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March 3, 2014
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Date of Report (Date of earliest event reported)
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NU SKIN ENTERPRISES, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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001-12421
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87-0565309
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification Number)
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75 West Center Street
Provo, UT 84601
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(Address of principal executive offices and zip code)
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(801) 345-1000
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(Registrant's telephone number, including area code)
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N/A
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(Former name or former address, if changed since last report)
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□ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
□ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
99.1 | Nu Skin Enterprises' press release dated March 3, 2014, regarding financial results for the fourth quarter and year ended December 31, 2013. |
•
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risk that regulatory and media scrutiny and investigations in China, and any actions taken by the company or by regulators, could cause unanticipated delays or make it more difficult to forecast 2014 results, and could negatively impact the company's revenue and business in this market, including the interruption of sales activities, loss of licenses, and the imposition of fines, and any other adverse actions or events;
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•
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risk that the company's internal review of its China operations could take longer than expected and that other events could cause the company to be unable to file the company's annual report on Form 10-K by March 18, 2014;
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•
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any changes to the company's anticipated financial results for both the year and quarter ended December 31, 2013 set forth in this release, as a result of our independent registered public accounting firm completing its audit of the company's financial statements;
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•
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any failure of current or planned initiatives or products to generate interest among our sales force and customers and generate sponsoring and selling activities on a sustained basis;
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•
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risks associated with rapid growth globally, which could strain our ability to effectively manage our operations, and result in, among other things, product delays or shortages, operating mistakes and errors, inadequate customer service, inappropriate claims or promotions by our sales force, and governmental inquires and investigations, all of which could harm our revenue and ability to generate sustained growth and result in unanticipated expenses;
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•
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risks related to accurately predicting, delivering or maintaining sufficient quantities of products to support our planned initiatives or launch strategies, and increased risk of inventory write-offs if we over forecast demand for a product or change our planned initiatives or launch strategies;
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•
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risk of foreign currency fluctuations and the currency translation impact on the company's business associated with these fluctuations;
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•
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unpredictable economic conditions and events globally;
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•
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regulatory risks associated with the company's products, which could require the company to modify its claims or inhibit the company's ability to import or continue selling a product in a market if it is determined to be a medical device or if it is unable to register the product in a timely manner under applicable regulatory requirements;
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•
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adverse publicity related to the company's business, products, industry or any legal actions or complaints by distributors or others;
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•
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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
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•
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continued competitive pressures in the company's markets.
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NU SKIN ENTERPRISES, INC.
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||||||||
Consolidated Statements of Income (Unaudited)
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||||||||
For the Fourth Quarters Ended December 31, 2013 and 2012
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(in thousands, except per share amounts)
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||||||||
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||||||||
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2013
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2012
|
||||||
Revenue:
|
||||||||
Greater China
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$
|
481,561
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$
|
138,322
|
||||
North Asia
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286,288
|
246,945
|
||||||
South Asia/Pacific
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99,477
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63,182
|
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Americas
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126,149
|
79,104
|
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Europe
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62,311
|
51,641
|
||||||
Total revenue
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1,055,786
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579,194
|
||||||
|
||||||||
Cost of sales
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164,672
|
95,044
|
||||||
Gross profit
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891,114
|
484,150
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||||||||
Operating expenses:
|
||||||||
Selling expenses
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508,846
|
255,569
|
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General and administrative expenses
|
193,673
|
139,679
|
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Total operating expenses
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702,519
|
395,248
|
||||||
|
||||||||
Operating income
|
188,595
|
88,902
|
||||||
|
||||||||
Other income, net
|
3,399
|
2,893
|
||||||
Income before provision for income taxes
|
191,994
|
91,795
|
||||||
Provision for income taxes
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66,723
|
32,562
|
||||||
Net income
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$
|
125,271
|
$
|
59,233
|
||||
|
||||||||
Net income per share:
|
||||||||
Basic
|
$
|
2.13
|
$
|
1.01
|
||||
Diluted
|
$
|
2.02
|
$
|
0.97
|
||||
|
||||||||
Weighted average common shares outstanding:
|
||||||||
Basic
|
58,791
|
58,620
|
||||||
Diluted
|
61,881
|
60,893
|
||||||
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NU SKIN ENTERPRISES, INC.
