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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nu Skin Enterprises Inc | NYSE:NUS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.34 | -2.45% | 13.52 | 13.86 | 13.44 | 13.82 | 38,522 | 15:18:32 |
☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________
|
NU SKIN ENTERPRISES, INC.
|
||
(Exact name of registrant as specified in its charter)
|
Delaware
|
87-0565309
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
75 West Center Street
Provo, Utah 84601
|
||
(Address of principal executive offices, including zip code)
|
(801) 345-1000
|
||
(Registrant’s telephone number, including area code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Class A Common Stock, $.001 par value
|
NUS
|
New York Stock Exchange
|
Large accelerated filer ☑
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
|
Page
|
||
Part I.
|
|||
Item 1.
|
|||
1
|
|||
2
|
|||
3
|
|||
4
|
|||
6
|
|||
7
|
|||
Item 2.
|
15
|
||
Item 3.
|
22
|
||
Item 4.
|
22
|
||
Part II.
|
|||
Item 1.
|
23
|
||
Item 1A.
|
23
|
||
Item 2.
|
25
|
||
Item 3.
|
25
|
||
Item 4.
|
25
|
||
Item 5.
|
25
|
||
Item 6.
|
26
|
||
27
|
|
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
|
||||||
Commitments and contingencies (Note 10)
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Class A common stock – 500 million shares authorized, $0.001 par value, 90.6 million shares issued
|
91
|
91
|
||||||
Additional paid-in capital
|
563,115
|
557,544
|
||||||
Treasury stock, at cost – 39.1 million and 35.0 million shares
|
(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
|
|
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 (Note 6):
|
||||||||||||||||
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
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net income
|
$
|
41,851
|
$
|
46,349
|
$
|
61,581
|
$
|
89,351
|
||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment, net of taxes of $8 and $362 for the three months ended June 30, 2020 and 2019, respectively, and $6 and $217 for the six months ended June 30, 2020 and 2019, respectively
|
6,848
|
(5,482
|
)
|
(8,149
|
)
|
(1,342
|
)
|
|||||||||
Comprehensive income
|
$
|
48,699
|
$
|
40,867
|
$
|
53,432
|
$
|
88,009
|
|
For the Three Months Ended June 30, 2020
|
|||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at April 1, 2020
|
$
|
91
|
$
|
557,916
|
$
|
(1,384,036
|
)
|
$
|
(100,289
|
)
|
$
|
1,726,816
|
$
|
800,498
|
||||||||||
Net income
|
—
|
—
|
—
|
—
|
41,851
|
41,851
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
—
|
—
|
—
|
6,848
|
—
|
6,848
|
||||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
(46,481
|
)
|
—
|
—
|
(46,481
|
)
|
||||||||||||||||
Exercise of employee stock options (0.2 million shares)/vesting of stock awards
|
—
|
330
|
3,453
|
—
|
—
|
3,783
|
||||||||||||||||||
Stock-based compensation
|
—
|
4,869
|
—
|
—
|
—
|
4,869
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(19,356
|
)
|
(19,356
|
)
|
||||||||||||||||
Balance at June 30, 2020
|
$
|
91
|
$
|
563,115
|
$
|
(1,427,064
|
)
|
$
|
(93,441
|
)
|
$
|
1,749,311
|
$
|
792,012
|
|
For the Three Months Ended June 30, 2019
|
|||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at April 1, 2019
|
$
|
91
|
$
|
553,270
|
$
|
(1,325,251
|
)
|
$
|
(75,794
|
)
|
$
|
1,658,879
|
$
|
811,195
|
||||||||||
Net income
|
—
|
—
|
—
|
—
|
46,349
|
46,349
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(5,482
|
)
|
—
|
(5,482
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Exercise of employee stock options (— million shares)/vesting of stock awards
|
—
|
(569
|
)
|
417
|
—
|
—
|
(152
