NU SKIN ENTERPRISES, INC. PROVO, Utah, Nov. 1, 2017 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced third-quarter 2017 financial results.
Executive Summary
Revenue: $563.7 million, compared to $604.2 million in Q3 2016, which included $56 million in limited-time-offer (LTO) sales. Q3 2017 was negatively impacted approximately 1% by foreign currency fluctuations.
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Earnings Per
Share (EPS): $0.76, compared to $0.98 in Q3 2016.
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Sales Leaders: 64,200 - 5% year-over-year
decrease, impacted by prior-year
LTOs.
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Customers: 1,069,000 - 7% year-over-year
improvement.
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"During the third quarter, we continued to execute our growth strategy and delivered results at the top-end of our previous guidance range," said Ritch Wood, chief executive officer. "We generated sequential improvements in the business, and are confident that our focus on social selling served as an important catalyst for steady customer and business growth in many of our markets. We also saw healthy energy within our sales force leading up to our October Nu Skin LIVE! event."
Q3 2017 Year-Over-Year Operating Results
Revenue: $563.7 million compared to $604.2 million.
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Gross Margin: 78.6% compared to 79.2%.
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Selling Expenses: 41.7% of revenue compared to 42.3%.
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G&A Expenses: 25.4% of revenue compared to 23.3%.
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Operating Margin: 11.4% compared to 13.6%.
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Other Income / ($1.2) million compared to ($5.7)
(Expense): million.
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Income Tax Rate: 34.1% compared to 25.8% due to
closing of Venezuela operations.
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EPS: $0.76 compared to $0.98.
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Stockholder Value
Dividend Payments: $19.0 million.
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Stock Repurchases: $25.7 million; $152 million remaining in authorization.
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2017 Outlook
Q4 Revenue: $650 to $670 million; approximately 1% negative foreign currency impact.
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Q4 EPS: $1.16 to $1.21.
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2017 Revenue: $2.263 to $2.283 billion; approximately 3% growth.
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2017 EPS $3.20 to $3.25.
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"As we look ahead to the fourth quarter, we remain focused on expanding our customer base as we begin rolling out our platform, product and program initiatives," said Wood. "During our LIVE! event, we introduced several new products aimed at increasing the pace of our social selling efforts, including the ageLOC LumiSpa treatment and cleansing device which we plan to launch in every market during the first half of 2018. Over the next several quarters, we will begin implementing enhanced programs to more effectively reward our sales leaders and build long-term customer loyalty. We are confident that our strategic focus on these initiatives will help us build a solid base for future growth and enhanced value for our shareholders."
"Looking forward, we expect fourth-quarter revenue in the $650 to $670 million range which includes a one percent negative foreign currency impact," said Mark Lawrence, chief financial officer. "In the quarter, we continue to anticipate approximately $100 million from the introduction of ageLOC LumiSpa, and project fourth-quarter earnings per share of $1.16 to $1.21."
Conference Call
The Nu Skin management team will host a conference call with the investment community on Nov. 1, 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 Nov. 15, 2017.
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. 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. The ageLOC brand has generated 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 in Asia, the Americas, Europe, Africa and the Pacific. 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.
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, sales force and customer base, growth, initiatives and areas of focus, 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 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;
-- 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;
-- 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 favorable 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.
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 September 30 are presented in the following table (in thousands).
2017 2016 % Constant
Currency
Change
% Change
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Mainland China $172,556 $168,320 2.5% 2.5%
South Korea 89,238 136,188 (34.5%) (33.7%)
Americas 79,214 71,250 11.2% 12.1%
South Asia/Pacific 78,994 70,867 11.5% 12.9%
Japan 62,513 72,489 (13.8%) (6.5%)
Hong Kong/Taiwan 41,050 48,140 (14.7%) (16.4%)
EMEA 40,133 36,908 8.7% 3.2%
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Total $563,698 $604,162 (6.7%) (5.8%)
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The Company's revenue results by segment for the nine-month periods ended September 30 are presented in the following table (in thousands).
