Full Press Release Details
NU SKIN ENTERPRISES REPORTS SECOND-QUARTER 2020 RESULTS
AND RAISES 2020 GUIDANCE
PROVO, Utah - Aug. 5, 2020 - Nu Skin Enterprises, Inc. (NYSE: NUS) today announced second-quarter results above expectations and raised its revenue and
earnings per share guidance for 2020.
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 |
| 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."
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:
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
| 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
| 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 |
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577