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
3,593
|
—
|
—
|
—
|
3,593
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(20,553
|
)
|
(20,553
|
)
|
||||||||||||||||
Balance at June 30, 2019
|
$
|
91
|
$
|
556,294
|
$
|
(1,324,834
|
)
|
$
|
(81,276
|
)
|
$
|
1,684,675
|
$
|
834,950
|
|
For the Six Months Ended June 30, 2020
|
|||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at January 1, 2020
|
$
|
91
|
$
|
557,544
|
$
|
(1,324,826
|
)
|
$
|
(85,292
|
)
|
$
|
1,727,772
|
$
|
875,289
|
||||||||||
Net income
|
—
|
—
|
—
|
—
|
61,581
|
61,581
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(8,149
|
)
|
—
|
(8,149
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
(107,367
|
)
|
—
|
—
|
(107,367
|
)
|
||||||||||||||||
Exercise of employee stock options (0.3 million shares)/vesting of stock awards
|
—
|
(2,753
|
)
|
5,129
|
—
|
—
|
2,376
|
|||||||||||||||||
Stock-based compensation
|
—
|
8,324
|
—
|
—
|
—
|
8,324
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(40,042
|
)
|
(40,042
|
)
|
||||||||||||||||
Balance at June 30, 2020
|
$
|
91
|
$
|
563,115
|
$
|
(1,427,064
|
)
|
$
|
(93,441
|
)
|
$
|
1,749,311
|
$
|
792,012
|
|
For the Six Months Ended June 30, 2019
|
|||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at January 1, 2019
|
$
|
91
|
$
|
552,564
|
$
|
(1,326,605
|
)
|
$
|
(79,934
|
)
|
$
|
1,635,751
|
$
|
781,867
|
||||||||||
Cumulative effect adjustment from adoption of ASC 842
|
—
|
—
|
—
|
—
|
657
|
657
|
||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
89,351
|
89,351
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(1,342
|
)
|
—
|
(1,342
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
(825
|
)
|
—
|
—
|
(825
|
)
|
||||||||||||||||
Exercise of employee stock options (0.2 million shares)/vesting of stock awards
|
—
|
(4,904
|
)
|
2,596
|
—
|
—
|
(2,308
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
8,634
|
—
|
—
|
—
|
8,634
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(41,084
|
)
|
(41,084
|
)
|
||||||||||||||||
Balance at June 30, 2019
|
$
|
91
|
$
|
556,294
|
$
|
(1,324,834
|
)
|
$
|
(81,276
|
)
|
$
|
1,684,675
|
$
|
834,950
|
|
Six Months Ended
June 30,
|
|||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
61,581
|
$
|
89,351
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
37,359
|
38,659
|
||||||
Foreign currency losses
|
1,347
|
1,355
|
||||||
Stock-based compensation
|
8,324
|
8,634
|
||||||
Loss on disposal of assets
|
2,580
|
—
|
||||||
Deferred taxes
|
506
|
5,854
|
||||||
Non-cash lease expense
|
22,238
|
22,505
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(13,343
|
)
|
(8,220
|
)
|
||||
Inventories, net
|
9,951
|
3,085
|
||||||
Prepaid expenses and other
|
(5,025
|
)
|
(13,245
|
)
|
||||
Other assets
|
(41,168
|
)
|
(14,892
|
)
|
||||
Accounts payable
|
13,063
|
1,606
|
||||||
Accrued expenses
|
62,932
|
(66,152
|
)
|
|||||
Other liabilities
|
5,736
|
5,937
|
||||||
Net cash provided by operating activities
|
166,081
|
74,477
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(28,692
|
)
|
(29,214
|
)
|
||||
Proceeds on investment sales
|
4,234
|
7,615
|
||||||
Purchases of investments
|
(4,031
|
)
|
(4,774
|
)
|
||||
Acquisitions and investments in equity investees
|
—
|
(8,073
|
)
|
|||||
Net cash used in investing activities
|
(28,489
|
)
|
(34,446
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards
|
2,376
|
(2,308
|
)
|
|||||
Payments of debt
|
(62,500
|
)
|
(152,455
|
)
|
||||
Payment of cash dividends
|
(40,042
|
)
|
(41,084
|
)
|
||||
Proceeds from debt
|
115,000
|
130,000
|
||||||
Repurchases of shares of common stock
|
(107,367
|
)
|
(825
|
)
|
||||
Net cash used in financing activities
|
