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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Date of Report (Date of earliest event reported)
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(Exact name of registrant as specified in its charter)
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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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(Address of principal executive offices and zip code)
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(
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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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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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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 August 4, 2021, Nu Skin Enterprises, Inc. (the “Company”) issued a press release announcing its financial results for the three- and six-month periods ended
June 30, 2021, 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 Exhibit 99.1 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 as 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) Exhibits.
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Nu Skin Enterprises’ press release dated August 4, 2021, regarding financial results for the three- and six-month periods ended June 30, 2021.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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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.
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(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: August 4, 2021
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Exhibit 99.1
FOR IMMEDIATE RELEASE
NU SKIN ENTERPRISES REPORTS 42 PERCENT EPS GROWTH AND
15 PERCENT REVENUE GROWTH IN THE SECOND QUARTER
PROVO, Utah — Aug. 4, 2021 — Nu Skin Enterprises, Inc. (NYSE: NUS) today announced second-quarter 2021 revenue of $704.1 million and earnings per share (EPS) of
$1.15 driven by an increase in operating margin of 260 basis points.
Executive Summary
Q2 2021 vs. Prior-year Quarter
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Revenue:
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$704.1 million; +15%
• +6%
fx impact or $36.9 million
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Earnings Per Share (EPS):
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$1.15; +42%
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Sales Leaders:
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64,228; +15%
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Customers:
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1,467,617; (2%)
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“Our growth and success this quarter and over the past year reflect our strategy of delivering world-class beauty and wellness products, being customer obsessed,
and digitally enabling our business,” said Ritch Wood, chief executive officer. “Our performance was led by continued growth in our beauty device systems and further adoption of social commerce. In addition, we significantly improved profitability
during the quarter, which led to strong earnings per share growth. We have a solid foundation in place, and I am fully confident in Ryan and our leadership team to build on the momentum and take Nu Skin to the next level.”
Ryan Napierski, president and CEO-elect, added, “We continue to advance our vision of becoming the world’s leading beauty and wellness company, powered by our
dynamic affiliate opportunity platform. During the quarter, we strengthened our position as the market leader in beauty device systems as our latest device system, ageLOC Boost, generated momentum with a strong launch in EMEA. Additionally, we are
pleased with the rollout of Nutricentials Bioadaptives, which is targeted at a millennial/Gen Z consumer. In the back half of the year, we will be begin rolling out Beauty Focus Collagen+, which leverages our unique strength in both beauty and
wellness, and ageLOC Meta, our next significant Pharmanex product introduction.
- more -
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Nu Skin Enterprises Reports Second-quarter 2021 Results
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Page 2
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“We are pleased with 15 percent growth in sales leaders, while customers declined slightly due to a significant surge in the prior year. To better support our
affiliates with customer acquisition, we will be rolling out additional digital tools over the next several quarters such as personalized social commerce shops in Mainland China. This represents a significant step forward in deploying our digital
tools in the world’s largest social commerce market.”
Q2 2021 Year-over-year Operating Results
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Revenue:
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$704.1 million compared to $612.4 million
• +6%
fx impact
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Gross Margin:
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75.6% compared to 74.8%
• Nu
Skin business was 78.3% compared to 77.6%
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Selling Expenses:
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39.5% compared to 40.6%
• Nu
Skin business was 42.4% compared to 43.3%
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G&A Expenses:
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24.0% compared to 24.7%
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Operating Margin:
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12.1% compared to 9.5%
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Other Income / (Expense):
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($4.0) million compared to $1.6 million
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Income Tax Rate:
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27.1% compared to 29.8%
• Benefited
by geographic mix
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EPS:
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$1.15 compared to $0.81
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Stockholder Value
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Dividend Payments:
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$19.0 million
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Stock Repurchases:
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$10.0 million
• $265.4
million remaining in authorization
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Q3 and Full-year 2021 Outlook
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Q3 2021 Revenue:
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• Approximately
+2 to 3% fx impact
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Q3 2021 EPS:
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$1.10 to $1.20; +2 to 11%
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2021 Revenue:
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• Approximately +3 to
4% fx impact
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2021 EPS:
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Mark Lawrence, chief financial officer, added, “We reported 42 percent EPS growth driven by strong
improvements in both gross margin and operating margin as a result of continued expense control and supply chain efficiency. We are raising our EPS guidance for the year as we continue to focus on generating enhanced value for our shareholders.”
|
Nu Skin Enterprises Reports Second-quarter 2021 Results
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Page 3
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About Nu Skin Enterprises, Inc.
