康寶萊 (HLF) 2018 Q1 法說會逐字稿

Good afternoon, and thank you for joining the First Quarter 2018 Earnings Conference Call for Herbalife Nutrition Ltd. On the call today is Rich Goudis, the company's CEO; Des Walsh, the company's Executive Vice Chairman; John DeSimone, the company's Co-President and Chief Strategic Officer; John -- Dr. John Agwunobi, the company's Co-President and Chief Health Nutrition Officer; and Eric Monroe, the company's, Director, Investor Relations. I would now like to turn the call over to Eric Monroe to read the company's safe harbor language.

下午好，感謝您參加康寶萊營養有限公司 2018 年第一季財報電話會議。今天參加電話會議的是該公司執行長 Rich Goudis； Des Walsh，公司執行副主席； John DeSimone，公司聯席總裁兼首席策略長；約翰－公司聯席總裁兼首席健康營養官約翰·阿格武諾比 (John Agwunobi) 博士；門羅 (Eric Monroe)，該公司投資者關係總監。我現在想將電話轉給埃里克·門羅（Eric Monroe），閱讀該公司的安全港語言。

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 today's earnings release and our SEC filings for a complete discussion of risks associated with these forward-looking statements in our business. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any future events or circumstances or to reflect the occurrence of unanticipated events, except as required by law.

在我們開始之前，提醒一下，在本次電話會議期間，可能會發表一些評論，其中包括一些前瞻性陳述。這些陳述涉及風險和不確定性，如您所知，實際結果可能與討論或預期的結果有重大差異。我們鼓勵您參考今天的收益報告和我們向 SEC 提交的文件，以全面討論與我們業務中的這些前瞻性陳述相關的風險。我們不承擔更新或發布任何前瞻性聲明的任何修訂或報告任何未來事件或情況或反映意外事件發生的義務，除非法律要求。

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 that these non-GAAP financial measures assist management and investors in evaluating our performance and preparing period-to-period results of operations in a more meaningful and consistent manner as discussed in greater detail in the supplemental schedules to our earnings release. Please refer to the Investor Relations section of our website, herbalife.com, for additional supplemental information and to find our press release for this quarter, which contains a reconciliation of these measures. Additionally, when management makes reference to volumes during this conference call, they are referring to volume points.

此外，在本次電話會議中，可能會討論某些財務績效衡量標準，這些衡量標準與我們根據美國公認會計原則編制的財務報表中包含的可比衡量標準不同，美國證券交易委員會將其稱為非公認會計原則財務衡量標準。我們相信，這些非公認會計原則財務指標有助於管理層和投資者以更有意義和一致的方式評估我們的業績並準備各時期的經營業績，正如我們的收益發布補充時間表中更詳細討論的那樣。請參閱我們網站 herbalife.com 的投資者關係部分，以了解更多補充資訊並尋找我們本季度的新聞稿，其中包含這些措施的協調表。此外，當管理階層在本次電話會議期間提到交易量時，他們指的是交易量點。

I will now turn the call over to our CEO, Rich Goudis.

我現在將把電話轉給我們的執行長 Rich Goudis。

Good afternoon, everyone. Thank you for joining our first call as Herbalife Nutrition Ltd. We're excited about the name change, which was approved by shareholders at our April General Meeting, because we believe this new name is more reflective of our purpose to make the world healthier and happier, and it better communicates our strategies and investments to position us as a leader in the nutrition industry.

大家下午好。感謝您作為康寶萊營養有限公司參加我們的第一次電話會議。我們對更名感到興奮，這一更名在四月份的股東大會上得到了股東的批准，因為我們相信這個新名稱更能體現我們讓世界更健康、更快樂的宗旨，並且能更好地傳達我們的策略和投資，以定位我們的目標。

In the first quarter, we exceeded expectations as we return to growth in the U.S. ahead of schedule, and as such, we raised our financial outlook for the year. This is an exciting time for the company. In the area of products, we're introducing more products than ever before, the speed of introductions has increased and the degree of collaboration on innovation with our distributor leadership has never been stronger.

第一季度，我們超出了預期，美國提前恢復了成長，因此我們上調了今年的財務前景。對於公司來說，這是一個令人興奮的時刻。在產品領域，我們推出的產品比以往任何時候都多，推出的速度也加快了，與經銷商領導層在創新方面的合作程度也空前強烈。

In the area of technology, our acute focus to develop tools that improve the efficiency and productivity of our distributors is accelerating, with the continued beta test of HN-connect, what we formerly called salesforce.com project.

在技​​術領域，隨著 HN-connect（我們以前稱為 salesforce.com 專案）的持續 Beta 測試，我們正在加速開發提高經銷商效率和生產力的工具。

In the area of education and training, we continue to increase our focus and investments to enhance our distributor difference, so our distributors, in turn, can help their customers achieve better results. And with our success in the U.S., where our first quarter of 2018 was greater than the highest quarter in 2017, we are clearly leading the industry.

在教育和培訓領域，我們不斷加大關注和投資，以增強我們的經銷商差異化，從而使我們的經銷商能夠幫助他們的客戶取得更好的成果。由於我們在美國取得了成功，2018 年第一季的業績超過了 2017 年最高季度的業績，因此我們顯然處於行業領先地位。

For the quarter, volume, net sales and EPS all exceeded our guidance. This is a testament to the hard work of our entrepreneurial distributors and the teamwork across our company.

本季的銷量、淨銷售額和每股收益均超出了我們的指導。這證明了我們企業家經銷商的辛勤工作和整個公司的團隊合作。

Now on the topic of teamwork. I'm thrilled to announce that, once again, we're included in the Forbes list of America's Best Midsize Employer for the third consecutive year. We also had very encouraging distributor metrics in the quarter. Let me share a few highlights with you.

現在談談團隊合作的話題。我很高興地宣布，我們連續第三年入選《富比士》美國最佳中型雇主名單。本季我們的經銷商指標也非常令人鼓舞。讓我與您分享一些亮點。

Worldwide Average Active Sales Leaders increased 3% year-over-year following 3 quarters of decline. And in the U.S., we welcomed over 67,000 new preferred members to our community of like-minded people, the highest number since we began segmenting the sign-up applications in the first quarter of 2017.

全球平均活躍銷售領先者繼三個季度下降後，年增 3%。在美國，我們迎來了超過 67,000 名新的首選會員加入我們志趣相投的社區，這是自 2017 年第一季我們開始細分註冊申請以來的最高數字。

In addition to our positive financial performance, we continue to execute initiatives designed to accelerate shareholder value. A few recent key initiatives were the completion of the refinancing for a portion of our convertible notes and the commencement of our modified Dutch auction tender offer to buy back up to $600 million of our common shares. As you can see from our reported numbers and as you'll hear on this call, we are confident about our future, and as a result, we've raised our guidance for the full year. John will give you the details of our financial performance and guidance in just a few minutes.

除了積極的財務表現外，我們還繼續執行旨在提高股東價值的舉措。最近的一些關鍵舉措包括完成部分可轉換票據的再融資，以及啟動修改後的荷蘭式拍賣要約收購，以回購最多 6 億美元的普通股。正如您從我們報告的數據中看到的以及您將在本次電話會議中聽到的那樣，我們對我們的未來充滿信心，因此，我們提高了全年指導。約翰將在短短幾分鐘內向您提供我們財務業績和指導的詳細資訊。

Our success continues to be attributable to the dedication of our entrepreneurial distributors and the difference they play to help ensure their customers receive the proper nutrition education, coaching and support and, of course, consume our great nutrition products to achieve their nutrition goals.

我們的成功仍然歸功於我們企業家經銷商的奉獻精神以及他們所發揮的作用，以幫助確保他們的客戶獲得適當的營養教育、指導和支持，當然，消費我們優質的營養產品來實現他們的營養目標。

Distributors are our unique point of difference. They play an important role in their customers' lives, providing them with much-needed nutrition education, support and encouragement, and they create communities of like-minded people, whether Nutrition Clubs and fit camps or through weight loss challenges and other methods of operation. This one-on-one high-touch customer experience that our distributors create is critically needed in our industry because of the complexity of nutrition and the individual needs and personal differences among consumers.