(92,533
|
)
|
(66,672
|
)
|
||||
Effect of exchange rate changes on cash
|
(5,177
|
)
|
362
|
|||||
Net increase (decrease) in cash and cash equivalents
|
39,882
|
(26,279
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
335,630
|
386,911
|
||||||
Cash and cash equivalents, end of period
|
$
|
375,512
|
$
|
360,632
|
1. |
The Company
|
2. |
Summary of Significant Accounting Policies
|
|
June 30,
2020
|
December 31,
2019
|
||||||
Raw materials
|
$
|
92,460
|
$
|
87,942
|
||||
Finished goods
|
169,509
|
187,949
|
||||||
Total Inventory, net
|
$
|
261,969
|
$
|
275,891
|
3. |
Goodwill
|
|
June 30,
2020
|
December 31,
2019
|
||||||
Nu Skin
|
||||||||
Mainland China
|
$
|
32,179
|
$
|
32,179
|
||||
Americas/Pacific
|
9,449
|
9,449
|
||||||
South Korea
|
29,261
|
29,261
|
||||||
Southeast Asia
|
18,537
|
18,537
|
||||||
Japan
|
16,019
|
16,019
|
||||||
EMEA
|
2,875
|
2,875
|
||||||
Hong Kong/Taiwan
|
6,634
|
6,634
|
||||||
Manufacturing
|
72,469
|
72,469
|
||||||
Grow Tech
|
9,150
|
9,150
|
||||||
Total
|
$
|
196,573
|
$
|
196,573
|
4. |
Debt
|
Facility or Arrangement
|
|
Original
Principal Amount
|
|
Balance as of
June 30, 2020(1)(2)
|
|
Balance as of
December 31, 2019(2)
|
|
Interest Rate
|
|
Repayment Terms
|
|||
Credit Agreement term loan facility
|
|
$
|
400.0 million
|
|
$
|
352.5 million
|
|
$
|
365.0 million
|
|
Variable 30 day: 2.43%
|
|
35% of the principal amount is payable in increasing quarterly installments over a five-year period that began on June 30, 2018, with the remainder payable at the end of the five-year term.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Agreement revolving credit facility
|
|
|
|
|
$
|
65.0 million
|
|
$
|
—
|
|
Variable 30 day: 2.43%
|
|
Revolving line of credit expires April 18, 2023.
|
(1) |
As of June 30, 2020, the current portion of the Company’s debt (i.e. becoming due in the next 12 months) included $30.0 million of the balance of its term loan under the Credit Agreement. The Company has classified the $65.0 million borrowed under the revolving line of credit as short term because it is the Company’s intention to use the line of credit to borrow and pay back funds over short periods of time.
|
(2) |
The carrying value of the debt reflects the amounts stated in the above table less debt issuance costs of $2.6 million and $3.0 million as of June 30, 2020 and December 31, 2019, respectively, related to the Credit Agreement, which are not reflected in this table.
|
5. |
Leases
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Operating lease cost
|
$
|
12,869
|
$
|
12,417
|
$
|
26,005
|
$
|
25,278
|
||||||||
Variable lease cost
|
410
|
1,105
|
1,384
|
2,157
|
||||||||||||
Short-term lease cost
|
95
|
52
|
140
|
104
|
||||||||||||
Sublease income
|
(1,058
|
)
|
(1,575
|
)
|
(2,189
|
)
|
(3,168
|
)
|
||||||||
Total lease expense
|
$
|
12,316
|
$
|
11,999
|
$
|
25,340
|
$
|
24,371
|
|
Six Months Ended
June 30,
|
|||||||
2020
|
2019
|
|||||||
Operating cash outflow from operating leases
|
$
|
25,955
|
$
|
26,570
|
||||
Right-of-use assets obtained in exchange for lease obligations
|
$
|
31,178
|
$
|
140,585
|
Year Ending December 31,
|
Operating
leases
|
|||
2020
|
$
|
27,085
|
||
2021
|
46,780
|
|||
2022
|
30,950
|
|||
2023
|
21,409
|
|||
2024
|
16,604
|
|||
Thereafter
|
27,835
|
|||
Total
|
170,663
|
|||
Less: Finance charges
|
26,054
|
|||
Total principal liability
|
$
|
144,609
|
6. |
Capital Stock
|
7. |
Fair Value
|
◾ |
Level 1 – quoted prices in active markets for identical assets or liabilities;
|
◾ |
Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;
|
◾ |
Level 3 – unobservable inputs based on the Company’s own assumptions.
