PR Newswire | Aug 4, 2021 04:06PM EDT

In The Second Quarter

08/04 15:06 CDT

Nu Skin Enterprises Reports 42 Percent EPS Growth And 15 Percent Revenue Growth In The Second Quarter PROVO, Utah, Aug. 4, 2021

PROVO, Utah, Aug. 4, 2021 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced second-quarter 2021 revenue of $704.1 million and earnings per share (EPS) of $1.15 driven by an increase in operating margin of 260 basis points.

Executive SummaryQ2 2021 vs. Prior-year Quarter

$704.1 million; +15% Revenue: ? +6% fx impact or $36.9 million

Earnings Per Share$1.15; +42% (EPS):

Sales Leaders: 64,228; +15%

Customers: 1,467,617; (2%)

"Our growth and success this quarter and over the past year reflect our strategy of delivering world-class beauty and wellness products, being customer obsessed, and digitally enabling our business," said Ritch Wood, chief executive officer. "Our performance was led by continued growth in our beauty device systems and further adoption of social commerce. In addition, we significantly improved profitability during the quarter, which led to strong earnings per share growth. We have a solid foundation in place, and I am fully confident in Ryan and our leadership team to build on the momentum and take Nu Skin to the next level."

Ryan Napierski, president and CEO-elect, added, "We continue to advance our vision of becoming the world's leading beauty and wellness company, powered by our dynamic affiliate opportunity platform. During the quarter, we strengthened our position as the market leader in beauty device systems as our latest device system, ageLOC Boost, generated momentum with a strong launch in EMEA. Additionally, we are pleased with the rollout of Nutricentials Bioadaptives, which is targeted at a millennial/Gen Z consumer. In the back half of the year, we will be begin rolling out Beauty Focus Collagen+, which leverages our unique strength in both beauty and wellness, and ageLOC Meta, our next significant Pharmanex product introduction.

"We are pleased with 15 percent growth in sales leaders, while customers declined slightly due to a significant surge in the prior year. To better support our affiliates with customer acquisition, we will be rolling out additional digital tools over the next several quarters such as personalized social commerce shops in Mainland China. This represents a significant step forward in deploying our digital tools in the world's largest social commerce market."

Q2 2021 Year-over-year Operating Results

$704.1 million compared to $612.4 million Revenue: ? +6% fx impact

75.6% compared to 74.8% Gross Margin: ? Nu Skin business was 78.3% compared to 77.6%

39.5% compared to 40.6% Selling Expenses: ? Nu Skin business was 42.4% compared to 43.3%

G&A Expenses: 24.0% compared to 24.7%

Operating Margin:12.1% compared to 9.5%

Other Income / ($4.0) million compared to $1.6 million (Expense):

27.1% compared to 29.8% Income Tax Rate: ? Benefited by geographic mix

EPS: $1.15 compared to $0.81

Stockholder Value

Dividend Payments:$19.0 million

$10.0 million Stock Repurchases: ? $265.4 million remaining in authorization

Q3 and Full-year 2021 Outlook

$700 to $730 million; 0 to 4% Q3 2021 Revenue: ? Approximately +2 to 3% fx impact

Q3 2021 EPS: $1.10 to $1.20; +2 to 11%

$2.81 to $2.87 billion; +9 to 11% 2021 Revenue: ? Approximately +3 to 4% fx impact

2021 EPS: $4.30 to $4.50; +18 to 24%

Mark Lawrence, chief financial officer, added, "We reported 42 percent EPS growth driven by strong improvements in both gross margin and operating margin as a result of continued expense control and supply chain efficiency. We are raising our EPS guidance for the year as we continue to focus on generating enhanced value for our shareholders."

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.

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, shareholder value, vision, product pipeline and product introductions, digital tools, 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 following table sets forth revenue for the three-month periods ended June 30, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):

Three Months Ended Constant-

June 30, Currency

2021 2020 Change Change

Nu Skin

Mainland China $ 154,182 $ 146,332 5% (4)%

Americas/Pacific 151,730 127,919 19% 14%

South Korea 88,604 76,915 15% 6%

EMEA 83,115 50,776 64% 49%

Southeast Asia 70,751 66,829 6% 2%

Japan 68,020 68,291 - 1%

Hong Kong/Taiwan 38,529 37,161 4% -

Nu Skin other 755 (85) 988% 988%

Total Nu Skin 655,686 574,138 14% 8%

Rhyz Investments

Manufacturing 48,140 37,918 27% 27%

Grow Tech 191 310 (38)% (38)%

Rhyz other 38 -

Total Rhyz Investments 48,369 38,228 27% 27%

Total $ 704,055 $ 612,366 15% 9%

The following table sets forth revenue for the six-month periods ended June 30, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):

