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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April 30, 2019
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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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
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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.
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On April 30, 2019, Nu Skin Enterprises, Inc. issued a press release announcing its financial results for the three-month period ended March 31, 2019, 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.
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(d) Exhibit.
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99.1
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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.
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NU SKIN ENTERPRISES, INC.
(Registrant)
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/s/ Mark H. Lawrence
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Mark H. Lawrence
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Chief Financial Officer
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Date: April 30, 2019
Exhibit 99.1
FOR IMMEDIATE RELEASE
NU SKIN ENTERPRISES REPORTS FIRST-QUARTER 2019 RESULTS
PROVO, Utah — April 30, 2019 — Nu Skin Enterprises, Inc. (NYSE: NUS) today announced first-quarter 2019 results.
Executive Summary
Q1 2019 vs. Prior-Year Quarter
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Revenue:
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$623.6 million, +1%
• 7% constant currency growth
• (6%) fx impact or ($33.3 M)
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Earnings Per Share (EPS):
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$0.77 compared to $0.64, + 20%
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Sales Leaders:
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63,248; consistent with the prior year
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Customers:
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1,193,206; +10%
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“We are encouraged by the positive start to the year, which began with a strong first quarter highlighted by 7 percent local-currency growth,” said Ritch
Wood, chief executive officer. “We were particularly pleased with local-currency revenue growth in nearly all our reporting segments, highlighted by 12 percent growth in Mainland China and 5 percent growth in Southeast Asia, or 6 percent and 2
percent on a reported basis, respectively. We continue to focus our global efforts on expanding our customer base through our Nu Skin growth strategy, which helped to drive a 10 percent increase in customers during the quarter.”
Q1 2019 Year-Over-Year Operating Results
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Revenue:
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$623.6 million compared to $616.2 million
• 7% constant currency growth
• (6%) fx impact or ($33.3 M)
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Gross Margin:
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76.5% compared to 76.3%
• Nu Skin business was 78.7%, compared to 77.9%
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Selling Expenses:
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40.0% of revenue compared to 41.8%
• Nu Skin business was 42.0%, compared to 42.9%
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G&A Expenses:
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25.4% of revenue compared to 24.9%
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Operating Margin:
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11.0% compared to 9.6%
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Other Income / (Expense):
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($2.8) million expense compared to $1.2 million income
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Income Tax Rate:
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34.7% compared to 41.0%
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EPS:
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$0.77 compared to $0.64, +20%
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Stockholder Value
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Dividend Payments:
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$20.5 million
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Stock Repurchases:
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$0.8 million; $470.2 million remaining in authorization
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Q2 and Full-Year 2019 Outlook
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Q2 2019 Revenue:
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$660 to $680 million, 3% to 6% decline
• Approximately (4%) to (5%) fx
impact
• Prior year included approximately
$95 million of LumiSpa sales, driven by Mainland China introduction
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Q2 2019 EPS:
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$0.91 to $0.98
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2019 Revenue:
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$2.76 to $2.81 billion, 3% to 5% growth
• Approximately (2%) to (3%) fx
impact
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2019 EPS
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$3.80 to $4.05
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“We remain confident in our growth prospects in 2019 as we focus on the continued execution of our growth strategy,” said Wood. “We will drive increased
productivity by investing in technologies to better support our sales leaders, expanding our global beauty device systems with product introductions and line extensions, and optimizing our Velocity sales compensation program.”
“Our solid first quarter results keep us on track to achieve a strong year,” said Mark Lawrence, chief financial officer. “Our 2019 annual revenue guidance is
$2.76 to $2.81 billion with an approximate 2 to 3 percent unfavorable foreign currency impact, and earnings per share of $3.80 to $4.05. For the second quarter, we project revenue of $660 to $680 million with an approximate 4 to 5 percent negative
foreign currency impact. The prior-year period included a strong LumiSpa introduction in Mainland China while current year product launches are slated for the back half of the year. We project earnings per share of $0.91 to $0.98.”
Conference Call
The Nu Skin management team will host a conference call with the investment community on April 30, 2019, 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 May 14, 2019.
About Nu Skin Enterprises, Inc.
Founded 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 automated 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 a collection of 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, 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,” “continue,” “project,” “anticipate,” “estimate,” “intend,” “plan,” “continue,” “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:
| • |
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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| • |
risk that direct selling laws and regulations in any of our markets, including the United
States and Mainland 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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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;
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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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| • |
uncertainties regarding the future financial performance of the company’s recent
acquisitions;
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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 the company over-forecasts demand for a product or changes its 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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unpredictable economic conditions and events globally;
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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
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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.
Non-GAAP Financial Measures: Constant-currency
revenue growth 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 this amount to the prior-year period’s revenue.
The Company’s revenue results by segment for the three-month periods ended March 31 are presented in the following table (in thousands).
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Three Months Ended
March 31,
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Change
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Constant
Currency
Change(1)
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||||||||||||||
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2019
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2018
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|||||||||||||||
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Nu Skin
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||||||||||||||||
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Mainland China
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$
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208,488
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$
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197,531
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6
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%
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12
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%
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||||||||
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Americas/Pacific
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86,456
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92,289
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(6
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)%
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2
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%
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South Korea
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83,853
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88,930
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(6
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)%
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(1
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)%
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Southeast Asia
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72,495
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70,860
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2
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%
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5
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%
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Japan
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62,109
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63,224
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(2
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)%
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—
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Hong Kong/Taiwan
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40,558
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40,992
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(1
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)%
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2
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%
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||||||||||
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EMEA
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41,818
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44,981
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(7
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)%
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1
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%
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||||||||||
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Other
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(1,426
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)
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235
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(707
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)%
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(707
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)%
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|||||||||
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Total Nu Skin
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594,351
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599,042
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(1
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)%
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5
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%
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||||||||||
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Manufacturing
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29,272
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17,177
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70
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%
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70
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%
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||||||||||
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Grow Tech
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—
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—
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—
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—
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||||||||||||
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Total
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$
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623,623
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$
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616,219
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1
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%
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7
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%
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||||||||
The company’s Customers and Sales Leaders statistics by segment for the three-month periods ended March 31 are presented in the following table.
