QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO
_____________
|
|
||
(Exact name of registrant as specified in its charter)
|
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
|
||
(Address of principal executive offices, including zip code)
|
(
|
||
(Registrant’s telephone number, including area code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
|
|
|
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company
|
Emerging growth company
|
Page
|
|||
Part I.
|
Financial Information
|
||
Item 1.
|
|||
1
|
|||
2
|
|||
3
|
|||
4
|
|||
6
|
|||
7
|
|||
Item 2.
|
17 | ||
Item 3.
|
25 | ||
Item 4.
|
25 | ||
Part II.
|
Other Information
|
||
Item 1.
|
26 | ||
Item 1A.
|
26 | ||
Item 2.
|
27 | ||
Item 3.
|
27 | ||
Item 4.
|
27 | ||
Item 5.
|
27 | ||
Item 6.
|
28 | ||
29 |
June 30,
2022
|
December 31,
2021
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Current investments
|
|
|
||||||
Accounts receivable, net
|
|
|
||||||
Inventories, net
|
|
|
||||||
Prepaid expenses and other
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Goodwill
|
|
|
||||||
Other intangible assets, net
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Current portion of long-term debt
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Long-term debt
|
|
|
||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Notes 5 and 11)
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Class A common stock –
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Treasury stock, at cost –
|
(
|
)
|
(
|
)
|
||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Retained earnings
|
|
|
||||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’
equity
|
$
|
|
$
|
|
Three Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Cost of sales
|
|
|
|
|
||||||||||||
Gross profit
|
|
|
|
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Selling expenses
|
|
|
|
|
||||||||||||
General and administrative expenses
|
|
|
|
|
||||||||||||
Total operating expenses
|
|
|
|
|
||||||||||||
Operating income
|
|
|
|
|
||||||||||||
Other income (expense), net
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Income before provision for income taxes
|
|
|
|
|
||||||||||||
Provision for income taxes
|
|
|
|
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income per share (Note 6):
|
||||||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||||||
Basic
|
|
|
|
|
||||||||||||
Diluted
|
|
|
|
|
Three Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other comprehensive (loss) income, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment, net of taxes of $
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Net unrealized gains/(losses) on cash flow hedges, net of taxes of $(
|
|
(
|
)
|
|
|
|||||||||||
Reclassification adjustment for realized losses/(gains) in current earnings on cash flow hedges, net
of taxes of $
|
(
|
)
|
|
(
|
)
|
|
||||||||||
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||
Comprehensive income
|
$
|
|
$
|
|
$
|
|
$
|
|
For the Three Months Ended June 30, 2022
|
||||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at April 1, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options (
|
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
Cash dividends
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at June 30, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
For the Three Months Ended June 30, 2021
|
||||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at April 1, 2021
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
||||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options (
|
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
Cash dividends
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at June 30, 2021
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
For the Six Months Ended June 30, 2022
|
||||||||||||||||||||||||
Class A
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at January 1, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options (
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
Cash dividends
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at June 30, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
For the Six
Months Ended June 30, 2021
|
