PROVO, Utah, Aug. 5, 2020 /PRNewswire/ -- Nu Skin Enterprises,
Inc. (NYSE: NUS) today announced second-quarter results above
expectations and raised its revenue and earnings per share guidance
for 2020.
Executive
Summary
|
Q2 2020 vs.
Prior-Year Quarter
|
|
Revenue:
|
$612.4 million;
(2%)
• (3%) fx
impact or ($19.8) million
|
Earnings Per Share
(EPS):
|
$0.81;
(2%)
|
Sales
Leaders:
|
56,036;
(9%)
|
Customers:
|
1,499,900;
+29%
|
"Our business performed well above expectations in the second
quarter of 2020 driven by our socially enabled business model,
strategic investments in technology and manufacturing, and our
balanced product portfolio," said Ritch
Wood, chief executive officer. "Strong global customer
growth of 29 percent in the quarter, driven by our focus on
empowering sales leaders to reach more customers, resulted in
constant currency revenue growth due to the strength of our
business in the Americas and Europe. Our Mainland China business continues
to recover with slight sequential revenue improvement and strong
customer growth.
"I am particularly proud of the way our global sales leaders
have embraced socially enabled commerce, with more than 85 percent
of revenue in the quarter coming through digital transactions. In
addition, our manufacturing division generated 20 percent revenue
growth and increased stability in our supply chain. In the first
half, we generated strong cash from operations, raised our
dividend, strengthened our balance sheet and reduced our
outstanding shares by nearly eight percent."
Q2 2020
Year-Over-Year Operating
Results
|
|
Revenue:
|
$612.4 million
compared to $623.5 million
• (3%) fx
impact or ($19.8) million
|
Gross
Margin:
|
74.8% compared to
75.3%
• Nu Skin
business was 77.6% compared to 77.8%
|
Selling
Expenses:
|
40.6% compared to
39.4%
• Nu Skin
business was 43.3% compared to 41.5%
|
G&A
Expenses:
|
24.7% compared to
24.0%
|
Operating
Margin:
|
9.5% compared to
11.9%
|
Other Income /
(Expense):
|
$1.6 million compared
to ($3.3) million
|
Income Tax
Rate:
|
29.8% compared to
34.6%
|
EPS:
|
$0.81 compared to
$0.83
|
Stockholder
Value
|
|
Dividend
Payments:
|
$19.4
million
|
Stock
Repurchases:
|
$46.5
million
• $362.8
million remaining in authorization
|
Q3 and Full-Year
2020 Outlook
|
|
Q3 2020
Revenue:
|
$605 to $635 million;
+3 to 8%
• Approximately
(1 to 2%) fx impact
|
Q3 2020
EPS:
|
$0.78 to
$0.88
|
2020
Revenue:
|
$2.37 to $2.45
billion; (2%) to +1%
• Approximately
(2 to 3%) fx impact
|
2020
EPS
|
$2.85 to
$3.10
|
"Our performance so far this year gives us confidence for the
second half and momentum as we move into 2021. We believe the
improved productivity of our sales leaders is driving strong
customer growth and will lead to sales force expansion as we move
toward the introduction of our ageLOC Boost device and
Nutricentials Bioadaptive Skin Care in the second half. We will
continue to focus on the expansion of our socially enabled business
around the world with the release of our latest digital tool, Vera,
a personal product recommendation app. Overall, we are confident in
the direction of our strategy and the future ahead," Wood
concluded.
Mark Lawrence, chief financial
officer, added, "We delivered results above expectations and
achieved constant currency revenue growth ahead of schedule. Given
our performance in the first half and continued trends in our
customer and sales leader pipeline, we are raising our guidance for
the year. As we look ahead to the third quarter, we anticipate
revenue of $605 to $635 million, which includes 1 to 2 percent
unfavorable foreign currency impact, and earnings per share of
$0.78 to $0.88. We are raising our 2020 revenue guidance
to $2.37 to $2.45 billion, which reflects a negative foreign
currency impact of 2 to 3 percent, and we anticipate annual
earnings per share of $2.85 to
$3.10."
Conference Call
The Nu Skin Enterprises management
team will host a conference call with the investment community
today 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. 19, 2020.
About Nu Skin Enterprises, Inc.
