þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________
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Commission File Number: 001-12421
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NU SKIN ENTERPRISES, INC.
|
||||
(Exact name of registrant as specified in its charter)
|
||||
Delaware
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87-0565309
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(State or other jurisdiction of incorporation or organization)
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75 WEST CENTER STREET
PROVO UT 84601
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(IRS Employer Identification No.)
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||
(Address of principal executive offices, including zip code)
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||||
(801) 345-1000
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||||
(Registrant’s telephone number, including area code)
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Page
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||||
Part I.
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Financial Information
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|||
Item 1.
|
Financial Statements (Unaudited):
|
|||
Consolidated Balance Sheets
|
1
|
|||
Consolidated Statements of Income
|
2
|
|||
Consolidated Statements of Cash Flows
|
3
|
|||
Notes to Consolidated Financial Statements
|
4
|
|||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
11
|
||
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
23
|
||
Item 4.
|
Controls and Procedures
|
23
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||
Part II.
|
Other Information
|
|||
Item 1.
|
Legal Proceedings
|
24
|
||
Item 1A.
|
Risk Factors
|
24
|
||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
24
|
||
Item 3.
|
Defaults Upon Senior Securities
|
25
|
||
Item 4.
|
(Removed and Reserved)
|
25
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||
Item 5.
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Other Information
|
25
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||
Item 6.
|
Exhibits
|
25
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||
Signature
|
26
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June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 233,403 | $ | 230,337 | ||||
Accounts receivable
|
32,885 | 25,701 | ||||||
Inventories, net
|
108,431 | 114,475 | ||||||
Prepaid expenses and other
|
58,831 | 52,013 | ||||||
433,550 | 422,526 | |||||||
Property and equipment, net
|
138,981 | 133,722 | ||||||
Goodwill
|
112,446 | 112,446 | ||||||
Other intangible assets, net
|
75,317 | 78,270 | ||||||
Other assets
|
127,909 | 145,260 | ||||||
Total assets
|
$ | 888,203 | $ | 892,224 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 28,620 | $ | 25,480 | ||||
Accrued expenses
|
125,500 | 146,108 | ||||||
Current portion of long-term debt
|
27,972 | 27,865 | ||||||
Related party payable
|
─
|
16,995 | ||||||
182,092 | 216,448 | |||||||
Long-term debt
|
118,287 | 133,013 | ||||||
Other liabilities
|
79,565 | 71,514 | ||||||
Total liabilities
|
379,944 | 420,975 | ||||||
Commitments and contingencies (Note 10)
|
||||||||
Stockholders’ equity:
|
||||||||
Class A common stock – 500 million shares authorized, $.001 par value, 90.6 million shares issued
|
91 | 91 | ||||||
Additional paid-in capital
|
271,957 | 256,505 | ||||||
Treasury stock, at cost – 28.5 million shares
|
(500,063 | ) | (476,748 | ) | ||||
Retained earnings
|
790,236 | 749,940 | ||||||
Accumulated other comprehensive loss
|
(53,962 | ) | (58,539 | ) | ||||
508,259 | 471,249 | |||||||
Total liabilities and stockholders’ equity
|
$ | 888,203 | $ | 892,224 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue
|
$ | 424,426 | $ | 388,362 | $ | 820,271 | $ | 752,486 | ||||||||
Cost of sales
|
71,168 | 67,937 | 171,822 | (1) | 132,770 | |||||||||||
Gross profit
|
353,258 | 320,425 | 648,449 | 619,716 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling expenses
|
183,500 | 160,739 | 352,642 | 315,001 | ||||||||||||
General and administrative expenses
|
103,712 | 100,525 | 204,854 | 199,437 | ||||||||||||
Total operating expenses
|
287,212 | 261,264 | 557,496 | 514,438 | ||||||||||||
Operating income
|
66,046 | 59,161 | 90,953 | 105,278 | ||||||||||||
Other income (expense), net
|
(127 | ) | (7,287 | ) | (549 | ) | (6,673 | ) | ||||||||
Income before provision for income taxes
|
65,919 | 51,874 | 90,404 | 98,605 | ||||||||||||
Provision for income taxes
|
24,218 | 19,482 | 33,395 | 35,173 | ||||||||||||
Net income
|
$ | 41,701 | $ | 32,392 | $ | 57,009 | $ | 63,432 | ||||||||
Net income per share (Note 2):
|
||||||||||||||||
Basic
|
$ | 0.67 | $ | 0.51 | $ | 0.92 | $ | 1.01 | ||||||||
Diluted
|
$ | 0.65 | $ | 0.50 | $ | 0.89 | $ | 0.98 | ||||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||||||
Basic
|
61,806 | 62,919 | 61,817 | 62,698 | ||||||||||||
Diluted
|
64,193 | 65,072 | 64,177 | 64,904 |
Six Months Ended
|
||||||||
June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 57,009 | $ | 63,432 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
15,853 | 15,006 | ||||||
Japan customs expense
|
32,754 |
─
|
||||||
Foreign currency (gains)/losses
|
(1,763 | ) | 4,308 | |||||
Stock-based compensation
|
7,762 | 4,395 | ||||||
Deferred taxes