|
|
Fair Value at June 30, 2020
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets:
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
68,422
|
$
|
—
|
$
|
—
|
$
|
68,422
|
||||||||
Other long-term assets
|
205
|
—
|
—
|
205
|
||||||||||||
Life insurance contracts
|
—
|
—
|
39,967
|
39,967
|
||||||||||||
Total
|
$
|
68,627
|
$
|
—
|
$
|
39,967
|
$
|
108,594
|
|
Fair Value at December 31, 2019
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets:
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
54,642
|
$
|
—
|
$
|
—
|
$
|
54,642
|
||||||||
Other long-term assets
|
3,216
|
—
|
—
|
3,216
|
||||||||||||
Life insurance contracts
|
—
|
—
|
41,707
|
41,707
|
||||||||||||
Total
|
$
|
57,858
|
$
|
—
|
$
|
41,707
|
$
|
99,565
|
Beginning balance at January 1, 2020
|
$
|
41,707
|
||
Actual return on plan assets
|
(1,740
|
)
|
||
Purchase and issuances
|
—
|
|||
Sales and settlements
|
—
|
|||
Transfers into Level 3
|
—
|
|||
Ending balance at June 30, 2020
|
$
|
39,967
|
8. |
Income Taxes
|
9. |
Segment Information
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
146,332
|
$
|
185,333
|
$
|
284,028
|
$
|
393,821
|
||||||||
Americas/Pacific
|
127,919
|
92,841
|
202,492
|
179,297
|
||||||||||||
South Korea
|
76,915
|
84,732
|
152,634
|
168,585
|
||||||||||||
Southeast Asia
|
66,829
|
75,395
|
136,415
|
147,890
|
||||||||||||
Japan
|
68,291
|
65,251
|
129,591
|
127,360
|
||||||||||||
EMEA
|
50,776
|
43,400
|
86,179
|
85,218
|
||||||||||||
Hong Kong/Taiwan
|
37,161
|
43,712
|
72,988
|
84,270
|
||||||||||||
Other
|
(85
|
)
|
1,249
|
688
|
(177
|
)
|
||||||||||
Total Nu Skin
|
574,138
|
591,913
|
1,065,015
|
1,186,264
|
||||||||||||
Manufacturing (1)
|
37,918
|
31,557
|
65,065
|
60,829
|
||||||||||||
Grow Tech
|
310
|
30
|
314
|
30
|
||||||||||||
Total
|
$
|
612,366
|
$
|
623,500
|
$
|
1,130,394
|
$
|
1,247,123
|
(1) |
The Manufacturing segment had $6.9 million and $6.5 million of intersegment revenue for the three months ended June 30, 2020 and 2019, respectively, and $13.3 million and $12.4 million, for the six months ended June 30, 2020 and 2019, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above.
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
43,668
|
$
|
51,087
|
$
|
81,055
|
$
|
110,254
|
||||||||
Americas/Pacific
|
24,343
|
16,420
|
34,928
|
28,439
|
||||||||||||
South Korea
|
24,090
|
25,979
|
48,189
|
51,647
|
||||||||||||
Southeast Asia
|
16,977
|
20,840
|
33,695
|
38,832
|
||||||||||||
Japan
|
16,455
|
15,823
|
31,047
|
29,929
|
||||||||||||
EMEA
|
3,342
|
3,234
|
3,973
|
4,585
|
||||||||||||
Hong Kong/Taiwan
|
6,839
|
9,217
|
13,777
|
16,691
|
||||||||||||
Nu Skin contribution
|
135,714
|
142,600
|
246,664
|
280,377
|
||||||||||||
Manufacturing
|
5,402
|
3,375
|
8,251
|
7,021
|
||||||||||||
Grow Tech
|
(5,487
|
)
|
(4,582
|
)
|
(12,337
|
)
|
(8,211
|
)
|
||||||||
Total segment contribution
|
135,629
|
141,393
|
242,578
|
279,187
|
||||||||||||
Corporate and other
|
(77,555
|
)
|
(67,191
|
)
|
(147,939
|
)
|
(136,332
|
)
|
||||||||
Operating income
|
58,074
|
74,202
|
94,639
|
142,855
|
||||||||||||
Other income (expense)
|
1,581
|
(3,326
|
)
|
(4,593
|
)
|
(6,174
|
)
|
|||||||||
Income before provision for income taxes
|
$
|
59,655
|
$
|
70,876
|
$
|
90,046
|
$
|
136,681
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
2,558
|
$
|
2,909
|
$
|
4,982
|
$
|
6,025
|
||||||||
Americas/Pacific
|
253
|
206
|
498
|
420
|
||||||||||||
South Korea
|
918
|
1,358
|
1,975
|
2,882
|
||||||||||||
Southeast Asia
|
444
|
462
|
931
|
939
|