||||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at January 1, 2021
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options (
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
Cash dividends
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at June 30, 2021
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
Six
Months Ended
June 30,
|
||||||||
2022
|
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to cash flows from operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Non-cash lease expense
|
|
|
||||||
Stock-based compensation
|
|
|
||||||
Foreign currency losses
|
|
|
||||||
Loss on disposal of assets
|
|
|
||||||
Deferred taxes
|
|
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(
|
)
|
(
|
)
|
||||
Inventories, net
|
|
(
|
)
|
|||||
Prepaid expenses and other
|
(
|
)
|
(
|
)
|
||||
Other assets
|
|
(
|
)
|
|||||
Accounts payable
|
|
(
|
)
|
|||||
Accrued expenses
|
(
|
)
|
(
|
)
|
||||
Other liabilities
|
(
|
)
|
|
|||||
Net cash provided by operating activities
|
|
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds on investment sales
|
|
|
||||||
Purchases of investments
|
(
|
)
|
(
|
)
|
||||
Acquisitions, net of cash acquired
|
( |
) | ||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock
awards
|
|
|
||||||
Payment of cash dividends
|
(
|
)
|
(
|
)
|
||||
Repurchases of shares of common stock
|
(
|
)
|
(
|
)
|
||||
Finance lease principal payments
|
(
|
)
|
(
|
)
|
||||
Payment of debt issuance costs
|
( |
) | ||||||
Payments of debt
|
(
|
)
|
(
|
)
|
||||
Proceeds from debt
|
|
|
||||||
Net cash used in financing activities
|
|
|
||||||
Effect of exchange rate changes on cash
|
(
|
)
|
(
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
1. |
The Company
|
2. |
Summary of Significant Accounting Policies
|
June 30,
2022
|
December 31,
2021
|
|||||||
Raw materials
|
$
|
|
$
|
|
||||
Finished goods
|
|
|
||||||
Total Inventory, net
|
$
|
|
$
|
|
3. |
Goodwill
|
June 30,
2022
|
December 31,
2021
|
|||||||
Nu Skin
|
||||||||
Americas
|
$
|
|
$
|
|
||||
Mainland China
|
|
|
||||||
Southeast Asia/Pacific
|
|
|
||||||
South Korea
|
|
|
||||||
Japan
|
|
|
||||||
EMEA
|
|
|
||||||
Hong Kong/Taiwan
|
|
|
||||||
Rhyz Investments
|
||||||||
Manufacturing
|
|
|
||||||
Rhyz Other
|
|
|
||||||
Total
|
$
|
|
$
|
|
4. |
Debt
|
Facility or Arrangement
|
Original
Principal Amount
|
Balance as of
June 30, 2022 (1)(2)
|
Balance as of
December 31, 2021
(1)(2)
|
Interest Rate
|
Repayment Terms
|
||||||||
2018 Credit Agreement term loan facility |
$ | $ |
|
||||||||||
2018 Credit Agreement revolving credit facility |
$ | |
|
||||||||||
Credit Agreement term loan facility
|
$
|
|
$
|
|
|
|
|
|
|||||
Credit Agreement revolving credit facility
|
$
|
|
|
|
|
(1) |
|
(2) |
|
5. |
Leases
|
Three Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Operating lease expense
|
||||||||||||||||
Operating lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Variable lease cost
|
|
|
|
|
||||||||||||
Short-term lease cost
|
|
|
|
|
||||||||||||
Sublease income
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Finance lease expense
|
||||||||||||||||
Amortization of right-of-use assets
|
|
|
|
|
||||||||||||
Interest on lease liabilities
|
|
|
|
|
||||||||||||
Total lease expense
|
$
|
|
$
|
|
$
|
|
$
|
|
Six
Months Ended
June 30,
|
||||||||
2022
|
2021
|
|||||||
Operating cash outflow from operating leases
|
$
|
|
$
|
|
||||
Operating cash outflow from finance leases
|
$
|
|
$
|
|
||||
Financing cash outflow from finance leases
|
$
|
|
$
|
|
||||
Right-of-use assets obtained in exchange for operating lease obligations
|
$
|
|
$
|
|
||||
Right-of-use assets obtained in exchange for finance lease obligations
|
$
|
|
$
|
|
Year Ending December 31
|
Operating
Leases
|
Finance
Leases
|
||||||
2022
|
$
|
|
$
|
|
||||
2023
|
|
|
||||||
2024
|
|
|
||||||
2025
|
|
|
||||||
2026
|
|
|
||||||
Thereafter
|
|
|
||||||
Total
|
|
|
||||||
Less: Finance charges
|
|
|
||||||
Total principal liability
|
$
|
|
$
|
|
6. |
Capital Stock
|
7. |
Fair Value and Equity Investments
|
■ |
Level 1 – quoted prices in active markets for identical assets or liabilities;
|
■ |
Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
■ |
Level 3 – unobservable inputs based on the Company’s own assumptions.
