UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

November 4, 2020
Date of Report (Date of earliest event reported)
 
NU SKIN ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)

Delaware
 
001-12421
 
87-0565309
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification Number)

75 West Center Street
Provo, Utah 84601
(Address of principal executive offices and zip code)
 
(801) 345-1000
(Registrant's telephone number, including area code)
 
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02
Results of Operations and Financial Condition.

On November 4, 2020, Nu Skin Enterprises, Inc. (the “Company”) issued a press release announcing its financial results for the three- and nine-month periods ended September 30, 2020, and certain other information. A copy of the press release is attached as Exhibit 99.1 to this report.

The information furnished pursuant to this Item 2.02 and the exhibit hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.

The press release furnished herewith in Exhibit 99.1 contains non-GAAP financial measures. Management believes non-GAAP financial measures assist management and investors in evaluating and comparing period-to-period results and projections in a more meaningful and consistent manner.

Item 9.01
Financial Statements and Exhibits.

(d) Exhibits.

Nu Skin Enterprises’ press release dated November 4, 2020, regarding financial results for the three- and nine-month periods ended September 30, 2020.
   
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
NU SKIN ENTERPRISES, INC.
 
 
(Registrant)
 
     
 
/s/ Mark H. Lawrence
 
 
Mark H. Lawrence
 
 
Chief Financial Officer
 
     
Date:  November 4, 2020
   

 

Exhibit 99.1


FOR IMMEDIATE RELEASE

NU SKIN ENTERPRISES REPORTS THIRD-QUARTER 2020 RESULTS
AND RAISES ANNUAL GUIDANCE

PROVO, Utah — Nov. 4, 2020 — Nu Skin Enterprises, Inc. (NYSE: NUS) today announced third-quarter results of 19 percent revenue growth and 37 percent earnings per share growth and raised its guidance for 2020.

Executive Summary
Q3 2020 vs. Prior-Year Quarter

Revenue:
   
$703.3 million; +19%
          Less than (1%) fx impact
Earnings Per Share (EPS):
   
$1.08; +37%
Sales Leaders:
   
68,516; +12%
Customers:
   
1,539,511; +28%

“We continued to build momentum with accelerated results in the third quarter, as we generated revenue and earnings per share well above expectations,” said Ritch Wood, chief executive officer. “As we executed on our long-term strategy, we drove double-digit growth in both customers and sales leaders with revenue improvements in all but one reporting segment. We delivered strong double-digit growth in the Americas, Pacific and EMEA regions, with modest growth throughout most of Asia. Mainland China continues to stabilize with sequentially improving revenue, customers and sales leaders, and we remain on track for a return to year-over-year growth in China in the fourth quarter. Our manufacturing division contributed to our results with impressive 34 percent growth.

“We are outpacing our 2020 growth projections due to strong product demand and ongoing digital investments that empower our sales leaders and affiliates to build a socially enabled business. We are also benefitting from the current environment where more individuals are working from home and shopping online. Currently, approximately 90 percent of Nu Skin revenue is coming from digital transactions.”

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Nu Skin Enterprises Reports Third-quarter 2020 Results, Raises Guidance
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Q3 2020 Year-Over-Year Operating Results

Revenue:
   
$703.3 million compared to $589.9 million
          Less than (1%) fx impact
Gross Margin:
   
73.9% compared to 76.2%
          Nu Skin business was 76.3% compared to 78.6%
          Impacted by increased freight charges and geographic mix
Selling Expenses:
   
39.9% compared to 39.3%
          Nu Skin business was 42.4% compared to 41.5%
G&A Expenses:
   
23.5% compared to 25.1%
Operating Margin:
   
10.6% compared to 11.8%
          Impacted by lower gross margin
Other Income / (Expense):
   
$0.5 million compared to ($5.0) million
Income Tax Rate:
   
24.7% compared to 32.1%
          Benefited by geographic mix
EPS:
   
$1.08 compared to $0.79

Stockholder Value

Dividend Payments:
   
$19.2 million
Stock Repurchases:
   
$20.0 million
          $342.8 million remaining in authorization

Q4 and Full-Year 2020 Outlook

Q4 2020 Revenue:
   
$720 to $750 million; +23 to 29%
          Approximately +1% fx impact
Q4 2020 EPS:
   
$1.10 to $1.20; +53 to 67%
2020 Revenue:
   
$2.55 to $2.58 billion; +6 to 7%
          Approximately (1%) fx impact
2020 EPS:
   
$3.35 to $3.45; +8 to 11%

“The growth in our core Nu Skin business is generating a great deal of energy ahead of our fourth-quarter ageLOC Boost and Nutricentials product introductions, and we continue to see increasing demand in our manufacturing segment. This gives us confidence that we will have a strong fourth quarter with momentum heading into 2021 when we fully launch these products and continue to extend our socially enabled business throughout our markets,” Wood concluded.

