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
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May 6, 2015
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Date of Report (Date of earliest event reported)
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NU SKIN ENTERPRISES, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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001-12421
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87-0565309
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification Number)
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75 West Center Street
Provo, Utah 84601
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(Address of principal executive offices and zip code)
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(801) 345-1000
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(Registrant's telephone number, including area code)
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N/A
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(Former name or former address, if changed since last report)
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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)) |
Item 2.02 Results of Operations and Financial Condition.
On May 6, 2015, Nu Skin Enterprises, Inc. (the "Company") issued a press release announcing its financial results for the first quarter ended March 31, 2015, and certain other information. A copy of the Company's press release is attached as Exhibit 99.1 to this report and incorporated by reference.
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 may contain 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) Exhibit.
| 99.1 | Nu Skin Enterprises' press release dated May 6, 2015, regarding financial results for the first quarter ended March 31, 2015. |
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)
(Registrant)
/s/ Ritch Wood
Ritch Wood
Chief Financial Officer
Chief Financial Officer
Date: May 6, 2015
EXHIBIT INDEX
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Exhibit No.
99.1
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Exhibit Description
Nu Skin Enterprises' press release dated May 6, 2015, regarding financial results for the first quarter ended March 31, 2015.
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FOR IMMEDIATE RELEASE
CONTACTS:
Investors — Scott Pond (801) 345-2657, spond@nuskin.com
Media — Kara Schneck (801) 345-2116, kschneck@nuskin.com
NU SKIN ENTERPRISES REPORTS FIRST-QUARTER 2015 RESULTS
Company Receives New Direct Selling Licenses in China
Company Receives New Direct Selling Licenses in China
PROVO, Utah — May 6, 2015 — Nu Skin Enterprises, Inc. (NYSE: NUS) today announced first-quarter results with revenue of $543.3 million, within the company's guided range, compared to $671.1 million in the prior-year period. Revenue in the quarter was negatively impacted 7 percent by foreign currency fluctuations. Earnings per share for the quarter were $0.60, or $0.72 when excluding a $0.12 per-share charge related to a new currency exchange mechanism adopted by Venezuela in the first quarter. Earnings per share in the prior-year period were $0.90, which included a $0.15 per-share charge related to Venezuela currency.
"Our business continues to make good progress as we prepare to introduce a number of new products in the second half of the year," said Truman Hunt, president and chief executive officer. "We are encouraged by growing enthusiasm among our sales force in advance of launching our new ageLOC skin care and nutritional products. While currency headwinds proved to be slightly more challenging than expected, we continue to believe we are well positioned for growth in the back half of the year."
"We are also pleased to have been approved to commence direct selling activities in two new cities in Guangdong province," continued Hunt. "We believe in the potential of China's large and growing market and look forward to expanding our footprint in the country."
-more-
Nu Skin Enterprises, Inc.
May 6, 2015
Page 2
Regional Results
The company's regional revenue results are presented in the following table.
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2015
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2014
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%
Change
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Constant Currency
% Change
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Greater China
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$
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187,367
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$
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278,929
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(33%)
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(31%)
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North Asia
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172,066
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195,461
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(12%)
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(5%)
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Americas
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79,872
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79,909
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─
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19%
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South Asia/Pacific
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70,817
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71,194
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(1%)
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6%
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EMEA
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33,210
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45,568
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(27%)
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(10%)
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Total
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$
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543,332
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$
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671,061
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(19%)
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(12%)
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The company's regional Actives and Sales Leaders statistics are presented in the following table.
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Actives/Sales Leaders Statistics
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As of March 31, 2015
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As of March 31, 2014 |
% Increase (Decrease)
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Actives
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Sales Leaders
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Actives
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Sales Leaders
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Actives
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Sales Leaders
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Greater China
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235,000
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22,533
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305,000
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31,118
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(23.0%)
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(27.6%)
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North Asia
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386,000
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16,984
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400,000
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17,794
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(3.5%)
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(4.6%)
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Americas
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177,000
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7,164
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180,000
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7,339
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(1.7%)
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(2.4%)
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South Asia/Pacific
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120,000
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7,060
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115,000
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6,787
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4.3%
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4.0%
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EMEA
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110,000
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3,811
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122,000
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4,326
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(9.8%)
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(11.9%)
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Total
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1,028,000
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57,552
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1,122,000
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67,364
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(8.4%)
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(14.6%)
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"Actives" are persons who purchased products directly from the company during the previous three months.
"Sales Leaders" are independent distributors, and sales employees and independent marketers in China, who achieve certain qualification requirements.
Operational Performance
The company's operating margin for the quarter was 12.6 percent, compared to 15.1 percent in the first quarter of 2014. Gross margin during the quarter was 80.7 percent, versus 84.1 percent in the prior-year period. Selling expenses were 43.1 percent of sales in the first quarter, compared to 46.7 percent in the prior-year period. General and administrative expenses were 25.0 percent of sales compared to 22.4 percent in the prior-year period. Other income/expense reflected an expense of $12.3 million compared to $17.5 million in the prior year. Both years included charges related to the devaluation of the Venezuelan bolivar. The company's effective income tax rate for the quarter was 35.7 percent, compared to 34.5 percent in the prior year. Cash and current investments at the end of the quarter were $316.3 million and debt was $265.1 million. Dividend payments during the quarter were $20.7 million. Cash flow from operations for the quarter was $74.2 million, and the company repurchased $26.3 million of its outstanding shares.
-more-
Nu Skin Enterprises, Inc.