|
Fair Value at June 30,
2022
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Derivative financial instruments asset
|
|
|
|
|
||||||||||||
Life insurance contracts
|
|
|
|
|
||||||||||||
Contingent consideration
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value at December 31, 2021
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Derivative financial instruments asset
|
|
|
|
|
||||||||||||
Life insurance contracts
|
|
|
|
|
||||||||||||
Contingent consideration
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
2022
|
2021
|
|||||||
Beginning balance at January 1
|
$
|
|
$
|
|
||||
Actual return on plan assets
|
(
|
)
|
|
|||||
Purchases and issuances
|
|
|
||||||
Sales and settlements
|
|
(
|
)
|
|||||
Transfers into Level 3
|
|
|
||||||
Ending balance at June 30
|
$
|
|
$
|
|
2022
|
2021
|
|||||||
Beginning balance at January 1
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Additions from acquisitions
|
|
(
|
)
|
|||||
Changes in fair value of contingent consideration
|
|
(
|
)
|
|||||
Ending balance at June 30
|
$
|
(
|
)
|
$
|
(
|
)
|
8. |
Income Taxes
|
9. |
Derivatives and Hedging Activities
|
Fair Values of
Derivative Instruments
|
||||||||||
Derivatives in Cash flow
Hedging Relationships:
|
Balance Sheet
Location
|
June 30,
2022
|
December 31,
2021
|
|||||||
Interest Rate Swap - Asset
|
Prepaid expenses and other
|
$
|
|
$
|
|
|||||
Interest Rate Swap - Asset
|
Other assets
|
$
|
|
$
|
|
Amount of Gain (Loss)
Recognized in OCI on Derivatives
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
Derivatives in Cash flow
|
June 30,
|
June 30,
|
||||||||||||||
Hedging Relationships:
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
Interest Rate Swaps
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
Amount of Gain (Loss)
Reclassified from Accumulated
Other Comprehensive Loss into Income
|
||||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||
Derivatives in Cash flow
|
Income Statement
|
June 30,
|
June 30,
|
|||||||||||||||
Hedging Relationships:
|
Location
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Interest Rate Swaps
|
Other income (expense), net
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
10. |
Segment Information
|
Three Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
(U.S. dollars in thousands) |
2022 | 2021 | 2022 | 2021 | ||||||||||||
Nu Skin
|
||||||||||||||||
Americas
|
$ |
$ |
$ |
$ |
||||||||||||
Mainland China
|
|
|
|
|
|
|
|
|
||||||||
Southeast Asia/Pacific | ||||||||||||||||
South Korea
|
||||||||||||||||
Japan
|
||||||||||||||||
EMEA
|
||||||||||||||||
Hong Kong/Taiwan | ||||||||||||||||
Nu Skin other | ||||||||||||||||
Total Nu Skin |
||||||||||||||||
Rhyz Investments |
||||||||||||||||
Manufacturing (1) | ||||||||||||||||
Rhyz other | ||||||||||||||||
Total Rhyz Investments |
||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
Three Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
Nu Skin
|
||||||||||||||||
Americas
|
$ | $ | $ | $ | ||||||||||||
Mainland China
|
|
|
|
|
||||||||||||
Southeast Asia/Pacific
|
||||||||||||||||
South Korea
|
|
|
|
|
||||||||||||
Japan
|
|
|
|
|
||||||||||||
EMEA
|
||||||||||||||||
Hong Kong/Taiwan
|
|
|
|
|
||||||||||||
Nu Skin contribution
|
|
|
|
|
||||||||||||
Rhyz Investments
|
||||||||||||||||
Manufacturing
|
|
|
|
|
||||||||||||
Rhyz other
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Rhyz Investments contribution
|
(
|
)
|
|
|
|
|||||||||||
Total segment contribution
|
|
|
|
|
||||||||||||
Corporate and other
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Operating income
|
|
|
|
|
