FOR IMMEDIATE RELEASE

Nu Skin Enterprises Reports First Quarter Financial Results

PROVO, Utah — May 4, 2022 — Nu Skin Enterprises, Inc. (NYSE: NUS) today announced first quarter 2022 results.

Executive Summary

Q1 2022 vs. Prior-year Quarter

Revenue:			$604.9 million; (11)% •    (3)% FX impact or $(17.2) million
Earnings Per Share (EPS):			$0.76; (16)%
Customers:			1,321,451; (13)%
Paid Affiliates:			251,436; (14)%
Sales Leaders:			52,462; (22)%

“Despite heightened global uncertainty and COVID-related obstacles, we are pleased with our first quarter results, which exceeded guidance,” said Ryan Napierski, Nu Skin president and CEO. “Demand remained strong for our most recent product introductions, ageLOC® Meta and Beauty Focus™ Collagen+, and the momentum from these product launches helped drive strong revenue growth in several markets including the U.S., Taiwan and Southeast Asia. Our business in Mainland China and several other markets was disrupted due to severe COVID-related lockdowns and other factors, and the conflict in Ukraine and Russia negatively impacted business throughout the EMEA region.

“As we look ahead to the remainder of the year, we are focused on the strategic imperatives that underpin Nu Vision 2025, including: EmpowerMe, our personalized beauty and wellness strategy with connected beauty device introductions beginning in the third quarter; expansion of our affiliate-powered social commerce business model; and the continued enhancement of our digital platform. While we anticipate near-term headwinds given the dynamic macro environment, we remain confident in the significant growth potential of our business, achieving our vision for the future and driving value for our shareholders.”

Q1 2022 Year-over-year Operating Results

Revenue:			$604.9 million compared to $677.0 million •    (3)% FX impact
Gross Margin:			73.3% compared to 74.8% •    Impacted by product mix and promotions •    Nu Skin business was 76.5% compared to 77.8%
Selling Expenses:			40.1% compared to 40.8% •    Nu Skin business was 43.0% compared to 43.7%
G&A Expenses:			24.6% compared to 24.8%
Operating Margin:			8.6% compared to 9.3%
Other Income / (Expense):			$(1.5) million compared to $1.6 million
Income Tax Rate:			23.6% compared to 26.5%
EPS:			$0.76 compared to $0.91

Stockholder Value

Dividend Payments:			$19.3 million
Stock Repurchases:			$10.0 million •    $235.4 million remaining in authorization

Q2 and Full-year 2022 Outlook

Q2 2022 Revenue:			$590 to $620 million; (16) to (12)% •    Approximately (3) to (4)% FX impact
Q2 2022 EPS:			$0.75 to $0.85; (35) to (26)%
2022 Revenue:			$2.51 to $2.62 billion; (7) to (3)% •    Approximately (3) to (4)% FX impact
2022 EPS:			$3.60 to $3.90; 26 to 36% on a reported basis, or (13) to (6)% non-GAAP

Conference Call

The Nu Skin Enterprises management team will host a conference call with the investment community today at 5 p.m. (ET). Those wishing to access the webcast, as well as the financial information presented during the call, can visit the Investor Relations page on the company’s website at ir.nuskin.com. A replay of the webcast will be available on the same page through May 18, 2022.

 

About Nu Skin Enterprises, Inc.

Nu Skin Enterprises, Inc. (NYSE: NUS) is a leading beauty and wellness company, powered by a dynamic affiliate opportunity platform. The company helps people look, feel and live their best with products that combine the best of science, technology and nature. Backed by more than 35 years of scientific research, Nu Skin develops innovative products including Nu Skin® personal care, Pharmanex® nutrition and the ageLOC® anti-aging brand which includes an award-winning line of beauty device systems. Nu Skin operates in approximately 50 markets worldwide in the Americas, Asia, Europe, Africa and the Pacific. Rhyz Inc. is the company’s strategic investment arm that includes a collection of technology and manufacturing companies to support growth in the core Nu Skin business. Nu Skin is committed to sustainability, including global initiatives such as transitioning to reduced and sustainable packaging for all products by 2030. The Nu Skin Force for Good Foundation also strives to improve children’s health, education and economic circumstances throughout the world. For more information, visit nuskin.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, strategies, vision, transformation, initiatives, product pipeline and product introductions, digital and social-commerce tools and initiatives, customers, sales leaders and affiliates; operational improvements, projections regarding revenue, expenses, operating income, earnings per share, foreign currency fluctuations, uses of cash 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,” “remain,” “become,” “plan,” “opportunity,” “expand,” “will,” “would,” “could,” “may,” “might,” the negative of these words and other similar words.

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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, increased scrutiny of sales force actions, 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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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.

