PROVO, Utah, May 3, 2017 /PRNewswire/ -- Nu Skin Enterprises,
Inc. (NYSE: NUS) today announced first-quarter 2017 financial
results.
Key Highlights
Revenue:
|
$499.1 million, a 6%
improvement over Q1 2016; negatively impacted 1% by foreign
currency fluctuations
|
Earnings Per Share
(EPS):
|
$0.51, compared to
$0.06 in Q1 2016 which included a $0.36 non-cash Japan customs
charge
|
Sales
Leaders:
|
54,600, a 1%
year-over-year decrease
|
Customers:
|
980,000, a 2%
year-over-year improvement
|
"We are pleased to deliver strong first-quarter results, which
demonstrates the progress we made executing on our strategic
priorities to increase customer trial and acquisition," said
Ritch Wood, chief executive officer.
"Our quarterly results reflect solid growth in Mainland China,
South Asia/Pacific and EMEA. Our
expanding social selling efforts and the continued rollout of
ageLOC Me and ageLOC Youth contributed to our strong revenue during
the quarter, positioning us to deliver solid performance for
2017."
Q1 2017 Operating Results
Revenue:
|
$499.1 million, a 7%
constant currency improvement
|
Gross
margin:
|
77.7% compared to
70.8% in Q1 2016, or 77.4% when excluding the Q1 2016 Japan customs
charge
|
Selling
Expenses:
|
41.9% of revenue
compared to 41.5% in Q1 2016
|
G&A
Expenses:
|
26.6% of revenue
compared to 27.6% in Q1 2016
|
Operating
Margin:
|
9.3% compared to 1.7%
in Q1 2016, or 8.4% when excluding the Japan customs
charge
|
Other Income /
(Expense):
|
($4.6) million,
compared to ($2.9) million in Q1 2016; the change is primarily
interest expense
|
Income Tax
Rate:
|
34.1% compared to
37.3% in Q1 2016; benefitted from a new stock compensation
accounting standard
|
EPS:
|
$0.51, a 21% increase
compared to Q1 2016, when excluding the Japan customs
charge
|
Stockholder Value
Dividend
Payments:
|
$19.0
million
|
Stock
Repurchases:
|
$6.8 million; $192.9
million remaining in authorization
|
2017 Outlook
Q2
Revenue:
|
$530 to $550 million;
negative foreign currency impact of 1 to 2%; prior year included
$106 million in LTO revenue
|
Q2
EPS:
|
$0.65 to
$0.70
|
2017
Revenue:
|
$2.26 to $2.30
billion; negative foreign currency impact of approximately 2 to
3%
|
2017
EPS
|
$3.10 to
$3.25
|
"Looking forward, we will continue to focus on accelerating
growth, driving innovation throughout our business, and empowering
our customers and sales leaders with the products, programs, and
platforms they need to succeed in a rapidly-evolving marketplace,"
said Wood. "A key component of our strategy is capitalizing on our
early social selling success by expanding our reach through online
channels globally. As part of this effort, we are making our
product portfolio and business opportunity more accessible and
attractive, particularly to the important millennial segment. We
are confident that as we continue to execute on our initiatives, we
will reach our 2017 business targets and will be well positioned
for long-term growth and shareholder value creation."
"Our financial results in the first quarter put us on track to
achieve our previously announced annual guidance," said
Mark Lawrence, chief financial
officer. "As we discussed at our investor day, we had
significant limited-time-offers (LTOs) of $106 and $56
million in the second and third quarters of 2016. In the
fourth quarter, we will begin a significant product introduction of
our new ageLOC LumiSpa skin renewal and deep-cleansing device,
which we anticipate will generate approximately $100 million in sales. These LTOs and product
introductions will significantly impact our comparable sales and
guidance for the balance of the year. We reiterate our 2017
forecast of $2.26 to $2.30 billion in
revenue, and earnings per share of $3.10 to
$3.25. We project second-quarter revenue of $530 to $550 million and earnings per share of
$0.65 to $0.70," concluded
Lawrence.
Conference Call
The Nu Skin management team will host a conference call with the
investment community on May 3, at
5 p.m. (ET). Those wishing to access
the webcast, as well as the financial information presented during
the call, can visit the Investor Relations page on the company's
website at ir.nuskin.com. A replay of the webcast will be
available at the same URL through May 19,
2017.
About Nu Skin Enterprises, Inc.