|
(7,580 | ) | 3,146 | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(6,423 | ) | (4,054 | ) | ||||
Inventories, net
|
7,943 | (8,470 | ) | |||||
Prepaid expenses and other
|
(1,882 | ) | (1,158 | ) | ||||
Other assets
|
(13,152 | ) | (5,580 | ) | ||||
Accounts payable
|
2,372 | 3,676 | ||||||
Accrued expenses
|
(23,571 | ) | 4,830 | |||||
Other liabilities
|
11,466 | 7,621 | ||||||
Net cash provided by operating activities
|
80,788 | 87,152 | ||||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(16,440 | ) | (18,053 | ) | ||||
Net cash used in investing activities
|
(16,440 | ) | (18,053 | ) | ||||
Cash flows from financing activities:
|
||||||||
Exercise of employee stock options
|
13,039 | 13,236 | ||||||
Payment of debt
|
(15,058 | ) | (14,745 | ) | ||||
Payment of cash dividends
|
(16,714 | ) | (15,675 | ) | ||||
Income tax benefit of options exercised
|
4,747 | 4,828 | ||||||
Payment of related party debt
|
(16,995 | ) |
─
|
|||||
Repurchases of shares of common stock
|
(33,817 | ) | (39,261 | ) | ||||
Net cash used in financing activities
|
(64,798 | ) | (51,617 | ) | ||||
Effect of exchange rate changes on cash
|
3,516 | (2,853 | ) | |||||
Net increase in cash and cash equivalents
|
3,066 | 14,629 | ||||||
Cash and cash equivalents, beginning of period
|
230,337 | 158,045 | ||||||
Cash and cash equivalents, end of period
|
$ | 233,403 | $ | 172,674 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income
|
$ | 41,701 | $ | 32,392 | $ | 57,009 | $ | 63,432 | ||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment
|
2,129 | (2,671 | ) | 4,537 | (3,774 | ) | ||||||||||
Net unrealized (losses)/gains on foreign currency cash flow hedges
|
(826 | ) |
─
|
145 | 29 | |||||||||||
Less: Reclassification adjustment for realized gains in current earnings
|
(93 | ) |
─
|
(104 | ) | (126 | ) | |||||||||
Comprehensive income
|
$ | 42,911 | $ | 29,721 | $ | 61,587 | $ | 59,561 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
Revenue:
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
North Asia
|
$ | 183,097 | $ | 164,105 | $ | 362,531 | $ | 334,966 | ||||||||
Greater China
|
79,404 | 80,642 | 147,997 | 138,327 | ||||||||||||
Americas
|
59,805 | 62,389 | 115,684 | 124,843 | ||||||||||||
South Asia/Pacific
|
59,212 | 45,938 | 109,158 | 81,282 | ||||||||||||
Europe (region)
|
42,908 | 35,288 | 84,901 | 73,068 | ||||||||||||
Totals
|
$ | 424,426 | $ | 388,362 | $ | 820,271 | $ | 752,486 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
Revenue:
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Nu Skin
|
$ | 227,931 | $ | 239,886 | $ | 444,891 | $ | 463,152 | ||||||||
Pharmanex
|
194,104 | 145,801 | 370,301 | 283,917 | ||||||||||||
Other
|
2,391 | 2,675 | 5,079 | 5,417 | ||||||||||||
Totals
|
$ | 424,426 | $ | 388,362 | $ | 820,271 | $ | 752,486 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
Revenue:
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Japan
|
$ | 115,067 | $ | 113,295 | $ | 226,900 | $ | 221,988 | ||||||||
South Korea
|
68,030 | 50,810 | 135,631 | 112,978 | ||||||||||||
United States
|
49,621 | 52,738 | 96,851 | 105,780 | ||||||||||||
Mainland China
|
38,110 | 20,558 | 69,166 | 40,939 | ||||||||||||
Europe
|
37,126 | 29,156 | 72,757 | 60,521 | ||||||||||||
Taiwan
|
28,999 | 28,633 | 54,211 | 52,776 |
Long-lived assets:
|
June 30,
2011
|
December 31, 2010
|
||||||
Japan
|
$ | 11,878 | $ | 12,473 | ||||
South Korea
|
12,255 | 9,396 | ||||||
United States
|
87,452 | 84,829 | ||||||
Europe
|
2,500 | 2,697 | ||||||
Mainland China
|
11,727 | 11,646 | ||||||
Taiwan
|
1,843 | 2,200 |
Facility or
Arrangement(1)
|
Original Principal Amount
|
Balance as of
June 30, 2011(2)
|
Interest Rate
|
Repayment terms
|
||||
2003 $205.0 million multi-currency uncommitted shelf facility:
|
||||||||
U.S. dollar denominated:
|
$40.0 million
|
$34.3 million
|
6.2%
|
Notes due July 2016, with annual principal payments that began in July 2010.
|
||||
$20.0 million
|
$17.1 million
|
6.2%
|
Notes due January 2017, with annual principal payments that began in January 2011.
|
|||||
Japanese yen denominated:
|
3.1 billion yen
|
1.3 billion yen ($16.6 million as of June 30, 2011)
|
1.7%
|
Notes due April 2014, with annual principal payments that began in April 2008.
|
||||
2.3 billion yen
|
2.3 billion yen ($28.1 million as of June 30, 2011)
|
2.6%
|
Notes due September 2017, with annual principal payments beginning September 2011.
|
|||||
2.2 billion yen
|
1.9 billion yen ($23.2 million as of June 30, 2011)
|
3.3%
|
Notes due January 2017, with annual principal payments that began in January 2011.
|
|||||
2010 committed loan:
|
||||||||
U.S. dollar denominated:
|
$30.0 million
|
$27.0 million
|
Variable 30 day: 1.25%
|
Amortizes $1.5 million per quarter
|
||||
2004 $25.0 million revolving credit facility
|
N/A
|
None
|
N/A
|
Credit facility is due May 2014. | ||||
2009 $100.0 million uncommitted multi-currency shelf facility
|
N/A
|
None
|
N/A
|
(1)
|
Each of the credit facilities and arrangements listed in the table are secured by guarantees issued by the Company’s material domestic subsidiaries and by pledges of 65% of the outstanding stock of the Company’s material foreign subsidiaries. The 2010 committed loan is also secured by deeds of trust with respect to the Company’s corporate headquarters and distribution center in Provo, Utah.