May 6, 2015
Page 3
Outlook
"We look forward to launching new ageLOC products in the second half of the year, and continue to believe we are on course for constant-currency revenue growth in 2015," said Hunt. "Enthusiasm is building for our upcoming product launches that include ageLOC Youth, our most advanced anti-aging supplement, as well as ageLOC Me, an innovative anti-aging skin care system that enables consumers to personalize a daily regimen based on individual preferences and skin care needs.
"In April, we introduced a line of essential oils under our Epoch trademark in the United States and Canada through a limited offering, and look forward to selling the oils in the region on a full-time basis in July. We are also introducing ageLOC Essentials, a line of cosmetic oils in Mainland China to be used in conjunction with our top-selling ageLOC Galvanic Spa. We believe our commitment to scientific rigor will position us well to compete in this growing product category," concluded Hunt.
"While foreign currency continues to negatively impact our results, our first-quarter revenue was in line with our forecast and we expect the fundamentals of the business to improve going forward," said Ritch Wood, chief financial officer. "Looking forward, we anticipate second-quarter revenue of $540 to $560 million with earnings per share of $0.72 to $0.75. For the year, we anticipate revenue of $2.45 to $2.50 billion, reflecting a negative impact from foreign currency of approximately 7 percent, with earnings per share of approximately $3.65 to $3.75."
-more-
Nu Skin Enterprises, Inc.
May 6, 2015
Page 4
About Nu Skin Enterprises, Inc.
Nu Skin Enterprises, Inc. demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives. The company's scientific leadership in both skin care and nutrition has established Nu Skin as a premier anti-aging company. The company's anti-aging products feature the new ageLOC® line of products including ageLOC® Tru Face® Essence Ultra firming serum, the ageLOC® TR90® weight management and body shaping system, ageLOC® R2 nutritional supplement, and ageLOC® Transformation daily skin care system. A global direct selling company, Nu Skin operates in 53 markets worldwide and is traded on the New York Stock Exchange under the symbol "NUS." More information is available at http://www.nuskin.com.
Please Note: 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 and new product introductions; 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," "project," "anticipate," "estimate," "intend," "plan," "targets," "likely," "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:
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·
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any failure of current or planned initiatives or products to generate interest among our sales force and customers and generate sponsoring and selling activities on a sustained basis;
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risk of foreign currency fluctuations and the currency translation impact on the company's business associated with these fluctuations;
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·
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risk that direct selling laws and regulations in any of our markets, including the United States and China, may be modified, interpreted or enforced in a manner that results in negative changes to our business model or negatively impacts our 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;
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-more-
Nu Skin Enterprises, Inc.
May 6, 2015
Page 5
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·
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risks related to accurately predicting, delivering or maintaining sufficient quantities of products to support our planned initiatives or launch strategies, and increased risk of inventory write-offs if we over-forecast demand for a product or change our planned initiatives or launch strategies;
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regulatory risks associated with the company's products, which could require the company to modify its claims or inhibit the company's ability to import or continue selling a product in a market if it is determined to be a medical device or if it is unable to register the product in a timely manner under applicable regulatory requirements;
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adverse publicity related to the company's business, products, industry or any legal actions or complaints by the company's sales force or others;
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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
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continued competitive pressures in the company's markets.
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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.
-more-
Nu Skin Enterprises, Inc.
May 6, 2015
Page 6
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NU SKIN ENTERPRISES, INC.
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Consolidated Statements of Income (Unaudited)
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For the First Quarters Ended March 31, 2015 and 2014
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(in thousands, except per share amounts)
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2015
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2014
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Revenue
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$
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543,332
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$
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671,061
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Cost of sales
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105,055
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106,644
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Gross profit
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438,277
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564,417
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Operating expenses:
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Selling expenses
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234,005
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313,101
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General and administrative expenses
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135,626
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150,119
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Total operating expenses
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369,631
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463,220
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Operating income
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68,646
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101,197
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Other income (expense), net
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(12,268
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)
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(17,508
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)
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Income before provision for income taxes
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56,378
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83,689
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Provision for income taxes
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20,096
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28,835
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Net income
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$
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36,282
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$
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54,854
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Net income per share:
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Basic
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$
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0.62
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$
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0.93
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Diluted
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$
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0.60
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$
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0.90
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Weighted average common shares outstanding:
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Basic
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58,991
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58,869
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Diluted
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60,261
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61,227
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-more-
Nu Skin Enterprises, Inc.
May 6, 2015
Page 7
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NU SKIN ENTERPRISES, INC.
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Consolidated Balance Sheets (Unaudited)
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(in thousands)
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March 31,
2015
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December 31,
2014
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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304,712
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$
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288,415
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Current investments
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11,632
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11,793
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Accounts receivable
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34,919
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35,834
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Inventories, net
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312,788
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338,491
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Prepaid expenses and other
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159,098
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160,134
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823,149
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834,667
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Property and equipment, net
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473,177
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464,783
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Goodwill
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112,446
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112,446
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Other intangible assets, net
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72,998
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75,062
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Other assets
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130,847
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127,476
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Total assets
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$
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1,612,617
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$
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1,614,434
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$
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33,564
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$
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34,712
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Accrued expenses
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292,299
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300,847
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Current portion of long-term debt
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83,899
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82,770
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409,762
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418,329
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Long-term debt
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181,197
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164,567
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Other liabilities
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97,809
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89,100
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Total liabilities
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688,768
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671,996
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Stockholders' equity:
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Class A common stock
|
91
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91
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Additional paid-in capital
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412,892
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414,394
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Treasury stock, at cost
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(884,828
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)
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(862,608
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)
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Accumulated other comprehensive loss
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(61,976
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)
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(51,521
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)
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Retained earnings
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1,457,670
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1,442,082
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||||||
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923,849
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942,438
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Total liabilities and stockholders' equity
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$
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1,612,617
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$
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1,614,434
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