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      Nu Skin Enterprises Reports Fourth Quarter and 2021 Financial Results

      Company provides initial 2022 outlook and introduces Nu Vision 2025

      Nu Skin Logo (PRNewsfoto/Nu Skin Enterprises, Inc.)

      News provided by

      Nu Skin Enterprises

      Feb 16, 2022, 07:00 ET

      Share this article

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      PROVO, Utah, Feb. 16, 2022 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) today announced fourth quarter and 2021 results.

      Executive Summary
      Q4 2021 vs. Prior-year Quarter

      Revenue:

      $673.4 million; (10)%

           • (2)% fx impact or $(11.9) million

      Earnings Per Share (EPS):

      $(0.18) or $1.11 excluding restructuring and impairment charges, compared to $1.40 in Q4 2020

      Sales Leaders:

      61,515; (13)% or 12% compared to 2019

      Customers:

      1,367,559; (12)% or 18% compared to 2019

      2021 Annual vs. 2020

      Revenue:

      $2.70 billion; +4%

           • 2% fx impact or $66.5 million

      Earnings Per Share (EPS):

      $2.86 or $4.14 excluding restructuring and impairment charges, compared to $3.63 in 2020, or $3.10 in 2019

           • (21)% or 14% excluding restructuring and impairment charges

           • (8)% or 34% excluding restructuring and impairment charges compared to 2019

      "For the year, we are encouraged with 4 percent year-over-year revenue growth and 11 percent growth compared to 2019, particularly considering the many COVID-related government restrictions, continued global uncertainty and ongoing transformation of our business," said Ryan Napierski, Nu Skin president and CEO. "We generated strong demand for our two most recent products, Beauty Focus™ Collagen+ and ageLOC® Meta, as both performed well during the quarter. Our U.S. business grew 32 percent for the year on top of 37 percent in 2020, due in large part to ongoing adoption of our social selling model. Many of our Asian markets, including Mainland China, continue to be impacted by strict lockdowns and restrictions on in-person sales events and promotional activities. However, South Korea is gaining some traction with social commerce and grew 9 percent due to the ageLOC Meta preview and continued demand for our TR90 weight management product.

      "Looking ahead to 2022, we anticipate another year of growth as we continue our transformation toward becoming the world's leading integrated beauty and wellness company, powered by our dynamic affiliate opportunity platform. Our Nu Vision 2025 strategy, which we will introduce at our investor event later today, encompasses several key strategic imperatives to accelerate growth, including: our EmpowerMe personalized beauty and wellness strategy with connected beauty devices; our affiliate-powered social commerce business model; and the expansion of our digital platform. We are confident in our plans as we work toward achieving our vision for the future."

      Q4 2021 Year-over-year Operating Results                

      Revenue:

      $673.4 million compared to $748.2 million

           • (2)% fx impact

      Gross Margin:

      74.2% or 75.2% excluding restructuring and impairment charges compared to 74.0%

           • Nu Skin business was 77.9% compared to 76.5%

      Selling Expenses:

      38.7% compared to 38.0%

           • Nu Skin business was 41.0% compared to 40.3%

      G&A Expenses:

      24.7% compared to 24.1%

      Operating Margin:

      3.0% or 11.7% excluding restructuring and impairment charges compared to 11.9%

      Other Income / (Expense):

      $(1.9) million compared to $2.7 million

      Income Tax Rate:

      150.1% or 26.9% excluding restructuring and impairment charges, compared to 19.6%

      EPS:

      $(0.18) or $1.11 excluding restructuring and impairment charges, compared to $1.40

      Stockholder Value

      Dividend Payments:

      $18.9 million

      Stock Repurchases:

      $10.0 million

           • $245.4 million remaining in authorization

      Q1 and Full-year 2022 Outlook

      Q1 2022 Revenue:

      $560 to $590 million; (13) to (17)%

           • Approximately (2) to (3)% fx impact

      Q1 2022 EPS:

      $0.65 to $0.75; (18) to (28)%

      2022 Revenue:

      $2.66 to $2.77 billion; (1) to 3%

           • Approximately (1) to (2)% fx impact

      2022 EPS:

      $4.05 to $4.45; +42 to 56% on a reported basis, or (2) to 8% non-GAAP

      "We are especially pleased with our adjusted earnings per share of $4.14 for the year and $1.11 for the quarter, driven by gross margin and operational improvements. Full year adjusted EPS results represent annual growth of 14 percent versus 2020 or 34 percent compared to 2019," added Mark Lawrence, chief financial officer. "During the quarter, we elected to exit our Grow Tech business and re-focus those resources on key strategic initiatives and growth objectives in our core business. We took a one-time pre-tax charge of $58.5 million and anticipate that substantially all the non-cash charges were incurred in the fourth quarter of 2021. As a result of these charges, our reported earnings per share was $2.86 for the year and $(0.18) for the quarter. Our 2022 outlook indicates that we plan to re-invest the bulk of the savings from the exit into technology that will further support our affiliates and drive long-term growth.