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Nu Skin Enterprises Reports Third-quarter 2020 Results, Raises Guidance
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Mark Lawrence, chief financial officer, added, “Given our third-quarter results above previous guidance and momentum in the business, we are raising our guidance for the remainder of the year. As we look ahead to the fourth quarter, we anticipate revenue of $720 to $750 million, which includes an approximate 1 percent favorable foreign currency impact, and earnings per share of $1.10 to $1.20. We are raising our 2020 revenue guidance to $2.55 to $2.58 billion, which reflects a negative foreign currency impact of approximately 1 percent, and we anticipate annual earnings per share of $3.35 to $3.45.”
 
Conference Call
The Nu Skin Enterprises management team will host a conference call with the investment community today at 5 p.m. (ET). Those wishing to access the webcast, as well as the financial information presented during the call, can visit the Investor Relations page on the company’s website at ir.nuskin.com. A replay of the webcast will be available at the same URL through Nov. 18, 2020.
 
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 launches, customers and sales leaders, strategies and initiatives; statements of management’s expectations regarding the future status of the COVID-19 pandemic globally and across the company’s markets, and government and public behavior in response to such status; 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,” “continue,” “anticipate,” “project,” “outlook,” “guidance,” “plan,” “continue,” “will,” “would,” “could,” “may,” “might,” the negative of these words and other similar words.

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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 outbreak, 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;

uncertainties related to interpretation of, and forthcoming regulations under, the recently enacted U.S. tax reform legislation; 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.

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Nu Skin Enterprises Reports Third-quarter 2020 Results, Raises Guidance
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The following table sets forth revenue for the three-month periods ended September 30, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):

   
Three Months Ended
September 30,
         
Constant-
Currency
 
   
2020
   
2019
   
Change
   
Change
 
Nu Skin
                       
Mainland China
 
$
169,068
   
$
173,974
     
(3
)%
   
(4
)%
Americas/Pacific
   
151,465
     
83,635
     
81
%
   
90
%
South Korea
   
83,460
     
79,435
     
5
%
   
5
%
Southeast Asia
   
84,102
     
78,963
     
7
%
   
8
%
Japan
   
70,958
     
67,197
     
6
%
   
4
%
EMEA
   
61,411
     
35,742
     
72
%
   
67
%
Hong Kong/Taiwan
   
42,265
     
40,449
     
4
%
   
 
Other
   
(314
)
   
(62
)
   
(406
)%
   
(403
)%
Total Nu Skin
   
662,415
     
559,333
     
18
%
   
19
%
Manufacturing
   
40,910
     
30,601
     
34
%
   
34
%
Grow Tech
   
22
     
     
100
%
   
100
%
Total
 
$
703,347
   
$
589,934
     
19
%
   
19
%

The following table sets forth revenue for the nine-month periods ended September 30, 2020 and 2019 for each of our reportable segments (U.S. dollars in thousands):

   
Nine Months Ended
September 30,
         
Constant-
Currency
 
   
2020
   
2019
   
Change
   
Change
 
Nu Skin
                       
Mainland China
 
$
453,096
   
$
567,795
     
(20
)%
   
(19
)%
Americas/Pacific
   
353,957
     
262,932
     
35
%
   
43
%
South Korea
   
236,094
     
248,020
     
(5
)%
   
(2
)%
Southeast Asia
   
220,517
     
226,853
     
(3
)%
   
(1
)%
Japan
   
200,549
     
194,557
     
3
%
   
2
%
EMEA
   
147,590
     
120,960
     
22
%
   
23
%
Hong Kong/Taiwan
   
115,253
     
124,719
     
(8
)%
   
(10
)%
Other
   
374
     
(239
)
   
256
%
   
256
%
Total Nu Skin
   
1,727,430
     
1,745,597
     
(1
)%
   
1
%
Manufacturing
   
105,975
     
91,430
     
16
%
   
16
%
Grow Tech
   
336
     
30
     
1,020
%
   
1,020
%
Total
 
$
1,833,741
   
$
1,837,057
     
     
2
%

The Company’s Customers and Sales Leaders statistics by segment as of September 30, 2020 and 2019 are presented in the following table:

   
As of
September 30, 2020
   
As of
September 30, 2019
   
% Increase (Decrease)
 