經銷商是我們獨特的差異點。他們在顧客的生活中發揮著重要作用，為他們提供急需的營養教育、支持和鼓勵，並且他們創建了志同道合的人社區，無論是營養俱樂部和健身營還是透過減肥挑戰和其他運作方式。由於營養的複雜性以及消費者之間的個人需求和個人差異，我們的經銷商創造的這種一對一的高接觸客戶體驗在我們的行業中是迫切需要的。

The distributor difference is especially important in weight management due to the behavior and lifestyle change consumers need in order to adopt a more healthy and active lifestyle. This is our competitive advantage over traditional and online retailing of nutrition products and one that we intend to continue to strengthen.

由於消費者需要改變行為和生活方式以採取更健康和積極的生活方式，因此經銷商的差異在體重管理中尤其重要。這是我們相對於傳統和線上營養產品零售的競爭優勢，也是我們打算繼續加強的優勢。

Our extensive product lineup is also important in helping the customers of our distributors achieve their desired results. Our Seed to Feed program, where we've invested over $300 million since 2010, ensures we have traceability and control over key ingredients. And today, we self-manufacture approximately 65% of our nutrition products in our state-of-the-art facilities, including our top products, to offer consumers more choice than ever before and provide us with the necessary flexibility and capacity to support future growth. Additionally, we are expanding our portfolio of products to help our distributors attract new consumers and retain their existing customers longer.

我們廣泛的產品系列對於幫助我們的經銷商的客戶實現他們期望的結果也很重要。自 2010 年以來，我們已投資超過 3 億美元的「種子到飼料」計劃，確保我們對關鍵成分進行可追溯和控制。如今，我們在最先進的設施中自行生產約 65% 的營養產品，包括我們的頂級產品，為消費者提供比以往更多的選擇，並為我們提供必要的靈活性和能力來支持未來生長。此外，我們正在擴大我們的產品組合，以幫助我們的經銷商吸引新消費者並更長久地保留現有客戶。

In the first quarter, new products and line extensions contributed to our growth as we launched more than 65 products globally. Let me mention just a few to highlight our underlying strategies.

第一季度，新產品和產品線擴展為我們的成長做出了貢獻，我們在全球推出了超過 65 種產品。讓我僅舉幾例來強調我們的基本策略。

In EMEA, PRO 20 Select is off to a great start, launching in 12 markets in the region and ranking among the top 3 selling SKUs in some markets. As a reminder, this product expands consumer choice in our protein shake portfolio, leveraging trends in the natural food and beverage market by offering a convenient water-mixable shake with more protein per serving, lower sugar and no artificial colors or sweeteners. We will look to build on this product's success and introduce similar products in other key markets in the next 12 to 18 months.

在 EMEA 地區，PRO 20 Select 取得了良好的開端，在該地區的 12 個市場推出，並在某些市場躋身銷​​售前 3 名的 SKU。提醒一下，該產品利用天然食品和飲料市場的趨勢，提供每份含有更多蛋白質、更低糖分、不含人工色素或甜味劑的方便的水混合奶昔，擴大了消費者對我們的蛋白質奶昔產品組合的選擇。我們將在該產品的成功基礎上再接再厲，並在未來 12 至 18 個月內在其他主要市場推出類似產品。

Following our launch of the first new flavor of our top-selling product, N-R-G Tea, in Brazil last quarter, we introduced a second flavor, green apple, in Mexico in January. It has proven to be a popular product so far, ranking in one of the top 10 SKUs in the country. Based on this success, we are exploring similar opportunities in key markets to create and satisfy consumer demand and drive increased consumption of our top-selling products.

繼上個季度在巴西推出我們最暢銷產品 N-R-G Tea 的第一個新口味之後，我們於 1 月在墨西哥推出了第二種口味：青蘋果。迄今為止，它已被證明是一款受歡迎的產品，位列全國前10名的SKU之一。基於這項成功，我們正在主要市場探索類似的機會，以創造和滿足消費者需求，並推動我們最暢銷產品的消費增加。

Early in the first quarter, we introduced our first Formula 1 shake made specifically for Nutrition Clubs and is currently among the top 10 SKUs sold in Brazil. The product comes in an 80-serving size pouch, delivering improved economics for our distributors. With the success of this product, we are evaluating and prioritizing additional markets to introduce a similar large format offering to help improve distributor economics for Nutrition Club operators around the world.

第一季初，我們推出了首款專為營養俱樂部製作的一級方程式奶昔，目前已躋身巴西銷售前 10 名的 SKU 之列。該產品採用 80 份大小的小袋包裝，為我們的經銷商帶來更高的經濟效益。隨著該產品的成功，我們正在評估並優先考慮其他市場，以推出類似的大幅面產品，以幫助提高全球營養俱樂部營運商的經銷商經濟效益。

In February, for the Chinese Lunar New Year, we launched a limited-edition Formula 1 red bean and [coy] seed flavor. This flavor was developed locally and is in line with our strategy to develop flavors that resonate specifically with consumers in each market. This product had tremendous sales performance selling out in only 2 months, further validating the success of this strategy and our ability to develop and manufacture local flavors of our top-selling products.

今年二月，為慶祝中國農曆新年，我們推出了限量版一級方程式紅豆和[靦腆]種子口味。這種口味是在當地開發的，符合我們開發能與每個市場的消費者產生特別共鳴的口味的策略。該產品在短短兩個月內就取得了巨大的銷售業績，進一步驗證了這項策略的成功以及我們開發和生產本土風味暢銷產品的能力。

In India, following the same strategy, we launched Formula 1 strawberry in January. It has exceeded our initial sales forecast and is the second most popular SKU in that country. We also launched a complementary product, Formula 1 Dinoshake Strawberry, for kids. And for the first time in India, we introduced our global top-selling Herbal Aloe Concentrate to expand our digestive health offering.

在印度，遵循同樣的策略，我們在一月推出了一級方程式草莓。它已經超出了我們最初的銷售預測，並且是全國第二受歡迎的 SKU。我們也推出了兒童的補充產品，Formula 1 Dinoshake Strawberry。我們首次在印度推出了全球最暢銷的草本蘆薈濃縮液，以擴大我們的消化健康產品範圍。

To wrap up the discussion on new products, let me give you 1 example of what we're doing and how we're working with our distributor leaders to accelerate new product introductions. In March, we hosted 2,500 of our top leaders from around the world here in Los Angeles. An exciting highlight for me was having our distributors experience our Concept Café, where our marketing and R&D teams shared samples of new products and innovative product concepts. The reception to these new concepts was amazing, and we're now working with our regional distributor product committees to prioritize many of the new products they sampled. We anticipate that you'll see significant activity in the area of new products over the next 12 to 18 months, products that will expand our offering into new daypart segments, along with products in new categories that will enable our distributors to attract new customers and extend the life cycle of their existing customers.

為了結束關於新產品的討論，讓我給您舉 1 個範例，說明我們正在做什麼以及我們如何與經銷商領導合作以加速新產品的推出。3 月份，我們在洛杉磯接待了來自世界各地的 2,500 名高層領導人。對我來說，一個令人興奮的亮點是讓我們的經銷商體驗我們的概念咖啡館，我們的行銷和研發團隊在那裡分享新產品和創新產品概念的樣品。這些新概念的反應令人驚嘆，我們現在正在與我們的區域經銷商產品委員會合作，優先考慮他們採樣的許多新產品。我們預計，在未來12 到18 個月內，您將看到新產品領域的重大活動，這些產品將把我們的產品擴展到新的時段細分市場，以及新類別的產品，使我們的經銷商能夠吸引新客戶和延長現有客戶的生命週期。

Increasing our investments in education and training is another key strategy for our company. Working with our top distributor leaders, we've created a new more personal and intimate educational experience. It was introduced at a premier leadership event in Los Angeles last month, delivered via master classes and breakout sessions that enabled distributors to personalize their educational journey. We believe the more educated and better trained our distributors are, the more confidence they will have and more value they will bring to their organizations and their customers.

增加對教育和培訓的投資是我們公司的另一個關鍵策略。我們與我們的頂級經銷商領導者合作，創造了一種更個性化和親密的新教育體驗。它是在上個月在洛杉磯舉行的一次重要領導力活動中推出的，透過大師班和分組會議提供，使經銷商能夠個性化他們的教育旅程。我們相信，我們的經銷商受過更多的教育和更好的培訓，他們就會更有信心，為他們的組織和客戶帶來更多的價值。

We've also been on a journey to educate key thought leaders and influencers about the value of what we bring to communities around the globe. This strategy is playing out in key markets where we do business and is extensive and ongoing. On our last call, we talked about our participation in South by Southwest here in the U.S. So on this call, let me share an example of what we're doing in China.