      "Our 2022 revenue guidance is $2.66 to $2.77 billion with EPS of $4.05 to $4.45. First quarter projected revenue is $560 to $590 million with EPS of $0.65 to $0.75. Although our near-term guidance continues to be impacted by global uncertainty, we believe our strategic initiatives will enable stronger growth in the second half. We remain committed to driving operational improvements along the way toward our stated mid-term 13 percent operating income target," concluded Lawrence. 

      Investor Day 
      The Nu Skin Enterprises management team will host an investor day event today at noon (ET). To tune in to the webcast and view supplemental materials, visit Nu Skin's investor relations page at ir.nuskin.com when the event begins. A replay of the event, along with supplemental materials, will be available on the same page through March 2, 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 live, look and feel 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, vision, transformation, initiatives, product pipeline and product introductions, digital tools, customers and sales leaders, affiliates, strategies and initiatives; 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.

      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;
      • 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 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;
      • 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;
      • political, legal, tax and regulatory uncertainties associated with operating in international markets, including Mainland China;
      • 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;
      • 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 businesses the company has acquired;
      • 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;
      • 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;
      • unpredictable economic conditions and events globally, including trade policies and tariffs;
      • 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.

      The following table sets forth revenue for the three-month periods ended December 31, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):


      Three Months Ended

      December 31,




      Constant-

      Currency


      2021


      2020


      Change


      Change

      Nu Skin












      Mainland China

      $

      130,708


      $

      172,442



      (24)%



      (26)%

      Americas


      144,000



      140,586



      2%



      4%

      South Korea


      92,528



      90,384



      2%



      8%

      Southeast Asia/Pacific


      90,313



      99,589



      (9)%



      (8)%

      EMEA


      68,066



      82,656



      (18)%



      (14)%

      Japan


      63,215



      73,132



      (14)%



      (6)%

      Hong Kong/Taiwan


      47,816



      45,864



      4%



      3%

      Nu Skin other


      (801)



      (391)



      (105)%



      (105)%

      Total Nu Skin


      635,845



      704,262



      (10)%



      (8)%

      Rhyz Investments












      Manufacturing


      36,360



      43,364



      (16)%



      (16)%

      Grow Tech


      957



      567



      69%



      69%

      Rhyz other


      274



      —







      Total Rhyz Investments


      37,591



      43,931



      (14)%



      (14)%

      Total

      $

      673,436


      $

      748,193



      (10)%



      (8)%

      The following table sets forth revenue for the years ended December 31, 2021 and 2020 for each of our reportable segments (U.S. dollars in thousands):


      Year Ended

      December 31,




      Constant-

      Currency


      2021


      2020


      Change


      Change

      Nu Skin












      Mainland China

      $

      568,774


      $

      625,538



      (9)%



      (15)%

      Americas


      547,755



      453,022



      21%



      20%

      South Korea


      354,252



      326,478



      9%



      6%

      Southeast Asia/Pacific


      336,651



      361,627



      (7)%



      (9)%

      EMEA


      283,200



      230,246



      23%



      18%

      Japan


      266,216



      273,681



      (3)%



      —

      Hong Kong/Taiwan


      162,611



      161,117



      1%



      (2)%

      Nu Skin other


      1,549



      (17)



      9,212%



      9,212%

      Total Nu Skin


      2,521,008



      2,431,692



      4%



      1%

      Rhyz Investments












      Manufacturing


      172,120



      149,339



      15%



      15%

      Grow Tech


      2,104



      903



      133%



      133%

      Rhyz other


      437



      —







      Total Rhyz Investments


      174,661



      150,242



      16%



      16%

      Total

      $

      2,695,669


      $

      2,581,934



      4%



      2%

      The company's Customers and Sales Leaders statistics by segment as of December 31, 2021 and 2020 are presented in the following table:


      2021


      2020


      % Increase (Decrease)


      Customers


      Sales Leaders


      Customers


      Sales Leaders


      Customers


      Sales Leaders

      Mainland China


      315,418



      17,658



      381,460



      21,990



      (17)%



      (20)%

      Americas


      336,564



      10,340



      366,688



      12,754



      (8)%



      (19)%

      South Korea


      146,354



      7,108



      158,953



      7,059



      (8)%



      1%

      Southeast Asia/Pacific


      169,601



      10,386



      192,622



      10,588



      (12)%



      (2)%

      EMEA


      210,414



      6,124



      258,587



      7,063



      (19)%



      (13)%

      Japan


      122,813



      5,872



      128,400



      6,318



      (4)%



      (7)%

      Hong Kong/Taiwan


      66,395



      4,027



      70,592



      4,663



      (6)%



      (14)%

      Total


      1,367,559



      61,515



      1,557,302



      70,435



      (12)%



      (13)%

      "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, INC.

