Full Press Release Details
NU SKIN ENTERPRISES REPORTS THIRD-QUARTER 2020 RESULTS
AND RAISES ANNUAL GUIDANCE
PROVO, Utah - Nov. 4, 2020 - Nu Skin Enterprises, Inc. (NYSE: NUS) today announced third-quarter results of 19 percent revenue growth and 37 percent earnings per share
growth and raised its guidance for 2020.
Q3 2020 vs. Prior-Year Quarter
| Revenue: | $703.3 million; +19% Less than (1%) fx impact | ||
| Earnings Per Share (EPS): | $1.08; +37% | ||
| Sales Leaders: | 68,516; +12% | ||
| Customers: | 1,539,511; +28% |
"We continued to build momentum with accelerated results in the third quarter, as we generated revenue and earnings per share well above
expectations," said Ritch Wood, chief executive officer. "As we executed on our long-term strategy, we drove double-digit growth in both customers and sales leaders with revenue improvements in all but one reporting segment. We delivered strong
double-digit growth in the Americas, Pacific and EMEA regions, with modest growth throughout most of Asia. Mainland China continues to stabilize with sequentially improving revenue, customers and sales leaders, and we remain on track for a return
to year-over-year growth in China in the fourth quarter. Our manufacturing division contributed to our results with impressive 34 percent growth.
"We are outpacing our 2020 growth projections due to strong product demand and ongoing digital investments that empower our sales leaders and affiliates to build a
socially enabled business. We are also benefitting from the current environment where more individuals are working from home and shopping online. Currently, approximately 90 percent of Nu Skin revenue is coming from digital transactions."
Q3 2020 Year-Over-Year Operating Results
| Revenue: | $703.3 million compared to $589.9 million Less than (1%) fx impact | ||
| Gross Margin: | 73.9% compared to 76.2% Nu Skin business was 76.3% compared to 78.6% Impacted by increased freight charges and geographic mix | ||
| Selling Expenses: | 39.9% compared to 39.3% Nu Skin business was 42.4% compared to 41.5% | ||
| G&A Expenses: | 23.5% compared to 25.1% | ||
| Operating Margin: | 10.6% compared to 11.8% Impacted by lower gross margin | ||
| Other Income / (Expense): | $0.5 million compared to ($5.0) million | ||
| Income Tax Rate: | 24.7% compared to 32.1% Benefited by geographic mix | ||
| EPS: | $1.08 compared to $0.79 |
| Dividend Payments: | $19.2 million | ||
| Stock Repurchases: | $20.0 million $342.8 million remaining in authorization |
Q4 and Full-Year 2020 Outlook
| Q4 2020 Revenue: | $720 to $750 million; +23 to 29% Approximately +1% fx impact | ||
| Q4 2020 EPS: | $1.10 to $1.20; +53 to 67% | ||
| 2020 Revenue: | $2.55 to $2.58 billion; +6 to 7% Approximately (1%) fx impact | ||
| 2020 EPS: | $ 3.35 to $3.45; +8 to 11% |
"The growth in our core Nu Skin business is generating a great deal of energy ahead of our fourth-quarter ageLOC Boost and Nutricentials product introductions, and we
continue to see increasing demand in our manufacturing segment. This gives us confidence that we will have a strong fourth quarter with momentum heading into 2021 when we fully launch these products and continue to extend our socially enabled
business throughout our markets," Wood concluded.
Mark Lawrence, chief financial officer, added, "Given our third-quarter results above previous guidance and momentum in the
business, we are raising our guidance for the remainder of the year. As we look ahead to the fourth quarter, we anticipate revenue of $720 to $750 million, which includes an approximate 1 percent favorable foreign currency impact, and earnings
per share of $1.10 to $1.20. We are raising our 2020 revenue guidance to $2.55 to $2.58 billion, which reflects a negative foreign currency impact of approximately 1 percent, and we anticipate annual earnings per share of $3.35 to $3.45."
