Full Press Release Details
NU SKIN ENTERPRISES REPORTS STRONG THIRD-QUARTER RESULTS WITH 20 PERCENT REVENUE GROWTH AND 24 PERCENT EARNINGS GROWTH
PROVO, Utah - Nov. 7, 2018 - Nu Skin Enterprises, Inc. (NYSE: NUS) today announced strong third-quarter financial results with revenue of $675.3 million, an increase of
20 percent over the prior-year period. Earnings per share were $0.94, an increase of 24 percent over the prior-year period, or $1.01, an increase of 33 percent, when excluding a foreign currency translation loss of $0.07.
Q3 2018 vs. Prior-Year Quarter
| Revenue: | $675.3 million, +20% (3%) fx impact |
| Earnings Per Share (EPS): | $0.94, +24% or $1.01, + 33% when excluding fx loss ($0.07) foreign currency translation loss ($0.04) purchase accounting charge |
| Sales Leaders: | 73,100; +14% |
| Customers : | 1,166,000; +9% |
"We delivered strong year-over-year financial results with reported revenue growth in every region, highlighted by double-digit increases in Mainland China and Southeast
Asia," said Ritch Wood, chief executive officer. "This is our fourth consecutive quarter of revenue growth of 20 percent or more, driven by the continued execution of our growth strategy focused on engaging platforms, enabling products and
empowering programs which led to solid customer growth of 9 percent and sales leader growth of 14 percent."
Q3 2018 Year-Over-Year Operating Results
| Revenue: | $675.3 million compared to $563.7 million |
| Gross Margin: | 76.7% compared to 78.6% Nu Skin business was 78.7% |
| Selling Expenses: | 40.2% of revenue compared to 41.7% Nu Skin business was 41.8% |
| G&A Expenses: | 24.5% of revenue compared to 25.4% |
| Operating Margin: | 11.9% compared to 11.4% |
| Other Income / (Expense): | ($7.0) million expense compared to ($1.2) million expense |
| Income Tax Rate: | 27.9% compared to 34.1% |
| EPS: | $0.94, which includes a ($0.07) foreign currency translation loss and a ($0.04) purchase accounting charge, compared to $0.76 |
| Dividend Payments: | $20.3 million |
| Stock Repurchases: | $12.4 million; $492 million remaining in authorization |
Q4 and Full-Year 2018 Outlook
| Q4 2018 Revenue: | $665 to $685 million, 0% to 3% growth Approximately (4 to 5%) negative fx impact |
| Q4 2018 EPS: | $1.00 to $1.07 which includes an estimated $0.04 purchase accounting charge |
| 2018 Revenue: | $2.66 billion to $2.68 billion, 17% to 18% growth Neutral fx impact |
| 2018 EPS | $3.48 to $3.55 including ($0.20) fx and ($0.16) purchase accounting charges |
"We continue to empower our sales leaders to effectively acquire customers through enabling social sharing, providing innovative products like ageLOC LumiSpa, and
implementing our enhanced sales compensation program, Velocity. We are on pace to generate a very strong finish to this year which we believe sets us up well for 2019," Wood concluded.
"We generated 20 percent year-over-year revenue growth and 24 percent improvement in earnings in the quarter," said Mark Lawrence, chief financial officer. "For the year,
we are increasing our annual revenue guidance to $2.66 billion to $2.68 billion with earnings per share of $3.48 to $3.55. This earnings guidance reflects the $0.20 foreign currency translation loss from the second and third quarters and the $0.16
purchase accounting charge. We are projecting fourth-quarter revenue of $665 to $685 million, including a 4 to 5 percent negative currency impact, and earnings per share of $1.00 to $1.07, or $1.04 to $1.11 when excluding the estimated $0.04
purchase accounting charge. As a reminder, in the fourth quarter of 2017, we held an ageLOC LumiSpa global introduction which generated $130 million in sales," concluded Lawrence.
The Nu Skin management team will host a conference call with the investment community on November 7, 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 Nov 21, 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 also traded on
the New York Stock Exchange under the symbol "NUS." More information is available at nuskin.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, 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.