Founded more than 35
years ago, Nu Skin Enterprises, Inc. (NSE) empowers innovative
companies to change the world with sustainable solutions,
opportunities, technologies and life-improving values. The company
currently focuses its efforts around innovative consumer products,
product manufacturing and controlled environment agriculture
technology. The NSE family of companies includes Nu Skin, which
develops and distributes a comprehensive line of premium-quality
beauty and wellness solutions through a global network of sales
leaders in Asia, the Americas,
Europe, Africa and the Pacific; and Rhyz, our
strategic investment arm that includes a collection of sustainable
manufacturing and technology innovation companies. Nu Skin
Enterprises is traded on the New York Stock Exchange under the
symbol "NUS." More information is available at
nuskinenterprises.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, growth, product launches,
customers and sales leaders, benefits to shareholders, strategies
and initiatives; statements of management's expectations regarding
the future status of the COVID-19 pandemic globally and across the
company's markets, and government and public behavior in response
to such status; 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," "continue,"
"anticipate," "project," "outlook," "guidance," "plan," "continue,"
"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:
- risk that epidemics, including the ongoing COVID-19
outbreak, and other crises could negatively impact our
business;
- adverse publicity related to the company's business,
products, industry or any legal actions or complaints by the
company's sales force or others;
- risk that direct selling laws and regulations in any of the
company's markets, including the United
States and Mainland China, may be modified, interpreted or
enforced in a manner that results in negative changes to the
company's business model or negatively impacts its 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;
- any failure of current or planned initiatives or products to
generate interest among the company's sales force and customers and
generate sponsoring and selling activities on a sustained
basis;
- political, legal, tax and regulatory uncertainties
associated with operating in international markets, including
Mainland China;
- uncertainty regarding meeting restrictions and other
government scrutiny in Mainland China, as well as negative media
and consumer sentiment in Mainland China on our business operations
and results;
- risk of foreign-currency fluctuations and the currency
translation impact on the company's business associated with these
fluctuations;
- uncertainties regarding the future financial performance of
the businesses the company has acquired;
- risks related to accurately predicting, delivering or
maintaining sufficient quantities of products to support planned
initiatives or launch strategies, and increased risk of inventory
write-offs if the company over-forecasts demand for a product or
changes its planned initiatives or launch strategies;
- regulatory risks associated with the company's products,
which could require the company to modify its claims or inhibit its
ability to import or continue selling a product in a market if the
product is determined to be a medical device or if the company is
unable to register the product in a timely manner under applicable
regulatory requirements;
- unpredictable economic conditions and events globally,
including trade policies and tariffs;
- uncertainties related to interpretation of, and forthcoming
regulations under, the recently enacted U.S. tax reform
legislation; the company's future tax-planning initiatives; 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 unfavorable 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 change 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 that amount to the prior-year period's
revenue. The company believes that constant-currency revenue change
is useful to investors, lenders and analysts because such
information enables them to gauge the impact of foreign-currency
fluctuations on the company's revenue from period to
period.
The following table sets forth revenue for the three-month
periods ended June 30, 2020 and
2019 for each of our reportable segments (U.S. dollars in
thousands):
|
Three Months
Ended June
30,
|
|
|
|
Constant-
Currency
|
|
2020
|
|
2019
|
|
Change
|
|
Change
|
Nu
Skin
|
|
|
|
|
|
|
|
|
|
|
|
Mainland
China
|
$
|
146,332
|
|
$
|
185,333
|
|
|
(21%)
|
|
|
(18%)
|
Americas/Pacific
|
|
127,919
|
|
|
92,841
|
|
|
38%
|
|
|
48%
|
South Korea
|
|
76,915
|
|
|
84,732
|
|
|
(9%)
|
|
|
(5%)
|
Southeast
Asia
|
|
66,829
|
|
|
75,395
|
|
|
(11%)
|
|
|
(9%)
|
Japan
|
|
68,291
|
|
|
65,251
|
|
|
5%
|
|
|
2%
|
EMEA
|
|
50,776
|
|
|
43,400
|
|
|
17%
|
|
|
21%
|
Hong
Kong/Taiwan
|
|
37,161
|
|
|
43,712
|
|
|
(15%)
|
|
|
(17%)
|
Other
|
|
(85)
|
|
|
1,249
|
|
|
(107%)
|
|
|
(107%)
|
Total Nu
Skin
|
|
574,138
|
|
|
591,913
|
|
|
(3%)
|
|
|
—
|
Manufacturing
|
|
37,918
|
|
|
31,557
|
|
|
20%
|
|
|
20%
|
Grow
Tech
|
|
310
|
|
|
30
|
|
|
933%
|
|
|
933%
|
Total
|
$
|
612,366
|
|
$
|
623,500
|
|
|
(2%)
|
|
|
1%
|
The following table sets forth revenue for the
six-month periods ended June 30,
2020 and 2019 for each of our reportable segments (U.S.
