PR Newswire | May 5, 2021 04:07PM EDT

05/05 15:06 CDT

Nu Skin Enterprises Reports Record First-Quarter 2021 ResultsCompany announces first-quarter revenue growth of 31% and EPS growth of 153%,raises annual guidance PROVO, Utah, May 5, 2021

PROVO, Utah, May 5, 2021 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced record first-quarter 2021 revenue and earnings per share.

Executive SummaryQ1 2021 vs. Prior-year Quarter

$677.0 million; +31% Revenue: ? +6% fx impact or $29.6 million

Earnings Per Share (EPS):$0.91; +153%

Sales Leaders: 60,619; +22%

Customers: 1,517,260; +34%

"We are very pleased with a strong start to 2021 with our highest-ever first quarter revenue and earnings per share," said Ritch Wood, chief executive officer. "Our innovative beauty and wellness product initiatives powered by our social commerce business model led to 34 percent growth in our customer base over the prior year and a 22 percent increase in global sales leaders. We were recognized again by Euromonitor as the world's number one beauty device systems brand.* We continue to improve our geographic balance, driven by ongoing strong performance in the West, providing a more diversified and sustainable growth profile. Our manufacturing segment also achieved record results with 69 percent year-over-year revenue growth."

Ryan Napierski, president and CEO-elect, added, "We continue to make progress toward our vision of becoming the world's leading beauty and wellness company powered by our dynamic affiliate opportunity platform. We added innovative products to our portfolio with the launch of ageLOC Boost and Nutricentials Bioadaptives, and our markets are forecasting strong demand for new product innovations being introduced in the back half of the year. These include Beauty Focus Collagen+, which is the first product in a new beauty-from-within line, and ageLOC Meta, a metabolic health supplement and our next major Pharmanex product introduction. The West markets continue to lead out in adopting our social commerce business model with triple-digit growth. Our affiliates are leveraging this model to connect with more consumers and attract people interested in building their own socially enabled affiliate marketing business. In the East, we grew 14 percent in Japan and modestly in Mainland China and anticipate increased adoption of our social commerce strategy and digital tools."

Q1 2021 Year-over-year Operating Results

$677.0 million compared to $518.0 million Revenue: ? +6% fx impact

74.8% compared to 75.7% ? Nu Skin business was 77.8% compared to Gross Margin: 78.1% ? Impacted by growth in manufacturing segment

40.4% compared to 39.8% Selling Expenses: ? Nu Skin business was 43.4% compared to 42.0%

G&A Expenses: 25.1% compared to 28.9%

Operating Margin: 9.3% compared to 7.1%

Other Income / $1.6 million compared to ($6.2) million (Expense):

26.5% compared to 35.1% Income Tax Rate: ? Benefited by geographic mix

EPS: $0.91 compared to $0.36

Stockholder Value

Dividend Payments:$19.3 million

$50.4 million Stock Repurchases: ? $275.4 million remaining in authorization

Q2 and Full-year 2021 Outlook

$680 to $705 million; +11 to 15% Q2 2021 Revenue: ? Approximately +5% fx impact

Q2 2021 EPS: $0.97 to $1.07; +20 to 32%

$2.80 to $2.87 billion; +9 to 11% 2021 Revenue: ? Approximately +3 to 4% fx impact

2021 EPS: $4.05 to $4.30; +12 to 18%

Mark Lawrence, chief financial officer, added, "During the quarter, we continued our focus on generating shareholder value by improving operating margin through G&A optimization and leveraging our balance sheet to repurchase nearly one million shares. We continue to create synergistic value from our Rhyz manufacturing companies as they enabled the accelerated growth throughout the West. Given the strong start to the year, as well as the positive trends we have seen in customer and sales leader growth, we are increasing our annual revenue and EPS guidance."

About Nu Skin Enterprises, Inc.

Founded more than 35 years ago, Nu Skin Enterprises, Inc. (NSE) empowers innovative companies 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.

*Source Euromonitor International Limited; Retail Value RSP terms; all channels; 2017 to 2020. Beauty Systems are at-home Skin Care Beauty Devices that are exclusively paired or recommended to be used with a topical consumable of the same brand. Claim verification based on Euromonitor custom research and methodology conducted January-March of 2021. Sales of at-home skin care beauty devices includes sales of electric facial cleansers as defined in Passport database. This category does not include hair care/removal appliances, body shavers, and oral care appliances.