|
(2)
|
The current portion of our long-term debt (i.e. becoming due in the next 12 months) includes $9.6 million of the balance of our Japanese yen-denominated debt under the 2003 multi-currency uncommitted shelf facility, $12.4 million of the balance on our U.S. dollar denominated debt under the 2003 multi-currency uncommitted shelf facility and $6.0 million of our 2010 committed loan.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
Japan
|
$ | 115.1 | $ | 113.3 | 2% | $ | 226.9 | $ | 222.0 | 2% | ||||||||||||||
South Korea
|
68.0 | 50.8 | 34% | 135.6 | 113.0 | 20% | ||||||||||||||||||
North Asia total
|
$ | 183.1 | $ | 164.1 | 12% | $ | 362.5 | $ | 335.0 | 8% |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
Taiwan
|
$ | 29.0 | $ | 28.6 | 1% | $ | 54.2 | $ | 52.8 | 3% | ||||||||||||||
Mainland China
|
38.1 | 20.6 | 85% | 69.2 | 40.9 | 69% | ||||||||||||||||||
Hong Kong
|
12.3 | 31.4 | (61%) | 24.6 | 44.6 | (45%) | ||||||||||||||||||
Greater China total
|
$ | 79.4 | $ | 80.6 | (2%) | $ | 148.0 | $ | 138.3 | 7% |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
United States
|
$ | 49.6 | $ | 52.7 | (6%) | $ | 96.8 | $ | 105.8 | (9%) | ||||||||||||||
Canada
|
5.5 | 6.0 | (8%) | 10.6 | 11.9 | (11%) | ||||||||||||||||||
Latin America
|
4.7 | 3.7 | 27% | 8.3 | 7.1 | 17% | ||||||||||||||||||
Americas total
|
$ | 59.8 | $ | 62.4 | (4%) | $ | 115.7 | $ | 124.8 | (7%) |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
Singapore/Malaysia/Brunei
|
$ | 26.6 | $ | 21.3 | 25% | $ | 47.5 | $ | 35.0 | 36% | ||||||||||||||
Thailand
|
16.2 | 13.6 | 19% | 31.0 | 25.6 | 21% | ||||||||||||||||||
Australia/New Zealand
|
7.2 | 4.6 | 57% | 13.3 | 9.0 | 48% | ||||||||||||||||||
Indonesia
|
5.5 | 3.7 | 49% | 10.2 | 6.8 | 50% | ||||||||||||||||||
Philippines
|
3.7 | 2.7 | 37% | 7.2 | 4.9 | 47% | ||||||||||||||||||
South Asia/Pacific total
|
$ | 59.2 | $ | 45.9 | 29% | $ | 109.2 | $ | 81.3 | 34% |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||||||||||
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|||||||||||||||||||
Europe
|
$ | 42.9 | $ | 35.3 | 22% | $ | 84.9 | $ | 73.1 | 16% |
|
•
|
planning and construction of a new innovation center on our Provo campus and a new Greater China regional headquarters in Shanghai, China, and related real estate acquisitions;
|
|
•
|
the build-out and upgrade of leasehold improvements in our various markets, including retail stores in China; and
|
|
•
|
purchases of computer systems and software, including equipment and development costs.
|
Facility or
Arrangement(1)
|
Original Principal Amount
|
Balance as of
June 30, 2011(2)
|
Interest Rate
|
Repayment terms
|
||||
2003 $205.0 million multi-currency uncommitted shelf facility:
|
||||||||
U.S. dollar
denominated:
|
$40.0 million
|
$34.3 million
|
6.2%
|
Notes due July 2016, with annual principal payments that began in July 2010.
|
||||
$20.0 million
|
$17.1 million
|
6.2%
|
Notes due January 2017, with annual principal payments that began in January 2011.
|
|||||
Japanese yen
denominated:
|
3.1 billion yen
|
1.3 billion yen ($16.6 million as of June 30, 2011)
|
1.7%
|
Notes due April 2014, with annual principal payments that began in April 2008.
|
||||
2.3 billion yen
|
2.3 billion yen ($28.1 million as of June 30, 2011)
|
2.6%
|
Notes due September 2017, with annual principal payments beginning September 2011.
|
|||||
2.2 billion yen
|
1.9 billion yen ($23.2 million as of June 30, 2011)
|
3.3%
|
Notes due January 2017, with annual principal payments that began in January 2011.
|
|||||
2010 committed loan:
|
||||||||
U.S. dollar
denominated:
|
$30.0 million
|
$27.0 million
|
Variable 30 day: 1.25%
|
Amortizes $1.5 million per quarter
|
||||
2004 $25.0 million revolving credit facility
|
N/A
|
None
|
N/A
|
Credit facility is due May 2014. | ||||
2009 $100.0 million uncommitted multi-currency shelf facility
|
N/A
|
None
|
N/A
|
(1)
|
Each of the credit facilities and arrangements listed in the table are secured by guarantees issued by the Company’s material domestic subsidiaries and by pledges of 65% of the outstanding stock of the Company’s material foreign subsidiaries. The 2010 committed loan is also secured by deeds of trust with respect to our corporate headquarters and distribution center in Provo, Utah.
|
(2)
|
The current portion of the Company’s long-term debt (i.e. becoming due in the next 12 months) includes $9.6 million of the balance of its Japanese yen-denominated debt under the 2003 multi-currency uncommitted shelf facility, $12.4 million of the balance on its U.S. dollar denominated debt under the 2003 multi-currency uncommitted shelf facility and $6.0 million of its 2010 committed loan.
