PR Newswire | Feb 10, 2021 08:02PM EST

Growth Of 94 Percent

02/10 19:02 CST

Nu Skin Enterprises Reports Fourth-Quarter Revenue Growth Of 28 Percent And EPS Growth Of 94 PercentCompany provides strong initial 2021 outlook PROVO, Utah, Feb. 10, 2021

PROVO, Utah, Feb. 10, 2021 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced fourth-quarter 2020 results, achieving 28 percent revenue growth and 94 percent earnings per share (EPS) growth. For the full year, revenue increased seven percent and EPS increased 17 percent. In addition, the company is projecting five to nine percent revenue growth and EPS of $3.80 to $4.10 in 2021.

Executive SummaryQ4 2020 vs. Prior-year Quarter

$748.2 million; +28%Revenue: ? +4% fx impact

Earnings Per Share (EPS):$1.40; +94%

Sales Leaders: 70,435; +29%

Customers: 1,557,302; +34%

2020 Annual vs. 2019

$2.58 billion; +7% Revenue: ? Less than (1%) fx impact

Earnings Per Share$3.63; +17% (EPS):

"Our strong fourth-quarter results were driven by exceptional customer growth of 34 percent compared to the prior year," said Ritch Wood, chief executive officer. "We grew revenue in each of our reporting segments with particular strength in the West markets where our brand affiliates have more broadly adopted social commerce to share our products. The successful Boost and Nutricentials product introductions helped generate 28 percent revenue and 29 percent sales leader growth in the quarter. In addition, our manufacturing segment continued to generate strong results, posting 42 percent revenue growth in the quarter and playing a critical role in our ability to keep product in stock, even with increased demand and global supply chain constraints.

"I am proud of the work and execution of our entire team, especially our global sales force, as we grew both revenue and earnings amidst the uncertainty of the pandemic. We strengthened our balance sheet, repurchased more than five million shares of stock, innovated in our product pipeline, enhanced our digital capabilities and established a path for double-digit earnings growth going forward," concluded Wood.

Q4 2020 Year-over-year Operating Results

$748.2 million compared to $583.4 million Revenue: ? +4% fx impact

74.0% compared to 75.9% Gross Margin: ? Nu Skin business was 76.5% compared to 78.5% ? Impacted by increased freight charges and geographic mix

38.0% compared to 39.1% Selling Expenses: ? Nu Skin business was 40.3% compared to 41.3%

G&A Expenses: 24.1% compared to 27.4%

Operating Margin: 11.9% compared to 9.4%

Other Income / $2.7 million compared to ($1.1) million (Expense):

19.6% compared to 25.1% Income Tax Rate: ? Benefited by geographic mix

EPS: $1.40 compared to $0.72

Stockholder Value

Dividend Payments:$19.1 million

$17.0 million Stock Repurchases: ? $325.8 million remaining in authorization

Q1 and Full-year 2021 Outlook

$610 to $640 million; +18 to 24% Q1 2021 Revenue: ? Approximately +3% fx impact

Q1 2021 EPS: $0.65 to $0.75; +81 to 108%

$2.71 to $2.81 billion; +5 to 9% 2021 Revenue: ? Approximately +2 to 3% fx impact

2021 EPS: $3.80 to $4.10; +5 to 13%

"We expect a strong 2021 driven by our robust product pipeline and digital initiatives combined with steady growth in both our customers and sales leaders," continued Wood. "We plan to expand our customer reach through the Boost and Nutricentials launches in the first half and the introduction of our new product innovations in the second half. We remain focused on balancing our geographic profile through the expansion of our social commerce business and our manufacturing segment. We are forecasting high single-digit revenue growth and expect solid improvement in our operating margin, together driving toward a double-digit increase in earnings per share. Additionally, we increased our quarterly dividend for the 20th consecutive year, a remarkable feat that demonstrates the durability of the Nu Skin business model."