|
||||||||
Consolidated Statements of Income (Unaudited)
|
||||||||
For the Years Ended December 31, 2013 and 2012
|
||||||||
(in thousands, except per share amounts)
|
||||||||
|
||||||||
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2013
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2012
|
||||||
Revenue:
|
||||||||
Greater China
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$
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1,363,182
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$
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550,690
|
||||
North Asia
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869,400
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785,302
|
||||||
South Asia/Pacific
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378,988
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328,597
|
||||||
Americas
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370,087
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285,283
|
||||||
Europe
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195,061
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182,385
|
||||||
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||||||||
Total revenue
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3,176,718
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2,132,257
|
||||||
|
||||||||
Cost of sales
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505,806
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353,152
|
||||||
Gross profit
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2,670,912
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1,779,105
|
||||||
|
||||||||
Operating expenses:
|
||||||||
Selling expenses
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1,476,772
|
932,812
|
||||||
General and administrative expenses
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640,028
|
505,449
|
||||||
Total operating expenses
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2,116,800
|
1,438,261
|
||||||
|
||||||||
Operating income
|
554,112
|
340,844
|
||||||
|
||||||||
Other income, net
|
2,828
|
4,398
|
||||||
Income before provision for income taxes
|
556,940
|
345,242
|
||||||
Provision for income taxes
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192,052
|
123,597
|
||||||
Net income
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$
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364,888
|
$
|
221,645
|
||||
|
||||||||
Net income per share:
|
||||||||
Basic
|
$
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6.23
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$
|
3.66
|
||||
Diluted
|
$
|
5.94
|
$
|
3.52
|
||||
|
||||||||
Weighted average common shares outstanding:
|
||||||||
Basic
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58,606
|
60,600
|
||||||
Diluted
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61,448
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63,025
|
||||||
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NU SKIN ENTERPRISES, INC.
|
||||||||
Consolidated Balance Sheets (Unaudited)
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||||||||
As of December 31, 2013 and 2012
|
||||||||
(in thousands)
|
||||||||
|
||||||||
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2013
|
2012
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
525,153
|
$
|
320,025
|
||||
Current investments
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21,974
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13,378
|
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Accounts receivable
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68,652
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36,850
|
||||||
Inventories, net
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339,669
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135,874
|
||||||
Prepaid expenses and other
|
162,886
|
82,476
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1,118,334
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588,603
|
|||||||
|
||||||||
Property and equipment, net
|
396,042
|
229,787
|
||||||
Goodwill
|
112,446
|
112,446
|
||||||
Other intangible assets, net
|
83,168
|
92,518
|
||||||
Other assets
|
111,072
|
101,453
|
||||||
Total assets
|
$
|
1,821,062
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$
|
1,124,807
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
82,684
|
$
|
47,882
|
||||
Accrued expenses
|
626,284
|
233,202
|
||||||
Current portion of long-term debt
|
67,824
|
39,019
|
||||||
|
776,792
|
320,103
|
||||||
Long-term debt
|
113,852
|
154,963
|
||||||
Other liabilities
|
71,799
|
59,129
|
||||||
Total liabilities
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962,443
|
534,195
|
||||||
|
||||||||
Stockholders' equity:
|
||||||||
Class A common stock
|
91
|
91
|
||||||
Additional paid-in capital
|
397,383
|
317,293
|
||||||
Treasury stock, at cost
|
(826,904
|
)
|
(714,853
|
)
|
||||
Accumulated other comprehensive loss
|
(46,228
|
)
|
(51,822
|
)
|
||||
Retained earnings
|
1,334,277
|
1,039,903
|
||||||
|
858,619
|
590,612
|
||||||
Total liabilities and stockholders' equity
|
$
|
1,821,062
|
$
|
1,124,807
|
NU SKIN ENTERPRISES, INC.
Actives/Sales Leaders Statistics
|
||||||||||||||||||||||||
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As of December 31, 2013
|
As of December 31, 2012
|
% Increase (Decrease)
|
|||||||||||||||||||||
|
Actives
|
Sales Leaders
|
Actives
|
Sales Leaders
|
Actives
|
Sales Leaders
|
||||||||||||||||||
|
||||||||||||||||||||||||
Greater China
|
490,000
|
61,546
|
216,000
|
18,527
|
126.9%
|
|
232.2%
|
|
||||||||||||||||
North Asia
|
409,000
|
19,816
|
349,000
|
17,395
|
17.2%
|
|
13.9%
|
|
||||||||||||||||
South Asia/Pacific
|
120,000
|
7,992
|
98,000
|
4,988
|
22.4%
|
|
60.2%
|
|
||||||||||||||||
Americas
|
193,000
|
8,274
|
164,000
|
6,352
|
17.7%
|
|
30.3%
|
|
||||||||||||||||
EMEA
|
123,000
|
4,489
|
119,000
|
4,528
|
3.4%
|
|
(0.9%)
|
|
||||||||||||||||
|
||||||||||||||||||||||||
Total
|
1,335,000
|
102,117
|
946,000
|
51,790
|
41.1%
|
|
97.2%
|
|