|
As of June 30, 2011
|
As of June 30, 2010
|
||||||||
Region:
|
Active
|
Executive
|
Active
|
Executive
|
|||||
North Asia
|
331,000
|
15,127
|
327,000
|
14,286
|
|||||
Greater China
|
130,000
|
9,580
|
114,000
|
8,398
|
|||||
Americas
|
65,000
|
5,185
|
169,000
|
5,528
|
|||||
South Asia/Pacific
|
91,000
|
4,499
|
74,000
|
3,630
|
|||||
Europe
|
110,000
|
3,917
|
102,000
|
3,664
|
|||||
Total
|
827,000
|
38,308
|
786,000
|
35,506
|
·
|
risks related to general disruption and market conditions following the recent disasters in Japan and the risk that the resulting impact on our operations in that market and on the ability of our independent distributors to maintain or reestablish their business and sponsoring activities may negatively impact our revenues more than anticipated;
|
·
|
continued or increased levels of regulatory and media scrutiny and any regulatory actions taken by regulators, or any adoption of more restrictive regulations, in response to such scrutiny;
|
·
|
any weakening of the Japanese yen;
|
·
|
regulatory constraints with respect to the claims we can make regarding the efficacy of products and tools, which could limit our ability to effectively market them;
|
·
|
risks that the initiatives we have implemented in Japan, which are patterned after successful initiatives implemented in other markets, will not have the same level of success in Japan, may not generate renewed growth or increased productivity among our distributors, and may cost more or require more time to implement than we have anticipated;
|
·
|
inappropriate activities by our distributors and any resulting regulatory actions;
|
·
|
any increased weakness in the economy or consumer confidence; and
|
·
|
competitive pressures from other direct selling companies and their distributors who actively seek to solicit our distributors to join their businesses.
|
Six Months Ended
June 30,
|
||||||||
2011
|
2010
|
|||||||
Revenue
|
$ | 820,271 | $ | 752,486 | ||||
Gross profit
|
$ | 648,449 | $ | 619,716 | ||||
Japan customs expense
|
32,754 |
─
|
||||||
Gross profit, excluding Japan customs expense
|
$ | 681,203 | $ | 619,716 | ||||
Gross profit, excluding Japan customs expense, as a % of revenue
|
83.0% | |||||||
Gross profit as a % of revenue
|
79.1% | 82.4% |
Six Months Ended
June 30,
|
||||||||
2011
|
2010
|
|||||||
Net income
|
$ | 57,009 | $ | 63,432 | ||||
Japan customs expense
|
32,754 |
─
|
||||||
Tax effect of Japan customs expense
|
(12,099 | ) |
─
|
|||||
Net income, excluding Japan customs expense
|
$ | 77,664 | $ | 63,432 | ||||
Diluted earnings per share, excluding Japan customs expense
|
$ | 1.21 | ||||||
Diluted earnings per share
|
$ | 0.89 | $ | 0.98 |
(a)
|
(b)
|
(c)
|
(d)
|
|||||
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(in millions)(1)
|
||||
April 1 – 30, 2011
|
217,600
|
$ 29.44
|
217,600
|
$ 145.9
|
||||
May 1 – 31, 2011
|
40,000
|
$ 33.46
|
40,000
|
$ 141.0
|
||||
June 1 – 30, 2011
|
112,314
|
$ 36.62
|
112,100
|
$ 119.3
|
||||
Total
|
369,914(2)
|
|
(1)
|
In August 1998, our board of directors approved a plan to repurchase $10.0 million of our Class A common stock on the open market or in private transactions. Our board has from time to time increased the amount authorized under the plan and a total amount of approximately $485.0 million is currently authorized. As of June 30, 2011, we had repurchased approximately $365.7 million of shares under the plan. There has been no termination or expiration of the plan since the initial date of approval.
|
(2)
|
We have authorized the repurchase of shares acquired by our employees and distributors in certain foreign markets because of regulatory and other issues that make it difficult or costly for these persons to sell such shares in the open market. These shares were awarded or acquired in connection with our initial public offering in 1996. Of the shares listed in this column, 214 relate to repurchases from such employees and distributors at an average price per share of $37.84.
|
(a)
|
As previously reported in a Form 8-K filed May 31, 2011, at our Annual Meeting of Stockholders on May 24, 2011, a plurality of our stockholders voted in favor of one year as the frequency of stockholder advisory votes on our executive compensation. Accordingly, until the next stockholder advisory vote on the frequency of stockholder advisory votes on our executive compensation, we intend to hold a stockholder advisory vote on our executive compensation annually.
|
(b)
|
As previously reported in a Form 8-K filed July 22, 2011, on July 18, 2011 our Board of Directors adopted an amendment and restatement of our bylaws (the “Second Amended and Restated Bylaws”), which, among other amendments, modified provisions regarding advance notice requirements for stockholders to make director nominations, including shortening the advance notice period from 120 days to 90 days for nominations not included in our proxy statement and identifying specific information that must be provided by the nominating stockholder. The Second Amended and Restated Bylaws are filed as Exhibit 3.1 to this quarterly report on Form 10-Q and are incorporated by reference.
|
ITEM 6.
|
EXHIBITS
|
3.1
|
Second Amended and Restated Bylaws of Nu Skin Enterprises, Inc.
|
31.1
|
Certification by M. Truman Hunt, President and Chief Executive Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes–Oxley Act of 2002.