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As of
March 31, 2019
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As of
March 31, 2018
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% Increase (Decrease)
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||||||||||||||||||||||
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Customers
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Sales Leaders
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Customers
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Sales Leaders
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Customers
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Sales Leaders
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|||||||||||||||||||
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Mainland China
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272,053
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26,986
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200,231
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27,045
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36
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%
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—
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|||||||||||||||||
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Americas/Pacific
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242,925
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7,862
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245,588
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8,248
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(1
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)%
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(5
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)%
|
||||||||||||||||
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South Korea
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181,150
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6,671
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179,384
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7,338
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1
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%
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(9
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)%
|
||||||||||||||||
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Southeast Asia
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138,112
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7,071
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117,689
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6,559
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17
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%
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8
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%
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||||||||||||||||
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Japan
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126,526
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5,840
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128,598
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6,198
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(2
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)%
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(6
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)%
|
||||||||||||||||
|
Hong Kong/Taiwan
|
70,354
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3,959
|
72,401
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3,864
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(3
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)%
|
2
|
%
|
||||||||||||||||
|
EMEA
|
162,086
|
4,859
|
141,673
|
4,246
|
14
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%
|
14
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%
|
||||||||||||||||
|
Total
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1,193,206
|
63,248
|
1,085,564
|
63,498
|
10
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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
March 31,
|
||||||||
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2019
|
2018
|
|||||||
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Revenue
|
$
|
623,623
|
$
|
616,219
|
||||
|
Cost of sales
|
146,664
|
146,281
|
||||||
|
Gross profit
|
476,959
|
469,938
|
||||||
|
Operating expenses:
|
||||||||
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Selling expenses
|
249,708
|
257,702
|
||||||
|
General and administrative expenses
|
158,598
|
153,246
|
||||||
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Total operating expenses
|
408,306
|
410,948
|
||||||
|
Operating income
|
68,653
|
58,990
|
||||||
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Other income (expense), net
|
(2,848
|
)
|
1,207
|
|||||
|
Income before provision for income taxes
|
65,805
|
60,197
|
||||||
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Provision for income taxes
|
22,803
|
24,658
|
||||||
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Net income
|
$
|
43,002
|
$
|
35,539
|
||||
|
Net income per share
|
||||||||
|
Basic
|
$
|
0.78
|
$
|
0.66
|
||||
|
Diluted
|
$
|
0.77
|
$
|
0.64
|
||||
|
Weighted-average common shares outstanding (000s):
|
||||||||
|
Basic
|
55,436
|
53,997
|
||||||
|
Diluted
|
56,128
|
55,959
|
||||||
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
|
March 31,
2019
|
December 31,
2018
|
|||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
310,288
|
$
|
386,911
|
||||
|
Current investments
|
8,038
|
11,346
|
||||||
|
Accounts receivable
|
57,390
|
53,282
|
||||||
|
Inventories, net
|
304,311
|
295,821
|
||||||
|
Prepaid expenses and other
|
67,655
|
51,877
|
||||||
|
747,682
|
799,237
|
|||||||
|
Property and equipment, net
|
445,605
|
464,535
|
||||||
|
Right-of-use assets
|
117,329
|
—
|
||||||
|
Goodwill
|
196,573
|
196,573
|
||||||
|
Other intangible assets, net
|
86,935
|
89,989
|
||||||
|
Other assets
|
160,977
|
144,112
|
||||||
|
Total assets
|
$
|
1,755,101
|
$
|
1,694,446
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$
|
52,273
|
$
|
47,617
|
||||
|
Accrued expenses
|
304,770
|
322,583
|
||||||
|
Current portion of long-term debt
|
45,000
|
69,455
|
||||||
|
402,043
|
439,655
|
|||||||
|
Operating lease liability
|
81,075
|
—
|
||||||
|
Long-term debt
|
356,247
|
361,008
|
||||||
|
Other liabilities
|
104,541
|
111,916
|
||||||
|
Total liabilities
|
943,906
|
912,579
|
||||||
|
Commitments and contingencies
|
||||||||
|
Stockholders’ equity:
|
||||||||
|
Class A common stock – 500 million shares authorized, $0.001 par value, 90.6 million shares issued
|
91
|
91
|
||||||
|
Additional paid-in capital
|
553,270
|
552,564
|
||||||
|
Treasury stock, at cost – 35.0 million and 35.2 million shares
|
(1,325,251
|
)
|
(1,326,605
|
)
|
||||
|
Accumulated other comprehensive loss
|
(75,794
|
)
|
(79,934
|
)
|
||||
|
Retained earnings
|
1,658,879
|
1,635,751
|
||||||
|
811,195
|
781,867
|
|||||||
|
Total liabilities and stockholders’ equity
|
$
|
1,755,101
|
$
|
1,694,446
|
||||
# # #
Nu Skin Social Media Channels
fb.com/nuskin 
twitter.com/nuskin 
instagram.com/nuskinCONTACTS:
Media: media@nuskin.com, (801) 345-6397
Investors: investorrelations@nuskin.com, (801) 345-3577