Full Press Release Details
NU SKIN ENTERPRISES REPORTS THIRD-QUARTER 2019 RESULTS
PROVO, Utah - Nov. 5, 2019 - Nu Skin Enterprises, Inc. (NYSE: NUS) today announced third-quarter 2019 results.
Q3 2019 vs. Prior-Year Quarter
| Revenue: | $589.9 million; (13%) (2%) fx impact or ($12 M) | ||
| Earnings Per Share (EPS): | $0.79; (16%) | ||
| Sales Leaders: | 61,090; (16%) | ||
| Customers: | 1,206,697;+4% |
"We delivered strong profitability, with earnings per share at the high end of our range due to our focus on operational efficiencies," said
Ritch Wood, chief executive officer. "Revenue came in slightly below expectation, primarily due to the challenging regulatory environment in Mainland China, where meeting restrictions continued throughout the quarter. Despite this, our sequential
sales leader trends stabilized both in China and globally, and recent product introductions and business incentives drove year-over-year increases in customer acquisition. Our manufacturing segment also continued to perform well, with revenue growing
18 percent this quarter."
Q3 2019 Year-Over-Year Operating Results
| Revenue: | $589.9 million compared to $675.3 million (2%) fx impact or ($12 M) | ||
| Gross Margin: | 76.2% compared to 76.7% Nu Skin business was 78.6% compared to 78.7% | ||
| Selling Expenses: | 39.3% of revenue compared to 40.2% Nu Skin business was 41.5% compared to 41.8% | ||
| G&A Expenses: | 25.1% of revenue compared to 24.5% | ||
| Operating Margin: | 11.8% compared to 11.9% | ||
| Other Income / (Expense): | ($5.0) million compared to ($7.0) million | ||
| Income Tax Rate: | 32.1% compared to 27.9% | ||
| EPS: | $0.79 compared to $0.94 |
| Dividend Payments: | $20.6 million | ||
| Stock Repurchases: | Nil |
Q4 and Full-Year 2019 Outlook
| Q4 2019 Revenue: | $570 to $590 million; (17%) to (14%) Approximately (2%) fx impact | ||
| Q4 2019 EPS: | $0.68 to $0.75 | ||
| 2019 Revenue: | $2.41 billion to $2.43 billion; (10%) to (9%) Approximately (4%) fx impact | ||
| 2019 EPS | $3.07 to $3.14 |
"In October, we hosted our global LIVE event in Salt Lake City to align and motivate our sales force and introduce our future product roadmap," continued Wood. "These new
products include our new and improved Galvanic Spa and accompanying consumable products, which are launching in many of our markets this quarter. We expect to introduce several new products in 2020, including a newly reformulated Tru Face Essence
Ultra and new Galvanic gels. We also announced our next major product launch - an innovative daily-use beauty device - that we anticipate will be a strong driver for our business in the second half of 2020. We are excited to add this product to our
top-ranked beauty device systems brand."
Mark Lawrence, chief financial officer, added, "Our fourth quarter revenue guidance is $570 to $590 million, which includes an approximate 2
percent unfavorable foreign currency impact, and earnings per share outlook is for $0.68 to $0.75, considering expenses related to LIVE. For the full year, we project revenue of $2.41 to $2.43 billion, with an approximate 4 percent negative foreign
currency impact and earnings per share of $3.07 to $3.14."
The Nu Skin 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 Nov. 19, 2019.
About Nu Skin Enterprises, Inc.
Founded 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 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, 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," "continue," "anticipate," "optimistic," "project," "estimate," "intend," "plan," "continue," "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 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 September 30, 2019 and 2018 for each of our reportable segments (U.S. dollars in thousands):
| Three Months Ended September 30, | Constant- Currency | |||||||||||||||
| 2019 | 2018 | Change | Change | |||||||||||||
| Nu Skin | ||||||||||||||||
| Mainland China | $ | 173,974 | $ | 226,645 | (23 | )% | (21 | )% | ||||||||
| Americas/Pacific | 83,635 | 93,580 | (11 | )% | (7 | )% | ||||||||||
| South Korea | 79,435 | 89,963 | (12 | )% | (6 | )% | ||||||||||
| Southeast Asia | 78,963 | 86,307 | (9 | )% | (10 | )% | ||||||||||
| Japan | 67,197 | 63,649 | 6 | % | 2 | % | ||||||||||
| Hong Kong/Taiwan | 40,449 | 44,949 | (10 | )% | (9 | )% | ||||||||||
| EMEA | 35,742 | 42,819 | (17 | )% | (13 | )% | ||||||||||
| Other | (62 | ) | 1,378 | (104 | )% | (104 | )% | |||||||||
| Total Nu Skin | 559,333 | 649,290 | (14 | )% | (12 | )% | ||||||||||
| Manufacturing | 30,601 | 26,022 | 18 | % | 18 | % | ||||||||||
| Grow Tech | - | - | - | - | ||||||||||||
| Total | $ | 589,934 | $ | 675,312 | (13 | )% | (11 | )% |
The following table sets forth revenue for the nine-month periods ended September 30, 2019 and 2018 for each of our reportable segments (U.S. dollars in thousands):
| Nine Months Ended September 30, | Constant- Currency | |||||||||||||||
| 2019 | 2018 | Change | Change | |||||||||||||