|
31.2
|
Certification by Ritch N. Wood, Chief Financial Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification by M. Truman Hunt, President and Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification by Ritch N. Wood, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
By:
|
/s/ Ritch N. Wood | |
Ritch N. Wood | |||
Its: |
Chief Financial Officer
|
||
(Duly Authorized Officer and Principal Financial and Accounting Officer) |
EXHIBIT 31.1
|
Consolidated Balance Sheets (Unaudited) Parenthetical (USD $)
In Millions, except Per Share data |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Stockholders' equity: | Â | Â |
Common stock - authorized (in shares) | 500 | 500 |
Common stock - par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock - issued (in shares) | 90.6 | 90.6 |
Treasury stock, at cost (in shares) | 28.5 | 28.5 |
Consolidated Statements of Income (Unaudited) (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Consolidated Statements of Income (Unaudited) [Abstract] | Â | Â | Â | Â |
Revenue | $ 424,426 | $ 388,362 | $ 820,271 | $ 752,486 |
Cost of sales | 71,168 | 67,937 | 171,822 | 132,770 |
Gross profit | 353,258 | 320,425 | 648,449 | 619,716 |
Operating expenses: | Â | Â | Â | Â |
Selling expenses | 183,500 | 160,739 | 352,642 | 315,001 |
General and administrative expenses | 103,712 | 100,525 | 204,854 | 199,437 |
Total operating expenses | 287,212 | 261,264 | 557,496 | 514,438 |
Operating income | 66,046 | 59,161 | 90,953 | 105,278 |
Other income (expense), net | (127) | (7,287) | (549) | (6,673) |
Income before provision for income taxes | 65,919 | 51,874 | 90,404 | 98,605 |
Provision for income taxes | 24,218 | 19,482 | 33,395 | 35,173 |
Net income | $ 41,701 | $ 32,392 | $ 57,009 | $ 63,432 |
Net income per share (Note 2): | Â | Â | Â | Â |
Basic (in dollars per share) | $ 0.67 | $ 0.51 | $ 0.92 | $ 1.01 |
Diluted (in dollars per share) | $ 0.65 | $ 0.50 | $ 0.89 | $ 0.98 |
Weighted-average common shares outstanding (000s): | Â | Â | Â | Â |
Basic (in shares) | 61,806 | 62,919 | 61,817 | 62,698 |
Diluted (in shares) | 64,193 | 65,072 | 64,177 | 64,904 |
NET INCOME PER SHARE (Details)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
NET INCOME PER SHARE [Abstract] | Â | Â | Â | Â |
Other shares excluded from the calculation of diluted earnings per share (in shares) | 2.2 | 0.1 | 2.2 | 0.1 |
Document And Entity Information (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Entity Registrant Name | NU SKIN ENTERPRISES INC |
Entity Central Index Key | 0001021561 |
Current Fiscal Year End Date | --06-30 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Public Float | $ 753,000,000 |
Entity Common Stock, Shares Outstanding | 28,546,007 |
Document Fiscal Year Focus | 2011 |
Document Fiscal Period Focus | Q2 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2011 |
REPURCHASES OF COMMON STOCK (Details) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Equity, Class of Treasury Stock [Line Items] | Â | Â | Â | Â |
Common stock repurchased (in shares) | 0.4 | 1.1 | 1.1 | 1.5 |
Common stock repurchased | $ 11.8 | $ 29.1 | $ 33.8 | $ 39.3 |
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SEGMENT INFORMATION
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | 7. SEGMENT INFORMATION The Company operates in a single operating segment by selling products to a global network of independent distributors that operates in a seamless manner from market to market, except for its operations in Mainland China. In Mainland China, the Company utilizes an employed sales force, contractual sales promoters and direct sellers to sell its products through fixed retail locations. Selling expenses are the Company's largest expense comprised of the commissions and incentives paid to its worldwide independent distributors as well as remuneration to its Mainland China sales employees, promoters and direct sellers paid on product sales. The Company manages its business primarily by managing its global sales force. The Company does not use profitability reports on a regional or divisional basis for making business decisions. However, the Company does recognize revenue in five geographic regions: North Asia, Greater China, Americas, South Asia/Pacific and Europe. Revenue generated in each of these regions is set forth below (U.S. dollars in thousands):
Revenue generated by each of the Company's three product lines is set forth below (U.S. dollars in thousands):
Additional information as to the Company's operations in its most significant geographic areas is set forth below (U.S. dollars in thousands):
|
COMPREHENSIVE INCOME (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
COMPREHENSIVE INCOME [Abstract] | Â | Â | Â | Â |
Net income | $ 41,701 | $ 32,392 | $ 57,009 | $ 63,432 |
Other comprehensive income, net of tax: | Â | Â | Â | Â |
Foreign currency translation adjustment | 2,129 | (2,671) | 4,537 | (3,774) |
Net unrealized losses on foreign currency cash flow hedges | (826) | 0 | 145 | 29 |
Less: Reclassification adjustment for realized losses (gains) in current earnings | 93 | 0 | 104 | 126 |
Comprehensive income | $ 42,911 | $ 29,721 | $ 61,587 | $ 59,561 |
DERIVATIVE FINANCIAL INSTRUMENTS (Details)
|
Jun. 30, 2011
USD ($)
|
Jun. 30, 2011
JPY (Â¥)
|
Jun. 30, 2011
EUR (€)
|
Sep. 30, 2008
USD ($)
|
---|---|---|---|---|
Derivative [Line Items] | Â | Â | Â | Â |
Notional amount of foreign currency cash flow hedges | $ 700,000 | ¥ 5,300,000,000 | € 500,000 | $ 65,800,000 |
Net unrealized gain | $ 0 | Â | Â | Â |
ACCOUNTING PRONOUNCEMENTS
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Accounting Pronouncements [Abstract] | Â |
Accounting Pronouncements | 12. ACCOUNTING PRONOUNCEMENTS In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. ASU 2011-04 provides a consistent definition of fair value and ensures that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. This guidance will be effective for interim and annual reporting periods beginning after January 1, 2012 and will be applied prospectively. The Company is currently evaluating the impact of adopting ASU 2011-04, but believes there will be no significant impact on its consolidated financial statements. In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income. ASU 2011-05 requires entities to present items of net income and other comprehensive income either in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive, statements of net income and other comprehensive income. This guidance will be effective as of January 1, 2012 for the Company and is not expected to have a significant impact on our financial statements, other than presentation. qual to the difference between the Company’s declared duties and the amount the customs authorities have determined the Company should be paying on all current imports. Because the Company believes that the higher rate determined by the customs authorities is an improper application of the regulations, the Company is currently expensing the portion of the duties the Company believes is supported under applicable customs law, and recording the additional deposit or payment as a receivable within long-term assets on its consolidated financial statements. To the extent that the Company is unsuccessful in recovering the amounts assessed and paid or held in bond, the Company will likely be required to record an expense for the full amount of the disputed assessments. |