   
Customers
   
Sales
Leaders
   
Customers
   
Sales
Leaders
   
Customers
   
Sales
Leaders
 
                                     
Mainland China
   
341,386
     
20,970
     
317,257
     
23,776
     
8
%
   
(12
)%
Americas/Pacific
   
438,889
     
14,400
     
229,013
     
7,760
     
92
%
   
86
%
South Korea
   
164,256
     
7,973
     
169,589
     
7,363
     
(3
)%
   
8
%
Southeast Asia
   
163,536
     
8,357
     
145,845
     
7,936
     
12
%
   
5
%
Japan
   
126,896
     
6,523
     
128,373
     
5,964
     
(1
)%
   
9
%
EMEA
   
235,202
     
6,226
     
147,758
     
4,060
     
59
%
   
53
%
Hong Kong/Taiwan
   
69,346
     
4,067
     
68,862
     
4,231
     
1
%
   
(4
)%
Total
   
1,539,511
     
68,516
     
1,206,697
     
61,090
     
28
%
   
12
%

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Nu Skin Enterprises Reports Third-quarter 2020 Results, Raises Guidance
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“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
September 30,
   
Nine Months Ended
September 30,
 
   
2020
   
2019
   
2020
   
2019
 
                         
Revenue
 
$
703,347
   
$
589,934
   
$
1,833,741
   
$
1,837,057
 
Cost of sales
   
183,374
     
140,162
     
463,277
     
440,854
 
Gross profit
   
519,973
     
449,772
     
1,370,464
     
1,396,203
 
                                 
Operating expenses:
                               
Selling expenses
   
280,695
     
231,937
     
735,365
     
727,473
 
General and administrative expenses
   
165,050
     
147,943
     
466,232
     
455,983
 
Total operating expenses
   
445,745
     
379,880
     
1,201,597
     
1,183,456
 
                                 
Operating income
   
74,228
     
69,892
     
168,867
     
212,747
 
Other income (expense), net
   
525
     
(4,979
)
   
(4,068
)
   
(11,153
)
                                 
Income before provision for income taxes
   
74,753
     
64,913
     
164,799
     
201,594
 
Provision for income taxes
   
18,446
     
20,823
     
46,911
     
68,153
 
                                 
Net income
 
$
56,307
   
$
44,090
   
$
117,888
   
$
133,441
 
                                 
Net income per share:
                               
Basic
 
$
1.10
   
$
0.79
   
$
2.24
   
$
2.40
 
Diluted
 
$
1.08
   
$
0.79
   
$
2.23
   
$
2.39
 
                                 
Weighted-average common shares outstanding (000s):
                               
Basic
   
51,308
     
55,548
     
52,741
     
55,507
 
Diluted
   
52,243
     
55,788
     
52,906
     
55,950
 

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NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)

   
September 30,
2020
   
December 31,
2019
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
 
$
366,710
   
$
335,630
 
Current investments
   
11,301
     
8,413
 
Accounts receivable, net
   
60,016
     
50,378
 
Inventories, net
   
270,319
     
275,891
 
Prepaid expenses and other
   
63,916
     
69,854
 
Total current assets
   
772,262
     
740,166
 
                 
Property and equipment, net
   
456,083
     
453,604
 
Right-of-use assets
   
165,749
     
144,326
 
Goodwill
   
196,573
     
196,573
 
Other intangible assets, net
   
74,391
     
80,321
 
Other assets
   
151,653
     
154,016
 
Total assets
 
$
1,816,711
   
$
1,769,006
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
 
$
55,298
   
$
38,979
 
Accrued expenses
   
381,052
     
290,281
 
Current portion of long-term debt
   
30,000
     
27,500
 
Total current liabilities
   
466,350
     
356,760
 
                 
                 
Operating lease liabilities
   
121,439
     
105,701
 
Long-term debt
   
312,664
     
334,461
 
Other liabilities
   
88,785
     
96,795
 
Total liabilities
   
989,238
     
893,717
 
                 
                 
Stockholders’ equity:
               
Class A common stock
   
91
     
91
 
Additional paid-in capital
   
570,491
     
557,544
 
Treasury stock, at cost
   
(1,446,374
)
   
(1,324,826
)
Accumulated other comprehensive loss
   
(83,108
)
   
(85,292
)
Retained earnings
   
1,786,373
     
1,727,772
 
Total stockholders’ equity
   
827,473
     
875,289
 
Total liabilities and stockholders’ equity
 
$
1,816,711
   
$
1,769,006
 

# # #
 
CONTACTS:
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577