||||||||||||
Other income (expense)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Income before provision for income taxes
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
Nu Skin
|
||||||||||||||||
Americas
|
$ |
$ |
$ |
$ |
||||||||||||
Mainland China
|
|
|
|
|
|
|
|
|
||||||||
Southeast Asia/Pacific
|
|
|
|
|
||||||||||||
South Korea
|
|
|
|
|
||||||||||||
Japan
|
||||||||||||||||
EMEA
|
|
|
|
|||||||||||||
Hong Kong/Taiwan
|
|
|
|
|
||||||||||||
Total Nu Skin
|
|
|
|
|
||||||||||||
Rhyz Investments
|
||||||||||||||||
Manufacturing
|
|
|
|
|
||||||||||||
Rhyz other
|
|
|
|
|
||||||||||||
Total Rhyz Investments
|
|
|
|
|
||||||||||||
Corporate and other
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
Nu Skin
|
||||||||||||||||
Americas
|
$ |
$ |
$ |
$ |
||||||||||||
Mainland China
|
|
|
|
|
|
|
|
|
||||||||
Southeast Asia/Pacific
|
|
|
||||||||||||||
South Korea
|
|
|
|
|
||||||||||||
Japan
|
|
|
|
|
||||||||||||
EMEA
|
||||||||||||||||
Hong Kong/Taiwan
|
|
|
|
|
||||||||||||
Total Nu Skin
|
|
|
|
|
||||||||||||
Rhyz Investments
|
||||||||||||||||
Manufacturing
|
|
|
|
|
||||||||||||
Rhyz other
|
|
|
|
|
||||||||||||
Total Rhyz Investments
|
|
|
|
|
||||||||||||
Corporate and other
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
11. |
Commitments and Contingencies
|
12. |
Acquisitions
|
13. |
Restructuring
|
14. |
Subsequent Events
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three Months Ended
June 30,
|
Constant-
Currency
|
Six Months Ended
June 30,
|
Constant-
Currency
|
|||||||||||||||||||||||||||||
2022
|
2021
|
Change
|
Change(1)
|
2022
|
2021
|
Change
|
Change(1)
|
|||||||||||||||||||||||||
Nu Skin
|
||||||||||||||||||||||||||||||||
Americas
|
$
|
124,445
|
$
|
138,512
|
(10
|
)%
|
(9
|
)%
|
$
|
248,025
|
$
|
272,273
|
(9
|
)%
|
(8
|
)%
|
||||||||||||||||
Mainland China
|
86,808
|
154,182
|
(44
|
)%
|
(42
|
)%
|
211,303
|
303,775
|
(30
|
)%
|
(31
|
)%
|
||||||||||||||||||||
Southeast Asia/Pacific
|
94,067
|
83,968
|
12
|
%
|
16
|
%
|
184,303
|
167,257
|
10
|
%
|
14
|
%
|
||||||||||||||||||||
South Korea
|
69,308
|
88,604
|
(22
|
)%
|
(12
|
)%
|
141,441
|
169,735
|
(17
|
)%
|
(8
|
)%
|
||||||||||||||||||||
Japan
|
55,952
|
68,020
|
(18
|
)%
|
(3
|
)%
|
117,743
|
137,884
|
(15
|
)%
|
(3
|
)%
|
||||||||||||||||||||
EMEA
|
50,871
|
83,115
|
(39
|
)%
|
(31
|
)%
|
103,839
|
159,295
|
(35
|
)%
|
(28
|
)%
|
||||||||||||||||||||
Hong Kong/Taiwan
|
39,327
|
38,529
|
2
|
%
|
6
|
%
|
77,821
|
74,874
|
4
|
%
|
6
|
%
|
||||||||||||||||||||
Nu Skin other
|
1,318
|
947
|
39
|
%
|
39
|
%
|
1,938
|
1,825
|
6
|
%
|
6
|
%
|
||||||||||||||||||||
Total Nu Skin
|
522,096
|
655,877
|
(20
|
)%
|
(15
|
)%
|
1,086,413
|
1,286,918
|
(16
|
)%
|
(12
|
)%
|
||||||||||||||||||||
Rhyz Investments
|
||||||||||||||||||||||||||||||||
Manufacturing
|
38,229
|
48,140
|
(21
|
)%
|
(21
|
)%
|
78,570
|
94,125
|
(17
|
)%
|
(17
|
)%
|
||||||||||||||||||||
Rhyz other
|
290
|
38
|
663
|
%
|
663
|
%
|
531
|
38
|
1,297
|
%
|
1,297
|
%
|
||||||||||||||||||||
Total Rhyz Investments
|
38,519
|
48,178
|
(20
|
)%
|
(20
|
)%
|
79,101
|
94,163
|
(16
|
)%
|
(16
|
)%
|
||||||||||||||||||||
Total
|
$
|
560,615
|
$
|
704,055
|
(20
|
)%
|
(15
|
)%
|
$
|
1,165,514
|
$
|
1,381,081
|
(16
|
)%
|
(12
|
)%
|
(1) |
Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||||||||||
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
|||||||||||||||||||
Nu Skin
|
||||||||||||||||||||||||
Americas
|
$
|
30,026
|
$
|
28,998
|
4
|
%
|
$
|
55,149
|
$
|
57,743
|
(4
|
)%
|
||||||||||||
Mainland China
|
12,945
|
51,480
|
(75
|
)%
|
41,940
|
90,919
|
(54
|
)%
|
||||||||||||||||