我們也一直在教育關鍵思想領袖和影響者，讓他們了解我們為全球社區帶來的價值。這項策略正在我們開展業務的主要市場中實施，並且範圍廣泛且持續。在我們上次的電話會議上，我們談到了我們在美國參加西南偏南音樂節的情況。

Our local team in China is continuing their outreach to thought leaders, and later this month, we'll partner with the Chinese Nutrition Society on National Nutrition Week, the largest official nutrition event in the country. CNS is a nonprofit organization dedicated to bringing together academics, research institutions and industries to advance the research and application of nutrition science for health, well-being and disease prevention. This year's event will be titled Healthy Weight, Eat Smart and Exercise Smart. As a major sponsor since 2015, our experts will be featured alongside CNS officials giving keynote presentations and conducting media interviews. This partnership in China is a key strategy to further strengthen our position as a premier nutrition company in this important market, and we believe our participation will help ensure we continue to be part of the conversation about the future of nutrition through our positive solutions to global mega trends such as obesity.

我們在中國的當地團隊正在繼續與思想領袖進行聯繫，本月晚些時候，我們將與中國營養學會合作舉辦全國營養週，這是中國最大的官方營養活動。CNS 是一個非營利組織，致力於將學術界、研究機構和產業聚集在一起，推動營養科學的研究和應用，以促進健康、福祉和疾病預防。今年的活動主題為「健康體重、明智飲食和明智運動」。自 2015 年起作為主要贊助商，我們的專家將與 CNS 官員一起發表主題演講並接受媒體採訪。在中國的這項合作關係是一項關鍵策略，旨在進一步加強我們作為這一重要市場中一流營養品公司的地位，我們相信，我們的參與將有助於確保我們透過積極的解決方案繼續參與營養未來的對話。

As I look to the future, I'm excited about the possibilities we have as we invest in our high-touch, high-tech approach to nutrition and continually strengthen our distributor difference. Since 2010, we've invested over $300 million in technology, creating an enviable and leverageable global Oracle-based platform. A key element of our strategy to leverage our technology investment is the launch of HN-connect using salesforce.com. Our beta test went live in the U.S. in January with a small group of distributors who are testing several journeys that have been developed with their help. These journeys include e-mail campaigns that personalize the customer experience and automate tasks for our distributors based on the specific needs of their customers. Automating marketing tasks and personalizing the customer experience or artificial intelligence, including suggestive selling, gives our distributors the freedom they need to focus on the true difference they make in people's lives through personal support, coaching, other one-on-one, relationship activities and creating communities of like-minded people in person and online. HN-connect was first showcased at our kickoff leadership event in Orlando earlier this year and, again, in March at our event for global leaders in Los Angeles, where some of our investors also had a chance to experience these new tools. Early feedback from our distributors has been positive. As we move through the summer months, we will continue to build functionality, working with our distributor leaders in preparation for a broad launch of Phase 1 later this year. Additionally, we are evaluating future market introductions after the U.S. rollout is complete.

展望未來，我對我們所擁有的可能性感到興奮，因為我們投資於高接觸、高科技的營養方法，並不斷加強我們的經銷商差異化。自 2010 年以來，我們已在技術方面投資超過 3 億美元，創建了一個令人羨慕且可利用的基於 Oracle 的全球平台。我們利用科技投資的策略的關鍵要素是使用 salesforce.com 推出 HN-connect。我們的 Beta 測試於一月份在美國與一小群分銷商一起進行，他們正在測試在他們的幫助下開發的幾個旅程。這些旅程包括電子郵件活動，可根據客戶的特定需求為我們的經銷商提供個人化的客戶體驗和自動化任務。自動化行銷任務和個人化客戶體驗或人工智慧（包括暗示性銷售）使我們的經銷商能夠自由地關注他們透過個人支援、輔導、其他一對一、關係活動和親自和線上創建志趣相投的人的社區。HN-connect 首次在今年稍早於奧蘭多舉行的領導力啟動活動中首次展示，並於 3 月在洛杉磯舉行的全球領導者活動中再次展示，我們的一些投資者也有機會體驗這些新工具。我們的經銷商的早期回饋是正面的。隨著夏季的到來，我們將繼續建立功能，與我們的經銷商領導者合作，為今年稍後廣泛推出第一階段做好準備。此外，我們正在評估美國推出完成後未來的市場推出。

Before we move on to John and the financial update, I would be remiss if I do not publicly thank Des Walsh for his leadership as our President since 2010. On May 1, Des moved into his new role as Executive Vice Chairman. His dedication, passion and strong distributor relationships have contributed greatly to our success. And, more importantly, his development of our future leaders has set us up for an amazing future.

在我們繼續討論約翰和財務更新之前，如果我不公開感謝德斯·沃爾什 (Des Walsh) 自 2010 年以來作為我們的總裁所發揮的領導作用，那就是我的失職。5 月 1 日，Des 就任執行副主席。他的奉獻精神、熱情和牢固的經銷商關係為我們的成功做出了巨大貢獻。更重要的是，他對我們未來領導人的培養為我們創造了美好的未來。

Let me also congratulate again John DeSimone and Dr. John Agwunobi on their promotions to Co-President this week. In addition to our solid growth strategies, our quality products and our amazing distributors and employees, it's our incredible bench strength of talented executives that makes us also optimistic about our future.

我還要再次祝賀約翰·德西蒙 (John DeSimone) 和約翰·阿格武諾比 (John Agwunobi) 博士本週晉升為聯合總裁。除了我們穩健的成長策略、優質的產品以及出色的經銷商和員工之外，我們才華橫溢的主管人員令人難以置信的後備力量也讓我們對未來感到樂觀。

Additionally, the quality leaders who are willing to serve on our Board of Directors also makes us confident about the future. Last month, we welcomed 4 new board members whose expertise will help our company deliver on our purpose of making the world healthier and happier. They are Nick Graziano, Portfolio Manager for Icahn Enterprises; Al LeFevre, former Chief Financial Officer at Jarden Corporation, a leading provider of consumer products; Juan Miguel Mendoza, independent Herbalife Nutrition distributor for 25 years and a member of our prestigious Chairman's Club since 2013; and Margarita Palau-Hernandez, Founder and CEO of Hernandez Ventures, a private firm engaged in the acquisition and management of a variety of business interests.

此外，願意在我們董事會任職的品質領導者也讓我們對未來充滿信心。上個月，我們迎來了 4 位新董事會成員，他們的專業知識將幫助我們公司實現讓世界更健康、更幸福的目標。他們是 Icahn Enterprises 的投資組合經理 Nick Graziano； Al LeFevre，消費產品領先供應商 Jarden Corporation 前財務長； Juan Miguel Mendoza，康寶萊營養品獨立經銷商 25 年，自 2013 年起成為我們著名的主席俱樂部的成員； Margarita Palau-Hernandez，Hernandez Ventures 的創始人兼首席執行官，這是一家從事收購和管理各種商業利益的私人公司。

And finally, I'd like to extend a heartfelt thanks and gratitude to those who just stepped off the board: Dick Bermingham, who's a board member since our IPO; Pedro Cardoso, an independent distributor who served for 8 years; and Keith Cozza, CEO of Icahn Enterprises, whose exemplary service and leadership helped see us through a critical time in our company's history.

最後，我要向那些剛離開董事會的人表示衷心的感謝：迪克·伯明翰，自我們首次公開募股以來一直擔任董事會成員； Pedro Cardoso，獨立經銷商，任職8年；伊坎企業執行長 Keith Cozza 的出色服務和領導力幫助我們度過了公司歷史上的關鍵時期。

Now I'll turn it over to John for the financial details.

現在我將把它交給約翰了解財務細節。

Thank you, Rich. Today, I will start by discussing the company's first quarter 2018 reported and adjusted results, which will include key market highlights. I will then review the second quarter and full year 2018 guidance and conclude by providing a brief update on our share repurchase program.

謝謝你，里奇。今天，我將首先討論該公司 2018 年第一季報告和調整後的業績，其中包括主要的市場亮點。然後，我將回顧 2018 年第二季和全年指引，最後簡要介紹我們的股票回購計畫。

First quarter reported net sales of $1.2 billion, represented an increase of 6.8% compared to the prior year.

第一季淨銷售額為 12 億美元，較上年成長 6.8%。

Volume points for the first quarter were 1.4 billion. And despite a very challenging comparison, it nearly matched the prior year's first quarter, led by the U.S. returning to growth ahead of plan. This is also the third quarter in a row where 5 of our 6 regions showed sequential improvements in volume point trends.