Mark Lawrence, chief financial officer, added, "Our guidance reflects the strong momentum coming out of 2020 and our focused strategy for 2021. Looking to the first quarter, we anticipate revenue of $610 to $640 million, a growth of 18 to 24 percent including an approximate three percent favorable foreign currency impact. We project earnings per share of $0.65 to $0.75, approximately double the prior year. For our initial full-year 2021 guidance, we anticipate revenue of $2.71 to $2.81 billion, reflecting a positive foreign currency impact of approximately two to three percent. We anticipate annual earnings per share of $3.80 to $4.10."

Investor DayThe Nu Skin Enterprises management team will host an investor day event Feb. 11 at noon (ET). Those wishing to access the webcast, as well as the information presented, can visit the Investor Relations page on the company's website at ir.nuskin.com. A replay of the event will be available at the same URL through Feb. 25, 2021.

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 pipeline and product launches, customers and sales leaders, strategies and initiatives; projections regarding revenue, operating margin, 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," "anticipate," "project," "outlook," "guidance," "plan," "forecast," "expand," "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:

* risk that epidemics, including the ongoing COVID-19 pandemic, and other crises could negatively impact our business; * adverse publicity related to the company's business, products, industry or any legal actions or complaints by the company's sales force or others; * risk that direct selling laws and regulations in any of the company's markets, including the United States and Mainland China, may be modified, interpreted or enforced in a manner that results in negative changes to the company's business model or negatively impacts its revenue, sales force or business, including through the interruption of sales activities, loss of licenses, imposition of fines, or any other adverse actions or events; * any failure of current or planned initiatives or products to generate interest among the company's sales force and customers and generate sponsoring and selling activities on a sustained basis; * political, legal, tax and regulatory uncertainties associated with operating in international markets, including Mainland China; * uncertainty regarding meeting restrictions and other government scrutiny in Mainland China, as well as negative media and consumer sentiment in Mainland China on our business operations and results; * risk of foreign-currency fluctuations and the currency translation impact on the company's business associated with these fluctuations; * uncertainties regarding the future financial performance of the businesses the company has acquired; * risks related to accurately predicting, delivering or maintaining sufficient quantities of products to support planned initiatives or launch strategies, and increased risk of inventory write-offs if the company over-forecasts demand for a product or changes its planned initiatives or launch strategies; * regulatory risks associated with the company's products, which could require the company to modify its claims or inhibit its ability to import or continue selling a product in a market if the product is determined to be a medical device or if the company is unable to register the product in a timely manner under applicable regulatory requirements; * unpredictable economic conditions and events globally, including trade policies and tariffs; * the company's future tax-planning initiatives; any prospective or retrospective increases in duties on the company's products imported into the company's markets outside of the United States; and any adverse results of tax audits or unfavorable changes to tax laws in the company's various markets; and * continued competitive pressures in the company's markets.

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 December 31, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):

Three Months Ended Constant- Currency December 31,

2020 2019 Change Change

Nu Skin

Mainland China $ 172,442 $ 154,731 11% 5%

Americas/Pacific 157,984 86,146 83% 86%

South Korea 90,384 81,958 10% 5%

Southeast Asia 82,191 74,767 10% 10%

Japan 73,132 65,482 12% 7%

EMEA 82,656 46,205 79% 68%

Hong Kong/Taiwan 45,864 41,616 10% 5%

Other (391) 1,860 (121)% (121)%

Total Nu Skin 704,262 552,765 27% 23%

Manufacturing 43,364 30,487 42% 42%

Grow Tech 567 107 430% 430%

Total $ 748,193 $ 583,359 28% 24%

The following table sets forth revenue for the years ended December 31, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):