dollars in thousands):
|
Six Months
Ended June
30,
|
|
|
|
Constant-
Currency
|
|
2020
|
|
2019
|
|
Change
|
|
Change
|
Nu
Skin
|
|
|
|
|
|
|
|
|
|
|
|
Mainland
China
|
$
|
284,028
|
|
$
|
393,821
|
|
|
(28%)
|
|
|
(25%)
|
Americas/Pacific
|
|
202,492
|
|
|
179,297
|
|
|
13%
|
|
|
21%
|
South Korea
|
|
152,634
|
|
|
168,585
|
|
|
(9%)
|
|
|
(5%)
|
Southeast
Asia
|
|
136,415
|
|
|
147,890
|
|
|
(8%)
|
|
|
(6%)
|
Japan
|
|
129,591
|
|
|
127,360
|
|
|
2%
|
|
|
—
|
EMEA
|
|
86,179
|
|
|
85,218
|
|
|
1%
|
|
|
4%
|
Hong
Kong/Taiwan
|
|
72,988
|
|
|
84,270
|
|
|
(13%)
|
|
|
(15%)
|
Other
|
|
688
|
|
|
(177)
|
|
|
(489%)
|
|
|
(488%)
|
Total Nu
Skin
|
|
1,065,015
|
|
|
1,186,264
|
|
|
(10%)
|
|
|
(7%)
|
Manufacturing
|
|
65,065
|
|
|
60,829
|
|
|
7%
|
|
|
7%
|
Grow
Tech
|
|
314
|
|
|
30
|
|
|
947%
|
|
|
947%
|
Total
|
$
|
1,130,394
|
|
$
|
1,247,123
|
|
|
(9%)
|
|
|
(7%)
|
The company's Customers and Sales Leaders statistics by segment
as of June 30, 2020 and 2019 are
presented in the following table:
|
As
of June
30, 2020
|
|
As
of June
30, 2019
|
|
% Increase
(Decrease)
|
|
Customers
|
|
Sales
Leaders
|
|
Customers
|
|
Sales
Leaders
|
|
Customers
|
|
Sales
Leaders
|
|
|
|
|
|
|
|
|
|
|
|
|
Mainland
China
|
|
321,946
|
|
|
17,104
|
|
|
226,877
|
|
|
24,336
|
|
|
42%
|
|
|
(30%)
|
Americas/Pacific
|
|
424,236
|
|
|
10,787
|
|
|
253,684
|
|
|
8,161
|
|
|
67%
|
|
|
32%
|
South
Korea
|
|
159,926
|
|
|
6,881
|
|
|
180,365
|
|
|
7,239
|
|
|
(11%)
|
|
|
(5%)
|
Southeast
Asia
|
|
155,822
|
|
|
6,790
|
|
|
137,450
|
|
|
7,417
|
|
|
13%
|
|
|
(8%)
|
Japan
|
|
125,332
|
|
|
6,011
|
|
|
127,900
|
|
|
5,931
|
|
|
(2%)
|
|
|
1%
|
EMEA
|
|
247,057
|
|
|
5,120
|
|
|
164,055
|
|
|
4,256
|
|
|
51%
|
|
|
20%
|
Hong
Kong/Taiwan
|
|
65,581
|
|
|
3,343
|
|
|
70,089
|
|
|
4,223
|
|
|
(6%)
|
|
|
(21%)
|
Total
|
|
1,499,900
|
|
|
56,036
|
|
|
1,160,420
|
|
|
61,563
|
|
|
29%
|
|
|
(9%)
|
"Customers" are persons who purchased products
directly from the company during the previous three months. Our
Customer numbers do not include consumers who purchase products
directly from members of our sales force.