第一季成交量為14億。儘管比較非常具有挑戰性，但在美國提前恢復成長的帶動下，它幾乎與去年第一季持平。這也是我們 6 個地區中的 5 個地區連續第三個季度在成交量趨勢上連續改善。

We reported net income of $82.1 million or $1.08 per diluted share for the first quarter of 2018 compared to reported net income of $85.2 million or $0.98 per diluted share for the first quarter of 2017.

我們報告 2018 年第一季淨利潤為 8,210 萬美元，即稀釋後每股收益 1.08 美元，而 2017 年第一季報告淨利潤為 8,520 萬美元，即稀釋後每股收益 0.98 美元。

Adjusted earnings per diluted share were $1.40 compared to $1.24 per share for the first quarter of 2017. The adjusted diluted EPS figures continue to exclude items we consider to be outside of normal company operations or we believe will be useful to investors when analyzing period-over-period comparisons of our results. Please refer to our first quarter 2018 earnings press release issued today for additional details on these adjustments.

調整後每股攤薄收益為 1.40 美元，而 2017 年第一季為 1.24 美元。調整後的稀釋後每股盈餘數據繼續排除我們認為不屬於公司正常營運範圍的項目，或我們認為在分析我們業績的同期比較時對投資者有用的項目。請參閱我們今天發布的 2018 年第一季財報新聞稿，以了解有關這些調整的更多詳細資訊。

Our first quarter adjusted diluted EPS exceeded the high end of our guidance range of $0.90 to $1.10. This EPS beat was driven by the higher-than-expected sales as well as excess tax benefits from the exercise of equity grants, partially offset by lower gross margins.

我們第一季調整後稀釋後每股收益超出了 0.90 美元至 1.10 美元指導範圍的上限。每股收益超出預期的原因是銷售額高於預期以及行使股權授予帶來的超額稅收優惠，但部分被毛利率下降所抵消。

Reported gross margin for the first quarter of 79.6% decreased by approximately 180 basis points compared to the prior year period. This decrease was driven primarily by foreign currency fluctuations and increased self-manufacturing costs from a planned inventory reduction, both of which were discussed on last quarter's conference call.

第一季毛利率為 79.6%，較去年同期下降約 180 個基點。這一下降主要是由於外匯波動和計劃庫存減少導致的自製成本增加所致，這兩點都在上個季度的電話會議上進行了討論。

Additionally, we experienced higher inventory write-offs in the quarter, partially offset by the favorable impact of retail price increases.

此外，本季我們經歷了較高的庫存沖銷，但部分被零售價格上漲的有利影響所抵消。

First quarter 2018 reported and adjusted SG&A as a percentage of net sales were 39.1% and 38.5%, respectively. Excluding China member payments, adjusted SG&A as a percentage of net sales was 29.1%, approximately 50 basis points higher than the first quarter of 2017. The increase was primarily driven by a change in revenue recognition accounting rules implemented in 2018 that increased both net sales and SG&A by approximately $6 million. This accounting rule relates to the accounting of sales to importers, a model we use for approximately 3% of our net sales. This change in accounting rules had no impact to net income.

2018 年第一季報告和調整後的 SG&A 佔淨銷售額的百分比分別為 39.1% 和 38.5%。不包括中國會員付款，調整後的銷售及管理費用佔淨銷售額的百分比為 29.1%，比 2017 年第一季高出約 50 個基點。這一增長主要是由於 2018 年實施的收入確認會計規則發生變化，導致淨銷售額和銷售、一般管理費用增加了約 600 萬美元。此會計規則涉及對進口商的銷售額的核算，我們使用的模型約佔淨銷售額的 3%。會計規則的這項變更對淨利潤沒有影響。

Our first quarter reported and adjusted effective tax rate were 10.2% and 10.6%, respectively.

我們第一季報告和調整後的有效稅率分別為 10.2% 和 10.6%。

This was significantly lower than our expectations primarily due to excess tax benefits and the exercise of equity grants generated during the quarter, along with other discrete benefits. Excluding the impact of equity grant exercises, our adjusted effective tax rate would have been approximately 1,600 basis points higher.

這明顯低於我們的預期，主要是由於本季度產生的超額稅收優惠和股權授予的行使以及其他離散福利。排除股權授予活動的影響，我們調整後的有效稅率將高出約 1,600 個基點。

Shifting now to our regional market highlights. In the U.S., the momentum we previously observed continued as we returned to growth a quarter earlier than expected. We look to build off the strength in the first quarter and expect to see trends continue to improve during the second quarter.

現在轉向我們的區域市場亮點。在美國，我們之前觀察到的勢頭仍在繼續，我們比預期提前一個季度恢復了成長。我們希望在第一季增強實力，並預計第二季趨勢將繼續改善。

In China, Q1 2018 volume points decreased 22%. As a reminder, this decline in China was expected because volume points in Q1 of last year was higher than it otherwise would have been due to a price increase implemented at the beginning of April 2017, which resulted in our distributors and customers buying extra product in March 2017 in front of this price increase. Normalizing Q1 2017 for the impact of the price increase, China would have been relatively flat compared to the first quarter of last year.

在中國，2018 年第一季銷量下降 22%。提醒一下，中國的這種下降是預料之中的，因為去年第一季的銷售點高於2017 年4 月初實施的價格上漲，導致我們的經銷商和客戶在2017 年第一季購買了額外的產品。考慮到 2017 年第一季價格上漲的影響，中國的情況與去年第一季相比將相對持平。

Turning to Mexico. We saw a meaningful improvement in trends in the quarter, with volume points down just 2%, coming off declines of 9% and 8% in Qs 3 and 4, respectively. During the first quarter 2018, we tested a small volume point value change on a few products in Mexico that benefited the comparison in the quarter by approximately 170 basis points. The Asia Pacific region showed 10% year-over-year growth, with notable performances from India, Indonesia and Malaysia, while EMEA grew 7%, its 32nd consecutive quarter of growth.

轉向墨西哥。我們看到本季趨勢顯著改善，成交量僅下降 2%，而第三季和第四季分別下降了 9% 和 8%。在 2018 年第一季度，我們對墨西哥的一些產品進行了小幅點值變化測試，該變化使本季度的比較受益約 170 個基點。亞太地區年增 10%，其中印度、印尼和馬來西亞表現突出，而歐洲、中東和非洲地區成長 7%，已連續 32 個季度成長。

Moving ahead to guidance. Worldwide volume point guidance for 2018 has been updated to a range of 3% to 7% growth. This reflects the beat of volume points in the first quarter, along with slightly higher expectations for the U.S. for the remainder of the year. Our combined volume point projections for the remaining markets are primarily unchanged from the guidance provided a quarter ago. For the second quarter 2018, we estimate volume points to grow in a range of 4% to 8%.

繼續指導。2018 年全球銷售點指引已更新為 3% 至 7% 的成長範圍。這反映了第一季成交量的成長，以及今年對美國剩餘時間的預期略有上升。我們對其餘市場的綜合成交量預測與上季前提供的指引基本沒有變化。對於 2018 年第二季度，我們預計銷量將成長 4% 至 8%。

With respect to full year net sales guidance, we are raising previous estimates of 5.5% to 9.5% growth by 350 basis points to a range of 9% to 13% growth. This reflects the better-than-expected results from the first quarter and a favorable movement in currency since last quarter. Currency is expected to have an approximate 330 basis point tailwind to full year net sales, which is 150 basis points higher than our previous guidance.

關於全年淨銷售額指引，我們將先前 5.5% 至 9.5% 成長的預測上調 350 個基點，至 9% 至 13% 的成長範圍。這反映了第一季好於預期的業績以及自上季以來貨幣的有利走勢。預計貨幣對全年淨銷售額將產生約 330 個基點的順風，比我們先前的指導高出 150 個基點。

For the second quarter 2018, we estimate net sales to be within a range of 8.5% to 12.5% growth, which includes an approximate 370 basis point currency benefit versus prior year. Our currency impact for the full year and second quarter both exclude Venezuela due to the hyperinflationary impact of currency, rate exchanges and associated price increases in that market.

