PR Newswire | Nov 3, 2021 04:06PM EDT

11/03 15:06 CDT

Nu Skin Enterprises Reports Third Quarter 2021 Results PROVO, Utah, Nov. 3, 2021

PROVO, Utah, Nov. 3, 2021 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced third quarter 2021 revenue of $641.2 million and earnings per share (EPS) of $0.97.

Executive SummaryQ3 2021 vs. Prior-year Quarter

$641.2 million; (9)% Revenue: ? +2% fx impact or $11.8 million

Earnings Per Share (EPS):$0.97; (10)%

Sales Leaders: 58,565; (15)%

Customers: 1,395,271; (9)%

"As we previously announced, our third quarter revenue was lower than anticipated due to COVID delta variant disruptions as unexpected government restrictions interrupted selling and promotional activities in several markets, specifically in Mainland China and Southeast Asia," said Ryan Napierski, Nu Skin president and CEO. "Despite these short-term impacts, we are encouraged by our continued growth in the U.S., which was driven by our Beauty Focus Collagen+ launch and double-digit growth in Korea due to successful product promotions and sales leader initiatives.

"Looking ahead, we anticipate the ongoing rollout of our Collagen+ and ageLOC Meta products in Q4 will build momentum going into next year. For 2022 and beyond, we remain focused on our vision of becoming the world's leading beauty and wellness company, powered by our dynamic affiliate opportunity platform. We will work toward this by introducing our EmpowerMe personalized beauty and wellness strategy with connected beauty devices, increasing adoption of our affiliate-powered social commerce business model and expanding our digital platform. Amidst global uncertainty, we are confident in this strategy as we transform our company toward our vision for the future."

Q3 2021 Year-over-year Operating Results

$641.2 million compared to $703.3 million Revenue: ? +2% fx impact

75.2% compared to 73.9% Gross Margin: ? Nu Skin business was 78.6% compared to 76.3%

39.9% compared to 39.9% Selling Expenses: ? Nu Skin business was 42.7% compared to 42.4%

G&A Expenses: 25.1% compared to 23.5%

Operating Margin: 10.2% compared to 10.6%

Other Income / (Expense):$2.8 million compared to $0.5 million

Income Tax Rate: 27.0% compared to 24.7%

EPS: $0.97 compared to $1.08

Stockholder Value

Dividend Payments:$19.0 million

$10.0 million Stock Repurchases: ? $255.4 million remaining in authorization

Q4 and Full-year 2021 Outlook

$645 to $675 million; (10) to (14)% Q4 2021 Revenue: ? Approximately (1)% fx impact

$0.90 to $1.00; (29) to (36)% Q4 2021 EPS: ? Prior year benefitted by 19.6% tax rate

$2.67 to $2.70 billion; +3 to 5% 2021 Revenue: ? Approximately +2 to 3% fx impact

2021 EPS: $3.93 to $4.03; +8 to 11%

Mark Lawrence, chief financial officer, added, "We are adjusting our 2021 forecast based on third quarter results and continued COVID uncertainty. Despite the difficult operating environment, we anticipate annual revenue growth of 3 to 5 percent on top of strong growth in 2020, with earnings per share growth of 8 to 11 percent."

About Nu Skin Enterprises, Inc.Nu Skin Enterprises, Inc. (NYSE: NUS) is a leading beauty and wellness company, powered by a dynamic affiliate opportunity platform. The company helps people live, look and feel their best with products that combine the best of science, technology and nature. Backed by more than 35 years of scientific research, Nu Skin develops innovative products including Nu Skin(r) personal care, Pharmanex(r) nutrition and the ageLOC(r) anti-aging brand which includes an award-winning line of beauty device systems. Nu Skin operates in approximately 50 markets worldwide in the Americas, Asia, Europe, Africa and the Pacific. Rhyz Inc. is the company's strategic investment arm that includes a collection of technology and manufacturing companies to support growth in the core Nu Skin business. Nu Skin is committed to sustainability, including global initiatives such as transitioning to reduced and sustainable packaging for all products by 2030. The Nu Skin Force for Good Foundation also strives to improve children's health, education and economic circumstances throughout the world. For more information, visit nuskin.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, initiatives, 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," "remain," "become," "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, increased scrutiny of sales force actions, 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 September 30, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):