Founded more than 30 years ago, Nu Skin Enterprises, Inc.
develops and distributes innovative consumer products, offering a
comprehensive line of premium-quality beauty and wellness
solutions. The company builds upon its scientific expertise in both
skin care and nutrition to continually develop innovative product
brands that include the Nu Skin® personal care brand,
the Pharmanex® nutrition brand, and most recently, the
ageLOC® anti-aging brand. The ageLOC brand has generated
a loyal following for such products as the ageLOC Youth nutritional
supplement, the ageLOC Me® customized skin care system,
as well as the ageLOC TR90® weight management and body
shaping system. Nu Skin sells its products through a global network
of sales leaders in Asia, the
Americas, Europe, Africa and the Pacific. As a long-standing
member of direct selling associations globally, Nu Skin is
committed to the industry's consumer guidelines that protect and
support those who sell and purchase its products through the direct
selling channel. Nu Skin is also traded on the New York Stock
Exchange under the symbol "NUS." More information is available at
nuskin.com.
Important information regarding forward-looking
statements: This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, that represent the company's current
expectations and beliefs. All statements other than statements of
historical fact are "forward-looking statements" for purposes of
federal and state securities laws and include, but are not limited
to, statements of management's expectations regarding the company's
performance, sales force and customer base, growth, shareholder
value creation, initiatives and areas of focus, and new product
introductions; projections regarding revenue, earnings per share,
foreign currency fluctuations, and other financial items;
statements of belief; and statements of assumptions underlying any
of the foregoing. In some cases, you can identify these statements
by forward-looking words such as "believe," "expect," "project,"
"anticipate," "estimate," "intend," "plan," "targets," "likely,"
"will," "would," "could," "may," "might," the negative of these
words and other similar words.
The forward-looking statements and related assumptions
involve risks and uncertainties that could cause actual results and
outcomes to differ materially from any forward-looking statements
or views expressed herein. These risks and uncertainties include,
but are not limited to, the following:
- any failure of current or planned initiatives or products to
generate interest among our sales force and customers and generate
sponsoring and selling activities on a sustained basis;
- risk of foreign currency fluctuations and the currency
translation impact on the company's business associated with these
fluctuations;
- risk that direct selling laws and regulations in any of our
markets, including the United
States and Mainland China, may be modified, interpreted or
enforced in a manner that results in negative changes to our
business model or negatively impacts our revenue, sales force or
business, including through the interruption of sales activities,
loss of licenses, imposition of fines, or any other adverse actions
or events;
- risks related to accurately predicting, delivering or
maintaining sufficient quantities of products to support our
planned initiatives or launch strategies, and increased risk of
inventory write-offs if we over-forecast demand for a product or
change our planned initiatives or launch strategies;
- regulatory risks associated with the company's products,
which could require the company to modify its claims or inhibit the
company's ability to import or continue selling a product in a
market if it is determined to be a medical device or if it is
unable to register the product in a timely manner under applicable
regulatory requirements;
- adverse publicity related to the company's business,
products, industry or any legal actions or complaints by the
company's sales force or others;
- unpredictable economic conditions and events
globally;
- any prospective or retrospective increases in duties on the
company's products imported into the company's markets outside of
the United States and any adverse
results of tax audits or favorable changes to tax laws in the
company's various markets; and
- continued competitive pressures in the company's
markets.
The company's financial performance and the forward-looking
statements contained herein are further qualified by a detailed
discussion of associated risks set forth in the documents filed by
the company with the Securities and Exchange Commission. The
forward-looking statements set forth the company's beliefs as of
the date that such information was first provided and the company
assumes no duty to update the forward-looking statements contained
in this release to reflect any change except as required by
law.
Non-GAAP Financial
Measures: Earnings per share, gross margin
and operating margin, each excluding the Japan customs charge, and
constant-currency revenue growth are non-GAAP financial
measures. Constant-currency revenue growth is calculated by
translating the current period's revenue at the same average
exchange rates in effect during the applicable prior-year period
and then comparing this amount to the prior-year period's
revenue. Management believes that the non-GAAP financial
measures assist management and investors in evaluating, and
comparing from period to period, results from ongoing operations in
a more meaningful and consistent manner while also highlighting
more meaningful trends in the results of operations. These measures
are used in addition to and in conjunction with results presented
in accordance with GAAP and should not be relied upon to the
exclusion of GAAP financial measures.