Six Months Ended Constant-

June 30, Currency

2021 2020 Change Change

Nu Skin

Mainland China $ 303,775 $ 284,028 7% (2)%

Americas/Pacific 301,195 202,492 49% 45%

South Korea 169,735 152,634 11% 3%

EMEA 159,295 86,179 85% 69%

Southeast Asia 138,336 136,415 1% (2)%

Japan 137,884 129,591 6% 6%

Hong Kong/Taiwan 74,874 72,988 3% (1)%

Nu Skin other 1,460 688 112% 112%

Total Nu Skin 1,286,554 1,065,015 21% 15%

Rhyz Investments

Manufacturing 94,125 65,065 45% 45%

Grow Tech 364 314 16% 16%

Rhyz other 38 -

Total Rhyz Investments 94,527 65,379 45% 45%

Total $ 1,381,081 $ 1,130,394 22% 16%

The company's Customers and Sales Leaders statistics by segment as of June 30, 2021 and 2020 are presented in the following table:

As of As of % Increase (Decrease) June 30, 2021 June 30, 2020

Customers Sales Customers Sales Customers Sales Leaders Leaders Leaders

Mainland 328,526 18,647 321,946 17,104 2% 9%China

Americas/ 397,685 13,078 424,236 10,787 (6)% 21%Pacific

South Korea 153,287 7,935 159,926 6,881 (4)% 15%

EMEA 261,857 7,900 247,057 5,120 6% 54%

Southeast 135,610 7,141 155,822 6,790 (13)% 5%Asia

Japan 125,791 6,053 125,332 6,011 - 1%

Hong Kong/ 64,861 3,474 65,581 3,343 (1)% 4%Taiwan

Total 1,467,617 64,228 1,499,900 56,036 (2)% 15%

"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 Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Revenue $ 704,055 $ 612,366 $ 1,381,081 $ 1,130,394

Cost of sales 171,975 154,110 342,541 279,903

Gross profit 532,080 458,256 1,038,540 850,491

Operating expenses:

Selling expenses 277,893 248,628 551,639 454,670

General and administrative expenses 168,811 151,554 338,612 301,182

Total operating expenses 446,704 400,182 890,251 755,852

Operating income 85,376 58,074 148,289 94,639

Other income (expense), net (4,012) 1,581 (2,430) (4,593)

Income before provision for income taxes 81,364 59,655 145,859 90,046

Provision for income taxes 22,026 17,804 39,091 28,465

Net income $ 59,338 $ 41,851 $ 106,768 $ 61,581

Net income per share:

Basic $ 1.18 $ 0.81 $ 2.12 $ 1.15

Diluted $ 1.15 $ 0.81 $ 2.06 $ 1.15

Weighted-average common shares outstanding (000s):

Basic 50,115 51,872 50,409 53,466

Diluted 51,557 51,925 51,850 53,502



NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)



June 30, December 31, 2021 2020

ASSETS

Current assets:

Cash and cash equivalents $ 354,759 $ 402,683

Current investments 24,499 21,216

Accounts receivable, net 64,701 63,370

Inventories, net 390,977 314,366

Prepaid expenses and other 126,586 101,563

Total current assets 961,522 903,198

Property and equipment, net 474,167 468,181

Operating lease right-of-use assets 136,738 155,104

Goodwill 215,582 202,979

Other intangible assets, net 98,955 89,532

Other assets 163,016 138,082

Total assets $ 2,049,980 $ 1,957,076

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 60,632 $ 66,174

Accrued expenses 403,165 446,682

Current portion of long-term debt 152,500 30,000

Total current liabilities 616,297 542,856

Operating lease liabilities 100,826 112,275

Long-term debt 288,343 305,393

Other liabilities 126,688 102,281

Total liabilities 1,132,154 1,062,805

Commitments and contingencies

Stockholders' equity:

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

Additional paid-in capital 586,976 579,801

Treasury stock, at cost - 40.4 million and 39.7 million shares (1,509,867) (1,461,593)

Accumulated other comprehensive loss (68,553) (64,768)

Retained earnings 1,909,179 1,840,740

Total stockholders' equity 917,826 894,271

Total liabilities and stockholders' equity $ 2,049,980 $ 1,957,076

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SOURCE Nu Skin Enterprises