對於 2018 年第二季度，我們預計淨銷售額將成長 8.5% 至 12.5%，其中包括與去年相比約 370 個基點的貨幣收益。我們對全年和第二季的貨幣影響均不包括委內瑞拉，因為該市場的貨幣、匯率波動和相關價格上漲的惡性通膨影響。

Full year reported diluted EPS is estimated to be in the range of $3.95 to $4.35, and adjusted diluted EPS guidance is expected to be in a range of $5.05 to $5.45, up from the previous ranges of $3.82 to $4.22 and $4.60 to $5.00, respectively. Full year reported and adjusted diluted EPS included currency benefit of $0.26, an increase from $0.13 included in our previous guidance.

全年報告的稀釋每股收益預計在3.95 美元至4.35 美元之間，調整後的稀釋每股收益指導預計在5.05 美元至5.45 美元之間，分別高於之前的3.82 美元至4.22 美元和4.60 美元至5.00 美元。全年報告和調整後的稀釋每股收益包括 0.26 美元的貨幣收益，高於我們先前指導中的 0.13 美元。

Second quarter reported diluted EPS is estimated to be in a range of $0.90 to $1.10 and adjusted diluted EPS to be in a range of $1.15 to $1.35. Second quarter reported and adjusted diluted EPS include a projected currency tailwind of $0.07 compared to the second quarter of 2017. These estimates are all on a pre-stock split basis. And as a reminder, our shareholders approved the stock split effective May 7, with the stock split distribution date of May 14. We are also slightly lowering our capital expenditure expectations for the year to a range of $110 million to $140 million.

第二季稀釋後每股盈餘預計在 0.90 美元至 1.10 美元之間，調整後稀釋後每股盈餘在 1.15 美元至 1.35 美元之間。第二季報告和調整後的稀釋每股收益包括與 2017 年第二季相比預計將上漲 0.07 美元的貨幣因素。這些估計都是在股票分割前的基礎上進行的。謹此提醒，我們的股東批准了股票分割，該股票分割於 5 月 7 日生效，股票分割分配日期為 5 月 14 日。我們也將今年的資本支出預期小幅下調至 1.1 億至 1.4 億美元。

Additionally, second quarter capital expenditures are expected to be within a range of $25 million to $35 million.

此外，第二季資本支出預計在 2,500 萬美元至 3,500 萬美元之間。

Full year effective tax rate guidance remains unchanged at 30% to 35% on a reported basis and reduced to 23% to 28% on an adjusted basis, primarily reflecting the excess tax benefits recognized in the first quarter.

全年有效稅率指引在報告基礎上保持在 30% 至 35% 不變，而在調整後基礎上降至 23% 至 28%，主要反映了第一季確認的超額稅收優惠。

Second quarter effective tax rate guidance is 36% to 41%, while the adjusted effective tax rate is expected to be in a range of 29% to 34%.

第二季有效稅率指引為36%至41%，而調整後的有效稅率預計在29%至34%範圍內。

Lastly, I'd like to make a few comments in regard to cash, debt and our share repurchase activity. Since we spoke last quarter, we announced multiple strategic initiatives designed to enhance shareholder value. As part of this plan, in March, we completed a new convertible debt offering of $550 million that effectively resulted in a refinancing of approximately $475 million of our outstanding convertible notes that mature in 2019.

最後，我想就現金、債務和我們的股票回購活動發表一些評論。自上季講話以來，我們宣布了多項旨在提高股東價值的策略舉措。作為該計劃的一部分，我們在 3 月完成了 5.5 億美元的新可轉換債券發行，這實際上導致了 2019 年到期的約 4.75 億美元的未償還可轉換票據的再融資。

Additionally, we announced a self-tender offer seeking to repurchase up to $600 million of common shares, which we expect to close on May 24. We believe the completion of the refinancing allows greater flexibility in our use of capital, while the tender offer is consistent with our long-term goal of returning value to shareholders. Our guidance assumes the entire $600 million tender is completed later this month.

此外，我們還宣布了一項自我要約收購，尋求回購最多 6 億美元的普通股，預計將於 5 月 24 日結束。我們相信，再融資的完成使我們的資金使用更加靈活，而要約收購也符合我們為股東回報價值的長期目標。我們的指導假設 6 億美元的全部招標將於本月晚些時候完成。

At the end of the quarter, we had $1.3 billion in cash, $2.2 billion in total debt and approximately $900 million in net debt, all prior to the execution of the tender.

截至本季末，我們擁有 13 億美元現金、22 億美元總債務和約 9 億美元淨債務，所有這些都是在執行招標之前。

Thank you. And this concludes our prepared remarks. Operator, please open the line for questions.

謝謝。我們準備好的演講到此結束。接線員，請開通提問線。

(Operator Instructions) Our first question comes from the line of Doug Lane with Lane Research.

（操作員說明）我們的第一個問題來自 Doug Lane 和 Lane Research 的路線。

John, just to stay on the buyback here. You mentioned you now have a full $600 million baked into your outlook this year. Before, I think you had $200 million. Can you give us an idea for what that differential - what the impact to EPS is from the additional $400 million?

約翰，只是為了繼續回購。您提到您今年的展望中已經包含了 6 億美元的資金。之前，我認為你有2億美元。您能否告訴我們這種差異是什麼？

Yes, around $0.08.

是的，大約 0.08 美元。

$0.08? Okay.

0.08 美元？好的。

For the rest of the year, all right? It's not an annual -- that's not an annualized number. That's just the impact on the change in guidance for...

今年剩下的時間，好嗎？這不是年度數字——這不是年度數字。這只是對指導方針變化的影響......

For this year? Right, right. I get that. Now stepping back, 1 number that really stuck out, and I know that China is a little bit -- has tough comparisons from last year, but the average service providers with volume points was a big jump year-over-year and sequentially. Can you give us a feel for what's going on there and what the implication is? Is that going to translate directly to volume points as soon as this quarter? Or how should we think about that?

今年？對，對。我明白了。現在退一步來說，有一個數字確實很突出，我知道中國與去年相比有一點困難，但平均服務提供者的數量點同比和環比都有大幅躍升。您能讓我們了解那裡發生了什麼以及這意味著什麼嗎？這是否會在本季直接轉化為銷售點？或者說我們該如何思考這個問題？

Yes, China has kind of been a little volatile in the last 6 to 8 quarters, as you probably tracked. I think one of the things that we talked about last quarter on the earnings call were 2 things we were doing in China. One was the $90 million investment program that's now going to be $105 million because as you noticed in our earnings release, we received another $15-ish million in grant, and so we're going to add that to this program, this investment program. Another thing we did is we augmented the marketing plan in China, with eligibility to train based on allowing people to earn money a little earlier in their journey than they may have in the past. As a reminder, in China, things work a little differently in that people's eligibility to earn, if you are a service provider, is not materially different in the amount than the rest of the world, but how you access that is through [hours] worked based on your eligibility. We've created a supplement to that, that allows people to get eligible to earn paid training a little sooner, and we think that's helped with engagement. So whether that translates to improved long-term trends or not is something we're following. And right now, the change that we made is a test, and we'll see how it works out.

是的，正如您可能注意到的那樣，中國在過去 6 到 8 個季度中有些波動。我認為我們上個季度在財報電話會議上討論的一件事是我們在中國所做的兩件事。其中一個是9000 萬美元的投資計劃，現在將達到1.05 億美元，因為正如您在我們的收益報告中註意到的那樣，我們收到了另外1500 萬美元左右的贈款，因此我們將把它添加到這個計劃，這個投資計劃中。我們做的另一件事是，我們擴大了在中國的行銷計劃，賦予培訓資格，讓人們比過去更早賺錢。提醒一下，在中國，情況略有不同，如果你是服務提供商，人們賺取收入的資格與世界其他地方的金額並沒有本質上的不同，但你如何通過[小時]獲得收入根據您的資格進行工作。我們為此創建了一個補充，讓人們有資格更快地獲得有薪培訓，我們認為這有助於提高參與度。因此，這是否會轉化為長期趨勢的改善是我們正在關注的事情。現在，我們所做的改變只是一個測試，我們將看看效果如何。

Okay. Okay, that's helpful. Then just one last thing. The North America number was certainly a lot better than what I was modeling, and the volume points back to flat. Already, it sounds like from your previous commentary, that is a trend line thing. There wasn't anything unusual in the quarter that we have to give back anywhere. It's just that the business has ramped a little bit ahead of schedule. Is that the way to look at it? And maybe give us some sort of drivers there and if you could comment also on the project with Salesforce and how that's panning out, where you start to see some benefit from that investment.