"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)
(U.S. dollars in
thousands, except per share amounts)
|
|
|
Three Months
Ended June
30,
|
|
Six Months
Ended June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
612,366
|
|
$
|
623,500
|
|
$
|
1,130,394
|
|
$
|
1,247,123
|
Cost of
sales
|
|
154,110
|
|
|
154,028
|
|
|
279,903
|
|
|
300,692
|
Gross
profit
|
|
458,256
|
|
|
469,472
|
|
|
850,491
|
|
|
946,431
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
248,628
|
|
|
245,828
|
|
|
454,670
|
|
|
495,536
|
General and
administrative expenses
|
|
151,554
|
|
|
149,442
|
|
|
301,182
|
|
|
308,040
|
Total operating
expenses
|
|
400,182
|
|
|
395,270
|
|
|
755,852
|
|
|
803,576
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
58,074
|
|
|
74,202
|
|
|
94,639
|
|
|
142,855
|
Other income
(expense), net
|
|
1,581
|
|
|
(3,326)
|
|
|
(4,593)
|
|
|
(6,174)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
59,655
|
|
|
70,876
|
|
|
90,046
|
|
|
136,681
|
Provision for income
taxes
|
|
17,804
|
|
|
24,527
|
|
|
28,465
|
|
|
47,330
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
41,851
|
|
$
|
46,349
|
|
$
|
61,581
|
|
$
|
89,351
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.81
|
|
$
|
0.83
|
|
$
|
1.15
|
|
$
|
1.61
|
Diluted
|
$
|
0.81
|
|
$
|
0.83
|
|
$
|
1.15
|
|
$
|
1.59
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding (000s):
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
51,872
|
|
|
55,536
|
|
|
53,466
|
|
|
55,486
|
Diluted
|
|
51,925
|
|
|
55,943
|
|
|
53,502
|
|
|
56,030
|
NU SKIN
ENTERPRISES, INC.
Consolidated
Balance Sheets (Unaudited)
(U.S. dollars in
thousands)
|
|
|
June 30,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
375,512
|
|
$
|
335,630
|
Current
investments
|
|
10,788
|
|
|
8,413
|
Accounts receivable,
net
|
|
64,371
|
|
|
50,378
|
Inventories,
net
|
|
261,969
|
|
|
275,891
|
Prepaid expenses and
other
|
|
73,200
|
|
|
69,854
|
Total current
assets
|
|
785,840
|
|
|
740,166
|
|
|
|
|
|
|
Property and
equipment, net
|
|
444,848
|
|
|
453,604
|
Right-of-use
assets
|
|
142,700
|
|
|
144,326
|
Goodwill
|
|
196,573
|
|
|
196,573
|
Other intangible
assets, net
|
|
76,161
|
|
|
80,321
|
Other
assets
|
|
148,371
|
|
|
154,016
|
Total
assets
|
$
|
1,794,493
|
|
$
|
1,769,006
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
51,655
|
|
$
|
38,979
|
Accrued
expenses
|
|
337,980
|
|
|
290,281
|
Current portion of
long-term debt
|
|
95,000
|
|
|
27,500
|
Total current
liabilities
|
|
484,635
|
|
|
356,760
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
103,043
|
|
|
105,701
|
Long-term
debt
|
|
319,932
|
|
|
334,461
|
Other
liabilities
|
|
94,871
|
|
|
96,795
|
Total
liabilities
|
|
1,002,481
|
|
|
893,717
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Class A common
stock
|
|
91
|
|
|
91
|
Additional paid-in
capital
|
|
563,115
|
|
|
557,544
|
Treasury stock, at
cost
|
|
(1,427,064)
|
|
|
(1,324,826)
|
Accumulated other
comprehensive loss
|
|
(93,441)
|
|
|
(85,292)
|
Retained
earnings
|
|
1,749,311
|
|
|
1,727,772
|
Total stockholders'
equity
|
|
792,012
|
|
|
875,289
|
Total liabilities and
stockholders' equity
|
$
|
1,794,493
|
|
$
|
1,769,006
|
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SOURCE Nu Skin Enterprises, Inc.