PROVO, Utah, Aug. 2, 2017 /PRNewswire/ -- Nu Skin
Enterprises, Inc. (NYSE: NUS) today announced second-quarter 2017
financial results. The Company reported second-quarter revenue of
$550.1 million, which was at the high
end of its outlook of $530 to $550
million, and earnings per share of $0.77, which exceeded its outlook of $0.65 to $0.70.
Executive
Summary
|
|
|
Revenue:
|
$550.1 million,
compared to $600.5 million in Q2 2016 which included $106 million
in limited-time-offer (LTO) sales. Q2 2017 was negatively impacted
2% by foreign currency fluctuations.
|
Earnings Per Share
(EPS):
|
$0.77 benefitted
$0.04 by a lower-than-expected tax rate, compared to $0.79 in Q2
2016.
|
Sales
Leaders:
|
58,900 – 11%
year-over-year decrease impacted by prior-year LTOs.
|
Customers:
|
1,060,000 – 5%
year-over-year improvement.
|
"We are pleased to deliver strong quarterly results as we
implement our growth strategy," said Ritch
Wood, chief executive officer. "We believe our
second-quarter results provide momentum we can build on as we
prepare to introduce several new products and significant business
initiatives in the fourth quarter. We remain focused on customer
acquisition and are encouraged by our year-over-year customer
growth. Looking forward, we believe our product and business
initiatives, coupled with our continued efforts to increase our
customer base, will help support business and sales leader growth
in the second half of the year."
Q2 2017
Year-Over-Year Operating Results
|
|
|
Revenue:
|
$550.1 million
compared to $600.5 million.
|
Gross
Margin:
|
77.9% compared to
78.7%.
|
Selling
Expenses:
|
41.5% of revenue
compared to 41.4%.
|
G&A
Expenses:
|
24.6% of revenue
compared to 24.0%.
|
Operating
Margin:
|
11.8% compared to
13.3%.
|
Other Income /
(Expense):
|
($2.7) million
compared to ($11.1) million, which included a foreign currency loss
from the translation of Yen-denominated debt in 2016.
|
Income Tax
Rate:
|
32.2% compared to
35.0% – benefitted from exercise of stock options.
|
EPS:
|
$0.77 compared to
$0.79.
|
Stockholder
Value
|
|
|
Dividend
Payments:
|
$19.1
million.
|
Stock
Repurchases:
|
$15.3 million; $177.6
million remaining in authorization.
|
2017
Outlook
|
|
|
Q3
Revenue:
|
$540 to $560 million;
2% negative foreign currency impact.
|
Q3
EPS:
|
$0.71 to
$0.76.
|
2017
Revenue:
|
$2.26 to $2.30
billion; 2 to 3% negative foreign currency impact.
|
2017
EPS
|
$3.20 to $3.30, an
increase from the prior outlook of $3.10 to $3.25.
|
"As we move into the second half of the year, we remain focused
on executing our three key growth drivers – platforms, products and
programs," said Wood. "In the platforms area, we continue to
drive social selling throughout our markets to expand our customer
acquisition efforts. To support this strategy, we will introduce
several new products at our 'Nu Skin LIVE!' global distributor
event in October, including our ageLOC LumiSpa device.
Additionally, we will begin to introduce new and enhanced programs
designed to more effectively reward our sales leaders to drive
growth. The progress we are making with these initiatives gives us
confidence in our future," Wood concluded.
"Given our strong second-quarter financial results, we are
raising our full year 2017 earnings per share outlook to
$3.20 to $3.30 and reiterating our
annual revenue guidance of $2.26 to $2.30
billion," said Mark Lawrence,
chief financial officer. "For the third quarter we project revenue
of $540 to $560 million and earnings
per share of $0.71 to $0.76. Our new
products and programs are planned for the fourth quarter with the
primary focus around ageLOC LumiSpa, which we anticipate will
generate approximately $100 million
in sales," concluded Lawrence.
Conference Call
The Nu Skin management team will host a conference call with the
investment community on Aug. 2 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 Aug. 18,
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, 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: Constant-currency revenue growth is a
non-GAAP financial measure that removes the impact of fluctuations
in foreign-currency exchange rates, thereby facilitating
period-to-period comparisons of the company's performance. It
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.