||||||||||||
Japan
|
834
|
957
|
1,306
|
2,005
|
||||||||||||
EMEA
|
242
|
272
|
500
|
712
|
||||||||||||
Hong Kong/Taiwan
|
618
|
537
|
1,257
|
1,053
|
||||||||||||
Total Nu Skin
|
5,867
|
6,701
|
11,449
|
14,036
|
||||||||||||
Manufacturing
|
2,062
|
1,631
|
3,877
|
3,205
|
||||||||||||
Grow Tech
|
1,248
|
945
|
2,473
|
1,820
|
||||||||||||
Corporate and other
|
9,087
|
9,775
|
19,560
|
19,598
|
||||||||||||
Total
|
$
|
18,264
|
$
|
19,052
|
$
|
37,359
|
$
|
38,659
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
716
|
$
|
1,033
|
$
|
3,577
|
$
|
2,714
|
||||||||
Americas/Pacific
|
72
|
473
|
766
|
747
|
||||||||||||
South Korea
|
195
|
30
|
364
|
79
|
||||||||||||
Southeast Asia
|
6
|
225
|
639
|
319
|
||||||||||||
Japan
|
1,491
|
946
|
1,648
|
1,118
|
||||||||||||
EMEA
|
633
|
42
|
660
|
76
|
||||||||||||
Hong Kong/Taiwan
|
12
|
1,091
|
16
|
1,554
|
||||||||||||
Total Nu Skin
|
3,125
|
3,840
|
7,670
|
6,607
|
||||||||||||
Manufacturing
|
603
|
1,579
|
11,108
|
3,181
|
||||||||||||
Grow Tech
|
239
|
2,066
|
417
|
5,051
|
||||||||||||
Corporate and other
|
5,338
|
7,964
|
9,497
|
14,375
|
||||||||||||
Total
|
$
|
9,305
|
$
|
15,449
|
$
|
28,692
|
$
|
29,214
|
10. |
Commitments and Contingencies
|
11. |
Restructuring
|
Beginning balance at January 1, 2019
|
$
|
15,462
|
||
Amounts paid
|
(15,046
|
)
|
||
Adjustments
|
(416
|
)
|
||
Ending balance at March 31, 2019
|
$
|
—
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three Months Ended
June 30,
|
Constant-
Currency
|
Six Months Ended
June 30,
|
Constant-
Currency
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
Change(1)
|
2020
|
2019
|
Change
|
Change(1)
|
|||||||||||||||||||||||||
Nu Skin
|
||||||||||||||||||||||||||||||||
Mainland China
|
$
|
146,332
|
$
|
185,333
|
(21
|
)%
|
(18
|
)%
|
$
|
284,028
|
$
|
393,821
|
(28
|
)%
|
(25
|
)%
|
||||||||||||||||
Americas/Pacific
|
127,919
|
92,841
|
38
|
%
|
48
|
%
|
202,492
|
179,297
|
13
|
%
|
21
|
%
|
||||||||||||||||||||
South Korea
|
76,915
|
84,732
|
(9
|
)%
|
(5
|
)%
|
152,634
|
168,585
|
(9
|
)%
|
(5
|
)%
|
||||||||||||||||||||
Southeast Asia
|
66,829
|
75,395
|
(11
|
)%
|
(9
|
)%
|
136,415
|
147,890
|
(8
|
)%
|
(6
|
)%
|
||||||||||||||||||||
Japan
|
68,291
|
65,251
|
5
|
%
|
2
|
%
|
129,591
|
127,360
|
2
|
%
|
—
|
|||||||||||||||||||||
EMEA
|
50,776
|
43,400
|
17
|
%
|
21
|
%
|
86,179
|
85,218
|
1
|
%
|
4
|
%
|
||||||||||||||||||||
Hong Kong/Taiwan
|
37,161
|
43,712
|
(15
|
)%
|
(17
|
)%
|
72,988
|
84,270
|
(13
|
)%
|
(15
|
)%
|
||||||||||||||||||||
Other
|
(85
|
)
|
1,249
|
(107
|
)%
|
(107
|
)%
|
688
|
(177
|
)
|
(489
|
)%
|
(488
|
)%
|
||||||||||||||||||
Total Nu Skin
|
574,138
|
591,913
|
(3
|
)%
|
—
|
1,065,015
|
1,186,264
|
(10
|
)%
|
(7
|
)%
|
|||||||||||||||||||||
Manufacturing
|
37,918
|
31,557
|
20
|
%
|
20
|
%
|
65,065
|
60,829
|
7
|
%
|
7
|
%
|
||||||||||||||||||||
Grow Tech
|
310
|
30
|
933
|
%
|
933
|
%
|
314
|
30
|
947
|
%
|
947
|
%
|
||||||||||||||||||||
Total
|
$
|
612,366
|
$
|
623,500
|
(2
|
)%
|
1
|
%
|
$
|
1,130,394
|
$
|
1,247,123
|
(9
|
)%
|
(7
|
)%
|
(1) |
Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||
Nu Skin
|
||||||||||||||||||||||||
Mainland China
|
$
|
43,668
|
$
|
51,087
|
(15
|
)%
|
$
|
81,055
|
$
|
110,254
|
(26
|
)%
|
||||||||||||
Americas/Pacific
|
24,343
|
16,420
|
48
|
%
|
34,928
|
28,439
|
23
|
%
|
||||||||||||||||
South Korea
|
24,090
|
25,979
|
(7
|
)%
|
48,189
|
51,647
|
(7
|
)%
|
||||||||||||||||
Southeast Asia
|
16,977
|
20,840
|
(19
|
)%
|
33,695
|
38,832
|
(13
|
)%
|
||||||||||||||||
Japan
