Full Press Release Details
NU SKIN ENTERPRISES REPORTS 28 PERCENT SECOND-QUARTER REVENUE
GROWTH AND RAISES ANNUAL GUIDANCE
PROVO, Utah - Aug. 2, 2018 - Nu Skin Enterprises, Inc. (NYSE: NUS) today announced strong second-quarter financial results with revenue of $704.2 million, up 28 percent over the prior-year period, and earnings per share of $0.90, a 17 percent increase over the prior-year period. Quarterly earnings were negatively impacted by a foreign currency translation loss of $0.13 and a $0.05 purchase accounting charge.
Q2 2018 vs. Prior-Year Quarter
| Revenue: | $704.2 million, +28% Core Nu Skin business +24%, including +4% fx impact Acquired companies +4% |
| Earnings Per Share (EPS): | $0.90, +17%, including: ($0.13) foreign currency translation loss ($0.05) purchase accounting charge |
| Sales Leaders: | 71,300, +21% |
| Customers: | 1,148,000, +8% |
"We continue to successfully execute on our customer growth strategy centered on engaging platforms, enabling products and empowering programs, which led to accelerated growth," said Ritch Wood, chief executive officer. "Our customers grew by 8 percent and sales leaders grew by 21 percent, and we saw healthy revenue generation throughout the business, highlighted by double-digit increases in Mainland China, Southeast Asia and the Americas and Pacific. We are also pleased with the solid performance of our acquired businesses, which we anticipate will show increased benefits in our future results."
Nu Skin Enterprises, Inc.
Q2 2018 Year-Over-Year Operating Results
| Revenue: | $704.2 million compared to $550.1 million |
| Gross Margin: | 76.1% compared to 77.9% Core Nu Skin business 77.9% |
| Selling Expenses: | 38.7% of revenue compared to 41.5% |
| G&A Expenses: | 25.6% of revenue compared to 24.6% |
| Operating Margin: | 11.8% compared to 11.8% |
| Other Income / (Expense): | ($11.2) million compared to ($2.7) million |
| Income Tax Rate: | 28.8% compared to 32.2% |
| EPS: | $0.90, +17%, including: ($0.13) foreign currency translation loss ($0.05) purchase accounting charge |
| Dividend Payments: | $20.3 million |
| Stock Repurchases: | $18.4 million; $500 million available with new authorization |
| Q3 Revenue: | $650 to $670 million, 15% to 19% growth Approximately (3%) fx impact |
| Q3 EPS: | $0.93 to $0.98, 22% to 29% growth Includes ($0.04) purchase accounting charge |
| 2018 Revenue: | $2.63 to $2.67 billion, 15% to 17% growth Estimated +1% fx impact Increase from prior outlook of $2.51 to $2.56 billion, which included a +3% fx impact |
| 2018 EPS: | $3.50 to $3.65, including ($0.13) fx and ($0.16) purchase accounting charges |
"Based on our strong first-half results, with double-digit growth in both the first and second quarters, we now see revenue growth of approximately 15 to 17 percent for the year," said Wood. "We will continue to invest in social selling capabilities, product innovation and the ongoing rollout of our Velocity sales compensation program. We expect these initiatives, coupled with the capability improvements we are making through development and recent acquisitions, will drive additional upside. As a testament of our confidence in the strength of the business, our board of directors approved an increase to our stock repurchase authorization to $500 million."
Nu Skin Enterprises, Inc.
"We generated 28 percent year-over-year revenue growth and strong earnings performance in the quarter," said Mark Lawrence, chief financial officer. "For the year, we are increasing our annual revenue guidance by $120 million to $2.63 billion to $2.67 billion with earnings per share of $3.50 to $3.65. This guidance includes $0.16 in purchase accounting charges and the $0.13 foreign currency translation loss from the second quarter. We are projecting third-quarter revenue of $650 to $670 million, including a negative 3 percent currency impact, and earnings per share of $0.93 to $0.98."
The Nu Skin management team will host a conference call with the investment community on Aug. 2, 2018, 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. 16, 2018.
