Full Press Release Details
Investors - Scott Pond (801) 345-2657, spond@nuskin.com
Media - Kara Schneck (801) 345-2116, kschneck@nuskin.com
NU SKIN ENTERPRISES REPORTS SECOND-QUARTER 2016 RESULTS
Company Raises Annual Guidance
PROVO, Utah - Aug. 4, 2016 - Nu Skin Enterprises, Inc. (NYSE: NUS) today announced second-quarter results with revenue above guidance at $600.5 million, compared to $560.2 million in the prior-year period. Quarterly revenue improved 7 percent, or 10 percent on a constant-currency basis. Earnings per share for the quarter were $0.79 compared to $0.75 in the prior-year period. Earnings were negatively impacted $0.13 per share due to foreign currency translation charges recorded in other income/expense.
"We are pleased with our second-quarter results and remain optimistic about the future as we continue to introduce our latest ageLOC products," said Truman Hunt, president and chief executive officer. "During the quarter, we held significant product introduction events in South Asia/Pacific and Greater China, generating revenue growth of 36 and 18 percent, respectively. We are also encouraged with the increase in sales leaders during the quarter, a reflection of the strength of our product launches."
Nu Skin Enterprises, Inc.
The company's regional revenue results for the three-month periods ended June 30 are presented in the following table.
| 2016 | 2015 | % Change | Constant Currency % Change | |||||||||||||
| Greater China | $ | 236,716 | $ | 200,136 | 18% | 24% | ||||||||||
| North Asia | 165,885 | 172,943 | (4%) | (6%) | ||||||||||||
| Americas | 67,884 | 83,468 | (19%) | (15%) | ||||||||||||
| South Asia/Pacific | 92,297 | 68,023 | 36% | 42% | ||||||||||||
| EMEA | 37,693 | 35,639 | 6% | 5% | ||||||||||||
| Total | $ | 600,475 | $ | 560,209 | 7% | 10% |
The company's regional revenue results for the six-month periods ended June 30 are presented in the following table.
| 2016 | 2015 | % Change | Constant Currency % Change | |||||||||||||
| Greater China | $ | 395,427 | $ | 387,503 | 2% | 7% | ||||||||||
| North Asia | 317,094 | 345,009 | (8%) | (7%) | ||||||||||||
| Americas | 133,632 | 163,340 | (18%) | (13%) | ||||||||||||
| South Asia/Pacific | 155,875 | 138,840 | 12% | 19% | ||||||||||||
| EMEA | 70,278 | 68,849 | 2% | 3% | ||||||||||||
| Total | $ | 1,072,306 | $ | 1,103,541 | (3%) | 1% |
The Company's regional actives and sales leaders statistics are presented in the following table.
| As of June 30, 2016 | As of June 30, 2015 | % Increase (Decrease) | ||||||||||||||||||||||
| Actives | Sales Leaders | Actives | Sales Leaders | Actives | Sales Leaders | |||||||||||||||||||
| Greater China | 257,000 | 31,554 | 215,000 | 25,956 | 19.5% | 21.6% | ||||||||||||||||||
| North Asia | 356,000 | 16,128 | 387,000 | 16,991 | (8.0%) | (5.1%) | ||||||||||||||||||
| Americas | 165,000 | 6,515 | 180,000 | 7,892 | (8.3%) | (17.4%) | ||||||||||||||||||
| South Asia/Pacific | 113,000 | 7,747 | 120,000 | 7,279 | (5.8%) | 6.4% | ||||||||||||||||||
| EMEA | 121,000 | 4,168 | 113,000 | 4,042 | 7.1% | 3.1% | ||||||||||||||||||
| Total | 1,012,000 | 66,112 | 1,015,000 | 62,160 | (0.3%) | 6.4% |
"Actives" 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.
Operational Performance
The company's operating margin improved to 13.3 percent, compared to 12.8 percent in the prior-year period. Gross margin for the quarter was 78.7 percent, compared to 80.3 percent in the prior-year quarter. Both gross and operating margins continued to be negatively impacted by foreign currency fluctuations. Selling expenses, as a percent of revenue, were 41.4 percent, compared to 42.7 percent in the second quarter of 2015. General and administrative expenses, as a percent of revenue, were 24.0 percent, compared to 24.8 percent in the prior-year period. The company's effective income tax rate for the quarter was 35.0 percent, compared to 35.3 percent in the second quarter of last year. Dividend payments during the quarter were $19.9 million, and the company repurchased $4.3 million of its outstanding shares, with $422.7 million remaining in the authorized share repurchase plan at the end of the quarter.
"We are pleased with the solid results of our product launches and growth of our sales force in the second quarter, which we believe will positively impact our business going forward," said Hunt. "In July, we executed a highly successful introduction of ageLOC Youth in South Korea, and we look forward to new product initiatives in all of our regions throughout the remainder of the year.
"Our balance sheet continues to be strong, boosted by positive cash flow from operations for the quarter of $139 million, with continued improvements to our inventory balance. Our cash balance includes approximately $200 million of proceeds from the recent investment by Ping An Securities during the second quarter, which we plan to deploy in repurchasing shares over the balance of the year," concluded Hunt.