Three Months Ended Constant-

September 30, Currency

2021 2020 Change Change

Nu Skin

Mainland China $ 134,291 $ 169,068 (21)% (26)%

Americas 131,482 133,618 (2)% (2)%

South Korea 91,989 83,460 10% 8%

Southeast Asia/Pacific 79,081 101,949 (22)% (23)%

EMEA 55,839 61,411 (9)% (11)%

Japan 65,117 70,958 (8)% (5)%

Hong Kong/Taiwan 39,921 42,265 (6)% (8)%

Nu Skin other 889 (314) 383% 382%

Total Nu Skin 598,609 662,415 (10)% (11)%

Rhyz Investments

Manufacturing 41,635 40,910 2% 2%

Grow Tech 783 22 3,459% 3,459%

Rhyz other 125 -

Total Rhyz Investments 42,543 40,932 4% 4%

Total $ 641,152 $ 703,347 (9)% (11)%

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

Nine Months Ended Constant-

September 30, Currency

2021 2020 Change Change

Nu Skin

Mainland China $ 438,066 $ 453,096 (3)% (11)%

Americas 403,755 312,436 29% 28%

South Korea 261,724 236,094 11% 5%

Southeast Asia/Pacific 246,338 262,038 (6)% (9)%

EMEA 215,134 147,590 46% 36%

Japan 203,001 200,549 1% 2%

Hong Kong/Taiwan 114,795 115,253 - (4)%

Nu Skin other 2,350 374 528% 530%

Total Nu Skin 1,885,163 1,727,430 9% 5%

Rhyz Investments

Manufacturing 135,760 105,975 28% 28%

Grow Tech 1,147 336 241% 241%

Rhyz other 163 -

Total Rhyz Investments 137,070 106,311 29% 29%

Total $ 2,022,233 $ 1,833,741 10% 6%

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

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

Customers Sales Customers Sales Customers Sales Leaders Leaders Leaders

Mainland China 355,256 13,838 341,386 20,970 4% (34)%

Americas 324,880 12,127 397,936 12,798 (18)% (5)%

South Korea 156,439 9,448 164,256 7,973 (5)% 18%

Southeast Asia 162,048 7,607 204,489 9,959 (21)% (24)%/Pacific

EMEA 210,705 5,726 235,202 6,226 (10)% (8)%

Japan 123,453 6,029 126,896 6,523 (3)% (8)%

Hong Kong/ 62,490 3,790 69,346 4,067 (10)% (7)%Taiwan

Total 1,395,271 58,565 1,539,511 68,516 (9)% (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 Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Revenue $ 641,152 $ 703,347 $ 2,022,233 $ 1,833,741

Cost of sales 158,907 183,374 501,448 463,277

Gross profit 482,245 519,973 1,520,785 1,370,464

Operating expenses:

Selling expenses 255,719 280,695 807,358 735,365

General and administrative 161,142 165,050 499,754 466,232expenses

Total operating expenses 416,861 445,745 1,307,112 1,201,597

Operating income 65,384 74,228 213,673 168,867

Other income (expense), net 2,781 525 351 (4,068)

Income before provision for 68,165 74,753 214,024 164,799income taxes

Provision for income taxes 18,436 18,446 57,527 46,911

Net income $ 49,729 $ 56,307 $ 156,497 $ 117,888

Net income per share:

Basic $ 0.99 $ 1.10 $ 3.11 $ 2.24

Diluted $ 0.97 $ 1.08 $ 3.03 $ 2.23

Weighted-average common sharesoutstanding (000s):

Basic 50,098 51,308 50,304 52,741

Diluted 51,260 52,243 51,629 52,906



NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)



September 30, December 31, 2021 2020

ASSETS

Current assets:

Cash and cash equivalents $ 282,412 $ 402,683

Current investments 19,190 21,216

Accounts receivable, net 52,441 63,370

Inventories, net 415,203 314,366

Prepaid expenses and other 121,626 101,563

Total current assets 890,872 903,198

Property and equipment, net 464,049 468,181

Operating lease right-of-use assets 128,887 155,104

Goodwill 215,582 202,979

Other intangible assets, net 88,497 89,532

Other assets 186,522 138,082

Total assets $ 1,974,409 $ 1,957,076

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 52,023 $ 66,174

Accrued expenses 378,573 446,682

Current portion of long-term debt 110,000 30,000

Total current liabilities 540,596 542,856

Operating lease liabilities 95,741 112,275

Long-term debt 278,563 305,393

Other liabilities 123,032 102,281

Total liabilities 1,037,932 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 590,678 579,801

Treasury stock, at cost - 40.5 million and (1,518,535) (1,461,593)39.7 million shares

Accumulated other comprehensive loss (75,658) (64,768)

Retained earnings 1,939,901 1,840,740

Total stockholders' equity 936,477 894,271

Total liabilities and stockholders' equity $ 1,974,409 $ 1,957,076

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SOURCE Nu Skin Enterprises