		Three Months Ended March 31,												Constant- Currency
		2022				2021				Change				Change
Nu Skin
Mainland China		$	124,495			$	149,593				(17	)%			(18	)%
Americas			123,580				133,761				(8	)%			(6	)%
Southeast Asia/Pacific			90,236				83,289				8	%			11	%
South Korea			72,133				81,131				(11	)%			(4	)%
Japan			61,791				69,864				(12	)%			(3	)%
EMEA			52,968				76,180				(30	)%			(25	)%
Hong Kong/Taiwan			38,494				36,345				6	%			6	%
Other			620				878				(29	)%			(29	)%
Total Nu Skin			564,317				631,041				(11	)%			(8	)%
Rhyz Investments
Manufacturing			40,341				45,985				(12	)%			(12	)%
Rhyz other			241				—
Total Rhyz Investments			40,582				45,985				(12	)%			(12	)%
Total		$	604,899			$	677,026				(11	)%			(8	)%

		Three Months Ended March 31,
Customers		2022				2021				Change
Mainland China		$	289,060				316,000				(9	)%
Americas			318,458				374,867				(15	)%
Southeast Asia/Pacific			165,657				185,435				(11	)%
South Korea			140,648				152,390				(8	)%
Japan			122,616				126,525				(3	)%
EMEA			216,037				296,001				(27	)%
Hong Kong/Taiwan			68,975				66,042				4	%
Total			1,321,451				1,517,260				(13	)%

		Three Months Ended March 31,
Paid Affiliates		2022				2021				Change
Mainland China		$	22,762				41,944				(46	)%
Americas			46,281				52,767				(12	)%
Southeast Asia/Pacific			43,262				45,871				(6	)%
South Korea			49,328				51,006				(3	)%
Japan			38,059				38,283				(1	)%
EMEA			33,834				43,696				(23	)%
Hong Kong/Taiwan			17,910				17,885				—
Total			251,436				291,452				(14	)%

		Three Months Ended March 31,
Sales Leaders		2022				2021				Change
Mainland China		$	14,146				23,013				(39	)%
Americas			9,547				11,394				(16	)%
Southeast Asia/Pacific			8,012				8,446				(5	)%
South Korea			6,072				6,682				(9	)%
Japan			5,977				6,135				(3	)%
EMEA			5,455				7,479				(27	)%
Hong Kong/Taiwan			3,253				3,755				(13	)%
Total			52,462				66,904				(22	)%

		Three Months Ended March 31,
		2022				2021
Revenue		$	604,899			$	677,026
Cost of sales			161,499				170,566
Gross profit			443,400				506,460
Operating expenses:
Selling expenses			242,699				275,965
General and administrative expenses			148,556				167,582
Total operating expenses			391,255				443,547
Operating income			52,145				62,913
Other income (expense), net			(1,453	)			1,582
Income before provision for income taxes			50,692				64,495
Provision for income taxes			11,976				17,065
Net income		$	38,716			$	47,430
Net income per share:
Basic		$	0.77			$	0.94
Diluted		$	0.76			$	0.91
Weighted-average common shares outstanding (000s):
Basic			49,991				50,706
Diluted			51,066				52,172

		March 31, 2022				December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	302,216			$	339,593
Current investments			15,313				15,221
Accounts receivable, net			52,171				41,299
Inventories, net			381,585				399,931
Prepaid expenses and other			97,923				76,906
Total current assets			849,208				872,950
Property and equipment, net			448,822				453,674
Operating lease right-of-use assets			132,949				120,973
Goodwill			206,432				206,432
Other intangible assets, net			74,874				76,991
Other assets			179,964				175,460
Total assets		$	1,892,249			$	1,906,480
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	40,719			$	49,993
Accrued expenses			343,737				372,201
Current portion of long-term debt			110,000				107,500
Total current liabilities			494,456				529,694
Operating lease liabilities			100,844				88,759
Long-term debt			258,995				268,781
Other liabilities			103,754				106,474
Total liabilities			958,049				993,708
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			599,258				601,703
Treasury stock, at cost – 40.4 million and 40.7 million shares			(1,526,778	)			(1,526,860	)
Accumulated other comprehensive loss			(69,528	)			(73,896	)
Retained earnings			1,931,157				1,911,734
Total stockholders’ equity			934,200				912,772
Total liabilities and stockholders’ equity		$	1,892,249			$	1,906,480

		Year Ended 2021				2022 EPS Guidance – low end				2022 Projected Annual Growth Rate – low end				2022 EPS Guidance – high end				2022 Projected Annual Growth Rate – high end
Net income		$	147,266
Impact of restructuring and impairment:
Restructuring and impairment			51,870
Inventory write-off			6,656
Income tax impact			6,933
Adjusted net income		$	212,725
Diluted earnings per share		$	2.86			$	3.60				26	%		$	3.90				36	%
Diluted earnings per share, excluding restructuring and impairment impact		$	4.14			$	3.60				(13	%)		$	3.90				(6	%)
Weighted-average common shares outstanding (000s):			51,427