"We are pleased with our results this quarter and are raising our revenue guidance for the year to $2.20 to $2.24 billion, assuming a negative foreign currency impact of 2 to 3 percent," said Ritch Wood, chief financial officer. "For the third quarter, we project revenue of $560 to $580 million including a negative currency impact of 1 to 2 percent. We project third-quarter earnings per share of $0.80 to $0.84, and full-year earnings per share of $2.44 to $2.54, or $2.80 to $2.90 when excluding a $0.36 per share non-cash Japan customs charge taken in the first quarter."
Nu Skin Enterprises, Inc.
The Nu Skin management team will host a conference call with the investment community on Aug. 4 at 5 p.m. (EDT). 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, 2016.
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 in more than 50 markets worldwide. 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. Since its introduction in 2008, the ageLOC brand has generated more than $5 billion in sales, and built 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. 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.
Please Note: 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, initiatives 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:
Nu Skin Enterprises, Inc.
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.
| NU SKIN ENTERPRISES, INC. | ||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||
| For the Second Quarters Ended June 30, 2016 and 2015 | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2016 | 2015 | |||||||
| Revenue | $ | 600,475 | $ | 560,209 | ||||
| Cost of sales | 128,205 | 110,263 | ||||||
| Gross profit | 472,270 | 449,946 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 248,363 | 239,449 | ||||||
| General and administrative expenses | 144,109 | 138,696 | ||||||
| Total operating expenses | 392,472 | 378,145 | ||||||
| Operating income | 79,798 | 71,801 | ||||||
| Other income (expense), net | (11,060 | ) | (2,758 | ) | ||||
| Income before provision for income taxes | 68,738 | 69,043 | ||||||
| Provision for income taxes | 24,025 | 24,386 | ||||||
| Net income | $ | 44,713 | $ | 44,657 | ||||
| Net income per share: | ||||||||
| Basic | $ | 0.80 | $ | 0.76 | ||||
| Diluted | $ | 0.79 | $ | 0.75 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 55,952 | 58,506 | ||||||
| Diluted | 56,356 | 59,713 |
Nu Skin Enterprises, Inc.
| NU SKIN ENTERPRISES, INC. | ||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||
| For the Six-Month Periods Ended June 30, 2016 and 2015 | ||||||||
| (in thousands, except per share amounts) | ||||||||
| 2016 | 2015 | |||||||
| Revenue | $ | 1,072,306 | $ | 1,103,541 | ||||
| Cost of sales | 266,074 | 215,318 | ||||||
| Gross profit | 806,232 | 888,223 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 443,922 | 473,454 | ||||||
| General and administrative expenses | 274,363 | 274,322 | ||||||
| Total operating expenses | 718,285 | 747,776 | ||||||
| Operating income | 87,947 | 140,447 | ||||||
| Other income (expense), net | (13,923 | ) | (15,026 | ) | ||||
| Income before provision for income taxes | 74,024 | 125,421 | ||||||
| Provision for income taxes | 25,995 | 44,482 | ||||||
| Net income | $ | 48,029 | $ | 80,939 | ||||
| Net income per share: | ||||||||
| Basic | $ | 0.86 | $ | 1.38 | ||||
| Diluted | $ | 0.85 | $ | 1.35 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 55,953 | 58,747 | ||||||
| Diluted | 56,388 | 59,994 |
Nu Skin Enterprises, Inc.
| NU SKIN ENTERPRISES, INC. | ||||||||
| Consolidated Balance Sheets (Unaudited) | ||||||||
| (in thousands) | ||||||||
| June 30, 2016 | December 31, 2015 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 544,848 | $ | 289,354 | ||||
| Current investments | 11,503 | 14,371 | ||||||
| Accounts receivable | 31,706 | 35,464 | ||||||
| Inventories, net | 259,933 | 265,256 | ||||||
| Prepaid expenses and other | 162,710 | 101,947 | ||||||
| 1,010,700 | 706,392 | |||||||
| Property and equipment, net | 453,342 | 454,537 | ||||||
| Goodwill | 114,954 | 112,446 | ||||||
| Other intangible assets, net | 67,410 | 67,009 | ||||||
| Other assets | 134,463 | 165,459 | ||||||
| Total assets | $ | 1,780,869 | $ | 1,505,843 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 43,360 | $ | 28,832 | ||||
| Accrued expenses | 350,849 | 310,916 | ||||||
| Current portion of long-term debt | 96,896 | 67,849 | ||||||
| 491,105 | 407,597 | |||||||
| Long-term debt | 362,051 | 181,745 | ||||||
| Other liabilities | 97,473 | 90,880 | ||||||
| Total liabilities | 950,629 | 680,222 | ||||||
| Stockholders' equity: | ||||||||
| Class A common stock | 91 | 91 | ||||||
| Additional paid-in capital | 431,459 | 419,921 | ||||||
| Treasury stock, at cost | (1,032,117 | ) | (1,017,063 | ) | ||||
| Accumulated other comprehensive loss | (71,463 | ) | (71,269 | ) | ||||
| Retained earnings | 1,502,270 | 1,493,941 | ||||||
| 830,240 | 825,621 | |||||||
| Total liabilities and stockholders' equity | $ | 1,780,869 | $ | 1,505,843 |