Nu Skin Enterprises Reports First Quarter 2009 Results
"We are very pleased with strong first-quarter results," said
"Our personal care business generated solid revenue growth of 19 percent in the quarter, driven by the continued success of the Nu Skin Galvanic Spa System. In addition, our restructuring efforts over the past three years are increasing profitability, as demonstrated by a significant improvement in first-quarter operating margin when excluding restructuring charges," said Hunt.
Regional Results
North Asia. First-quarter revenue in North Asia was
Americas. First-quarter revenue in the Americas was
Operational Performance
The company's gross margin in the first quarter was 81.8 percent, even
with the prior-year period. Selling expenses, as a percent of revenue,
improved to 41.6 percent in the first quarter compared to 42.9 percent in the
prior-year period due to distributor compensation plan modifications to reward
productivity. General and administrative expenses for the quarter were
During the period, the company incurred a gain of approximately
Outlook
"We begin our 25th year of operations in a solid position," said Hunt. "Our business results are on pace with expectations. Strong product and business initiatives are helping drive growth and our restructuring efforts are leading to more streamlined operations and cost savings, which will lead to improved operating margins.
"Going forward, we will continue to fuel the success of our Nu Skin Galvanic Spa System and look forward to building on our revolutionary ageLOC anti-aging platform at our 25th Anniversary convention in the fourth quarter of this year. Our differentiating strategy of going beyond addressing the superficial signs of aging to addressing aging at its source, combined with our proven scientific expertise in both skin care and nutrition, gives us a powerful advantage in the anti-aging arena," Hunt continued.
"We continue to see strong potential for our business opportunities. With
an aging population and turbulent economic environment, we are seeing
increasing numbers of people recognize the benefits that our products and
business offer. In addition, we are continuing the rollout of a compensation
plan enhancement, known as the Wealth Maximizer, aimed at keeping distributors
at all income levels engaged in the business. We initially introduced this
feature in the U.S. and
"We are encouraged with the ongoing success of our global business
transformation initiative and continue to focus on driving greater
efficiencies into our business - particularly in
"We continue to be pleased with healthy growth rates in the Americas and
"In the second quarter, we expect constant currency revenue growth
comparable to the first quarter. This will put second quarter revenue in the
The company's management will host a webcast with the investment community
on April, 30, 2009 at
The Company
For 25 years,
Please note: This press release, particularly the "Outlook" section,
contains forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934 that represent the company's current
expectations and beliefs, including, among other things: (i) management's
positive outlook for the company; (ii) management's expectations regarding the
company's initiatives, strategies, product development and launches,
transformation efforts and other innovation efforts; and (iii) management's
projections regarding revenue, foreign currency translation, earnings per
share, operating margin and restructuring charges and timing for the year 2009
and for the first quarter of 2009 set forth in the "Outlook" section. 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: (a) economic
conditions globally, including the current financial crisis and decreased
consumer confidence and spending, and related risks; (b) the recent
fluctuations of numerous foreign currencies and the associated currency
translation impact on our business if these currencies continue to fluctuate;
(c) uncertainty regarding the impact on our business of increased regulatory
scrutiny of the direct selling industry in
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
For the First Quarters Ended March 31, 2009 and 2008
(in thousands, except per share amounts)
2009 2008
Revenue:
North Asia $ 139,818 $ 149,434
Americas 58,416 50,416
Greater China 47,470 49,904
Europe 26,674 22,833
South Asia/Pacific 23,820 25,502
Total revenue 296,198 298,089
Cost of sales 53,806 54,197
Gross profit 242,392 243,892
Operating expenses:
Selling expenses 123,164 127,913
General and administrative expenses 89,691 88,555
Restructuring charges 9,386 -
Total operating expenses 222,241 216,468
Operating income 20,151 27,424
Other income (expense), net (1,236) (5,829)
Income before provision for income taxes 18,915 21,595
Provision for income taxes 7,074 8,106
Net income $ 11,841 $ 13,489
Net income per share:
Basic $ 0.19 $ 0.21
Diluted $ 0.19 $ 0.21
Weighted average common shares
outstanding:
Basic 63,334 63,457
Diluted 63,522 64,166
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands)
March 31, 2009 December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents $ 117,034 $ 114,586
Accounts receivable 19,829 16,496
Inventories, net 112,917 114,378
Prepaid expenses and other 43,345 44,944
293,125 290,404
Property and equipment, net 77,165 82,336
Goodwill 112,446 112,446
Other intangible assets, net 85,111 87,888
Other assets 131,190 136,698
Total assets $ 699,037 $ 709,772
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,099 $ 20,378
Accrued expenses 113,471 115,794
Current portion of long-term debt 28,518 30,196
161,088 166,368
Long-term debt 151,387 158,760
Other liabilities 65,607 68,464
Total liabilities 378,082 393,592
Stockholders' equity:
Class A common stock 91 91
Additional paid-in capital 220,496 218,928
Treasury stock, at cost (418,475) (417,017)
Retained earnings 588,794 584,239
Accumulated other comprehensive loss (69,951) (70,061)
320,955 316,180
Total liabilities and
stockholders' equity $ 699,037 $ 709,772
NU SKIN ENTERPRISES, INC.
Distributor/Preferred Customer Growth by Market
As of As of % Increase
March 31, 2009 March 31, 2008 (Decrease)
Active* Executive Active* Executive Active* Executive
North Asia 319,000 13,971 324,000 14,938 (1.5%) (6.5%)
Americas 171,000 4,993 162,000 4,627 5.6% 7.9%
Greater China 99,000 5,972 137,000 6,140 (27.7%) (2.7%)
Europe 85,000 2,850 62,000 2,244 37.1% 27.0%
South
Asia/Pacific 63,000 2,368 62,000 2,138 1.6% 10.8%
Total 737,000 30,154 747,000 30,087 (1.3%) 0.2%
* Active distributors include preferred customers and distributors
purchasing products directly from the company during the quarter.
SOURCE
CONTACT:
Investors,
+1-801-345-2657,
spond@nuskin.com,
or
Media,
+1-801-345-2116,
kschneck@nuskin.com,
both of
Web Site: http://www.nuskinenterprises.com /