DIVIDENDS PER SHARE
|
3 Months Ended |
---|---|
Jun. 30, 2011
|
|
DIVIDENDS PER SHARE [Abstract] | Â |
DIVIDENDS PER SHARE | 3. DIVIDENDS PER SHARE In February and May 2011, the Company’s board of directors declared a quarterly cash dividend of $0.135 per share for all shares of Class A common stock. These quarterly cash dividends totaling $8.4 million each were paid on March 16, 2011 and June 15, 2011, to stockholders of record on February 25, 2011 and May 27, 2011, respectively. In July 2011, the Company’s board of directors declared a quarterly cash dividend of $0.160 per share for all shares of Class A common stock to be paid September 14, 2011 to stockholders of record on August 26, 2011. |
UNCERTAIN TAX POSITIONS
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
UNCERTAIN TAX POSITIONS [Abstract] | Â |
UNCERTAIN TAX POSITIONS | 9. UNCERTAIN TAX POSITIONS The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. The Company is currently under examination by the United States Internal Revenue Service (the “IRS”) for the 2005 through 2008 tax years. With a few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examination by tax authorities for years before 2005. In 2009, the Company entered into a voluntary program with the IRS called Compliance Assurance Process (“CAP”).The objective of CAP is to contemporaneously work with the IRS to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company has elected to participate in the CAP program for 2011 and may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. In major foreign jurisdictions, the Company is no longer subject to income tax examinations for years before 2004. Along with the IRS examination, the Company is currently under examination in certain foreign jurisdictions; however, the outcomes of those reviews are not yet determinable. The Company’s unrecognized tax benefits relate to multiple foreign and domestic jurisdictions. Due to potential increases in unrecognized tax benefits from the multiple jurisdictions in which the Company operates, as well as the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross unrecognized tax benefits, net of foreign currency adjustments, may change within the next 12 months by a range of approximately $8 to $11 million. The amount of gross unrecognized tax benefits increased by $0.5 million during the six months ended June 30, 2011, due mainly to the completion of a tax audit in Korea, current tax positions and changes in currency exchange rates. |
THE COMPANY (Policies)
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
THE COMPANY [Abstract] | Â |
Consolidation, policy | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited consolidated financial statements include the accounts of the Company and its Subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Company's financial information as of June 30, 2011, and for the three- and six-month periods ended June 30, 2011 and 2010. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the fiscal year. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. |
COMMITMENTS AND CONTINGENCIES
|
12 Months Ended |
---|---|
Dec. 31, 2010
|
|
COMMITMENTS AND CONTINGENCIES [Abstract] | Â |
COMMITMENTS AND CONTINGENCIES |
LONG (Details)
|
6 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
USD ($)
|
Dec. 31, 2010
USD ($)
|
Jun. 30, 2011
2003 multi-currency uncommitted shelf facility, U.S. dollar denominated 1 [Member]
USD ($)
|
Jun. 30, 2011
2003 multi-currency uncommitted shelf facility, U.S. dollar denominated 2 [Member]
USD ($)
|
Jun. 30, 2011
2003 multi-currency uncommitted shelf facility, Japanese yen denominated 1 [Member]
USD ($)
|
Jun. 30, 2011
2003 multi-currency uncommitted shelf facility, Japanese yen denominated 1 [Member]
JPY (Â¥)
|
Jun. 30, 2011
2003 multi-currency uncommitted shelf facility, Japanese yen denominated 3 [Member]
USD ($)
|
Jun. 30, 2011
2003 multi-currency uncommitted shelf facility, Japanese yen denominated 3 [Member]
JPY (Â¥)
|
Jun. 30, 2011
2003 multi-currency uncommitted shelf facility, total Japanese yen-denominated debt [Member]
USD ($)
|
Jun. 30, 2011
2003 multi-currency uncommitted shelf facility, Total [Member]
USD ($)
|
Jun. 30, 2011
2010 committed loan, U.S. dollar denominated [Member]
USD ($)
|
Jun. 30, 2011
Multi Currency Uncommitted Shelf Facility Japanese Yen Denominated 2 Member [Member]
USD ($)
|
Jun. 30, 2011
Multi Currency Uncommitted Shelf Facility Japanese Yen Denominated 2 Member [Member]
JPY (Â¥)
|
Jun. 30, 2011
Revcolving Credit Facility Member [Member]
USD ($)
|
Jun. 30, 2011
Uncommitted Multi Currency Shelf Facility Member [Member]
USD ($)
|
|
Debt Instrument [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Original principal amount - facilities |  |  | $ 40,000,000 | $ 20,000,000 |  | ¥ 3,100,000,000 |  | ¥ 2,200,000,000 |  | $ 205,000,000 | $ 30,000,000 |  | ¥ 2,300,000,000 | $ 25,000,000 | $ 100,000,000 |
Balance - facilities | Â | Â | 34,300,000 | 17,100,000 | 16,600,000 | 1,300,000,000 | 23,200,000 | 1,900,000,000 | Â | Â | 27,000,000 | 28,100,000 | 2,300,000,000 | 0 | 0 |
Interest rate - facilities (in hundredths) | Â | Â | 6.20% | 6.20% | 1.70% | 1.70% | 3.30% | 3.30% | Â | Â | Â | 2.60% | 2.60% | Â | Â |
Repayment terms | Â | Â | Notes due July 2016, with annual principal payments that began in July 2010. |
Notes due January 2017, with annual principal payments that began in January 2011. |
Notes due April 2014, with annual principal payments that began in April 2008 | Notes due April 2014, with annual principal payments that began in April 2008 | Notes due January 2017, with annual principal payments that began in January 2011 | Notes due January 2017, with annual principal payments that began in January 2011 | Â | Â | Â | Notes due September 2017, with annual principal payments beginning September 2011. |
Notes due September 2017, with annual principal payments beginning September 2011. |
 |  |
Interest rate description - other borrowings | Â | Â | Â | Â | Â | Â | Â | Â | Â | Variable 30 day | Â | Â | Â | Â | Â |
Interest rate - other borrowings (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 1.25% | Â | Â | Â | Â |
Amortization per quarter | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 1,500,000 | Â | Â | Â | Â |
