NU SKIN ENTERPRISES, INC. PROVO, Utah, Aug. 4, 2016 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced second-quarter results with revenue above guidance at $600.5 million, compared to $560.2 million in the prior-year period. Quarterly revenue improved 7 percent, or 10 percent on a constant-currency basis. Earnings per share for the quarter were $0.79 compared to $0.75 in the prior-year period. Earnings were negatively impacted $0.13 per share due to foreign currency translation charges recorded in other income/expense.
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"We are pleased with our second-quarter results and remain optimistic about the future as we continue to introduce our latest ageLOC products," said Truman Hunt, president and chief executive officer. "During the quarter, we held significant product introduction events in South Asia/Pacific and Greater China, generating revenue growth of 36 and 18 percent, respectively. We are also encouraged with the increase in sales leaders during the quarter, a reflection of the strength of our product launches."
Regional Results
The company's regional revenue results for the three-month periods ended June 30 are presented in the following table.
2016 2015 % Constant
Change Currency
% Change
--------
Greater China $236,716 $200,136 18% 24%
North Asia 165,885 172,943 (4%) (6%)
Americas 67,884 83,468 (19%) (15%)
South Asia/Pacific 92,297 68,023 36% 42%
EMEA 37,693 35,639 6% 5%
------ ------
Total $600,475 $560,209 7% 10%
======== ========
The company's regional revenue results for the six-month periods ended June 30 are presented in the following table.
2016 2015 % Constant
Change Currency
% Change
--------
Greater China $395,427 $387,503 2% 7%
North Asia 317,094 345,009 (8%) (7%)
Americas 133,632 163,340 (18%) (13%)
South Asia/Pacific 155,875 138,840 12% 19%
EMEA 70,278 68,849 2% 3%
------ ------
Total $1,072,306 $1,103,541 (3%) 1%
========== ==========
The Company's regional actives and sales leaders statistics are presented in the following table.
As of June 30, 2016 As of June 30, 2015 % Increase (Decrease)
------------------- ------------------- --------------------
Actives Sales Leaders Actives Sales Leaders Actives Sales Leaders
------- ------------- ------- ------------- ------- -------------
Greater China 257,000 31,554 215,000 25,956 19.5% 21.6%
North Asia 356,000 16,128 387,000 16,991 (8.0%) (5.1%)
Americas 165,000 6,515 180,000 7,892 (8.3%) (17.4%)
South Asia/
Pacific 113,000 7,747 120,000 7,279 (5.8%) 6.4%
EMEA 121,000 4,168 113,000 4,042 7.1% 3.1%
------- ----- ------- -----
Total 1,012,000 66,112 1,015,000 62,160 (0.3%) 6.4%
========= ====== ========= ======
"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 improved to 13.3 percent, compared to 12.8 percent in the prior-year period. Gross margin for the quarter was 78.7 percent, compared to 80.3 percent in the prior-year quarter. Both gross and operating margins continued to be negatively impacted by foreign currency fluctuations. Selling expenses, as a percent of revenue, were 41.4 percent, compared to 42.7 percent in the second quarter of 2015. General and administrative expenses, as a percent of revenue, were 24.0 percent, compared to 24.8 percent in the prior-year period. The company's effective income tax rate for the quarter was 35.0 percent, compared to 35.3 percent in the second quarter of last year. Dividend payments during the quarter were $19.9 million, and the company repurchased $4.3 million of its outstanding shares, with $422.7 million remaining in the authorized share repurchase plan at the end of the quarter.
Outlook
"We are pleased with the solid results of our product launches and growth of our sales force in the second quarter, which we believe will positively impact our business going forward," said Hunt. "In July, we executed a highly successful introduction of ageLOC Youth in South Korea, and we look forward to new product initiatives in all of our regions throughout the remainder of the year.
"Our balance sheet continues to be strong, boosted by positive cash flow from operations for the quarter of $139 million, with continued improvements to our inventory balance. Our cash balance includes approximately $200 million of proceeds from the recent investment by Ping An Securities during the second quarter, which we plan to deploy in repurchasing shares over the balance of the year," concluded Hunt.
"We are pleased with our results this quarter and are raising our revenue guidance for the year to $2.20 to $2.24 billion, assuming a negative foreign currency impact of 2 to 3 percent," said Ritch Wood, chief financial officer. "For the third quarter, we project revenue of $560 to $580 million including a negative currency impact of 1 to 2 percent. We project third-quarter earnings per share of $0.80 to $0.84, and full-year earnings per share of $2.44 to $2.54, or $2.80 to $2.90 when excluding a $0.36 per share non-cash Japan customs charge taken in the first quarter."