      Consolidated Statements of Income (Unaudited)

      (U.S. dollars in thousands, except per share amounts)



      Three Months Ended

      December 31,


       Years Ended

      December 31,


      2021


      2020


      2021


      2020













      Revenue

      $

      673,436


      $

      748,193


      $

      2,695,669


      $

      2,581,934

      Cost of sales


      173,775



      194,751



      675,223



      658,028

      Gross profit


      499,661



      553,442



      2,020,446



      1,923,906













      Operating expenses:












      Selling expenses


      260,831



      284,129



      1,068,189



      1,019,494

      General and administrative expenses


      166,641



      180,616



      666,395



      646,848

      Restructuring and impairment expenses


      51,870



      —



      51,870



      —

      Total operating expenses


      479,342



      464,745



      1,786,454



      1,666,342













      Operating income


      20,319



      88,697



      233,992



      257,564

      Other income (expense), net


      (1,883)



      2,736



      (1,533)



      (1,332)













      Income before provision for income taxes


      18,436



      91,433



      232,459



      256,232

      Provision for income taxes


      27,666



      17,966



      85,193



      64,877













      Net income

      $

      (9,230)


      $

      73,467


      $

      147,266


      $

      191,355













      Net income per share:












      Basic

      $

      (0.19)


      $

      1.44


      $

      2.93


      $

      3.66

      Diluted

      $

      (0.18)


      $

      1.40


      $

      2.86


      $

      3.63













      Weighted-average common shares outstanding (000s):












      Basic


      49,862



      50,971



      50,193



      52,296

      Diluted


      50,801



      52,403



      51,427



      52,765

      NU SKIN ENTERPRISES, INC.

      Consolidated Balance Sheets (Unaudited)

      (U.S. dollars in thousands)



      December 31, 2021


      December 31, 2020

      ASSETS




      Current assets:




      Cash and cash equivalents

      $

      339,593


      $

      402,683

      Current investments


      15,221



      21,216

      Accounts receivable, net


      41,299



      63,370

      Inventories, net


      399,931



      314,366

      Prepaid expenses and other


      76,906



      101,563

       Total current assets


      872,950



      903,198







      Property and equipment, net


      453,674



      468,181

      Operating lease right-of-use assets


      120,973



      155,104

      Goodwill


      206,432



      202,979

      Other intangible assets, net


      76,991



      89,532

      Other assets


      175,460



      138,082

      Total assets

      $

      1,906,480


      $

      1,957,076







      LIABILITIES AND STOCKHOLDERS' EQUITY






      Current liabilities:






      Accounts payable

      $

      49,993


      $

      66,174

      Accrued expenses


      372,201



      446,682

      Current portion of long-term debt


      107,500



      30,000

       Total current liabilities


      529,694



      542,856







      Operating lease liabilities 


      88,759



      112,275

      Long-term debt


      268,781



      305,393

      Other liabilities


      106,474



      102,281

      Total liabilities


      993,708



      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


      601,703



      579,801

      Treasury stock, at cost – 40.7 million and 39.7 million shares


      (1,526,860)



      (1,461,593)

      Accumulated other comprehensive loss


      (73,896)



      (64,768)

      Retained earnings


      1,911,734



      1,840,740

      Total stockholders' equity


      912,772



      894,271

      Total liabilities and stockholders' equity

      $

      1,906,480


      $

      1,957,076

      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.

      Gross margin, operating margin, income tax rate, earnings per share and adjusted earnings per share growth, each excluding impairment and restructuring charges, also are non-GAAP financial measures. Impairment and restructuring charges are not part of the ongoing operations of our underlying business. The company believes that these non-GAAP financial measures are useful to investors, lenders and analysts because removing the impact of impairment and restructuring charges facilitates period-to-period comparisons of the company's performance. Please see the reconciliations of these items to our gross margin, operating margin, income tax rate, earnings per share and earnings per share growth calculated under GAAP, below.

      NU SKIN ENTERPRISES, INC.