Percentage of outstanding stock of material foreign subsidiaries pledged as security (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | 65.00% | 65.00% | Â | Â | 65.00% | 65.00% |
Current portion of long-term debt | $ 27,972,000 | $ 27,865,000 | $ 12,400,000 | Â | Â | Â | Â | Â | $ 9,600,000 | Â | $ 6,000,000 | Â | Â | Â | Â |
DEFERRED TAX ASSETS AND LIABILITIES
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
DEFERRED TAX ASSETS AND LIABILITIES [Abstract] | Â |
DEFERRED TAX ASSETS AND LIABILITIES | 8. DEFERRED TAX ASSETS AND LIABILITIES The Company accounts for income taxes in accordance with the Income Taxes Topic of the Financial Accounting Standards Codification. These standards establish financial accounting and reporting standards for the effects of income taxes that result from an enterprise’s activities during the current and preceding years. The Company takes an asset and liability approach for financial accounting and reporting of income taxes. The Company pays income taxes in many foreign jurisdictions based on the profits realized in those jurisdictions, which can be significantly impacted by terms of intercompany transactions between the Company and its foreign affiliates. Deferred tax assets and liabilities are created in this process. As of June 30, 2011 the Company has net deferred tax assets of $68.0 million. The Company has netted these deferred tax assets and deferred tax liabilities by jurisdiction. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized |
THE COMPANY
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
THE COMPANY [Abstract] | Â |
THE COMPANY | 1. THE COMPANY Nu Skin Enterprises, Inc. (the "Company") is a leading, global direct selling company that develops and distributes premium-quality, innovative personal care products and nutritional supplements that are sold worldwide under the Nu Skin and Pharmanex brands and a small number of other products and services. The Company reports revenue from five geographic regions: North Asia, which consists of Japan and South Korea; Greater China, which consists of Mainland China, Hong Kong, Macau and Taiwan; Americas, which consists of the United States, Canada and Latin America; South Asia/Pacific, which consists of Australia, Brunei, Indonesia, Malaysia, New Zealand, the Philippines, Singapore and Thailand; and Europe, which consists of several markets in Europe as well as Israel, Russia and South Africa (the Company's subsidiaries operating in these countries are collectively referred to as the "Subsidiaries"). The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited consolidated financial statements include the accounts of the Company and its Subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Company's financial information as of June 30, 2011, and for the three- and six-month periods ended June 30, 2011 and 2010. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the fiscal year. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. |
DERIVATIVE FINANCIAL INSTRUMENTS
|
3 Months Ended |
---|---|
Jun. 30, 2010
|
|
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | Â |
DERIVATIVE FINANCIAL INSTRUMENTS | 4. DERIVATIVE FINANCIAL INSTRUMENTS At June 30, 2011, the Company held mark to market forward contracts designated as foreign currency cash flow hedges with notional amounts totaling 5.3 billion Japanese yen ($65.8 million as of June 30, 2011) and 500,000 Euros ($0.7 million as of June 30, 2011) to hedge forecasted foreign-currency-denominated intercompany transactions, and a net unrealized gain of $0.1 million was recorded in accumulated other comprehensive income. The Company did not hold any mark to market forward contracts as of June 30, 2010. The contracts held at June 30, 2011 have maturities through June 30, 2012 and accordingly, all unrealized gains and losses on foreign currency cash flow hedges included in accumulated other comprehensive income will be recognized in current earnings over the next 12 months. There were no pre-tax net (losses)/gains on foreign currency cash flow hedges recorded in current earnings for the year ended December 31, 2010. The pre-tax net (losses)/gains on foreign currency cash flow hedges recorded in current earnings were immaterial for the quarter ending June 30, 2011. |
COMMITMENTS AND CONTINGENCIES (Details)
In Millions |
Jun. 30, 2011
USD ($)
|
Jun. 30, 2011
JPY (Â¥)
|
---|---|---|
Loss Contingencies [Line Items] | Â | Â |
Aggregate amount of assessments and disputed duties | $ 46.8 | ¥ 3,800.0 |
Increase per quarter in disputed assessments | $ 3.5 | Â |
REPURCHASES OF COMMON STOCK
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
REPURCHASES OF COMMON STOCK [Abstract] | Â |
REPURCHASES OF COMMON STOCK | 5. REPURCHASES OF COMMON STOCK During the three- and six-month periods ended June 30, 2011, the Company repurchased approximately 0.4 million and 1.1 million shares of its Class A common stock under its open market repurchase plan for approximately $11.8 million and $33.8 million, respectively. During the three- and six-month periods ended June 30, 2010, the Company repurchased approximately 1.1 million and 1.5 million shares of its Class A common stock under its open market repurchase plan for approximately $29.1 and $39.3 million, respectively At June 30, 2011, $119.3 million was available for repurchases under the stock repurchase program. |
SEGMENT INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
SEGMENT INFORMATION [Abstract] | Â | Â | Â | Â | Â |
Number of geographic regions | Â | Â | 5 | Â | Â |
Number of product lines | Â | Â | 3 | Â | Â |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | $ 424,426 | $ 388,362 | $ 820,271 | $ 752,486 | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 424,426 | 388,362 | 820,271 | 752,486 | Â |
North Asia [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 183,097 | 164,105 | 362,531 | 334,966 | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 183,097 | 164,105 | 362,531 | 334,966 | Â |
Greater China [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 79,404 | 80,642 | 147,997 | 138,327 | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 79,404 | 80,642 | 147,997 | 138,327 | Â |
Americas [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 59,805 | 62,389 | 115,684 | 124,843 | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 59,805 | 62,389 | 115,684 | 124,843 | Â |
South Asia/Pacific [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 59,212 | 45,938 | 109,158 | 81,282 | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 59,212 | 45,938 | 109,158 | 81,282 | Â |
Europe - By Region [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 42,908 | 35,288 | 84,901 | 73,068 | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 42,908 | 35,288 | 84,901 | 73,068 | Â |
Japan [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 115,067 | 113,295 | 226,900 | 221,988 | Â |