好的。好的，這很有幫助。然後還有最後一件事。北美的數字肯定比我模擬的要好得多，而且成交量也回到了持平狀態。從您之前的評論來看，這已經是趨勢線的事情了。本季沒有任何異常情況需要我們回饋。只是業務提前了一點。是這樣看的嗎？也許給我們一些驅動因素，如果您也可以評論一下 Salesforce 的專案以及該專案的進展情況，您會開始從該投資中看到一些好處。

Yes, So I think to answer your first -- the first part of your question, there was nothing unusual from a timing perspective in the U.S. So it wasn't that Q1 pulled away from future quarters. In fact, when you look at our increased guidance for Q2s through 4 on a volume standpoint, it's almost exclusively coming from the U.S. Having said that, we did implement a new promotion that we may make permanent, which is, through documented sales, [that are receiving] [to non-distributors], people can qualify to become a sales leader at a lower volume in 1 or 2 months than they've done in the past, and that's really a benefit of having documented sales because you know everything is going to be end user. So that's something we did exclusively for the U.S. And we're monitoring it, and it's going really well. And I think it created a lot of confidence and activation. Not to mention, just the adjustment period for the implementation of the changes we made 3 quarters ago, it's kind of worked mostly through the system. So all that is kind of combined to generate a lot of confidence and excitement in the U.S.

是的，所以我想回答你的第一個問題——你問題的第一部分，從時間的角度來看，美國沒有什麼不尋常的，所以第一季並不是與未來幾季脫節。事實上，當你從銷量的角度來看我們對第二季度到第四季度增加的指導時，它幾乎完全來自美國。即透過有記錄的銷售，[ [非分銷商]，人們可以在 1 或 2 個月內以比過去更低的銷量成為銷售領導者，這確實是有記錄的銷售的好處，因為你知道一切將成為最終用戶。所以這是我們專門為美國做的事情，我們正在監控它，而且進展非常順利。我認為它創造了很多信心和活力。更不用說，只是我們三個季度前所做的改變的實施調整期，這主要是透過系統來實現的。因此，所有這些結合在一起，給美國帶來了極大的信心和興奮。

And on Salesforce?

那麼在 Salesforce 上呢？

On Salesforce, it's early. On Salesforce, we launched with a beta group in January, a small group. It's not going to get to be a bigger group until, I think, in summer once it's designed in a way that we think distributors will like it when it's launched. I think the worst thing we could do is drive trial to a bad product. So we have to make sure there's a point where it's effective, and as planned, that's part of the process. And so I think it will be a big group in the summer. I think by the end of the year, you'll start seeing some impact to it. And it's really much more of a driver for 2019. But it is, as you heard from Rich's script, a priority for the company.

在 Salesforce 上，現在還為時過早。在 Salesforce 上，我們在一月推出了一個測試小組，一個小小組。我認為，直到夏天，一旦它的設計方式達到我們認為發行商會喜歡的方式，它就不會成為一個更大的團體。我認為我們能做的最糟糕的事情就是推動不良產品的試用。因此，我們必須確保在某個點上它是有效的，並且按照計劃，這是該過程的一部分。所以我認為夏天這將是一個大團體。我認為到今年年底，您將開始看到它的一些影響。它確實更能成為 2019 年的推手。但正如您從里奇的劇本中聽到的那樣，這是公司的首要任務。

Our next question is from the line of Mike Swartz with SunTrust.

我們的下一個問題來自 SunTrust 的 Mike Swartz。

John, maybe can we take a step back on guidance and maybe you can just help us understand, I guess, the bridge between prior guidance and current guidance? It looks like you're picking up some in, obviously, this -- the -- with the tender a little bit with currency. And then I would assume there's a flow-through of the tax benefit in the first quarter that benefits the full year as well. So maybe you can help us understand that better.

約翰，也許我們可以在指導上退後一步，也許你可以幫助我們理解，我想，之前的指導和當前的指導之間的橋樑？看起來你顯然是在用貨幣招標來獲得一些東西。然後我假設第一季的稅收優惠也會有利於全年。所以也許你可以幫助我們更好地理解這一點。

Yes, I think maybe the simplest way to understand it is focused on the high end of guidance. Previously, for the first quarter, it was $1.10, came in at $1.40 on an adjusted basis. That's a beat of $0.30. We raised the range for the full year up $0.45, so it's a $0.15 incremental change to the positive side. The 2 key drivers on the positive side were FX another $0.09, and the share base from the buyback, which is another $0.08. And then we had kind of an offset of $0.05 from the new debt deal, which has slightly higher interest than the convertible that we replaced, and then just some other ins and outs, some minor stuff that will get to right around the $0.45 incremental change in guidance.

是的，我認為也許理解它的最簡單方法是專注於高端指導。此前，第一季的價格為 1.10 美元，調整後為 1.40 美元。相當於 0.30 美元。我們將全年範圍上調了 0.45 美元，因此正面增量為 0.15 美元。正面的兩個關鍵驅動因素是外匯價格再上漲 0.09 美元，以及回購帶來的股價基礎再上漲 0.08 美元。然後我們從新的債務交易中抵消了 0.05 美元，該交易的利息比我們替換的可轉換債券略高，然後還有其他一些細節，一些小東西將在 0.45 美元的增量變化周圍得到解決在指導中。

Okay, that's helpful. And then just, Rich, in your prepared commentary, and I noticed this going back a couple of quarters, there's been more and more talk about product development and expanding the so-called arsenal at Herbalife. I would assume that comes with stepped-up costs in terms of product development, R&D. Maybe can you give us a sense of how much incrementally you might be spending longer term around product development?

好的，這很有幫助。然後，Rich，在您準備好的評論中，我注意到這可以追溯到幾個季度，越來越多的討論涉及產品開發和擴大康寶萊所謂的武器庫。我認為這會導致產品開發、研發方面的成本增加。也許您能讓我們了解您在產品開發上可能會花費多少長期的增量？

Well, that's a great question. I think what you're hearing right now is really just a reflection of the investments we've made, the tools and the technology we put in place, the prioritization efforts that we've been working on, both internally and with our distributor leaders. So -- and also focus, right? We are more on the offense today than ever before. Our distributor leaders see the opportunity for us to get into new product categories, and we're just -- the acceleration is just happening. So let me pass it back to John.

嗯，這是一個很好的問題。我認為您現在聽到的實際上只是我們所做的投資、我們所採用的工具和技術、我們一直在內部和與分銷商領導者一起努力的優先級工作的反映。那麼——還要集中註意力，對吧？今天我們比以往任何時候都更注重進攻。我們的經銷商領導者看到了我們進入新產品類別的機會，而我們只是——加速正在發生。讓我把它傳回給約翰。

Yes, one of the things that -- I think it's a great question because, certainly, the priorities for the company have matured over the last 4, 5 years from changes that we had to make [and put a lot of] resources on to something a little more proactive in driving growth. And so one of the initiatives with the company this year heading into next year, it may not be exclusive around the world, but certainly, within certain regions, incorporated is a zero-based budgeting approach so that we can figure out if and how we fund some of these new initiatives through defunding some of the other things that may not be as important going forward as they have been in the past. So that's something we're working on this year.

是的，其中一件事——我認為這是一個很好的問題，因為，當然，在過去的四五年裡，我們必須做出[並投入大量]資源的改變，公司的優先事項已經成熟。因此，該公司今年到明年的舉措之一，可能不是全球獨有的，但當然，在某些地區，納入了零基預算方法，以便我們能夠弄清楚是否以及如何我們通過取消對其他一些事情的資助，為其中一些新舉措提供資金，這些事情未來可能不像過去那麼重要。這就是我們今年正在努力的事情。

Okay, that's helpful. And then, John, just on Mexico, I think you said you're running a test benefit -- or, sorry, a test program there in the quarter. Could you just provide a little more color on what exactly you are doing and then maybe quantify the benefit that you had in volume points from that?

好的，這很有幫助。然後，約翰，關於墨西哥，我想你說過你正在運行測試福利——或者，抱歉，本季在那裡進行測試計劃。您能否就您正在做的事情提供更多信息，然後量化您從中獲得的收益？

Yes, I think it was 170-ish basis points to the volume point change in Mexico. I may be off by 10 or 20, but I think it was 170. And that's from a change in volume point [guides.] We've done 2 -- we did 2 tests in the first quarter. 1 was March and had almost no impact, and that was in Brazil. We did another 1 in Mexico. And this was increase in the volume point value on certain Nutrition Club SKUs. In Mexico, it was our Formula 1, which was obviously our #1 product, had a different volume point to retail ratio than some of the other products in the market. So we're testing to see if increase in volume point value in some of the Nutrition Club markets would make it easier for some of the Nutrition Clubs in Mexico to qualify. And in Brazil, along those same lines. In Brazil, we launched a Nutrition Club unique SKU that was 80 servings, it's going to have a higher volume point value per serving than the traditional Formula 1. And the reason is, we want clubs to get more into the C and D markets in Brazil. And so you want the price point to be lower, but you don't have to get that many more customers to qualify. So it's a balancing approach. And it's just -- it's a test, let's see how it goes. And over time, if it's of value to our distributors, then we may do more.