The Nu Skin management team will host a conference call with the investment community on Aug. 4 at 5 p.m. (EDT). 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 Aug. 19, 2016.
About Nu Skin Enterprises, Inc.
Founded more than 30 years ago, Nu Skin Enterprises, Inc. develops and distributes innovative consumer products, offering a comprehensive line of premium-quality beauty and wellness solutions in more than 50 markets worldwide. The company builds upon its scientific expertise in both skin care and nutrition to continually develop innovative product brands that include the Nu Skin® personal care brand, the Pharmanex® nutrition brand, and most recently, the ageLOC® anti-aging brand. Since its introduction in 2008, the ageLOC brand has generated more than $5 billion in sales, and built a loyal following for such products as the ageLOC Youth nutritional supplement, the ageLOC Me® customized skin care system, as well as the ageLOC TR90® weight management and body shaping system. Nu Skin sells its products through a global network of sales leaders. As a long-standing member of direct selling associations globally, Nu Skin is committed to the industry's consumer guidelines that protect and support those who sell and purchase its products through the direct selling channel. Nu Skin is also traded on the New York Stock Exchange under the symbol "NUS." More information is available at 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, initiatives 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:
-- 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;
-- risk of foreign currency fluctuations and the currency translation
impact on the company's business associated with these fluctuations;
-- 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;
-- 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;
-- 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;
-- adverse publicity related to the company's business, products, industry
or any legal actions or complaints by the company's sales force or
others;
-- risk that litigation, investigations or other legal matters could result
in settlements, assessments or damages that significantly affect
financial results;
-- unpredictable economic conditions and events globally;
-- 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
-- continued competitive pressures in the company's markets.
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.
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
For the Second Quarters Ended June 30, 2016 and 2015
(in thousands, except per share amounts)
2016 2015
---- ----
Revenue $600,475 $560,209
Cost of sales 128,205 110,263
------- -------
Gross profit 472,270 449,946
------- -------
Operating expenses:
Selling expenses 248,363 239,449
General and administrative expenses 144,109 138,696
------- -------
Total operating expenses 392,472 378,145
------- -------
Operating income 79,798 71,801
Other income (expense), net (11,060) (2,758)
------- ------
Income before provision for income
taxes 68,738 69,043
Provision for income taxes 24,025 24,386
------ ------
Net income $44,713 $44,657
======= =======
Net income per share:
Basic $0.80 $0.76
Diluted $0.79 $0.75
Weighted average common shares outstanding:
Basic 55,952 58,506
Diluted 56,356 59,713
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
For the Six-Month Periods Ended June 30, 2016 and 2015
(in thousands, except per share amounts)
2016 2015
---- ----
Revenue $1,072,306 $1,103,541
Cost of sales 266,074 215,318
------- -------
Gross profit 806,232 888,223
------- -------
Operating expenses:
Selling expenses 443,922 473,454
General and administrative expenses 274,363 274,322
------- -------
Total operating expenses 718,285 747,776
------- -------
Operating income 87,947 140,447
Other income (expense), net (13,923) (15,026)
------- -------
Income before provision for income
taxes 74,024 125,421
Provision for income taxes 25,995 44,482
------ ------
Net income $48,029 $80,939
======= =======
Net income per share:
Basic $0.86 $1.38
Diluted $0.85 $1.35
Weighted average common shares outstanding:
Basic 55,953 58,747
Diluted 56,388 59,994
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands)
June 30, 2016 December 31, 2015
------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $544,848 $289,354
Current investments 11,503 14,371
Accounts receivable 31,706 35,464
Inventories, net 259,933 265,256
Prepaid expenses and other 162,710 101,947
------- -------
1,010,700 706,392
Property and equipment, net 453,342 454,537
Goodwill 114,954 112,446
Other intangible assets, net 67,410 67,009
Other assets 134,463 165,459
------- -------
Total assets $1,780,869 $1,505,843
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $43,360 $28,832
Accrued expenses 350,849 310,916
Current portion of long-
term debt 96,896 67,849
------ ------
491,105 407,597
Long-term debt 362,051 181,745
Other liabilities 97,473 90,880
------ ------
Total liabilities 950,629 680,222
------- -------
Stockholders' equity:
Class A common stock 91 91
Additional paid-in capital 431,459 419,921
Treasury stock, at cost (1,032,117) (1,017,063)
Accumulated other
comprehensive loss (71,463) (71,269)
Retained earnings 1,502,270 1,493,941
--------- ---------
830,240 825,621
------- -------
Total liabilities and
stockholders' equity $1,780,869 $1,505,843
========== ==========
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SOURCE Nu Skin Enterprises, Inc.