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 LumiSpa skin cleansing and treatment device, 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 traded on the New York Stock Exchange under the symbol "NUS." More information is available at nuskin.com.
Nu Skin Enterprises, Inc.
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, 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," "project," "anticipate," "estimate," "intend," "plan," "continue," "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:
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.
Nu Skin Enterprises, Inc.
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.
Nu Skin Enterprises, Inc.
The Company's revenue results by segment for the three-month periods ended June 30 are presented in the following table (in thousands).
| 2018 | 2017 | % Change | Constant Currency % Change | |||||||||||||
| Mainland China | $ | 245,256 | $ | 172,098 | 43% | 33% | ||||||||||
| Americas/Pacific | 103,990 | 82,997 | 25% | 31% | ||||||||||||
| South Korea | 91,624 | 86,917 | 5% | 1% | ||||||||||||
| Southeast Asia | 79,223 | 60,545 | 31% | 28% | ||||||||||||
| Japan | 64,113 | 64,796 | (1%) | (3%) | ||||||||||||
| Hong Kong/Taiwan | 52,206 | 43,071 | 21% | 21% | ||||||||||||
| EMEA | 44,010 | 38,188 | 15% | 7% | ||||||||||||
| Other | 23,768 | 1,489 | 1,496% | 1,496% | ||||||||||||
| Total | $ | 704,190 | $ | 550,101 | 28% | 24% |
The Company's revenue results by segment for the six-month periods ended June 30 are presented in the following table (in thousands).
| 2018 | 2017 | % Change | Constant Currency % Change | |||||||||||||
| Mainland China | $ | 442,787 | $ | 322,102 | 37% | 27% | ||||||||||
| Americas/Pacific | 196,279 | 154,422 | 27% | 31% | ||||||||||||
| South Korea | 180,554 | 169,388 | 7% | 1% | ||||||||||||
| Southeast Asia | 150,083 | 123,570 | 21% | 18% | ||||||||||||
| Japan | 127,337 | 125,952 | 1% | (2%) | ||||||||||||
| Hong Kong/Taiwan | 93,198 | 79,019 | 18% | 16% | ||||||||||||
| EMEA | 88,991 | 72,252 | 23% | 11% | ||||||||||||
| Other | 41,180 | 2,495 | 1,551% | 1,551% | ||||||||||||
| Total | $ | 1,320,409 | $ | 1,049,200 | 26% | 21% |
Nu Skin Enterprises, Inc.
The company's Customers and Sales Leaders statistics by segment for the three-month periods ended June 30 are presented in the following table.
| 2018 | 2017 | % Increase (Decrease) | ||||||||||||||||||||||
| Customers | Sales Leaders | Customers | Sales Leaders | Customers | Sales Leaders | |||||||||||||||||||
| Mainland China | 209,000 | 33,400 | 207,000 | 22,600 | 1% | 48% | ||||||||||||||||||
| Americas/Pacific | 265,000 | 9,000 | 230,000 | 7,800 | 15% | 15% | ||||||||||||||||||
| South Korea | 184,000 | 6,900 | 188,000 | 7,700 | (2%) | (10%) | ||||||||||||||||||
| Southeast Asia | 135,000 | 7,500 | 104,000 | 6,300 | 30% | 19% | ||||||||||||||||||
| Japan | 132,000 | 6,000 | 134,000 | 6,400 | (1%) | (6%) | ||||||||||||||||||
| Hong Kong/Taiwan | 76,000 | 4,200 | 68,000 | 3,900 | 12% | 8% | ||||||||||||||||||
| EMEA | 147,000 | 4,300 | 129,000 | 4,200 | 14% | 2% | ||||||||||||||||||
| Total | 1,148,000 | 71,300 | 1,060,000 | 58,900 | 8% | 21% |
"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.