Founded more than 35 years ago, Nu Skin Enterprises, Inc. (NSE) empowers innovative companies 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, shareholder value, vision, 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,” “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;
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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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| • |
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;
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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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political, legal, tax and regulatory uncertainties associated with operating in international markets, including Mainland China;
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| • |
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;
|
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Nu Skin Enterprises Reports Second-quarter 2021 Results
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Page 4
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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 businesses the company has acquired;
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| • |
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;
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| • |
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;
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| • |
unpredictable economic conditions and events globally, including trade policies and tariffs;
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| • |
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 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 Second-quarter 2021 Results
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Page 5
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The following table sets forth revenue for the three-month periods ended June 30, 2021 and 2020 for each of our reportable segments (U.S. dollars in
thousands):
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Three Months Ended
June 30,
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Constant-
Currency
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|||||||||||||||
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2021
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2020
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Change
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Change
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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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154,182
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$
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146,332
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5
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%
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(4
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)%
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||||||||
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Americas/Pacific
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151,730
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127,919
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19
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%
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14
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%
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||||||||||
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South Korea
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88,604
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76,915
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15
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%
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6
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%
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||||||||||
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EMEA
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83,115
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50,776
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64
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%
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49
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%
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||||||||||
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Southeast Asia
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70,751
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66,829
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6
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%
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2
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%
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||||||||||
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Japan
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68,020
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68,291
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—
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1
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%
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|||||||||||
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Hong Kong/Taiwan
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38,529
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37,161
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4
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%
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—
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|||||||||||
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Nu Skin other
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755
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(85
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)
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988
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%
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988
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%
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|||||||||
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Total Nu Skin
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655,686
|
574,138
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14
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%
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8
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%
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||||||||||
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Rhyz Investments
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||||||||||||||||
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Manufacturing
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48,140
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37,918
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27
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%
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27
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%
|
||||||||||
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Grow Tech
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191
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310
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(38
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)%
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(38
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)%
|
||||||||||
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Rhyz other
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38
|
—
|
||||||||||||||
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Total Rhyz Investments
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48,369
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38,228
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27
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%
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27
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%
|
||||||||||
|
Total
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$
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704,055
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$
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612,366
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15
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%
|
9
|
%
|
||||||||
The following table sets forth revenue for the six-month periods ended June 30, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):
|
Six Months Ended
June 30,
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Constant-
Currency
|
|||||||||||||||
|
2021
|
2020
|
Change
|
Change
|
|||||||||||||
|
Nu Skin
|
||||||||||||||||
