Nu Skin Enterprises Reports Fourth-Quarter Revenue Growth Of 28 Percent And EPS Growth Of 94 Percent

Nu Skin Enterprises Reports Fourth-Quarter Revenue Growth of 28 Percent and EPS Growth of 94 Percent 

Company provides strong initial 2021 outlook

 

PROVO, Utah — Feb. 10, 2021 — Nu Skin Enterprises, Inc. (NYSE: NUS) today announced fourth-quarter 2020 results, achieving 28 percent revenue growth and 94 percent earnings per share (EPS) growth. For the full year, revenue increased seven percent and EPS increased 17 percent. In addition, the company is projecting five to nine percent revenue growth and EPS of $3.80 to $4.10 in 2021.

 

Executive Summary

Q4 2020 vs. Prior-year Quarter

Revenue:

$748.2 million; +28%

·       +4% fx impact

Earnings Per Share (EPS):

$1.40; +94%

Sales Leaders:

70,435; +29%

Customers:

1,557,302; +34%

 

2020 Annual vs. 2019

Revenue:

$2.58 billion; +7%

·       Less than (1%) fx impact

Earnings Per Share (EPS):

$3.63; +17%

 

“Our strong fourth-quarter results were driven by exceptional customer growth of 34 percent compared to the prior year,” said Ritch Wood, chief executive officer. “We grew revenue in each of our reporting segments with particular strength in the West markets where our brand affiliates have more broadly adopted social commerce to share our products. The successful Boost and Nutricentials product introductions helped generate 28 percent revenue and 29 percent sales leader growth in the quarter. In addition, our manufacturing segment continued to generate strong results, posting 42 percent revenue growth in the quarter and playing a critical role in our ability to keep product in stock, even with increased demand and global supply chain constraints.

 

“I am proud of the work and execution of our entire team, especially our global sales force, as we grew both revenue and earnings amidst the uncertainty of the pandemic. We strengthened our balance sheet, repurchased more than five million shares of stock, innovated in our product pipeline, enhanced our digital capabilities and established a path for double-digit earnings growth going forward,” concluded Wood.

 

Q4 2020 Year-over-year Operating Results                                                                              

Revenue:

$748.2 million compared to $583.4 million

·       +4% fx impact

Gross Margin:

74.0% compared to 75.9%

·       Nu Skin business was 76.5% compared to 78.5%

·       Impacted by increased freight charges and geographic mix

Selling Expenses:

38.0% compared to 39.1%

·       Nu Skin business was 40.3% compared to 41.3%

G&A Expenses:

24.1% compared to 27.4%

Operating Margin:

11.9% compared to 9.4%

Other Income / (Expense):

$2.7 million compared to ($1.1) million

Income Tax Rate:

19.6% compared to 25.1%

·       Benefited by geographic mix

EPS:

$1.40 compared to $0.72

Stockholder Value

Dividend Payments:

$19.1 million

Stock Repurchases:

$17.0 million

·       $325.8 million remaining in authorization

Q1 and Full-year 2021 Outlook

Q1 2021 Revenue:

$610 to $640 million; +18 to 24%

·       Approximately +3% fx impact

Q1 2021 EPS:

$0.65 to $0.75; +81 to 108%

2021 Revenue:

$2.71 to $2.81 billion; +5 to 9%

·       Approximately +2 to 3% fx impact

2021 EPS:

$3.80 to $4.10; +5 to 13%

“We expect a strong 2021 driven by our robust product pipeline and digital initiatives combined with steady growth in both our customers and sales leaders,” continued Wood. “We plan to expand our customer reach through the Boost and Nutricentials launches in the first half and the introduction of our new product innovations in the second half. We remain focused on balancing our geographic profile through the expansion of our social commerce business and our manufacturing segment. We are forecasting high single-digit revenue growth and expect solid improvement in our operating margin, together driving toward a double-digit increase in earnings per share. Additionally, we increased our quarterly dividend for the 20th consecutive year, a remarkable feat that demonstrates the durability of the Nu Skin business model.”