Southeast Asia/Pacific
|
24,367
|
21,213
|
15
|
%
|
47,773
|
40,861
|
17
|
%
|
||||||||||||||||
South Korea
|
20,578
|
28,892
|
(29
|
)%
|
43,321
|
55,417
|
(22
|
)%
|
||||||||||||||||
Japan
|
13,451
|
16,461
|
(18
|
)%
|
28,764
|
34,442
|
(16
|
)%
|
||||||||||||||||
EMEA
|
6,162
|
13,681
|
(55
|
)%
|
9,998
|
22,577
|
(56
|
)%
|
||||||||||||||||
Hong Kong/Taiwan
|
9,161
|
8,560
|
7
|
%
|
17,851
|
15,908
|
12
|
%
|
||||||||||||||||
Total Nu Skin
|
116,690
|
169,285
|
(31
|
)%
|
244,796
|
317,867
|
(23
|
)%
|
||||||||||||||||
Rhyz Investments
|
||||||||||||||||||||||||
Manufacturing
|
1,188
|
6,764
|
(82
|
)%
|
4,480
|
12,590
|
(64
|
)%
|
||||||||||||||||
Rhyz other
|
(1,299
|
)
|
(519
|
)
|
(150
|
)%
|
(2,345
|
)
|
(519
|
)
|
(352
|
)%
|
||||||||||||
Total Rhyz Investments
|
$ |
(111
|
)
|
$ |
6,245
|
(102
|
)%
|
$ |
2,135
|
$ |
12,071
|
82
|
%
|
● |
“Customers” are persons who have purchased directly from the Company during the three months ended as of the date indicated. Our Customer numbers include members of our sales force who made such a purchase, including Paid Affiliates and
those who qualify as Sales Leaders, but they do not include consumers who purchase products directly from members of our sales force.
|
● |
“Paid Affiliates” are any Brand Affiliates, as well as sales employees and independent marketers in Mainland China, who earned sales compensation during the three-month period. In all of our markets besides Mainland China, we refer to
members of our independent sales force as “Brand Affiliates” because their primary role is to promote our brand and products through their personal social networks.
|
● |
“Sales Leaders” are the three-month average of our monthly Brand Affiliates, as well as sales employees and independent marketers in Mainland China, who had achieved certain qualification requirements as of the end of each month of the
quarter.
|
Three Months Ended
June 30,
|
||||||||||||
Customers
|
2022
|
2021
|
Change
|
|||||||||
Americas
|
302,849
|
368,052
|
(18
|
)%
|
||||||||
Mainland China
|
|
392,268
|
328,526
|
19
|
%
|
|||||||
Southeast Asia/Pacific
|
152,775
|
165,221
|
(8
|
)%
|
||||||||
South Korea
|
135,290
|
153,282
|
(12
|
)%
|
||||||||
Japan
|
122,643
|
125,734
|
(2
|
)%
|
||||||||
EMEA
|
205,379
|
261,881
|
(22
|
)%
|
||||||||
Hong Kong/Taiwan
|
69,411
|
64,861
|
7
|
%
|
||||||||
Total
|
1,380,615
|
1,467,557
|
(6
|
)%
|
Three Months Ended
June 30,
|
||||||||||||
Paid Affiliates
|
2022
|
2021
|
Change
|
|||||||||
Americas
|
44,523
|
53,492
|
(17
|
)%
|
||||||||
Mainland China
|
|
19,257
|
39,889
|
(52
|
)%
|
|||||||
Southeast Asia/Pacific
|
41,512
|
44,734
|
(7
|
)%
|
||||||||
South Korea
|
48,605
|
52,680
|
(8
|
)%
|
||||||||
Japan
|
38,269
|
38,623
|
(1
|
)%
|
||||||||
EMEA
|
32,323
|
42,682
|
(24
|
)%
|
||||||||
Hong Kong/Taiwan
|
17,644
|
17,815
|
(1
|
)%
|
||||||||
Total
|
242,133
|
289,915
|
(16
|
)%
|
Three Months Ended
June 30,
|
||||||||||||
Sales Leaders
|
2022
|
2021
|
Change
|
|||||||||
Americas
|
9,320
|
11,752
|
(21
|
)%
|
||||||||
Mainland China
|
|
11,458
|
20,946
|
(45
|
)%
|
|||||||
Southeast Asia/Pacific
|
8,407
|
8,190
|
3
|
%
|
||||||||
South Korea
|
6,557
|
7,701
|
(15
|
)%
|
||||||||
Japan
|
6,097
|
6,057
|
1
|
%
|
||||||||
EMEA
|
5,192
|
8,002
|
(35
|
)%
|
||||||||
Hong Kong/Taiwan
|
3,054
|
3,446
|
(11
|
)%
|
||||||||
Total
|
50,085
|
66,094
|
(24
|
)%
|
● |
purchases and expenditures for computer systems and equipment, software, and application development;
|
● |
the expansion and upgrade of facilities in our various markets; and
|
● |
a new manufacturing plant in Mainland China.