Year Ended Constant- Currency December 31,

2020 2019 Change Change

Nu Skin

Mainland China $ 625,538 $ 722,526 (13)% (14)%

Americas/Pacific 511,941 349,078 47% 53%

South Korea 326,478 329,978 (1)% -

Southeast Asia 302,708 301,620 - 1%

Japan 273,681 260,039 5% 3%

EMEA 230,246 167,165 38% 35%

Hong Kong/Taiwan 161,117 166,335 (3)% (6)%

Other (17) 1,621 (101)% (101)%

Total Nu Skin 2,431,692 2,298,362 6% 6%

Manufacturing 149,339 121,917 22% 22%

Grow Tech 903 137 559% 559%

Total $ 2,581,934 $ 2,420,416 7% 7%

The Company's Customers and Sales Leaders statistics by segment as of December 31, 2020 and 2019 are presented in the following table:

2020 2019 % Increase (Decrease)

Customers Sales Customers Sales Customers Sales Leaders Leaders Leaders

Mainland China 381,460 21,990 292,812 17,987 30% 22%

Americas/Pacific 404,955 14,439 220,216 7,607 84% 90%

South Korea 158,953 7,059 168,972 7,251 (6)% (3)%

Southeast Asia 154,355 8,903 136,349 7,480 13% 19%

Japan 128,400 6,318 125,557 5,916 2% 7%

EMEA 258,587 7,063 153,330 4,619 69% 53%

Hong Kong/Taiwan 70,592 4,663 65,669 3,900 7% 20%

Total 1,557,302 70,435 1,162,905 54,760 34% 29%

"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 Years Ended

December 31, December 31,

2020 2019 2020 2019

Revenue $ 748,193 $ 583,359 $ 2,581,934 $ 2,420,416

Cost of sales 194,751 140,566 658,028 581,420

Gross profit 553,442 442,793 1,923,906 1,838,996

Operating expenses:

Selling expenses 284,129 228,127 1,019,494 955,600

General and administrative expenses 180,616 159,987 646,848 615,970

Total operating expenses 464,745 388,114 1,666,342 1,571,570

Operating income 88,697 54,679 257,564 267,426

Other income (expense), net 2,736 (1,101) (1,332) (12,254)

Income before provision for income taxes 91,433 53,578 256,232 255,172

Provision for income taxes 17,966 13,466 64,877 81,619

Net income $ 73,467 $ 40,112 $ 191,355 $ 173,553

Net income per share:

Basic $ 1.44 $ 0.72 $ 3.66 $ 3.13

Diluted $ 1.40 $ 0.72 $ 3.63 $ 3.10

Weighted-average common shares outstanding (000s):

Basic 50,971 55,548 52,296 55,518

Diluted 52,403 55,807 52,765 55,927

NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)

December 31, December 31, 2020 2019

ASSETS

Current assets:

Cash and cash equivalents $ 402,683 $ 335,630

Current investments 21,216 8,413

Accounts receivable, net 63,370 50,378

Inventories, net 314,366 275,891

Prepaid expenses and other 101,563 69,854

Total current assets 903,198 740,166

Property and equipment, net 468,181 453,604

Operating lease right-of-use assets 155,104 144,326

Goodwill 202,979 196,573

Other intangible assets, net 89,532 80,321

Other assets 138,082 154,016

Total assets $ 1,957,076 $ 1,769,006

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 66,174 $ 38,979

Accrued expenses 446,682 290,281

Current portion of long-term debt 30,000 27,500

Total current liabilities 542,856 356,760

Operating lease liabilities 112,275 105,701

Long-term debt 305,393 334,461

Other liabilities 102,281 96,795

Total liabilities 1,062,805 893,717

Stockholders' equity:

Class A common stock 91 91

Additional paid-in capital 579,801 557,544

Treasury stock, at cost (1,461,593) (1,324,826)

Accumulated other comprehensive loss (64,768) (85,292)

Retained earnings 1,840,740 1,727,772

Total stockholders' equity 894,271 875,289

Total liabilities and stockholders' equity $ 1,957,076 $ 1,769,006

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SOURCE Nu Skin Enterprises