to cope with the growth that we see ahead.

Actually a very tough subject, very intuitive for you to recognize that we are going to introduce some capacity enhancement in China in the near future.

Can you share with us the capacity utilization rate at the moment? Are you romping up close to 100% or do you still have a couple of quarters to go until you get there?

Now, we are about 66% of our capacity within China on a monthly basis. So some time over the next 18 months when we do make sure we have new capacity ready to go.

Okay. Perfect. Thanks again and congratulations on the quarter.

Thanks, Rommel.

Your next question comes from Michael Schwartz with SunTrust.

Hey. Good morning everyone.

Good morning, Mike.

Just wanted to touch on the U.S. business. I know you do not break it out anymore on the conference call but just in terms of how at least historically we have looked at the market in terms of the Latino and general market, do you have any more information about how they are growing?

Well, we stop breaking at our seniors ago because they somewhat blended together. When it was originally broken out separately, it was broken out because the Latino community was operating a nutrition club model though much of the general market community was not. That has changed as of -- we're on 2010, in addition, the only way we broke out Latino distributors was based on their language of choice. If they chose Spanish speaking applications Latino, if they did not we consider them general market, we did not ask for any background on that point. And over time, more of our Latino that choose they're bilingual it's a new generation and they're choosing English speaking application. So strictly speaking from a, just looking at the number of distributors that are Spanish speaking versus non-Spanish speaking it's around 50:50, but the implications there are that the general market includes now some Latino distributors or members.

Okay. So the lines have blurred a little bit then?

The lines have been blurred now for the last three years. Correct.

Okay. And then just in terms of the new facility in North Carolina, can you give us an update where you stand when we should expect production the kind of ramp up and the potential cost savings from '14 or '15 how you are looking at it?

Sure, so the first life production run will happen May, which is slightly ahead of schedule. We are on budget. We expect to ramp up beginning the end of May this year really an 18 month ramp up from an increasing dilution stand point, the operations will be above $0.03 dilutive this year, which is included in our guidance, and accretive next year we have not given any specific members around how accretive, but we will as we move closer to the end of the year.

Okay. Great. Thanks for the color.

(Operator Instructions) And your comes from Scott Van Winkle with Canaccord Genuity.

Hi thanks. Sticking on the US as a topic, I know you can't talk anymore about the regulatory comments, beginning of the call, but can you talk about your public relations efforts? It seems like it's stepped up a little bit and you became more responsive over the last month. Has there been any change in PR and as well as your outreach efforts to distributors?

Hi Scott, this is John, I will take that. Our efforts are what they are in response to the situation we are in. We are in a campaign. That campaign is something that we think is beneficial to long-term value creation of our stock and for our shareholders and we will do whatever it is we feel we need to. You sense that is stepped up, maybe that's the case, but at the end of the day, there is a proactive and a reactive piece I think you will sense that both that stepped up and we will continue to step up.

And on the distributor side, is there any change in communication to present your point of view?

Yeah, Scott, this is Des. Our communication with distributors has remained consistent throughout and I think you see the impact of that; obviously, tremendous distributor confidence. You see it reflected distributor engagement, you see it reflecting those numbers that we shared in terms of meeting attendance, 112% increase compared to the same period prior year. You see it reflected in activity rates in terms of average checks of sales leaders and you see it also enters the new members. So as we announced another record for the United States despite all the noise, approximately 85,000 new members came to us just in the first quarter of 2014. So certainly our distributor communication strategy has been very effective for the last 15 months and that same strategy is going to continue.

I reiterate something that's on the call earlier which is that the month of March was the largest sales in the history of the US.

And then Des, I think you made a comment about April having good attendance as well at events. Is there any other metric as far as new member growth or something of that nature in the month of April where the news flow seemed to turn a little more negative?

I think you see it reflected in our Q2 guidance. Scott, we have tremendous momentum going into the second quarter, you see it reflecting the guidance and that gives you the answer you are looking for.

Great, thanks. A couple of markets, following up on Rommel's questions about China, you posted 90% volume growth and about 40% growth in sales leader activity. Is that -- what's the driver of the productivity improvement we're seeing in that number?

I think what you are seeing reflected there is just increased focus on daily consumption; we have more customers. The preferred customer program has been hugely successful. This is a pilot program in China, but we have 200,000 people now sign up as preferred customers. We are seeing that drive productivity rates and activity rates in the club. So really a whole combination of factors but all product consumption based.

Yes, Des, how does the preferred customer model there differ from maybe just being a member in other markets?

Those requires a modest fee to participate, probably the equivalent of about $2 or $3 and we turn to that especially think that it's a loyalty program, Scott. So what it is that it gives our individual members there the opportunity to provide various incentives to those who signed up as preferred members, it could be for attendance of the club, it could be referring other members of the club, just a variety of different local activity. So it's a way of creating loyalty, creating a relationship, and in addition those preferred customers have the ability to order directly from the company. So a variety of different benefits. We are obviously tracking it very careful, we are excited about it and create an additional focus and we are now looking at expanding an adapted version of that pile into other markets in the Asia-Pacific regions.

And then moving on to Venezuela, I think Venezuela's 4% of sales in the quarter. Do you have a number excluding the revaluation cost? Do you have a number as what kind of percentage Venezuela is of operating profit? Is it a profitable market given the scenario there?

So that is an interesting question. So it ultimately will depend on whether we can repatriate the cash or not. If we can repatriate the cash it's profitable, if not it's about a breakeven market for us. Our objective long-term is to partner with a local manufacturer who has access to dollars. So we are not concerned with repatriating currency to pay for product. So I think worst case, our expectations would be breakeven best case, it could be a long-term profitable market.

Great. And then John, on the share repurchase, just to kind of help with the numbers, do you have an ending diluted share count for Q1, trying to work the averages and roll in the incremental buyback, makes it a little bit of challenge?

Ending for '12? I have on the top of my head the ending on a basic basis for the end of the year, which is about 86 million, 85 million shares, somewhere in that range. You can back -- I do not know what the end of Q1 was, you can easily back into it based on our assumptions on future buyback. Right, there is $50 million sent in Q4, $50 million sent in Q3, $581 million sent in Q2. We have a share price that assume -- you can do your own math and determine what it was at the end of Q1. But we will get back to you also to confirm it. But it -- so something you can calculate.

Great. Thank you very much.

There are no further questions. I would now turn the call back to the company for closing comments.

We want to thank everybody for the ongoing support. We are extremely proud at Herbalife, who we are and what we do to create opportunity in the lives of our customers, our member and of course, we are part of our employees what they are doing every day. We promote a healthy active lifestyle. Our members help their customers find healthy solutions in a social support system that creates incredibly strong bond to our product and to our people. With the incredible amount of money and energy being thrown against the (inaudible) trying to store who we really are, we are always and we always have been confident in the integrity of our longstanding business and the company's compliance with applicable laws and regulation. So this has lead to another record quarter. We look forward to seeing you again next quarter and to repeat what we have repeated today. So I thank you all very much for being with us.

That concludes today's conference. Thank you for your participation. You may not disconnect.