| Nu Skin | ||||||||||||||||
| Mainland China | $ | 567,795 | $ | 669,432 | (15 | )% | (11 | )% | ||||||||
| Americas/Pacific | 262,932 | 289,859 | (9 | )% | (3 | )% | ||||||||||
| South Korea | 248,020 | 270,517 | (8 | )% | (2 | )% | ||||||||||
| Southeast Asia | 226,853 | 236,390 | (4 | )% | (3 | )% | ||||||||||
| Japan | 194,557 | 190,986 | 2 | % | 1 | % | ||||||||||
| Hong Kong/Taiwan | 124,719 | 138,147 | (10 | )% | (8 | )% | ||||||||||
| EMEA | 120,960 | 131,810 | (8 | )% | (2 | )% | ||||||||||
| Other | (239 | ) | 2,643 | (109 | )% | (109 | )% | |||||||||
| Total Nu Skin | 1,745,597 | 1,929,784 | (10 | )% | (6 | )% | ||||||||||
| Manufacturing | 91,430 | 65,937 | 39 | % | 39 | % | ||||||||||
| Grow Tech | 30 | - | - | - | ||||||||||||
| Total | $ | 1,837,057 | $ | 1,995,721 | (8 | )% | (4 | )% |
The company's Customers and Sales Leaders statistics by segment for the three-month periods ended September 30 are presented in the following table:
| As of September 30, 2019 | As of September 30, 2018 | % Increase (Decrease) | ||||||||||||||||||||||
| Customers | Sales Leaders | Customers | Sales Leaders | Customers | Sales Leaders | |||||||||||||||||||
| Mainland China | 317,257 | 23,776 | 210,212 | 33,335 | 51 | % | (29 | )% | ||||||||||||||||
| Americas/Pacific | 229,013 | 7,760 | 276,923 | 8,475 | (17 | )% | (8 | )% | ||||||||||||||||
| South Korea | 169,589 | 7,363 | 180,254 | 7,700 | (6 | )% | (4 | )% | ||||||||||||||||
| Southeast Asia | 145,845 | 7,936 | 146,586 | 8,668 | (1 | )% | (8 | )% | ||||||||||||||||
| Japan | 128,373 | 5,964 | 130,831 | 6,182 | (2 | )% | (4 | )% | ||||||||||||||||
| Hong Kong/Taiwan | 68,862 | 4,231 | 75,985 | 4,402 | (9 | )% | (4 | )% | ||||||||||||||||
| EMEA | 147,758 | 4,060 | 144,977 | 4,320 | 2 | % | (6 | )% | ||||||||||||||||
| Total | 1,206,697 | 61,090 | 1,165,768 | 73,082 | 4 | % | (16 | )% |
"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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue | $ | 589,934 | $ | 675,312 | $ | 1,837,057 | $ | 1,995,721 | ||||||||
| Cost of sales | 140,162 | 157,457 | 440,854 | 472,287 | ||||||||||||
| Gross profit | 449,772 | 517,855 | 1,396,203 | 1,523,434 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling expenses | 231,937 | 271,509 | 727,473 | 801,968 | ||||||||||||
| General and administrative expenses | 147,943 | 165,671 | 455,983 | 499,037 | ||||||||||||
| Total operating expenses | 379,880 | 437,180 | 1,183,456 | 1,301,005 | ||||||||||||
| Operating income | 69,892 | 80,675 | 212,747 | 222,429 | ||||||||||||
| Other income (expense), net | (4,979 | ) | (6,982 | ) | (11,153 | ) | (16,940 | ) | ||||||||
| Income before provision for income taxes | 64,913 | 73,693 | 201,594 | 205,489 | ||||||||||||
| Provision for income taxes | 20,823 | 20,547 | 68,153 | 65,843 | ||||||||||||
| Net income | $ | 44,090 | $ | 53,146 | $ | 133,441 | $ | 139,646 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.79 | $ | 0.96 | $ | 2.40 | $ | 2.54 | ||||||||
| Diluted | $ | 0.79 | $ | 0.94 | $ | 2.39 | $ | 2.47 | ||||||||
| Weighted-average common shares outstanding (000s): | ||||||||||||||||
| Basic | 55,548 | 55,603 | 55,507 | 55,075 | ||||||||||||
| Diluted | 55,788 | 56,704 | 55,950 | 56,539 |
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
| September 30, 2019 | December 31, 2018 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 320,034 | $ | 386,911 | ||||
| Current investments | 7,458 | 11,346 | ||||||
| Accounts receivable | 56,342 | 53,282 | ||||||
| Inventories, net | 282,997 | 295,821 | ||||||
| Prepaid expenses and other | 72,298 | 51,877 | ||||||
| Total current assets | 739,129 | 799,237 | ||||||
| Property and equipment, net | 447,653 | 464,535 | ||||||
| Right-of-use assets | 115,557 | - | ||||||
| Goodwill | 196,573 | 196,573 | ||||||
| Other intangible assets, net | 83,172 | 89,989 | ||||||
| Other assets | 154,821 | 144,112 | ||||||
| Total assets | $ | 1,736,905 | $ | 1,694,446 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 39,404 | $ | 47,617 | ||||
| Accrued expenses | 304,003 | 322,583 | ||||||
| Current portion of long-term debt | 25,000 | 69,455 | ||||||
| Total current liabilities | 368,407 | 439,655 | ||||||
| Operating lease liabilities | 80,953 | - | ||||||
| Long-term debt | 341,724 | 361,008 | ||||||
| Other liabilities | 100,021 | 111,916 | ||||||
| Total liabilities | 891,105 | 912,579 | ||||||
| Stockholders' equity: | ||||||||
| Class A common stock | 91 | 91 | ||||||
| Additional paid-in capital | 557,283 | 552,564 | ||||||
| Treasury stock, at cost | (1,324,826 | ) | (1,326,605 | ) | ||||
| Accumulated other comprehensive loss | (94,961 | ) | (79,934 | ) | ||||
| Retained earnings | 1,708,213 | 1,635,751 | ||||||
| Total stockholders' equity | 845,800 | 781,867 | ||||||
| Total liabilities and stockholders' equity | $ | 1,736,905 | $ | 1,694,446 |
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577