Nu Skin Enterprises Reports 42 Percent EPS Growth 15 Percent Revenue Growth

NU SKIN ENTERPRISES REPORTS 42 PERCENT EPS GROWTH AND
15 PERCENT REVENUE GROWTH IN THE SECOND QUARTER

PROVO, Utah — Aug. 4, 2021 — Nu Skin Enterprises, Inc. (NYSE: NUS) today announced second-quarter 2021 revenue of $704.1 million and earnings per share (EPS) of $1.15 driven by an increase in operating margin of 260 basis points.

 

Executive Summary

Q2 2021 vs. Prior-year Quarter

Revenue:

$704.1 million; +15%

·       +6% fx impact or $36.9 million

Earnings Per Share (EPS):

$1.15; +42%

Sales Leaders:

64,228; +15%

Customers:

1,467,617; (2%)

“Our growth and success this quarter and over the past year reflect our strategy of delivering world-class beauty and wellness products, being customer obsessed, and digitally enabling our business,” said Ritch Wood, chief executive officer. “Our performance was led by continued growth in our beauty device systems and further adoption of social commerce. In addition, we significantly improved profitability during the quarter, which led to strong earnings per share growth. We have a solid foundation in place, and I am fully confident in Ryan and our leadership team to build on the momentum and take Nu Skin to the next level.”

 

Ryan Napierski, president and CEO-elect, added, “We continue to advance our vision of becoming the world’s leading beauty and wellness company, powered by our dynamic affiliate opportunity platform. During the quarter, we strengthened our position as the market leader in beauty device systems as our latest device system, ageLOC Boost, generated momentum with a strong launch in EMEA. Additionally, we are pleased with the rollout of Nutricentials Bioadaptives, which is targeted at a millennial/Gen Z consumer. In the back half of the year, we will be begin rolling out Beauty Focus Collagen+, which leverages our unique strength in both beauty and wellness, and ageLOC Meta, our next significant Pharmanex product introduction.

 

“We are pleased with 15 percent growth in sales leaders, while customers declined slightly due to a significant surge in the prior year. To better support our affiliates with customer acquisition, we will be rolling out additional digital tools over the next several quarters such as personalized social commerce shops in Mainland China. This represents a significant step forward in deploying our digital tools in the world’s largest social commerce market.”

 

Q2 2021 Year-over-year Operating Results                                                             

Revenue:

$704.1 million compared to $612.4 million

·       +6% fx impact

Gross Margin:

75.6% compared to 74.8%

·       Nu Skin business was 78.3% compared to 77.6%

Selling Expenses:

39.5% compared to 40.6%

·       Nu Skin business was 42.4% compared to 43.3%

G&A Expenses:

24.0% compared to 24.7%

Operating Margin:

12.1% compared to 9.5%

Other Income / (Expense):

($4.0) million compared to $1.6 million

Income Tax Rate:

27.1% compared to 29.8%

·       Benefited by geographic mix

EPS:

$1.15 compared to $0.81


Stockholder Value

Dividend Payments:

$19.0 million

Stock Repurchases:

$10.0 million

·       $265.4 million remaining in authorization

 

Q3 and Full-year 2021 Outlook

Q3 2021 Revenue:

$700 to $730 million; 0 to 4%

·       Approximately +2 to 3% fx impact

Q3 2021 EPS:

$1.10 to $1.20; +2 to 11%

2021 Revenue:

$2.81 to $2.87 billion; +9 to 11%

·       Approximately +3 to 4% fx impact

2021 EPS:

$4.30 to $4.50; +18 to 24%

Mark Lawrence, chief financial officer, added, “We reported 42 percent EPS growth driven by strong improvements in both gross margin and operating margin as a result of continued expense control and supply chain efficiency. We are raising our EPS guidance for the year as we continue to focus on generating enhanced value for our shareholders.”

 

About Nu Skin Enterprises, Inc.

