Published October 28, 2013
Herbalife (HLF), which over the last year has had to fend off claims by billionaire activist investor Bill Ackman that it is a “pyramid scheme,” announced the appointment on Monday of a former U.S. Surgeon General to its board.
The company, which sells nutritional products through a network of independent distributors, said Dr. Richard Carmona, the 17th Surgeon General of the U.S., joined the company’s board as independent director on Friday.
"As a scientist and medical professional, I was first attracted by the depth and breadth of Herbalife’s commitment to excellence in nutrition science," Carmona said in a statement. "As a business person, my due diligence showed me a company of integrity with a good business plan.”
Carmona, who currently serves as the first distinguished professor of public health at the University of Arizona and the first distinguished professor of health promotion and entrepreneurship at Ohio State University, brings with him more than 40 years of experience in medicine and nutrition.
He served as U.S. Surgeon General from 2002 to 2006.
His appointment is an interesting one as it comes just a year after hedge fund manager Ackman publicly blasted Herbalife and called it a sham, thrusting the nutritional supplement multi-level marketing company into the spotlight.
Herbalife posted a big year-over-year quarterly beat on Monday and a fiscal 2013 outlook of $5.19 to $5.23 that tops average analyst estimates of $4.99 in a Thomson Reuters poll.
As demand ramped up in emerging markets and Herbalife tightened expenses, third-quarter adjusted earnings of $1.41 topped the Street’s view of $1.14 a share, while sales of $1.2 billion virtually matched the consensus view.
“Our initial 2014 guidance demonstrates our belief that the macro trend of global obesity will increase worldwide consumer demand for our products," Herbalife CEO Michael Johnson said in a statement.
Shares of Herbalife, initially up as much as 3% following the results, were trading virtually flat at around $68 after hours.