The Company's revenue results by segment for the three-month
periods ended June 30 are presented
in the following table (in thousands).
|
|
|
2017
|
|
|
2016
|
|
%
Change
|
|
Constant
Currency
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Mainland
China
|
|
$
|
172,098
|
|
$
|
184,344
|
|
(6.6%)
|
|
(1.9%)
|
South
Korea
|
|
|
86,917
|
|
|
93,036
|
|
(6.6%)
|
|
(9.2%)
|
Americas
|
|
|
77,096
|
|
|
67,884
|
|
13.6%
|
|
15.0%
|
South
Asia/Pacific
|
|
|
67,935
|
|
|
92,297
|
|
(26.4%)
|
|
(24.7%)
|
Japan
|
|
|
64,796
|
|
|
72,849
|
|
(11.1%)
|
|
(8.4%)
|
Hong
Kong/Taiwan
|
|
|
43,071
|
|
|
52,372
|
|
(17.8%)
|
|
(20.7%)
|
EMEA
|
|
|
38,188
|
|
|
37,693
|
|
1.3%
|
|
2.6%
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
550,101
|
|
$
|
600,475
|
|
(8.4%)
|
|
(6.8%)
|
The Company's revenue results by segment for the six-month
periods ended June 30 are presented
in the following table (in thousands).
|
|
|
2017
|
|
|
2016
|
|
%
Change
|
|
Constant
Currency
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
Mainland
China
|
|
$
|
322,102
|
|
$
|
302,999
|
|
6.3%
|
|
11.8%
|
South
Korea
|
|
|
169,388
|
|
|
179,154
|
|
(5.5%)
|
|
(8.7%)
|
Americas
|
|
|
142,754
|
|
|
133,632
|
|
6.8%
|
|
7.5%
|
South
Asia/Pacific
|
|
|
137,733
|
|
|
155,875
|
|
(11.6%)
|
|
(10.2%)
|
Japan
|
|
|
125,952
|
|
|
137,940
|
|
(8.7%)
|
|
(7.9%)
|
Hong
Kong/Taiwan
|
|
|
79,019
|
|
|
92,428
|
|
(14.5%)
|
|
(17.5%)
|
EMEA
|
|
|
72,252
|
|
|
70,278
|
|
2.8%
|
|
4.4%
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,049,200
|
|
$
|
1,072,306
|
|
(2.2%)
|
|
(0.9%)
|
The company's Customers and Sales Leaders statistics by segment
for the three-month periods ended June
30 are presented in the following table.
|
2017
|
|
2016
|
|
%
Increase (Decrease)
|
|
|
Customers
|
|
Sales
Leaders
|
|
Customers
|
|
Sales
Leaders
|
|
Customers
|
|
Sales
Leaders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mainland
China
|
|
207,000
|
|
22,600
|
|
179,000
|
|
26,300
|
|
15.6%
|
|
(14.1%)
|
South
Korea
|
|
188,000
|
|
7,700
|
|
216,000
|
|
8,900
|
|
(13.0%)
|
|
(13.5%)
|
Americas
|
|
209,000
|
|
7,000
|
|
165,000
|
|
6,500
|
|
26.7%
|
|
7.7%
|
South
Asia/Pacific
|
|
125,000
|
|
7,100
|
|
113,000
|
|
7,700
|
|
10.6%
|
|
(7.8%)
|
Japan
|
|
134,000
|
|
6,400
|
|
140,000
|
|
7,200
|
|
(4.3%)
|
|
(11.1%)
|
Hong
Kong/Taiwan
|
|
68,000
|
|
3,900
|
|
78,000
|
|
5,300
|
|
(12.8%)
|
|
(26.4%)
|
EMEA
|
|
129,000
|
|
4,200
|
|
121,000
|
|
4,200
|
|
6.6%
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
1,060,000
|
|
58,900
|
|
1,012,000
|
|
66,100
|
|
4.7%
|
|
(10.9%)
|
"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 Second
Quarters Ended June 30, 2017 and 2016
|
(in thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
Revenue
|
$
|
550,101
|
|
$
|
600,475
|
|
|
|
|
|
|
Cost of
sales
|
|
121,521
|
|
|
128,205
|
|
|
|
|
|
|
Gross
profit
|
|
428,580
|
|
|
472,270
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
|
228,353
|
|
|
248,363
|
General
and administrative expenses
|
|
135,488
|
|
|
144,109
|
Total operating
expenses
|
|
363,841
|
|
|
392,472
|
|
|
|
|
|
|
Operating
income
|
|
64,739
|
|
|
79,798
|
|
|
|
|
|
|
Other income
(expense), net
|
|
(2,731)
|
|
|
(11,060)
|
Income before
provision for income taxes
|
|
62,008
|
|
|
68,738
|
Provision for income
taxes
|
|
19,967
|
|
|
24,025
|
|
|
|
|
|
|
Net
income
|
$
|
42,041
|
|
$
|
44,713
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
Basic
|
|
$0.79
|
|
|
$0.80
|
Diluted
|
|
$0.77
|
|
|
$0.79
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
Basic
|
|
52,929
|
|
|
55,952
|
Diluted
|
|
54,839
|
|
|
56,356
|
NU SKIN
ENTERPRISES, INC.