2017 2016 % Constant
Currency
Change
% Change
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Mainland China $494,658 $471,319 5.0% 8.5%
South Korea 258,626 315,342 (18.0%) (19.5%)
Americas 221,968 204,882 8.3% 9.1%
South Asia/Pacific 216,727 226,742 (4.4%) (2.9%)
Japan 188,465 210,429 (10.4%) (7.4%)
Hong Kong/Taiwan 120,069 140,568 (14.6%) (17.2%)
EMEA 112,385 107,186 4.9% 4.0%
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Total $1,612,898 $1,676,468 (3.8%) (2.7%)
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The Company's Customers and Sales Leaders statistics by segment for the three-month periods ended September 30 are presented in the following table.
2017 2016 % Increase (Decrease)
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Customers Sales Customers Sales Customers Sales
Leaders Leaders Leaders
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Mainland China 190,000 25,600 182,000 25,300 4.4% 1.2%
South Korea 185,000 8,400 198,000 11,700 (6.6%) (28.2%)
Americas 215,000 7,200 171,000 6,700 25.7% 7.5%
South Asia/Pacific 149,000 7,900 116,000 7,200 28.4% 9.7%
Japan 131,000 6,500 136,000 7,000 (3.7%) (7.1%)
Hong Kong/Taiwan 71,000 4,300 75,000 5,300 (5.3%) (18.9%)
EMEA 128,000 4,300 121,000 4,100 5.8% 4.9%
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Total 1,069,000 64,200 999,000 67,300 7.0% (4.6%)
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"Customers" 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.
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
For the Third Quarters Ended September 30, 2017 and 2016
(in thousands, except per share amounts)
2017 2016
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Revenue $563,698 $604,162
Cost of sales 120,832 125,863
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Gross profit 442,866 478,299
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Operating expenses:
Selling expenses 235,285 255,274
General and administrative expenses 143,219 140,651
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Total operating expenses 378,504 395,925
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Operating income 64,362 82,374
Other income (expense), net (1,172) (5,695)
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Income before provision for income
taxes 63,190 76,679
Provision for income taxes 21,518 19,807
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Net income $41,672 $56,872
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Net income per share:
Basic $0.79 $1.02
Diluted $0.76 $0.98
Weighted average common shares outstanding:
Basic 52,873 55,983
Diluted 54,834 57,852
NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
For the Nine-Month Periods Ended September 30, 2017 and 2016
(in thousands, except per share amounts)
2017 2016
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Revenue $1,612,898 $1,676,468
Cost of sales 353,619 391,937
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Gross profit 1,259,279 1,284,531
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Operating expenses:
Selling expenses 672,646 699,196
General and administrative expenses 411,270 415,014
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Total operating expenses 1,083,916 1,114,210
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Operating income 175,363 170,321
Other income (expense), net (8,470) (19,618)
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Income before provision for income
taxes 166,893 150,703
Provision for income taxes 55,691 45,802
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Net income $111,202 $104,901
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Net income per share:
Basic $2.10 $1.87
Diluted $2.04 $1.85
Weighted average common shares outstanding:
Basic 52,834 55,963
Diluted 54,519 56,586
NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands)
September 30, 2017 December 31, 2016
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ASSETS
Current assets:
Cash and cash equivalents $363,769 $357,246
Current investments 7,983 10,880
Accounts receivable 37,725 31,199
Inventories, net 252,470 249,936
Prepaid expenses and other 87,282 65,076
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749,229 714,337
Property and equipment, net 449,555 444,732
Goodwill 114,954 114,954
Other intangible assets, net 68,904 63,553
Other assets 164,689 136,469
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Total assets $1,547,331 $1,474,045
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $41,638 $41,261
Accrued expenses 276,486 275,023
Current portion of long-term
debt 101,701 82,727
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419,825 399,011
Long-term debt 316,519 334,165
Other liabilities 93,464 76,799
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Total liabilities 829,808 809,975
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Stockholders' equity:
Class A common stock 91 91
Additional paid-in capital 460,782 439,635
Treasury stock, at cost (1,284,043) (1,250,123)
Accumulated other
comprehensive loss (69,233) (84,122)
Retained earnings 1,609,926 1,558,589
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717,523 664,070
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Total liabilities and
stockholders' equity $1,547,331 $1,474,045
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Nu Skin Social Media Channels
fb.com/nuskin twitter.com/nuskin instagram.com/nuskin
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SOURCE Nu Skin Enterprises, Inc.