Founded more than 35 years ago, Nu Skin Enterprises, Inc. (NSE) empowers innovative companies 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, shareholder value, vision, product pipeline and product introductions, digital tools, customers and sales leaders, affiliates, strategies and initiatives; 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,” “anticipate,” “project,” “outlook,” “guidance,” “plan,” “forecast,” “expand,” “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 pandemic, 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;

·       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, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):

 

 

Three Months Ended

June 30,

 

 

 

Constant-

Currency

 

2021

 

2020

 

Change

 

Change

Nu Skin

                     

Mainland China

$

154,182

 

$

146,332

 

 

5%

 

 

(4)%

Americas/Pacific

 

151,730

 

 

127,919

 

 

19%

 

 

14%

South Korea

 

88,604

 

 

76,915

 

 

15%

 

 

6%

EMEA

 

83,115

 

 

50,776

 

 

64%

 

 

49%

Southeast Asia

 

70,751

 

 

66,829

 

 

6%

 

 

2%

Japan

 

68,020

 

 

68,291

 

 

 

 

1%

Hong Kong/Taiwan

 

38,529

 

 

37,161

 

 

4%

 

 

Nu Skin other

 

755

 

 

(85)

 

 

988%

 

 

988%

Total Nu Skin

 

655,686

   

574,138

   

14%

   

8%

Rhyz Investments

                     

Manufacturing

 

48,140

   

37,918

   

27%

   

27%

Grow Tech

 

191

   

310

   

(38)%

   

(38)%

Rhyz other

 

38

   

           

Total Rhyz Investments

 

48,369

   

38,228

   

27%

   

27%

Total

$

704,055

 

$

612,366

 

 

15%

 

 

9%

 

 

The following table sets forth revenue for the six-month periods ended June 30, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):

 

 

Six Months Ended

June 30,

 

 

 

Constant-

Currency

 

2021

 

2020

 

Change

 

Change

Nu Skin

                     

Mainland China

$

303,775

 

$

284,028

 

 

7%

 

 

(2)%

Americas/Pacific

 

301,195

 

 

202,492

 

 

49%

 

 

45%

South Korea

 

169,735

 

 

152,634

 

 

11%

 

 

3%

EMEA

 

159,295

 

 

86,179

 

 

85%

 

 

69%

Southeast Asia

 

138,336

 

 

136,415

 

 

1%

 

 

(2)%

Japan

 

137,884

 

 

129,591

 

 

6%

 

 

6%

Hong Kong/Taiwan

 

74,874

 

 

72,988

 

 

3%

 

 

(1)%

Nu Skin other

 

1,460

 

 

688

 

 

112%

 

 

112%

Total Nu Skin

 

1,286,554

   

1,065,015

   

21%

   

15%

Rhyz Investments

                     

Manufacturing

 

94,125

   

65,065

   

45%

   

45%

Grow Tech

 

364

   

314

   

16%

   

16%

Rhyz other

 

38

   

           

Total Rhyz Investments

 

94,527

   

65,379

   

45%

   

45%

Total

$

1,381,081

 

$

1,130,394

 

 

22%

 

 

16%

 

 

The company's Customers and Sales Leaders statistics by segment as of June 30, 2021 and 2020 are presented in the following table:

 

 

As of

June 30, 2021

 

As of

June 30, 2020

 

% Increase (Decrease)

 

Customers

 

Sales Leaders

 

Customers

 

Sales Leaders

 

Customers

 

Sales Leaders

Mainland China

 

328,526

 

 

18,647

 

 

321,946

 

 

17,104

 

 

2%

 

 

9%

Americas/Pacific

 

397,685

 

 

13,078

 

 

424,236

 

 

10,787

 

 

(6)%

 

 

21%

South Korea

 

153,287

 

 

7,935

 

 

159,926

 

 

6,881

 

 

(4)%

 

 

15%

EMEA

 

261,857

 

 

7,900

 