      Reconciliation of Earnings Per Share Excluding Impact of Restructuring and Impairment to GAAP Earnings Per Share

      (in thousands, except per share amounts)



      Three Months Ended


      Years Ended


      December 31,


      December 31,


      2021


      2020


      2021


      2020









      Net income

      $          (9,230)


      $            73,467


      $           147,266


      $          191,335

      Impact of restructuring and impairment:








              Restructuring and impairment

      51,870


      —


      51,870


      —

          Inventory write-off

      6,656


      —


      6,656


      —

             Income tax impact

      6,933


      —


      6,933


      —

      Adjusted net income

      $           56,229


      $            73,467


      $           212,725


      $          191,335









      Diluted earnings per share

      $            (0.18)


      $                1.40


      $                 2.86


      $                3.63

      Diluted earnings per share, excluding restructuring and impairment impact

      $               1.11


      $                1.40


      $                 4.14


      $                3.63









      Weighted-average common shares outstanding (000s):

      50,801


      52,403


      51,427


      52,765









      NU SKIN ENTERPRISES, INC.

      Reconciliation of Earnings Per Share Growth Rate Excluding Impact of Restructuring and Impairment to GAAP Earnings Per Share

      (in thousands, except per share amounts)




      Years Ended



      December 31,



      2021


      2020


      2019








      Net income


      $           147,266


      $          191,335


      $          173,553

      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


      $          191,335


      $          173,553








      Diluted earnings per share


      $                 2.86


      $                3.63


      $                3.10

      Diluted earnings per share, excluding restructuring and impairment impact


      $                 4.14


      $                3.63


      $                3.10








      Weighted-average common shares outstanding (000s):


      51,427


      52,765


      55,927








      2021 annual growth rate







      Earnings per share, growth rate


      (21)%





      Earnings per share, growth rate, excluding restructuring and impairment impact


      14%










      2021 growth over 2019






      Earnings per share, growth rate


      (8)%





      Earnings per share, growth rate, excluding restructuring and impairment impact


      34%




      NU SKIN ENTERPRISES, INC.

      Reconciliation of Gross Margin Excluding Impact of Restructuring and Impairment to GAAP Gross Margin

      (in thousands, except per share amounts)



      Three Months Ended


      Years Ended


      December 31,


      December 31,


      2021


      2020


      2021


      2020









      Gross Profit

      $         499,661


      $          553,442


      $        2,020,446


      $       1,923,906

      Impact of restructuring and impairment:








          Inventory write-off

      6,656


      —


      6,656


      —

      Adjusted Gross Profit

      $         506,317


      $          553,442


      $        2,027,102


      $       1,923,906









      Gross margin

      74.2%


      74.0%


      75.0%


      74.5%

      Gross margin, excluding restructuring and impairment impact

      75.2%


      74.0%


      75.2%


      74.5%









      Revenue

      $        673,436


      $          748,193


      $        2,695,669


      $       2,581,934

      NU SKIN ENTERPRISES, INC.

      Reconciliation of Operating Margin Excluding Impact of Restructuring to GAAP Operating Margin

      (in thousands, except per share amounts)



      Three Months Ended


      Years Ended


      December 31,


      December 31,


      2021


      2020


      2021


      2020









      Operating income

      $           20,319


      $            88,697


      $           233,992


      $          257,564

      Impact of restructuring and impairment:








              Restructuring and impairment

      51,870


      —


      51,870


      —

          Inventory write-off

      6,656


      —


      6,656


      —

      Adjusted operating income

      $           78,845


      $            88,697


      $           292,518


      $          257,564









      Operating margin

      3.0%


      11.9%


      8.7%


      10.0%

      Operating margin, excluding restructuring and impairment impact

      11.7%


      11.9%


      10.9%


      10.0%









      Revenue

      $        673,436


      $          748,193


      $        2,695,669


      $       2,581,934

      NU SKIN ENTERPRISES, INC.

      Reconciliation of Effective Tax Rate Excluding Impact of Restructuring to GAAP Effective Tax Rate

      (in thousands, except per share amounts)



      Three Months Ended


      Years Ended


      December 31,


      December 31,


      2021


      2020


      2021


      2020









      Provision for income taxes

      $           27,666


      $            17,966


      $             85,193


      $          64,877

      Impact of restructuring on tax provision

      (6,933)


      —


      (6,933)


      —

      Provision for income taxes, excluding impact of restructuring

      $           20,733


      $            17,966


      $             78,260


      $            64,877









      Income before provision for income taxes

      $           18,436


      $           91,433


      $           232,459


      $          256,232

      Impact of restructuring and impairment:








              Restructuring and impairment

      51,870


      —


      51,870


      —

             Inventory write-off

      6,656


      —


      6,656


      —

      Income before provision for income taxes, excluding restructuring and impairment impact

      $           76,962


      $            91,433


      $           290,985


      $          256,232









      Effective tax rate

      150.1%


      19.6%


      36.6%


      25.3%

      Effective tax rate, excluding restructuring and impairment impact

      26.9%


      19.6%


      26.9%


      25.3%

      SOURCE Nu Skin Enterprises

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