The Company's revenue results by segment for the three-month
periods ended March 31 are presented
in the following table (in thousands).
|
|
2017
|
|
2016
|
|
%
Change
|
|
Constant
Currency
%
Change
|
|
|
|
|
|
|
|
|
|
Mainland
China
|
|
$
150,004
|
|
$
118,655
|
|
26.4%
|
|
33.1%
|
South
Korea
|
|
82,471
|
|
86,118
|
|
(4.2%)
|
|
(8.2%)
|
South
Asia/Pacific
|
|
69,798
|
|
63,578
|
|
9.8%
|
|
11.0%
|
Americas
|
|
65,658
|
|
65,748
|
|
(0.1%)
|
|
(0.4%)
|
Japan
|
|
61,156
|
|
65,091
|
|
(6.0%)
|
|
(7.3%)
|
Hong
Kong/Taiwan
|
|
35,948
|
|
40,056
|
|
(10.3%)
|
|
(13.4%)
|
EMEA
|
|
34,064
|
|
32,585
|
|
4.5%
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
499,099
|
|
$
471,831
|
|
5.8%
|
|
6.6%
|
The company's Customers and Sales Leaders statistics by segment
for the three-month periods ended March
31 are presented in the following table.
|
2017
|
|
2016
|
|
% Increase
(Decrease)
|
|
|
Customers
|
|
Sales
Leaders
|
|
Customers
|
|
Sales
Leaders
|
|
Customers
|
|
Sales
Leaders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mainland
China
|
|
176,000
|
|
19,100
|
|
142,000
|
|
16,900
|
|
23.9%
|
|
13.0%
|
South
Korea
|
|
189,000
|
|
8,000
|
|
208,000
|
|
8,800
|
|
(9.1%)
|
|
(9.1%)
|
South
Asia/Pacific
|
|
116,000
|
|
6,900
|
|
110,000
|
|
6,800
|
|
5.5%
|
|
1.5%
|
Americas
|
|
172,000
|
|
6,200
|
|
164,000
|
|
6,900
|
|
4.9%
|
|
(10.1%)
|
Japan
|
|
132,000
|
|
6,400
|
|
145,000
|
|
7,000
|
|
(9.0%)
|
|
(8.6%)
|
Hong
Kong/Taiwan
|
|
70,000
|
|
3,900
|
|
77,000
|
|
4,800
|
|
(9.1%)
|
|
(18.8%)
|
EMEA
|
|
125,000
|
|
4,100
|
|
112,000
|
|
3,800
|
|
11.6%
|
|
7.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
980,000
|
|
54,600
|
|
958,000
|
|
55,000
|
|
2.3%
|
|
(0.7%)
|
"Customers" are persons who purchased products directly
from the company during the previous three months.
"Sales Leaders" are independent distributors, and sales
employees and independent marketers in China, who achieve certain qualification
requirements.
NU SKIN
ENTERPRISES, INC.
|
Consolidated
Statements of Income (Unaudited)
|
For the First
Quarters Ended March 31, 2017 and 2016
|
(in thousands, except
per share amounts)
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
Revenue
|
$
499,099
|
|
$
471,831
|
|
|
|
|
Cost of
sales
|
111,266
|
|
137,869
|
|
|
|
|
Gross
profit
|
387,833
|
|
333,962
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling
expenses
|
209,008
|
|
195,559
|
General
and administrative expenses
|
132,563
|
|
130,254
|
Total operating
expenses
|
341,571
|
|
325,813
|
|
|
|
|
Operating
income
|
46,262
|
|
8,149
|
|
|
|
|
Other income
(expense), net
|
(4,567)
|
|
(2,863)
|
Income before
provision for income taxes
|
41,695
|
|
5,286
|
Provision for income
taxes
|
14,206
|
|
1,970
|
|
|
|
|
Net
income
|
$
27,489
|
|
$
3,316
|
|
|
|
|
Net income per
share:
|
|
|
|
Basic
|
$
0.52
|
|
$
0.06
|
Diluted
|
$
0.51
|
|
$
0.06
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
Basic
|
52,678
|
|
55,955
|
Diluted
|
54,057
|
|
56,411
|
NU SKIN
ENTERPRISES, INC.