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 Nov. 18, 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, 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 September 30, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):
| Three Months Ended September 30, | Constant- Currency | |||||||||||||||
| 2020 | 2019 | Change | Change | |||||||||||||
| Nu Skin | ||||||||||||||||
| Mainland China | $ | 169,068 | $ | 173,974 | (3 | )% | (4 | )% | ||||||||
| Americas/Pacific | 151,465 | 83,635 | 81 | % | 90 | % | ||||||||||
| South Korea | 83,460 | 79,435 | 5 | % | 5 | % | ||||||||||
| Southeast Asia | 84,102 | 78,963 | 7 | % | 8 | % | ||||||||||
| Japan | 70,958 | 67,197 | 6 | % | 4 | % | ||||||||||
| EMEA | 61,411 | 35,742 | 72 | % | 67 | % | ||||||||||
| Hong Kong/Taiwan | 42,265 | 40,449 | 4 | % | - | |||||||||||
| Other | (314 | ) | (62 | ) | (406 | )% | (403 | )% | ||||||||
| Total Nu Skin | 662,415 | 559,333 | 18 | % | 19 | % | ||||||||||
| Manufacturing | 40,910 | 30,601 | 34 | % | 34 | % | ||||||||||
| Grow Tech | 22 | - | 100 | % | 100 | % | ||||||||||
| Total | $ | 703,347 | $ | 589,934 | 19 | % | 19 | % |
The following table sets forth revenue for the nine-month periods ended September 30, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):
| Nine Months Ended September 30, | Constant- Currency | |||||||||||||||
| 2020 | 2019 | Change | Change | |||||||||||||
| Nu Skin | ||||||||||||||||
| Mainland China | $ | 453,096 | $ | 567,795 | (20 | )% | (19 | )% | ||||||||
| Americas/Pacific | 353,957 | 262,932 | 35 | % | 43 | % | ||||||||||
| South Korea | 236,094 | 248,020 | (5 | )% | (2 | )% | ||||||||||
| Southeast Asia | 220,517 | 226,853 | (3 | )% | (1 | )% | ||||||||||
| Japan | 200,549 | 194,557 | 3 | % | 2 | % | ||||||||||
| EMEA | 147,590 | 120,960 | 22 | % | 23 | % | ||||||||||
| Hong Kong/Taiwan | 115,253 | 124,719 | (8 | )% | (10 | )% | ||||||||||
| Other | 374 | (239 | ) | 256 | % | 256 | % | |||||||||
| Total Nu Skin | 1,727,430 | 1,745,597 | (1 | )% | 1 | % | ||||||||||
| Manufacturing | 105,975 | 91,430 | 16 | % | 16 | % | ||||||||||
| Grow Tech | 336 | 30 | 1,020 | % | 1,020 | % | ||||||||||
| Total | $ | 1,833,741 | $ | 1,837,057 | - | 2 | % |
The Company's Customers and Sales Leaders statistics by segment as of September 30, 2020 and 2019 are presented in the following table:
| As of September 30, 2020 | As of September 30, 2019 | % Increase (Decrease) | ||||||||||||||||||||||
| Customers | Sales Leaders | Customers | Sales Leaders | Customers | Sales Leaders | |||||||||||||||||||
| Mainland China | 341,386 | 20,970 | 317,257 | 23,776 | 8 | % | (12 | )% | ||||||||||||||||
| Americas/Pacific | 438,889 | 14,400 | 229,013 | 7,760 | 92 | % | 86 | % | ||||||||||||||||
| South Korea | 164,256 | 7,973 | 169,589 | 7,363 | (3 | )% | 8 | % | ||||||||||||||||
| Southeast Asia | 163,536 | 8,357 | 145,845 | 7,936 | 12 | % | 5 | % | ||||||||||||||||
| Japan | 126,896 | 6,523 | 128,373 | 5,964 | (1 | )% | 9 | % | ||||||||||||||||
| EMEA | 235,202 | 6,226 | 147,758 | 4,060 | 59 | % | 53 | % | ||||||||||||||||
| Hong Kong/Taiwan | 69,346 | 4,067 | 68,862 | 4,231 | 1 | % | (4 | )% | ||||||||||||||||