|
Mainland China
|
$
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303,775
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$
|
284,028
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7
|
%
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(2
|
)%
|
||||||||
|
Americas/Pacific
|
301,195
|
202,492
|
49
|
%
|
45
|
%
|
||||||||||
|
South Korea
|
169,735
|
152,634
|
11
|
%
|
3
|
%
|
||||||||||
|
EMEA
|
159,295
|
86,179
|
85
|
%
|
69
|
%
|
||||||||||
|
Southeast Asia
|
138,336
|
136,415
|
1
|
%
|
(2
|
)%
|
||||||||||
|
Japan
|
137,884
|
129,591
|
6
|
%
|
6
|
%
|
||||||||||
|
Hong Kong/Taiwan
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74,874
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72,988
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3
|
%
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(1
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)%
|
||||||||||
|
Nu Skin other
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1,460
|
688
|
112
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%
|
112
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%
|
||||||||||
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Total Nu Skin
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1,286,554
|
1,065,015
|
21
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%
|
15
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%
|
||||||||||
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Rhyz Investments
|
||||||||||||||||
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Manufacturing
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94,125
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65,065
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45
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%
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45
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%
|
||||||||||
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Grow Tech
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364
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314
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16
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%
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16
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%
|
||||||||||
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Rhyz other
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38
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—
|
||||||||||||||
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Total Rhyz Investments
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94,527
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65,379
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45
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%
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45
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%
|
||||||||||
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Total
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$
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1,381,081
|
$
|
1,130,394
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22
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%
|
16
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%
|
||||||||
|
Nu Skin Enterprises Reports Second-quarter 2021 Results
|
Page 6
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The company's Customers and Sales Leaders statistics by segment as of June 30, 2021 and 2020 are presented in the following table:
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As of
June 30, 2021
|
As of
June 30, 2020
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% Increase (Decrease)
|
||||||||||||||||||||||
|
Customers
|
Sales
Leaders |
Customers
|
Sales
Leaders
|
Customers
|
Sales
Leaders
|
|||||||||||||||||||
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Mainland China
|
328,526
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18,647
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321,946
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17,104
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2
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%
|
9
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%
|
||||||||||||||||
|
Americas/Pacific
|
397,685
|
13,078
|
424,236
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10,787
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(6
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)%
|
21
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%
|
||||||||||||||||
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South Korea
|
153,287
|
7,935
|
159,926
|
6,881
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(4
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)%
|
15
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%
|
||||||||||||||||
|
EMEA
|
261,857
|
7,900
|
247,057
|
5,120
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6
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%
|
54
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%
|
||||||||||||||||
|
Southeast Asia
|
135,610
|
7,141
|
155,822
|
6,790
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(13
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)%
|
5
|
%
|
||||||||||||||||
|
Japan
|
125,791
|
6,053
|
125,332
|
6,011
|
—
|
1
|
%
|
|||||||||||||||||
|
Hong Kong/Taiwan
|
64,861
|
3,474
|
65,581
|
3,343
|
(1
|
)%
|
4
|
%
|
||||||||||||||||
|
Total
|
1,467,617
|
64,228
|
1,499,900
|
56,036
|
(2
|
)%
|
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 Reports Second-quarter 2021 Results
|
Page 7
|
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
(U.S. dollars in thousands, except per share amounts)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||||
|
Revenue
|
$
|
704,055
|
$
|
612,366
|
$
|
1,381,081
|
$
|
1,130,394
|
||||||||
|
Cost of sales
|
171,975
|
154,110
|
342,541
|
279,903
|
||||||||||||
|
Gross profit
|
532,080
|
458,256
|
1,038,540
|
850,491
|
||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
Selling expenses
|
277,893
|
248,628
|
551,639
|
454,670
|
||||||||||||
|
General and administrative expenses
|
168,811
|
151,554
|
338,612
|
301,182
|
||||||||||||
|
Total operating expenses
|
446,704
|
400,182
|
890,251
|
755,852
|
||||||||||||
|
Operating income
|
85,376
|
58,074
|
148,289
|
94,639
|
||||||||||||
|
Other income (expense), net
|
(4,012
|
)
|
1,581
|
(2,430
|
)
|
(4,593
|
)
|
|||||||||
|
Income before provision for income taxes
|
81,364
|
59,655
|
145,859
|
90,046
|
||||||||||||
|
Provision for income taxes
|
22,026
|
17,804
|
39,091
|
28,465
|
||||||||||||
|
Net income
|
$
|
59,338
|
$
|
41,851
|
$
|
106,768
|
$
|
61,581
|
||||||||
|
Net income per share:
|
||||||||||||||||
|
Basic
|
$
|
1.18
|
$
|
0.81
|
$
|
2.12
|
$
|
1.15
|
||||||||
|
Diluted
|
$
|
1.15
|
$
|
0.81
|
$
|
2.06
|
$
|
1.15
|
||||||||
|
Weighted-average common shares outstanding (000s):
|
||||||||||||||||
|
Basic
|
50,115
|
51,872
|
50,409
|
53,466
|
||||||||||||
|
Diluted
|
51,557
|
51,925
|
51,850
|
53,502
|
||||||||||||
|
Nu Skin Enterprises Reports Second-quarter 2021 Results
|
Page 8
|
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. dollars in thousands)
|
June 30,
2021
|
December 31, 2020
|
|||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
354,759
|
$
|
402,683
|
||||
|
Current investments
|
24,499
|
21,216
|
||||||
|
Accounts receivable, net
|
64,701
|
63,370
|
||||||
|
Inventories, net
|
390,977
|
314,366
|
||||||
|
Prepaid expenses and other
|
126,586
|
101,563
|
||||||
|
Total current assets
|
961,522
|
903,198
|
||||||
|
Property and equipment, net
|
474,167
|
468,181
|
||||||
|
Operating lease right-of-use assets
|
136,738
|
155,104
|
||||||
|
Goodwill
|
215,582
|
202,979
|
||||||
|
Other intangible assets, net
|
98,955
|
89,532
|
||||||
|
Other assets
|
163,016
|
138,082
|
||||||
|
Total assets
|
$
|
2,049,980
|
$
|
1,957,076
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$
|
60,632
|
$
|
66,174
|
||||
|
Accrued expenses
|
403,165
|
446,682
|
||||||
|
Current portion of long-term debt
|
152,500
|
30,000
|
||||||
|
Total current liabilities
|
616,297
|
542,856
|
||||||
|
Operating lease liabilities
|
100,826
|
112,275
|
||||||
|
Long-term debt
|
288,343
|
305,393
|
||||||
|
Other liabilities
|
126,688
|
102,281
|
||||||
|
Total liabilities
|
1,132,154
|
1,062,805
|
||||||
|
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
|
586,976
|
579,801
|
||||||
|
Treasury stock, at cost – 40.4 million and 39.7 million shares
|
(1,509,867
|
)
|
(1,461,593
|
)
|
||||
|
Accumulated other comprehensive loss
|
(68,553
|
)
|
(64,768
|
)
|
||||
|
Retained earnings
|
1,909,179
|
1,840,740
|
||||||
|
Total stockholders' equity
|
917,826
|
894,271
|
||||||
|
Total liabilities and stockholders’ equity
|
$
|
2,049,980
|
$
|
1,957,076
|
||||
# # #
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Investors: investorrelations@nuskin.com, (801) 345-3577