Long-lived assets | 11,878 | Â | 11,878 | Â | 12,473 |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 115,067 | 113,295 | 226,900 | 221,988 | Â |
South Korea [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 68,030 | 50,810 | 135,631 | 112,978 | Â |
Long-lived assets | 12,255 | Â | 12,255 | Â | 9,396 |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 68,030 | 50,810 | 135,631 | 112,978 | Â |
United States [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 49,621 | 52,738 | 96,851 | 105,780 | Â |
Long-lived assets | 87,452 | Â | 87,452 | Â | 84,829 |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 49,621 | 52,738 | 96,851 | 105,780 | Â |
Europe - By Significant Geographic Area [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 37,126 | 29,156 | 72,757 | 60,521 | Â |
Long-lived assets | 11,727 | Â | 11,727 | Â | 11,646 |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 37,126 | 29,156 | 72,757 | 60,521 | Â |
Mainland China [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 38,110 | 20,558 | 69,166 | 40,939 | Â |
Long-lived assets | 2,500 | Â | 2,500 | Â | 2,697 |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 38,110 | 20,558 | 69,166 | 40,939 | Â |
Taiwan [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 28,999 | 28,633 | 54,211 | 52,776 | Â |
Long-lived assets | 1,843 | Â | 1,843 | Â | 2,200 |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 28,999 | 28,633 | 54,211 | 52,776 | Â |
Nu Skin [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 227,931 | 239,886 | Â | Â | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 227,931 | 239,886 | Â | Â | Â |
Pharmanex [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 194,104 | 145,801 | Â | Â | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | 194,104 | 145,801 | Â | Â | Â |
Other Product Lines [Member]
|
 |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â |
Revenue | 2,391 | 2,675 | Â | Â | Â |
Revenue from External Customer [Line Items] | Â | Â | Â | Â | Â |
Revenue | $ 2,391 | $ 2,675 | Â | Â | Â |
COST OF SALES (Details) (USD $)
In Millions |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Loss Contingencies [Line Items] | Â |
Expense recorded for the full amount of disputed assessments | $ 32.8 |
UNCERTAIN TAX POSITIONS (Details) (USD $)
In Millions |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
UNCERTAIN TAX POSITIONS [Abstract] | Â |
Estimate of change in gross unrecognized tax benefits, net of foreign currency adjustments, within the next 12 months - minimum | $ 8 |
Estimate of change in gross unrecognized tax benefits, net of foreign currency adjustments, within the next 12 months - maximum | 11 |
Increase in gross unrecognized tax benefit due to completion of tax audit | $ 0.5 |
COST OF SALES
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Resolution of Regulatory Matter [Abstract] | Â |
Cost Of Sales | 13. COST OF SALES In March 2011, the Tokyo District Court upheld a disputed $32.8 million customs assessment on certain of the Company’s products imported into Japan during the period of October 2002 through July 2005. As a result of this decision, the Company recorded an expense for the full amount of the disputed assessments in the first quarter of 2011. The charge was a non-cash item, as the Company was previously required to pay the assessments under protest. The Company has appealed this decision. |
COMPREHENSIVE INCOME
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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COMPREHENSIVE INCOME [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME | 6. COMPREHENSIVE INCOME The components of comprehensive income, net of related tax, for the three- and six-month periods ended June 30, 2011 and 2010, were as follows (U.S. dollars in thousands):
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LONG (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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LONG TERM DEBT [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-Term Debt Arrangements | The Company currently has debt pursuant to various credit facilities and other borrowings. The following table summarizes the Company's long-term debt arrangements as of June 30, 2011:
|
DEFERRED TAX ASSETS AND LIABILITIES (Details) (USD $)
In Millions |
Jun. 30, 2011
|
---|---|
DEFERRED TAX ASSETS AND LIABILITIES [Abstract] | Â |
Net deferred tax assets | $ 68.0 |
THE COMPANY (Details)
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
THE COMPANY [Abstract] | Â |
Number of geographic regions | 5 |
DIVIDENDS PER SHARE (Details) (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
DIVIDENDS PER SHARE [Abstract] | Â | Â | Â | Â |
Date declared | 2011-02 | Â | 2011-05 | Â |
Cash dividend declared (in dollars per share) | $ 0.135 | $ 0.135 | Â | Â |
Payment of cash dividends | $ 8,400 | $ 8,400 | $ 16,714 | $ 15,675 |
Date paid | Mar. 16, 2011 | Jun. 15, 2011 | ||
Date of record | Feb. 25, 2011 | May 27, 2011 |
NET INCOME PER SHARE
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
NET INCOME PER SHARE [Abstract] | Â |
NET INCOME PER SHARE | 2. NET INCOME PER SHARE Net income per share is computed based on the weighted-average number of common shares outstanding during the periods presented. Additionally, diluted earnings per share data gives effect to all potentially dilutive common shares that were outstanding during the periods presented. For the three-month periods ended June 30, 2011 and 2010, other stock options totaling 2.2 million and 0.1 million, respectively, and for the six-month periods ended June 30, 2011 and 2010, other stock options totaling 2.2 million and 0.1 million, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. |
LONG
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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LONG TERM DEBT [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG TERM DEBT | 11. LONG-TERM DEBT The Company currently has debt pursuant to various credit facilities and other borrowings. The following table summarizes the Company's long-term debt arrangements as of June 30, 2011:
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SEGMENT INFORMATION (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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SEGMENT INFORMATION [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Long-Lived Assets by Geographic Region |
Additional information as to the Company’s operations in its most significant geographic areas is set forth below (U.S. dollars in thousands):
|
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Revenue Generated by Each of the Company's Major Product Lines | Revenue generated by each of the Company's three product lines is set forth below (U.S. dollars in thousands):
|
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