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. Earnings per share excluding foreign-currency translation loss and projected earnings per share
excluding purchase-accounting charge also are non-GAAP financial measures. Removing the impact of these items facilitates period-to-period comparisons of the company's performance.
The Company's revenue results by segment for the three-month periods ended September 30 are presented in the following table (in thousands).
| 2018 | 2017 | % Change | Constant Currency % Change | |||||||||||||
| Mainland China | $ | 226,645 | $ | 172,556 | 31 | % | 34 | % | ||||||||
| Americas/Pacific | 93,580 | 85,672 | 9 | % | 20 | % | ||||||||||
| South Korea | 89,963 | 89,238 | 1 | % | - | |||||||||||
| Southeast Asia | 86,307 | 71,141 | 21 | % | 24 | % | ||||||||||
| Japan | 63,649 | 62,513 | 2 | % | 2 | % | ||||||||||
| Hong Kong/Taiwan | 44,949 | 41,050 | 9 | % | 10 | % | ||||||||||
| EMEA | 42,819 | 40,133 | 7 | % | 8 | % | ||||||||||
| Other | 27,400 | 1,395 | 1,864 | % | 1,864 | % | ||||||||||
| Total | $ | 675,312 | $ | 563,698 | 20 | % | 23 | % |
The Company's revenue results by segment for the nine-month periods ended September 30 are presented in the following table (in thousands).
| 2018 | 2017 | % Change | Constant Currency % Change | |||||||||||||
| Mainland China | $ | 669,432 | $ | 494,658 | 35 | % | 30 | % | ||||||||
| Americas/Pacific | 289,859 | 240,094 | 21 | % | 27 | % | ||||||||||
| South Korea | 270,517 | 258,626 | 5 | % | - | |||||||||||
| Southeast Asia | 236,390 | 194,711 | 21 | % | 20 | % | ||||||||||
| Japan | 190,986 | 188,465 | 1 | % | (1 | %) | ||||||||||
| Hong Kong/Taiwan | 138,147 | 120,069 | 15 | % | 14 | % | ||||||||||
| EMEA | 131,810 | 112,385 | 17 | % | 10 | % | ||||||||||
| Other | 68,580 | 3,890 | 1,663 | % | 1,663 | % | ||||||||||
| Total | $ | 1,995,721 | $ | 1,612,898 | 24 | % | 21 | % |
The company's Customers and Sales Leaders statistics by segment for the three-month periods ended September 30 are presented in the following table.
| 2018 | 2017 | % Increase (Decrease) | ||||||||||||||||||||||
| Customers | Sales Leaders | Customers | Sales Leaders | Customers | Sales Leaders | |||||||||||||||||||
| Mainland China | 210,000 | 33,300 | 190,000 | 25,600 | 11 | % | 30 | % | ||||||||||||||||
| Americas/Pacific | 277,000 | 8,500 | 237,000 | 8,000 | 17 | % | 6 | % | ||||||||||||||||
| South Korea | 180,000 | 7,700 | 185,000 | 8,400 | (3 | %) | (8 | %) | ||||||||||||||||
| Southeast Asia | 147,000 | 8,700 | 127,000 | 7,100 | 16 | % | 23 | % | ||||||||||||||||
| Japan | 131,000 | 6,200 | 131,000 | 6,500 | - | (5 | %) | |||||||||||||||||
| Hong Kong/Taiwan | 76,000 | 4,400 | 71,000 | 4,300 | 7 | % | 2 | % | ||||||||||||||||
| EMEA | 145,000 | 4,300 | 128,000 | 4,300 | 13 | % | - | |||||||||||||||||
| Total | 1,166,000 | 73,100 | 1,069,000 | 64,200 | 9 | % | 14 | % |
"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)
(in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue | $ | 675,312 | $ | 563,698 | $ | 1,995,721 | $ | 1,612,898 | ||||||||
| Cost of sales | 157,457 | 120,832 | 472,287 | 353,619 | ||||||||||||
| Gross profit | 517,855 | 442,866 | 1,523,434 | 1,259,279 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling expenses | 271,509 | 235,285 | 801,968 | 672,646 | ||||||||||||