| Total | 1,539,511 | 68,516 | 1,206,697 | 61,090 | 28 | % | 12 | % |
"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, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenue | $ | 703,347 | $ | 589,934 | $ | 1,833,741 | $ | 1,837,057 | ||||||||
| Cost of sales | 183,374 | 140,162 | 463,277 | 440,854 | ||||||||||||
| Gross profit | 519,973 | 449,772 | 1,370,464 | 1,396,203 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling expenses | 280,695 | 231,937 | 735,365 | 727,473 | ||||||||||||
| General and administrative expenses | 165,050 | 147,943 | 466,232 | 455,983 | ||||||||||||
| Total operating expenses | 445,745 | 379,880 | 1,201,597 | 1,183,456 | ||||||||||||
| Operating income | 74,228 | 69,892 | 168,867 | 212,747 | ||||||||||||
| Other income (expense), net | 525 | (4,979 | ) | (4,068 | ) | (11,153 | ) | |||||||||
| Income before provision for income taxes | 74,753 | 64,913 | 164,799 | 201,594 | ||||||||||||
| Provision for income taxes | 18,446 | 20,823 | 46,911 | 68,153 | ||||||||||||
| Net income | $ | 56,307 | $ | 44,090 | $ | 117,888 | $ | 133,441 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 1.10 | $ | 0.79 | $ | 2.24 | $ | 2.40 | ||||||||
| Diluted | $ | 1.08 | $ | 0.79 | $ | 2.23 | $ | 2.39 | ||||||||
| Weighted-average common shares outstanding (000s): | ||||||||||||||||
| Basic | 51,308 | 55,548 | 52,741 | 55,507 | ||||||||||||
| Diluted | 52,243 | 55,788 | 52,906 | 55,950 |
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
| September 30, 2020 | December 31, 2019 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 366,710 | $ | 335,630 | ||||
| Current investments | 11,301 | 8,413 | ||||||
| Accounts receivable, net | 60,016 | 50,378 | ||||||
| Inventories, net | 270,319 | 275,891 | ||||||
| Prepaid expenses and other | 63,916 | 69,854 | ||||||
| Total current assets | 772,262 | 740,166 | ||||||
| Property and equipment, net | 456,083 | 453,604 | ||||||
| Right-of-use assets | 165,749 | 144,326 | ||||||
| Goodwill | 196,573 | 196,573 | ||||||
| Other intangible assets, net | 74,391 | 80,321 | ||||||
| Other assets | 151,653 | 154,016 | ||||||
| Total assets | $ | 1,816,711 | $ | 1,769,006 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 55,298 | $ | 38,979 | ||||
| Accrued expenses | 381,052 | 290,281 | ||||||
| Current portion of long-term debt | 30,000 | 27,500 | ||||||
| Total current liabilities | 466,350 | 356,760 | ||||||
| Operating lease liabilities | 121,439 | 105,701 | ||||||
| Long-term debt | 312,664 | 334,461 | ||||||
| Other liabilities | 88,785 | 96,795 | ||||||
| Total liabilities | 989,238 | 893,717 | ||||||
| Stockholders' equity: | ||||||||
| Class A common stock | 91 | 91 | ||||||
| Additional paid-in capital | 570,491 | 557,544 | ||||||
| Treasury stock, at cost | (1,446,374 | ) | (1,324,826 | ) | ||||
| Accumulated other comprehensive loss | (83,108 | ) | (85,292 | ) | ||||
| Retained earnings | 1,786,373 | 1,727,772 | ||||||
| Total stockholders' equity | 827,473 | 875,289 | ||||||
| Total liabilities and stockholders' equity | $ | 1,816,711 | $ | 1,769,006 |
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577