 

Mark Lawrence, chief financial officer, added, “Our guidance reflects the strong momentum coming out of 2020 and our focused strategy for 2021. Looking to the first quarter, we anticipate revenue of $610 to $640 million, a growth of 18 to 24 percent including an approximate three percent favorable foreign currency impact. We project earnings per share of $0.65 to $0.75, approximately double the prior year. For our initial full-year 2021 guidance, we anticipate revenue of $2.71 to $2.81 billion, reflecting a positive foreign currency impact of approximately two to three percent. We anticipate annual earnings per share of $3.80 to $4.10.”

Investor Day

The Nu Skin Enterprises management team will host an investor day event Feb. 11 at noon (ET). Those wishing to access the webcast, as well as the information presented, can visit the Investor Relations page on the company’s website at ir.nuskin.com. A replay of the event will be available at the same URL through Feb. 25, 2021.

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 pipeline and product launches, customers and sales leaders, strategies and initiatives; projections regarding revenue, operating margin, 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 December 31, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):

 

Three Months Ended

December 31,

 

 

 

Constant-Currency

 

2020

 

2019

 

Change

 

Change

 

Nu Skin

                     

 

Mainland China

$

172,442

 

$

154,731

 

 

11%

   

5%

 

Americas/Pacific

 

157,984

 

 

86,146

 

 

83%

   

86%

 

South Korea

 

90,384

 

 

81,958

 

 

10%

   

5%

 

Southeast Asia

 

82,191

 

 

74,767

 

 

10%

   

10%

 

Japan

 

73,132

 

 

65,482

 

 

12%

   

7%

 

EMEA

 

82,656

 

 

46,205

 

 

79%

   

68%

 

Hong Kong/Taiwan

 

45,864

 

 

41,616

 

 

10%

   

5%

 

Other

 

(391)

 

 

1,860

 

 

(121)%

   

(121)%

 

Total Nu Skin

 

704,262

   

552,765

   

27%

   

23%

 

Manufacturing

 

43,364

   

30,487

   

42%

   

42%

 

Grow Tech

 

567

   

107

   

430%

   

430%

 

Total

$

748,193

 

$

583,359

 

 

28%

   

24%

                         

The following table sets forth revenue for the years ended December 31, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):

 

Year Ended

December 31,

 

 

 

Constant-Currency

 

2020

 

2019

 

Change

 

Change

 

Nu Skin

                     

 

Mainland China

$

625,538

 

$

722,526

 

 

(13)%

 

 

(14)%

 

Americas/Pacific

 

511,941

 

 

349,078

 

 

47%

 

 

53%

 

South Korea

 

326,478

 

 

329,978

 

 

(1)%

 

 

 

Southeast Asia

 

302,708

 

 

301,620

 

 

 

 

1%

 

Japan

 

273,681

 

 

260,039

 

 

5%

 

 

3%

 

EMEA

 

230,246

 

 

167,165

 

 

38%

 

 

35%

 

Hong Kong/Taiwan

 

161,117

 

 

166,335

 

 

(3)%

 

 

(6)%

 

Other

 

(17)

 

 

1,621

 

 

(101)%

 

 

(101)%

 

Total Nu Skin

 

2,431,692

   

2,298,362

   

6%

 

 

6%

 

Manufacturing

 

149,339

   

121,917

   

22%

 

 

22%

 

Grow Tech

 

903

   

137

   

559%

 

 

559%

 

Total

$

2,581,934

 

$

2,420,416

 

 

7%

 

 

7%

                         

The Company's Customers and Sales Leaders statistics by segment as of December 31, 2020 and 2019 are presented in the following table:

 

2020

 

2019

 

% Increase (Decrease)

 

Customers

 

Sales Leaders

 

Customers

 

Sales Leaders

 

Customers

 

Sales Leaders

 

 

 

 

 

 

 

 

 

 

 

 

Mainland China

 

381,460

   

21,990

 

 

292,812

 

 

17,987

 

 

30%

   

22%

Americas/Pacific

 

404,955

   

14,439

 

 

220,216

 

 

7,607

 

 

84%

   

90%

South Korea

 

158,953

   

7,059

 