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 introductions, customers and sales leaders, affiliates, 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," "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 Company's revenue results by segment for the three-month periods ended March 31 are presented in the following table (in thousands).

Three Months Ended Constant-Currency March 31,

2021 2020 Change Change

Nu Skin

Mainland China $ 149,593 $ 137,696 9% 1%

Americas/Pacific 149,465 74,573 100% 97%

South Korea 81,131 75,719 7% -

EMEA 76,180 35,403 115% 98%

Japan 69,864 61,300 14% 11%

Southeast Asia 67,585 69,586 (3)% (5)%

Hong Kong/Taiwan 36,345 35,827 1% (3)%

Other 705 773 (9)% (9)%

Total Nu Skin 630,868 490,877 29% 22%

Manufacturing 45,985 27,147 69% 69%

Grow Tech 173 4 4,225% 4,225%

Total $ 677,026 $ 518,028 31% 25%

The company's Customers and Sales Leaders statistics by segment as of March 31, 2021 and 2020 are presented in the following table:

As of As of % Increase (Decrease) March 31, 2021 March 31, 2020

Customers Sales Customers Sales Customers Sales Leaders Leaders Leaders

Mainland 316,000 16,716 271,536 16,159 16% 3%China

Americas/ 407,413 12,340 214,139 6,930 90% 78%Pacific

South Korea 152,390 7,099 174,004 6,608 (12)% 7%

EMEA 296,001 7,950 140,344 4,237 111% 88%

Japan 126,525 6,131 119,784 5,635 6% 9%

Southeast 152,889 6,882 145,116 6,634 5% 4%Asia

Hong Kong/ 66,042 3,501 66,024 3,348 - 5%Taiwan

Total 1,517,260 60,619 1,130,947 49,551 34% 22%

"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

March 31,

2021 2020

Revenue $ 677,026 $ 518,028

Cost of sales 170,566 125,793

Gross profit 506,460 392,235

Operating expenses:

Selling expenses 273,746 206,042

General and administrative expenses 169,801 149,628

Total operating expenses 443,547 355,670

Operating income 62,913 36,565

Other income (expense), net 1,582 (6,174)

Income before provision for income taxes 64,495 30,391

Provision for income taxes 17,065 10,661

Net income $ 47,430 $ 19,730

Net income per share:

Basic $ 0.94 $ 0.36

Diluted $ 0.91 $ 0.36

Weighted-average common shares outstanding (000s):

Basic 50,706 55,059

Diluted 52,172 55,101

NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)

March 31, December 31, 2021 2020

ASSETS

Current assets:

Cash and cash equivalents $ 339,099 $ 402,683

Current investments 23,615 21,216

Accounts receivable, net 60,625 63,370

Inventories, net 363,431 314,366

Prepaid expenses and other 114,118 101,563

Total current assets 900,888 903,198

Property and equipment, net 464,247 468,181

Operating lease right-of-use assets 147,129 155,104

Goodwill 202,979 202,979

Other intangible assets, net 87,135 89,532

Other assets 147,721 138,082

Total assets $ 1,950,099 $ 1,957,076

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 67,083 $ 66,174

Accrued expenses 404,493 446,682

Current portion of long-term debt 90,000 30,000

Total current liabilities 561,576 542,856

Operating lease liabilities 108,237 112,275

Long-term debt 298,120 305,393

Other liabilities 110,692 102,281

Total liabilities 1,078,625 1,062,805

Commitments and contingencies

Stockholders' equity:

Class A common stock - 500 million sharesauthorized, $0.001 par value, 90.6 million shares 91 91issued

Additional paid-in capital 579,204 579,801

Treasury stock, at cost - 40.4 million and (1,505,076) (1,461,593)39.7 million shares

Accumulated other comprehensive loss (71,626) (64,768)

Retained earnings 1,868,881 1,840,740

Total stockholders' equity 871,474 894,271

Total liabilities and stockholders' equity $ 1,950,099 $ 1,957,076

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SOURCE Nu Skin Enterprises