|
Consolidated
Statements of Income (Unaudited)
|
For the Six-Month
Periods Ended June 30, 2017 and 2016
|
(in thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
Revenue
|
$
|
1,049,200
|
|
$
|
1,072,306
|
|
|
|
|
|
|
Cost of
sales
|
|
232,787
|
|
|
266,074
|
|
|
|
|
|
|
Gross
profit
|
|
816,413
|
|
|
806,232
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
|
437,361
|
|
|
443,922
|
General
and administrative expenses
|
|
268,051
|
|
|
274,363
|
Total operating
expenses
|
|
705,412
|
|
|
718,285
|
|
|
|
|
|
|
Operating
income
|
|
111,001
|
|
|
87,947
|
|
|
|
|
|
|
Other income
(expense), net
|
|
(7,298)
|
|
|
(13,923)
|
Income before
provision for income taxes
|
|
103,703
|
|
|
74,024
|
Provision for income
taxes
|
|
34,173
|
|
|
25,995
|
|
|
|
|
|
|
Net
income
|
$
|
69,530
|
|
$
|
48,029
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
Basic
|
|
$1.32
|
|
|
$0.86
|
Diluted
|
|
$1.28
|
|
|
$0.85
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
Basic
|
|
52,804
|
|
|
55,953
|
Diluted
|
|
54,466
|
|
|
56,388
|
NU SKIN
ENTERPRISES, INC.
|
Consolidated
Balance Sheets (Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
June 30,
2017
|
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
345,102
|
|
$
|
357,246
|
Current
investments
|
|
|
7,982
|
|
|
10,880
|
Accounts
receivable
|
|
|
35,010
|
|
|
31,199
|
Inventories, net
|
|
|
246,658
|
|
|
249,936
|
Prepaid expenses and
other
|
|
|
85,547
|
|
|
65,076
|
|
|
|
720,299
|
|
|
714,337
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
450,707
|
|
|
444,732
|
Goodwill
|
|
|
114,954
|
|
|
114,954
|
Other intangible
assets, net
|
|
|
59,802
|
|
|
63,553
|
Other
assets
|
|
|
161,383
|
|
|
136,469
|
Total
assets
|
|
$
|
1,507,145
|
|
$
|
1,474,045
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
37,846
|
|
$
|
41,261
|
Accrued
expenses
|
|
|
262,123
|
|
|
275,023
|
Current portion of long-term debt
|
|
|
100,533
|
|
|
82,727
|
|
|
|
400,502
|
|
|
399,011
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
324,059
|
|
|
334,165
|
Other
liabilities
|
|
|
83,014
|
|
|
76,799
|
Total liabilities
|
|
|
807,575
|
|
|
809,975
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Class A
common stock
|
|
|
91
|
|
|
91
|
Additional
paid-in capital
|
|
|
448,928
|
|
|
439,635
|
Treasury
stock, at cost
|
|
|
(1,261,983)
|
|
|
(1,250,123)
|
Accumulated
other comprehensive loss
|
|
|
(74,743)
|
|
|
(84,122)
|
Retained
earnings
|
|
|
1,587,277
|
|
|
1,558,589
|
|
|
|
699,570
|
|
|
664,070
|
Total liabilities and stockholders'
equity
|
|
$
|
1,507,145
|
|
$
|
1,474,045
|
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SOURCE Nu Skin Enterprises, Inc.