是的，我認為墨西哥的成交量變化大約有 170 個基點。我可能落後了 10 或 20，但我認為是 170。這是來自音量點的變化[指南]。1 是 3 月份，幾乎沒有影響，而且是在巴西。我們在墨西哥又做了一次。這是某些營養俱樂部 SKU 的銷售積分值的增加。在墨西哥，我們的一級方程式賽車顯然是我們的第一大產品，其銷售量與零售比率與市場上的其他一些產品不同。因此，我們正在測試一些營養俱樂部市場的交易量積分值的增加是否會使墨西哥的一些營養俱樂部更容易獲得資格。在巴西，也是如此。在巴西，我們推出了營養俱樂部獨特的 SKU，即 80 份，每份的積分值將比傳統的一級方程式賽車更高。因此，您希望價格更低，但不需要獲得更多客戶才能獲得資格。所以這是一種平衡方法。這只是——這是一個測試，讓我們看看效果如何。隨著時間的推移，如果這對我們的經銷商有價值，那麼我們可能會做得更多。

Our next question is from the line of Tim Ramey with Pivotal Research.

我們的下一個問題來自 Pivotal Research 的 Tim Ramey。

I think this was the first time we've seen the revaluation on the CVR, and that might have been just because the only -- I don't know, fourth quarter, maybe it hadn't moved enough. How often are you going to have to reevaluate? Is it a continuous thing or once a year kind of thing?

我認為這是我們第一次看到 CVR 的重估，這可能只是因為唯一的——我不知道，第四季度，也許它沒有發生足夠的變化。您需要多久重新評估一次？是連續的事情還是每年一次的事情？

Yes, it's -- a, it's every quarter. B, it's kind of a Monte Carlo revaluation approach to the third-party values it right? So the reason why it appears to have more value is because stock price went up, right? That doesn't change the probability of an event happening. So the reality is -- we carve it out, because the reality is, at some point in time, if we don't go private between now and the end of the CVR, all that balance sheet -- I mean, [debt] is going to come through the (inaudible) balance sheet, will come through as a credit on the P&L, the income. We don't want to organize that income, just like we're not recognizing expense. It's all just kind of -- just noncash valuation just going to have its ins and outs. And so it has nothing else to do with. Don't -- I don't want you to think that it's more valuable because there's some talks going on or anything like that. That's not the case. It's certainly just a third-party valuation Monte Carlo analysis.

是的，每季一次。B，這是一種對第三方價值進行蒙特卡羅重估的方法，對嗎？所以它看起來更有價值的原因是因為股價上漲了，對嗎？這不會改變事件發生的機率。所以現實是——我們把它排除掉，因為現實是，在某個時間點，如果我們從現在到 CVR 結束之間不私有化，所有的資產負債表——我的意思是，[債務]將通過（聽不清楚）資產負債表，將作為損益表的貸項，即收入。我們不想組織這些收入，就像我們不承認費用一樣。這只是一種——非現金估值有其來龍去脈。所以它與其他無關。不要——我不想讓你認為它更有價值，因為正在進行一些談判或類似的事情。事實並非如此。這當然只是第三方估值蒙特卡羅分析。

Understood. And then on the China income, I assume that this just meant you had expenses related to the China investment thing but no income this particular quarter or did I misunderstand?

明白了。然後關於中國收入，我認為這只是意味著您有與中國投資相關的費用，但這個特定季度沒有收入，還是我誤解了？

No, it's the other way around. So we didn't start spending against the program, but we received another $15 million or so of grant money from the Chinese government in the first quarter.

不，情況恰恰相反。因此，我們並沒有開始針對該計劃進行支出，但第一季我們又從中國政府收到了大約 1500 萬美元的補助金。

Okay. All right. What -- will you net expenses into that single line when that happens?

好的。好的。什麼——當這種情況發生時，你會把費用淨計入這一行嗎？

Will -- if we can, we will. If we can't, we'll just identify it so you can get your models appropriate.

會——如果可以的話，我們會的。如果我們不能，我們只會識別它，以便您可以獲得合適的模型。

Okay. And, I guess, that China investment thing was announced pretty late in the first quarter, but I'm surprised there wasn't some investment.

好的。而且，我猜，中國投資的事情在第一季很晚才宣布，但令我驚訝的是沒有一些投資。

It was announced like, I want to say, in the middle of February. So there wasn't enough time to actually execute against it. Again, we're calling it a program instead of a fund so people aren't confused as to exactly what it is. Because the words investment fund together can mean different things to different people. This is an investment program that we identified -- okay. So that's starting in -- Q2, you'll see some expenditures against that. There were 3 different programs that we're expecting to start in Q2. And so at -- on the next call, you'll hear some dollars and a little more specifics on the initiatives that will be launched in that program.

我想說，它是在二月中旬宣布的。因此沒有足夠的時間來實際執行它。再次強調，我們稱之為計劃而不是基金，這樣人們就不會對其到底是什麼感到困惑。因為投資基金這兩個詞對不同的人來說可能有不同的意義。這是我們確定的投資計劃——好的。所以從第二季開始，你會看到一些支出。我們預計在第二季啟動 3 個不同的計劃。因此，在下一次電話會議上，您將聽到一些資金以及有關該計劃中將推出的舉措的更多細節。

And let's assume perhaps not even too aggressively that the stock trades above $1.08 tomorrow morning. Now what do we do? Do we -- I mean, I'm hoping we don't go right down to the wire on the 24th before we say, "Well, let's take another 10 days to adjust the range." Have we made a plan?

讓我們假設明天早上該股的交易價格高於 1.08 美元，這一假設也許不太激進。現在我們該怎麼辦？我們是否——我的意思是，我希望我們不要在 24 日就說「好吧，讓我們再花 10 天來調整範圍」。我們制定計劃了嗎？

It's not a topic I think we can comment on, on this call.

我認為我們不能在這次電話會議上評論這個主題。

Our final question comes from the line of Beth Kite with Citi.

我們的最後一個問題來自貝絲·凱特 (Beth Kite) 與花旗集團 (Citi) 的對話。

If we could just first start on the U.S. preferred members and that strong growth of new joiners you saw in the first quarter of '18. Were there any specific initiatives or sort of anything you attribute to that growth of preferred members? And then also, how is the renewal rate from the first 63,000 of last year's first quarter?

如果我們可以先從美國優先會員以及您在 18 年第一季看到的新加入者的強勁成長開始。對於首選會員的成長，您有什麼具體的舉措或類似的事情嗎？另外，與去年第一季的前 63,000 名相比，續訂率如何？

Yes, so I think the first part of your question ties very much into what I answered earlier on in the call, which is what changed in the U.S.? There's a couple of things that changed. Some of it is just the time since the structural changes were made where people have adapted both from a transaction standpoint but also emotionally around that. But further, we changed the qualification in the U.S. that provided you submit documentation on your sales to third parties and not the distributors, you can actually qualify at -- with less volume than you could have in the past, and I think that's just all helped to reignite the market in the U.S., and that's tied to preferred members. And then on your second part, I don't have the stats as to what the renewal rates are. I don't have that in front of me for the new preferred members in the U.S. I'm sorry. (inaudible)

是的，所以我認為你問題的第一部分與我之前在電話中回答的內容密切相關，這就是美國發生的變化？有幾件事發生了變化。其中一些只是自從結構性變化發生以來，人們從交易的角度以及情感上都已經適應了這一點。但更進一步，我們改變了美國的資格，只要你向第三方而不是經銷商提交銷售文件，你實際上就可以獲得資格——數量比過去少，我認為這就是全部幫助重新點燃了美國市場，而這與優先會員息息相關。然後在第二部分，我沒有關於續訂率的統計數據。我面前沒有給美國新優先會員的訊息，抱歉。（聽不清楚）

Okay. Very well. I can follow up with Eric on that maybe. The gross margin discussion that you had in terms of puts and takes to the first quarter were really helpful. How much of that in terms of sort of the drags do you expect might persist here in the second quarter? Or sort of, I guess, said a different way, how do you think sort of 2Q and 3Q and 4Q will shake out from sort of an expansion or contraction mode for gross margin?

