PROVO, Utah, March 28, 2011 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) announced today that the Tokyo District Court issued its ruling on a dispute between the company and Japan Customs. The District Court upheld previous assessments by Japan Customs of approximately $33 million in customs duties on the company's products from 2002 to 2005.
"We strongly disagree with the court's decision and are likely to appeal," said Ritch Wood, chief financial officer for Nu Skin. "As a result of this decision, however, we plan to take a charge of approximately $33 million this quarter. The charge is a non-cash item as the company was previously required to pay the assessments."
Given the recent natural disasters in Japan, the company also provided an update on the potential impact on its Japan operations.
"First and foremost, our hearts go out to those impacted in Japan," said Truman Hunt, president and chief executive officer. "Our primary concern is the safety of our sales leaders, staff and all those who have been affected by these disasters. Gratefully, we can report that all of our employees, as well as our top sales leaders are accounted for and we continue to reach out to all of our distributors in the heavily impacted areas."
"To support our distributors throughout Japan, our team has been working diligently to bring us back to a fully operational level. We have modified business hours to accommodate commuting delays for many of our employees. Product orders continue to be received and shipped to distributors and customers, with the exception of shipments to the most severely impacted areas, which account for less than 10 percent of our business in Japan.
"Because our sales leaders work to achieve sales targets on a monthly basis, we will have a clearer understanding of the impact of the natural disasters after the end of the month. As of today, we believe that the first-quarter negative impact on our Japan revenue will be approximately $3 to $5 million and $0.01 to $0.02 to earnings per share. We believe this first-quarter impact will largely be offset by strength from our other markets and favorable foreign currency moves. We will continue to provide transparency by issuing a high-level update on the company's first-quarter results by April 6," concluded Hunt.
About Nu Skin Enterprises, Inc.
Nu Skin Enterprises, Inc. demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives. The company's scientific leadership in both skin care and nutrition has established Nu Skin as a premier anti-aging company, evidenced in its unique ageLOC™ science that addresses aging at its source. The company's anti-aging products feature the new ageLOC suite of products including the ageLOC Transformation daily skin care system, ageLOC Future Serum and the ageLOC Edition Galvanic Spa® System II, as well as the ageLOC Vitality nutritional supplement. A global direct selling company, Nu Skin operates in 51 markets worldwide and has approximately 800,000 independent distributors. Nu Skin is traded on the New York Stock Exchange under the symbol "NUS." More information is available at http://www.nuskin.com.
Please note: This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that represent the company's current expectations and beliefs regarding, among other things, the company's expectations and plans, and projections regarding foreign currency and the company's operating results. 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: (a) the risk that continued safety concerns, general disruptions, and general market conditions during and following these events may make it difficult for our distributors to maintain their business activities and negatively impact our revenues more than anticipated; (b) risks and uncertainties related to the ongoing crisis at multiple damaged nuclear power facilities and/or additional aftershocks in Japan and the risk that any escalation of this crisis could cause a further disruption in our ability to operate our business; (c) risk that we may be unable to ship ordered products if shipping services are disrupted; and (d) risk that our operations may be disrupted by evacuations, power or transportation outages, or food or fuel shortages. 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 of this release, 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.
SOURCE Nu Skin Enterprises, Inc.