 

168,972

 

 

7,251

 

 

(6)%

   

(3)%

Southeast Asia

 

154,355

   

8,903

 

 

136,349

 

 

7,480

 

 

13%

   

19%

Japan

 

128,400

   

6,318

 

 

125,557

 

 

5,916

 

 

2%

   

7%

EMEA

 

258,587

   

7,063

 

 

153,330

 

 

4,619

 

 

69%

   

53%

Hong Kong/Taiwan

 

70,592

   

4,663

 

 

65,669

 

 

3,900

 

 

7%

   

20%

Total

 

1,557,302

   

70,435

 

 

1,162,905

 

 

54,760

 

 

34%

   

29%

 

“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

December 31,

 

Years Ended

December 31,

 

2020

 

2019

 

2020

 

2019

                       

Revenue

$

748,193

 

$

583,359

 

$

2,581,934

 

$

2,420,416

Cost of sales

 

194,751

 

 

140,566

 

 

658,028

 

 

581,420

Gross profit

 

553,442

 

 

442,793

 

 

1,923,906

 

 

1,838,996

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

284,129

 

 

228,127

 

 

1,019,494

 

 

955,600

General and administrative expenses

 

180,616

 

 

159,987

 

 

646,848

 

 

615,970

Total operating expenses

 

464,745

 

 

388,114

 

 

1,666,342

 

 

1,571,570

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

88,697

 

 

54,679

 

 

257,564

 

 

267,426

Other income (expense), net

 

2,736

 

 

(1,101)

 

 

(1,332)

 

 

(12,254)

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

91,433

 

 

53,578

 

 

256,232

 

 

255,172

Provision for income taxes

 

17,966

 

 

13,466

 

 

64,877

 

 

81,619

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

73,467

 

$

40,112

 

$

191,355

 

$

173,553

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1.44

 

$

0.72

 

$

3.66

 

$

3.13

Diluted

$

1.40

 

$

0.72

 

$

3.63

 

$

3.10

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding (000s):

 

 

 

 

 

 

 

 

 

 

 

Basic

 

50,971

 

 

55,548

 

 

52,296

 

 

55,518

Diluted

 

52,403

 

 

55,807

 

 

52,765

 

 

55,927

NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)

 

 December 31, 2020

 

December 31, 2019

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

402,683

 

$

335,630

Current investments

 

21,216

 

 

8,413

Accounts receivable, net

 

63,370

 

 

50,378

Inventories, net

 

314,366

 

 

275,891

Prepaid expenses and other

 

101,563

 

 

69,854

 Total current assets

 

903,198

 

 

740,166

 

 

 

 

 

 

Property and equipment, net

 

468,181

 

 

453,604

Operating lease right-of-use assets

 

155,104

   

144,326

Goodwill

 

202,979

 

 

196,573

Other intangible assets, net

 

89,532

 

 

80,321

Other assets

 

138,082

 

 

154,016

Total assets

$

1,957,076

 

$

1,769,006

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

66,174

 

$

38,979

Accrued expenses

 

446,682

 

 

290,281

Current portion of long-term debt

 

30,000

 

 

27,500

 Total current liabilities

 

542,856

 

 

356,760

 

 

 

 

 

 

           

Operating lease liabilities

 

112,275

 

 

105,701

Long-term debt

 

305,393

 

 

334,461

Other liabilities

 

102,281

 

 

96,795

Total liabilities

 

1,062,805

 

 

893,717

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Class A common stock

 

91

 

 

91

Additional paid-in capital

 

579,801

 

 

557,544

Treasury stock, at cost

 

(1,461,593)

 

 

(1,324,826)

Accumulated other comprehensive loss

 

(64,768)

 

 

(85,292)

Retained earnings

 

1,840,740

 

 

1,727,772

Total stockholders' equity

 

894,271

 

 

875,289

Total liabilities and stockholders’ equity

$

1,957,076

 

$

1,769,006

 

 

# # #

 

CONTACTS:
Media: media@nuskin.com, (801) 345-6397

Investors: investorrelations@nuskin.com, (801) 345-3577­­­

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