| NU SKIN ENTERPRISES, INC. | ||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||
| For the Second Quarters Ended June 30, 2018 and 2017 | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2018 | 2017 | |||||||
| Revenue | $ | 704,190 | $ | 550,101 | ||||
| Cost of sales | 168,549 | 121,521 | ||||||
| Gross profit | 535,641 | 428,580 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 272,757 | 228,353 | ||||||
| General and administrative expenses | 180,120 | 135,488 | ||||||
| Total operating expenses | 452,877 | 363,841 | ||||||
| Operating income | 82,764 | 64,739 | ||||||
| Other income (expense), net | (11,165 | ) | (2,731 | ) | ||||
| Income before provision for income taxes | 71,599 | 62,008 | ||||||
| Provision for income taxes | 20,638 | 19,967 | ||||||
| Net income | $ | 50,961 | $ | 42,041 | ||||
| Net income per share: | ||||||||
| Basic | $ | 0.92 | $ | 0.79 | ||||
| Diluted | $ | 0.90 | $ | 0.77 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 55,608 | 52,929 | ||||||
| Diluted | 56,713 | 54,839 |
Nu Skin Enterprises, Inc.
| NU SKIN ENTERPRISES, INC. | ||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||
| For the Six-Month Periods Ended June 30, 2018 and 2017 | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2018 | 2017 | |||||||
| Revenue | $ | 1,320,409 | $ | 1,049,200 | ||||
| Cost of sales | 314,830 | 232,787 | ||||||
| Gross profit | 1,005,579 | 816,413 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 530,459 | 437,361 | ||||||
| General and administrative expenses | 333,366 | 268,051 | ||||||
| Total operating expenses | 863,825 | 705,412 | ||||||
| Operating income | 141,754 | 111,001 | ||||||
| Other income (expense), net | (9,958 | ) | (7,298 | ) | ||||
| Income before provision for income taxes | 131,796 | 103,703 | ||||||
| Provision for income taxes | 45,296 | 34,173 | ||||||
| Net income | $ | 86,500 | $ | 69,530 | ||||
| Net income per share: | ||||||||
| Basic | $ | 1.58 | $ | 1.32 | ||||
| Diluted | $ | 1.53 | $ | 1.28 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 54,807 | 52,804 | ||||||
| Diluted | 56,430 | 54,466 |
Nu Skin Enterprises, Inc.
| NU SKIN ENTERPRISES, INC. | ||||||||
| Consolidated Balance Sheets (Unaudited) | ||||||||
| (in thousands) | ||||||||
| June 30, 2018 | December 31, 2017 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 402,031 | $ | 426,399 | ||||
| Current investments | 8,200 | 11,847 | ||||||
| Accounts receivable | 50,180 | 33,196 | ||||||
| Inventories, net | 283,730 | 253,454 | ||||||
| Prepaid expenses and other | 70,898 | 52,893 | ||||||
| 815,039 | 777,789 | |||||||
| Property and equipment, net | 503,452 | 464,587 | ||||||
| Goodwill | 187,423 | 114,954 | ||||||
| Other intangible assets, net | 95,887 | 67,647 | ||||||
| Other assets | 144,562 | 164,895 | ||||||
| Total assets | $ | 1,746,363 | $ | 1,589,872 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 58,920 | $ | 50,341 | ||||
| Accrued expenses | 290,653 | 319,189 | ||||||
| Current portion of long-term debt | 97,481 | 77,840 | ||||||
| 447,054 | 447,370 | |||||||
| Long-term debt | 370,525 | 310,790 | ||||||
| Other liabilities | 125,250 | 127,116 | ||||||
| Total liabilities | 942,829 | 885,276 | ||||||
| Stockholders' equity: | ||||||||
| Class A common stock | 91 | 91 | ||||||
| Additional paid-in capital | 532,996 | 466,349 | ||||||
| Treasury stock, at cost | (1,296,628 | ) | (1,304,694 | ) | ||||
| Accumulated other comprehensive loss | (75,460 | ) | (66,318 | ) | ||||
| Retained earnings | 1,642,535 | 1,609,168 | ||||||
| 803,534 | 704,596 | |||||||
| Total liabilities and stockholders' equity | $ | 1,746,363 | $ | 1,589,872 |
Nu Skin Social Media Channels
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Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577