 

247,057

 

 

5,120

 

 

6%

 

 

54%

Southeast Asia

 

135,610

 

 

7,141

 

 

155,822

 

 

6,790

 

 

(13)%

 

 

5%

Japan

 

125,791

 

 

6,053

 

 

125,332

 

 

6,011

 

 

 

 

1%

Hong Kong/Taiwan

 

64,861

 

 

3,474

 

 

65,581

 

 

3,343

 

 

(1)%

 

 

4%

Total

 

1,467,617

 

 

64,228

 

 

1,499,900

 

 

56,036

 

 

(2)%

 

 

15%

 

“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,

 

2021

 

2020

 

2021

 

2020

                       

Revenue

$

704,055

 

$

612,366

 

$

1,381,081

 

$

1,130,394

Cost of sales

 

171,975

 

 

154,110

 

 

342,541

 

 

279,903

Gross profit

 

532,080

 

 

458,256

 

 

1,038,540

 

 

850,491

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

277,893

 

 

248,628

 

 

551,639

 

 

454,670

General and administrative expenses

 

168,811

 

 

151,554

 

 

338,612

 

 

301,182

Total operating expenses

 

446,704

 

 

400,182

 

 

890,251

 

 

755,852

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

85,376

 

 

58,074

 

 

148,289

 

 

94,639

Other income (expense), net

 

(4,012)

 

 

1,581

 

 

(2,430)

 

 

(4,593)

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

81,364

 

 

59,655

 

 

145,859

 

 

90,046

Provision for income taxes

 

22,026

 

 

17,804

 

 

39,091

 

 

28,465

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

59,338

 

$

41,851

 

$

106,768

 

$

61,581

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1.18

 

$

0.81

 

$

2.12

 

$

1.15

Diluted

$

1.15

 

$

0.81

 

$

2.06

 

$

1.15

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding (000s):

 

 

 

 

 

 

 

 

 

 

 

Basic

 

50,115

 

 

51,872

 

 

50,409

 

 

53,466

Diluted

 

51,557

 

 

51,925

 

 

51,850

 

 

53,502

 

 

NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)

 

 

June 30,   2021

 

December 31, 2020

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

354,759

 

$

402,683

Current investments

 

24,499

 

 

21,216

Accounts receivable, net

 

64,701

 

 

63,370

Inventories, net

 

390,977

 

 

314,366

Prepaid expenses and other

 

126,586

 

 

101,563

 Total current assets

 

961,522

 

 

903,198

 

 

 

 

 

 

Property and equipment, net

 

474,167

 

 

468,181

Operating lease right-of-use assets

 

136,738

   

155,104

Goodwill

 

215,582

 

 

202,979

Other intangible assets, net

 

98,955

 

 

89,532

Other assets

 

163,016

 

 

138,082

Total assets

$

2,049,980

 

$

1,957,076

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

60,632

 

$

66,174

Accrued expenses

 

403,165

 

 

446,682

Current portion of long-term debt

 

152,500

 

 

30,000

 Total current liabilities

 

616,297

 

 

542,856

 

         

Operating lease liabilities

 

100,826

 

 

112,275

Long-term debt

 

288,343

 

 

305,393

Other liabilities

 

126,688

 

 

102,281

Total liabilities

 

1,132,154

 

 

1,062,805

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Class A common stock – 500 million shares authorized, $0.001 par value, 90.6 million shares issued

 

91

 

 

91

Additional paid-in capital

 

586,976

 

 

579,801

Treasury stock, at cost – 40.4 million and 39.7 million shares

 

(1,509,867)

 

 

(1,461,593)

Accumulated other comprehensive loss

 

(68,553)

 

 

(64,768)

Retained earnings

 

1,909,179

 

 

1,840,740

Total stockholders' equity

 

917,826

 

 

894,271

Total liabilities and stockholders’ equity

$

2,049,980

 

$

1,957,076

 

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