|
16,455
|
15,823
|
4
|
%
|
31,047
|
29,929
|
4
|
%
|
||||||||||||||||
EMEA
|
3,342
|
3,234
|
3
|
%
|
3,973
|
4,585
|
(13
|
)%
|
||||||||||||||||
Hong Kong/Taiwan
|
6,839
|
9,217
|
(26
|
)%
|
13,777
|
16,691
|
(17
|
)%
|
||||||||||||||||
Total Nu Skin
|
135,714
|
142,600
|
(5
|
)%
|
246,664
|
280,377
|
(12
|
)%
|
||||||||||||||||
Manufacturing
|
5,402
|
3,375
|
60
|
%
|
8,251
|
7,021
|
18
|
%
|
||||||||||||||||
Grow Tech
|
(5,487
|
)
|
(4,582
|
)
|
(20
|
)%
|
(12,337
|
)
|
(8,211
|
)
|
(50
|
)%
|
|
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
|
)%
|
● |
the expansion and upgrade of our facilities and equipment;
|
● |
purchases and expenditures for computer systems and equipment, software, and application development; and
|
● |
purchases of equipment and development of our technology in our Grow Tech initiative.
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
● |
the possibility that a government might ban or severely restrict our sales compensation and business models;
|
● |
the possibility that local civil unrest, political instability, or changes in diplomatic or trade relationships might disrupt our operations in one or more markets;
|
● |
the lack of well-established or reliable legal systems in certain areas where we operate;
|
● |
the presence of high inflation in the economies of international markets in which we operate;
|
● |
the possibility that a government authority might impose legal, tax, customs, or other financial burdens on us or our sales force, due, for example, to the structure of our operations in various markets;
|
● |
the possibility that a government authority might challenge the status of our sales force as independent contractors or impose employment or social taxes on our sales force; and
|
● |
the possibility that governments may impose currency remittance restrictions limiting our ability to repatriate cash.
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
(a)
|
(b)
|
(c)
|
(d)
|
||||||||
Period
|
Total
Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
the Plans or Programs
(in millions)(1)
|
||||||||
April 1 - 30, 2020
|
1,111,923
|
$
|
22.90
|
1,111,923
|
$
|
383.8
|
||||||
May 1 - 31, 2020
|
471,635
|
31.82
|
471,635
|
$
|
368.8
|
|||||||
June 1 - 30, 2020
|
155,856
|
38.52
|
155,856
|
$
|
362.8
|
|||||||
Total
|
1,739,414
|
$
|
26.72
|
1,739,414
|
(1) |
In August 2018, we announced that our board of directors approved a stock repurchase plan. Under this plan, our board of directors authorized the repurchase of up to $500 million of our outstanding Class A common stock on the open market or in privately negotiated transactions.
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
Exhibits
Regulation S-K
Number
|
Description
|
|
Third Amended and Restated 2010 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed June 3, 2020, file no. 333-238908).
|
||
Certification by Ritch N. Wood, Chief Executive Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification by Mark H. Lawrence, Chief Financial Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification by Ritch N. Wood, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
Certification by Mark H. Lawrence, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
NU SKIN ENTERPRISES, INC.
|
||
By:
|
/s/ Mark H. Lawrence
|
|
Mark H. Lawrence
|
||
Chief Financial Officer
|
||
(Duly Authorized Officer and Principal Financial Officer)
|
1 Year Nu Skin Enterprises Chart |
1 Month Nu Skin Enterprises Chart |
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