Nu Skin Enterprises Reports 28 Percent Second-Quarter Revenue Growth And Raises Annual Guidance

PROVO, Utah, Aug. 2, 2018 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced strong second-quarter financial results with revenue of $704.2 million, up 28 percent over the prior-year period, and earnings per share of $0.90, a 17 percent increase over the prior-year period. Quarterly earnings were negatively impacted by a foreign currency translation loss of $0.13 and a $0.05 purchase accounting charge.

Executive Summary

Q2 2018 vs. Prior-Year Quarter

"We continue to successfully execute on our customer growth strategy centered on engaging platforms, enabling products and empowering programs, which led to accelerated growth," said Ritch Wood, chief executive officer. "Our customers grew by 8 percent and sales leaders grew by 21 percent, and we saw healthy revenue generation throughout the business, highlighted by double-digit increases in Mainland China, Southeast Asia and the Americas and Pacific. We are also pleased with the solid performance of our acquired businesses, which we anticipate will show increased benefits in our future results."

Q2 2018 Year-Over-Year Operating Results

Stockholder Value

Q3 and 2018 Outlook

"Based on our strong first-half results, with double-digit growth in both the first and second quarters, we now see revenue growth of approximately 15 to 17 percent for the year," said Wood. "We will continue to invest in social selling capabilities, product innovation and the ongoing rollout of our Velocity sales compensation program. We expect these initiatives, coupled with the capability improvements we are making through development and recent acquisitions, will drive additional upside. As a testament of our confidence in the strength of the business, our board of directors approved an increase to our stock repurchase authorization to $500 million."

"We generated 28 percent year-over-year revenue growth and strong earnings performance in the quarter," said Mark Lawrence, chief financial officer. "For the year, we are increasing our annual revenue guidance by $120 million to $2.63 billion to $2.67 billion with earnings per share of $3.50 to $3.65. This guidance includes $0.16 in purchase accounting charges and the $0.13 foreign currency translation loss from the second quarter. We are projecting third-quarter revenue of $650 to $670 million, including a negative 3 percent currency impact, and earnings per share of $0.93 to $0.98."

Conference Call

The Nu Skin management team will host a conference call with the investment community on Aug. 2, 2018, 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 Aug. 16, 2018.

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 LumiSpa skin cleansing and treatment device, 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 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, growth, 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," "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;
• 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;
• 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;
• risk of foreign currency fluctuations and the currency translation impact on the company's business associated with these fluctuations;
• uncertainties regarding the future financial performance of the company's recent acquisitions;
• 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;
• 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;
• unpredictable economic conditions and events globally;
• uncertainties related to the trade disputes between the U.S. and Mainland China, and associated risks if the trade disputes are prolonged or worsen, or additional changes or actions are taken by the two countries with respect to trade policies, that could further adversely impact exchange rates, the economies of both markets and consumer sentiment;
• 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
• 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 June 30 are presented in the following table (in thousands).

The Company's revenue results by segment for the six-month periods ended June 30 are presented in the following table (in thousands).

The company's Customers and Sales Leaders statistics by segment for the three-month periods ended June 30 are presented in the following table.

Nu Skin Social Media Channels
• fb.com/nuskin   • twitter.com/nuskin   • instagram.com/nuskin

SOURCE Nu Skin Enterprises, Inc.