| General and administrative expenses | 165,671 | 143,219 | 499,037 | 411,270 | ||||||||||||
| Total operating expenses | 437,180 | 378,504 | 1,301,005 | 1,083,916 | ||||||||||||
| Operating income | 80,675 | 64,362 | 222,429 | 175,363 | ||||||||||||
| Other income (expense), net | (6,982 | ) | (1,172 | ) | (16,940 | ) | (8,470 | ) | ||||||||
| Income before provision for income taxes | 73,693 | 63,190 | 205,489 | 166,893 | ||||||||||||
| Provision for income taxes | 20,547 | 21,518 | 65,843 | 55,691 | ||||||||||||
| Net income | $ | 53,146 | $ | 41,672 | $ | 139,646 | $ | 111,202 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.96 | $ | 0.79 | $ | 2.54 | $ | 2.10 | ||||||||
| Diluted | $ | 0.94 | $ | 0.76 | $ | 2.47 | $ | 2.04 | ||||||||
| Weighted-average common shares outstanding (000s): | ||||||||||||||||
| Basic | 55,603 | 52,873 | 55,075 | 52,834 | ||||||||||||
| Diluted | 56,704 | 54,834 | 56,539 | 54,519 |
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
| September 30, 2018 | December 31, 2017 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 390,066 | $ | 426,399 | ||||
| Current investments | 11,388 | 11,847 | ||||||
| Accounts receivable | 57,175 | 33,196 | ||||||
| Inventories, net | 289,291 | 253,454 | ||||||
| Prepaid expenses and other | 78,395 | 52,893 | ||||||
| 826,315 | 777,789 | |||||||
| Property and equipment, net | 496,704 | 464,587 | ||||||
| Goodwill | 187,423 | 114,954 | ||||||
| Other intangible assets, net | 91,957 | 67,647 | ||||||
| Other assets | 143,838 | 164,895 | ||||||
| Total assets | $ | 1,746,237 | $ | 1,589,872 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 52,843 | $ | 50,341 | ||||
| Accrued expenses | 292,962 | 319,189 | ||||||
| Current portion of long-term debt | 82,455 | 77,840 | ||||||
| 428,260 | 447,370 | |||||||
| Long-term debt | 365,767 | 310,790 | ||||||
| Other liabilities | 120,076 | 127,116 | ||||||
| Total liabilities | 914,103 | 885,276 | ||||||
| Stockholders' equity: | ||||||||
| Class A common stock | 91 | 91 | ||||||
| Additional paid-in capital | 545,234 | 466,349 | ||||||
| Treasury stock, at cost | (1,306,012 | ) | (1,304,694 | ) | ||||
| Accumulated other comprehensive loss | (82,555 | ) | (66,318 | ) | ||||
| Retained earnings | 1,675,376 | 1,609,168 | ||||||
| 832,134 | 704,596 | |||||||
| Total liabilities and stockholders' equity | $ | 1,746,237 | $ | 1,589,872 |
NU SKIN ENTERPRISES, INC.
Reconciliation of Earnings Per Share
Excluding Foreign-Currency Translation Loss to
GAAP Earnings Per Share
(in thousands, except per share amounts)
| Q3 2018 | ||||
| Net income | $ | 53,146 | ||
| Foreign-currency translation loss | 4,766 | |||
| Tax impact of foreign-currency translation loss | (548 | ) | ||
| Net income, excluding foreign-currency translation loss | $ | 57,364 | ||
| Weighted-average common shares outstanding | 56,704 | |||
| Diluted earnings per share | $ | 0.94 | ||
| Diluted earnings per share, excluding foreign-currency translation loss | $ | 1.01 | ||
| Q3 2017 diluted earnings per share | $ | 0.76 | ||
| Year-over-year earnings per share increase | 24 | % | ||
| Year-over-year earnings per share increase, excluding Q3 2018 foreign-currency translation loss | 33 | % |
Nu Skin Social Media Channels
fb.com/nuskin twitter.com/nuskin
instagram.com/nuskin
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577