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
● |
any adverse publicity or negative public perception regarding us, our products or ingredients, our distribution channel, or our industry or competitors;
|
● |
lack of interest in, dissatisfaction with, or the technical failure of, existing or new products;
|
● |
lack of compelling products or income opportunities, including through our sales compensation plans and incentive trips and other offerings;
|
● |
negative sales force reaction to changes in our sales compensation plans or to our failure to make changes that would be necessary to keep our compensation competitive with the market;
|
● |
interactions with our company, including our actions to enforce our policies and procedures and the quality of our customer service;
|
● |
any regulatory actions or charges against us or others in our industry, as well as regulatory changes that impact product formulations and sales viability;
|
● |
general economic, business, public health and geopolitical conditions, including employment levels, employment trends such as the gig and sharing economies, pandemics or other conditions
that curtail person-to-person interactions, and the ongoing conflict in Russia and Ukraine which has caused distraction to our sales force;
|
● |
changes in the policies of social media platforms used to prospect or recruit potential consumers and sales force participants;
|
● |
our and our sales force’s ability to provide a positive customer experience and to facilitate customer loyalty;
|
● |
recruiting efforts of our competitors and changes in consumer-loyalty trends; and
|
● |
potential saturation or maturity levels in a given market, which could negatively impact our ability to attract and retain our sales force in such market.
|
● |
the possibility that a government might ban or severely restrict our sales compensation and business models;
|
● |
the possibility that local civil unrest, political instability, or changes in diplomatic or trade relationships might disrupt our operations in one or more markets—for example, the ongoing conflict in Russia and
Ukraine has caused distraction to our sales force;
|
● |
the lack of well-established or reliable legal systems in certain areas where we operate;
|
● |
the presence of high inflation in the economies of international markets in which we operate;
|
● |
the possibility that a government authority might impose legal, tax, customs, or other financial burdens on us or our sales force, due, for example, to the structure of our operations in various markets;
|
● |
the possibility that a government authority might challenge the status of our sales force as independent contractors or impose employment or social taxes on our sales force; and
|
● |
the possibility that governments may impose currency remittance restrictions limiting our ability to repatriate cash.
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
(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, 2022
|
—
|
$
|
—
|
—
|
$
|
235.4
|
||||||||||
May 1 - 31, 2022
|
109,818
|
44.64
|
109,818
|
$
|
230.5
|
|||||||||||
June 1 - 30, 2022
|
112,017
|
45.55
|
112,017
|
$
|
225.4
|
|||||||||||
Total
|
221,835
|
$
|
45.10
|
221,835
|
(1) |
In August 2018, we announced that our board of directors approved a stock repurchase plan. Under this plan, our board of directors authorized the repurchase of up to $500 million of our outstanding Class A common stock on the open market
or in privately negotiated transactions.
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
ITEM 6. |
EXHIBITS
|
Exhibits
Regulation S-K
Number
|
Description
|
|
Amended and Restated Credit Agreement among the Company, various financial institutions, and Bank of America, N.A. as administrative agent, dated as of June 14, 2022 (incorporated by reference to Exhibit 10.1
to the Company's Current Report on Form 8-K filed June 17, 2022).
|
||
Certification by Ryan S. Napierski, 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.
|
||
Certification by Mark H. Lawrence, 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.
|
||
Certification by Ryan S. Napierski, 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.
|
||
Certification by Mark H. Lawrence, 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.
|
||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
August 4, 2022
|
||
NU SKIN ENTERPRISES, INC.
|
||
By:
|
/s/ Mark H. Lawrence
|
|
Mark H. Lawrence
|
||
Chief Financial Officer
|
||
(Duly Authorized Officer and Principal Financial Officer)
|