|
Consolidated
Balance Sheets (Unaudited)
|
(in
thousands)
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
335,578
|
|
$
357,246
|
Current
investments
|
11,759
|
|
10,880
|
Accounts
receivable
|
28,838
|
|
31,199
|
Inventories, net
|
251,947
|
|
249,936
|
Prepaid expenses and
other
|
77,717
|
|
65,076
|
|
705,839
|
|
714,337
|
|
|
|
|
Property and
equipment, net
|
450,607
|
|
444,732
|
Goodwill
|
114,954
|
|
114,954
|
Other intangible
assets, net
|
61,678
|
|
63,553
|
Other
assets
|
161,338
|
|
136,469
|
Total
assets
|
$
1,494,416
|
|
$
1,474,045
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
42,076
|
|
$
41,261
|
Accrued
expenses
|
253,359
|
|
275,023
|
Current portion of long-term debt
|
99,482
|
|
82,727
|
|
394,917
|
|
399,011
|
|
|
|
|
Long-term
debt
|
329,001
|
|
334,165
|
Other
liabilities
|
82,913
|
|
76,799
|
Total liabilities
|
806,831
|
|
809,975
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Class A
common stock
|
91
|
|
91
|
Additional
paid-in capital
|
449,762
|
|
439,635
|
Treasury stock,
at cost
|
(1,251,788)
|
|
(1,250,123)
|
Accumulated
other comprehensive loss
|
(74,771)
|
|
(84,122)
|
Retained
earnings
|
1,564,291
|
|
1,558,589
|
|
687,585
|
|
664,070
|
Total liabilities and stockholders'
equity
|
$
1,494,416
|
|
$
1,474,045
|
NU SKIN
ENTERPRISES, INC.
Reconciliation of
GAAP Gross Profit to
Gross Profit
Excluding Japan Customs Expense
|
(in
thousands)
|
|
|
|
|
|
Quarter
Ended
March
31,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Revenue as
reported
|
|
$
499,099
|
|
$
471,831
|
|
|
|
|
|
GAAP gross profit as
reported
|
|
$
387,833
|
|
$
333,962
|
|
|
|
|
|
Japan
customs expense
|
|
—
|
|
31,355
|
|
|
|
|
|
Gross profit
excluding Japan customs expense
|
|
$
387,833
|
|
$
365,317
|
|
|
|
|
|
GAAP gross profit as
a percent of revenue
|
|
77.7%
|
|
70.8%
|
|
|
|
|
|
Gross profit as a
percent of revenue excluding Japan customs expense
|
|
77.7%
|
|
77.4%
|
NU SKIN
ENTERPRISES, INC.
Reconciliation of
GAAP Operating Income to
Operating Income
Excluding Japan Customs Expense
|
(in
thousands)
|
|
|
|
Quarter
Ended
March
31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
Revenue as
reported
|
|
$
499,099
|
|
$
471,831
|
|
|
|
|
|
|
|
GAAP operating income
as reported
|
|
$
46,262
|
|
$
8,149
|
|
|
|
|
|
|
|
Japan
customs expense
|
|
—
|
|
31,355
|
|
|
|
|
|
|
|
Operating income
excluding Japan customs expense
|
|
$
46,262
|
|
$
39,504
|
|
|
|
|
|
|
|
GAAP operating income
as a percent of revenue
|
|
9.3%
|
|
1.7%
|
|
|
|
|
|
|
|
Operating income as a
percent of revenue excluding Japan customs
expense
|
|
9.3%
|
|
8.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NU SKIN
ENTERPRISES, INC.
Reconciliation of
GAAP Diluted Earnings Per Share to
Diluted Earnings
Per Share Excluding Japan Customs Expense
|
(in thousands, except
per share amounts)
|
|
|
|
Quarter
Ended
March
31,
|
|
%
Increase
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
GAAP net income as
reported
|
|
$
27,489
|
|
$
3,316
|
|
|
|
|
|
|
|
|
|
Japan
customs expense
|
|
—
|
|
31,355
|
|
|
|
|
|
|
|
|
|
Tax effect
of Japan customs expense
|
|
—
|
|
(11,257)
|
|
|
|
|
|
|
|
|
|
Net income excluding
Japan customs expense
|
|
$
27,489
|
|
$
23,414
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
|
$
0.51
|
|
$
0.06
|
|
750.0%
|
|
|
|
|
|
|
|
Diluted earnings per
share excluding Japan customs expense
|
|
$
0.51
|
|
$
0.42
|
|
21.4%
|
|
|
|
|
|
|
|
Diluted
weighted-average common shares outstanding
|
|
54,057
|
|
56,411
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nu-skin-enterprises-reports-first-quarter-2017-results-300450981.html
SOURCE Nu Skin Enterprises, Inc.