好的。很好。也許我可以跟埃里克跟進一下。您就第一季的看跌期權和看跌期權進行的毛利率討論非常有幫助。您預計第二季可能會持續存在多少這種阻力？或者，我想，換句話說，您認為第二季、第三季和第四季將如何擺脫毛利率的擴張或收縮模式？

Well, we certainly expect an expansion of gross margin in Q2, not all the way to what we would consider normal under the current FX rates, because, again, we talked about inventory reduction last year in Qs 3 and 4 and how that's basically a 5- to 6-month rollout before it hits the P&L, which is one of the reasons why FX can have a benefit to sales in 1 quarter and a detriment to gross profit, because the cost of sales are always lagging 5 or 6 months. And so by the time you get into May, you're almost at normal. So maybe half the quarter will be in a more normalized gross margin rate. So I think you're good to see meaningful growth in gross margin sequentially, still might be a little bit below last year. And then I think in Qs 3 and 4 for the other one, you'll see growth versus last year.

好吧，我們當然預計第二季度的毛利率會擴大，但不會一直達到我們在當前匯率下認為正常的水平，因為我們再次討論了去年第三季度和第四季度的庫存減少以及這基本上是如何減少庫存的。 6 個月。所以當你進入五月時，你就幾乎恢復正常了。因此，也許有一半的季度毛利率將處於更正常化的水平。因此，我認為您很高興看到毛利率連續大幅成長，但仍可能略低於去年。然後我認為在另一個問題的第三季度和第四季度中，您會看到與去年相比有所增長。

Perfect. And then 2 countries that maybe don't get talked about as much being India and Indonesia. You had really great growth in India, I see in the Q, of 26%. And even Indonesia, on a really tough comp, I would say, the 9% looks good. Are there any particular initiatives going on different in those countries? I don't think I recall hearing them getting new products per se in the first quarter. But anything specific you can talk to for growth in those markets.

完美的。然後是印度和印尼這兩個國家可能沒有被太多談論。我在第二季度看到，印度的成長確實非常快，成長了 26%。即使是印度尼西亞，在非常艱難的競爭中，我想說，9% 看起來也不錯。這些國家是否有任何不同的具體措施？我不記得他們在第一季獲得了新產品。但任何具體的事情你都可以談論這些市場的成長。

Yes. So India is actually the more complex answer because it's been 2 consecutive Q1s, so the last 2 years, each very unique things going on in India. So if you go back to 2016, we had a really big price change in Q4 of 2015, which pulled a lot of volume out of Q1. And then last year in Q1, we were implementing bifurcation, which was a new regulation in India. For the last 2 first quarters, as complicated as that sounds, were artificially low. So this growth rate appears higher than it really is. So I hate to say you got to look at 3-year growth rates, but if you did, you see India's 30% to 40% combined equals last 4 quarters over 3 years. So you got to take that -- it's doing great. India is doing well. It's strong, but it's not 25% growth rate, not strong enough, not something you should model. And it's going to be a little more normal after Q1, maybe [it will set] a little into Q2. But other than that, nothing else unusual in India. And Indonesia, I think Indonesia actually was a -- coming off a tough comp, but it's just -- it's [normal,] it's single digits, it's a good market with a lot of opportunity for us. I think it's the seventh largest market. Its growth rate is a little, actually, lower than it was in Q4 sequentially. One of the things that I thought was interesting this quarter, I didn't mention so far, is of our number markets we're in, 70% of them actually had sequential improvement in their volume point trends versus Q4, right? So -- and that 7% actually represents 75% of our volume globally. And one of them markets that didn't was China, with a lot of things going on there, especially with the price increase last year. If you exclude that, actually, 83% of our volume was coming from markets that had sequential improvement over Q4 in strength. I don't mean actual volume point values. But you look at growth rates or decline rates in Q4 versus Q1, it was just sequential improvement.

是的。因此，印度實際上是更複雜的答案，因為它已經連續兩個季度，所以過去兩年，印度都發生了非常獨特的事情。因此，如果你回到 2016 年，我們在 2015 年第四季的價格變化非常大，這導致第一季的銷量大幅下降。去年第一季度，我們實施了分叉，這是印度的一項新規定。在第一季的最後兩個季度中，儘管聽起來很複雜，但人為地壓低了業績。所以這個成長率看起來比實際情況高。所以我不想說你必須看看 3 年成長率，但如果你這樣做了，你會發現印度 30% 到 40% 的總和相當於過去 3 年中 4 個季度的成長率。所以你必須接受這一點——它做得很好。印度表現不錯。它很強大，但它的成長率不是 25%，不夠強大，不是你應該效仿的東西。在第一季之後，情況會變得更加正常，也許會在第二季度有所調整。但除此之外，印度沒有什麼不尋常的。印度尼西亞，我認為印度尼西亞實際上是一個 - 擺脫了艱難的競爭，但這只是 - 這是[正常，]它是個位數，這是一個很好的市場，為我們提供了很多機會。我認為這是第七大市場。實際上，其成長率比第四季的連續成長率低一些。我認為本季有趣的事情之一（到目前為止我還沒有提到）是我們所處的數位市場，其中 70％ 的數量點趨勢與第四季度相比實際上有所連續改善，對嗎？所以，這 7% 實際上代表了我們全球銷售的 75%。其中一個沒有的市場是中國，那裡發生了很多事情，尤其是去年的價格上漲。如果排除這一點，實際上，我們 83% 的交易量來自於第四季實力連續改善的市場。我的意思不是實際的音量點值。但你看看第四季與第一季相比的成長率或下降率，這只是連續的改善。

Wonderful. And if I could squeeze just one more in. Just going to Tim's discussion with you on China and the grant money. So it's great to hear that some of that will likely start to be deployed in the second quarter. I know it's gone now from $90 million to $105 million or $106 million in terms of total grant. Do you expect to largely deploy most of that here in '18? Or is that sort of a couple year endeavor at this point to spend that in to the country? And also -- sorry. And also, are you still -- is part of that still largely focused on Nutrition Club development in the country? I'm all done now.

精彩的。如果我能再擠進去一點就好了。我即將與您討論蒂姆關於中國和贈款的問題。因此，很高興聽到其中一些可能會在第二季開始部署。我知道現在撥款總額已從 9,000 萬美元減少到 1.05 億美元或 1.06 億美元。您預計 18 年將大部分部署在這裡嗎？或者說，這是為了花幾年的時間去國內做的努力？還有——抱歉。而且，您仍然——其中一部分仍然主要集中在該國營養俱樂部的發展嗎？我現在一切都完成了。

So it's certainly going to be multiyear, but I'd like to -- or we'd like to front-load it as much as we can, but the most important thing is to do it effectively and in conjunction with our distributor leaders in China so that they can activate around it. Some of the programs that we're doing is -- are already launching, I think, in the month of May. But I think it will be a slow build. And, really, maybe Q3 to Q4, you'll start seeing more meaningful investments, but it will certainly carry into next year. And it won't be just Nutrition Clubs. I think that was just one of a whole list of investment opportunities that we talked about when we did the release last quarter.

所以這肯定會持續多年，但我願意——或者我們願意盡可能地預先加載它，但最重要的是與我們的經銷商領導者一起有效地做到這一點中國這樣他們就可以在它周圍活動。我認為，我們正在做的一些計劃已經在五月啟動了。但我認為這將是一個緩慢的建設。而且，實際上，也許從第三季度到第四季度，您將開始看到更有意義的投資，但它肯定會延續到明年。而且不僅僅是營養俱樂部。我認為這只是我們在上季發佈時討論的所有投資機會之一。

And there are no more questions at this time. I would like to turn the call back over to Mr. Rich Goudis for closing remarks.

目前沒有更多問題了。我想將電話轉回給里奇·古迪斯 (Rich Goudis) 先生，讓其致閉幕詞。

Okay, thank you. Listen, this is clearly an exciting time for our company, and we look forward to updating you again on our business in August. Thank you.

好的，謝謝。聽著，這對我們公司來說顯然是一個激動人心的時刻，我們期待在八月再次向您介紹我們的業務最新情況。謝謝。

And ladies and gentlemen, this does conclude today's conference call. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。您現在可以斷開連線。