Segment Information

3 Months Ended

Mar. 31, 2023

Segment Information [Abstract]

Segment Information

10. Segment Information

The Company reports revenue from nine segments, consisting of its seven geographic Nu Skin segments—Americas, Mainland China,  Southeast Asia/Pacific, South Korea, Japan, EMEA, and Hong Kong/Taiwan—and two Rhyz Investments segments—Manufacturing and Rhyz other. The Nu Skin other category includes miscellaneous corporate revenue and related adjustments. The Rhyz other segment includes other investments by our Rhyz strategic investment arm. These segments reflect the way the chief operating decision maker evaluates the Company’s business performance and allocates resources. Reported revenue includes only the revenue generated by sales to external customers.

Profitability by segment as determined under US GAAP is driven primarily by the Company’s transfer pricing policies. Segment contribution, which is the Company’s segment profitability metric presented in the table below, excludes certain intercompany charges, specifically royalties, license fees, transfer pricing, discrete charges and other miscellaneous items. These charges have been included in Corporate and other expenses. Corporate and other expenses also include costs related to the Company’s executive and administrative offices, information technology, research and development, and marketing and supply chain functions not recorded at the segment level.

In the first quarter of 2023, the Company adjusted how it allocates certain corporate overhead costs to the segments. The prior-year segment information has been recast to comply with current presentation. Consolidated financial information is not affected.

The accounting policies of the segments are the same as those described in Note 2 – Summary of Significant Accounting Policies. The Company evaluates the performance of its segments based on revenue and segment contribution. Each segment records direct expenses related to its employees and its operations.

Summarized financial information for the Company’s reportable segments is shown in the following tables. Asset information is not reviewed or included with the Company’s internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment.

Revenue by Segment

	Three Months Ended March 31,
(U.S. dollars in thousands)	2023			2022
Nu Skin
Americas	$	101,157		$	123,580
South Korea		70,324			72,133
Mainland China		67,976			124,495
Southeast Asia/Pacific		67,810			90,236
Japan		52,606			61,791
EMEA		47,444			52,968
Hong Kong/Taiwan		34,548			38,494
Other		(115	)		620
Total Nu Skin		441,750			564,317
Rhyz Investments
Manufacturing (1)		35,767			40,341
Rhyz other		3,945			241
Total Rhyz Investments		39,712			40,582
Total	$	481,462		$	604,899

(1) The Rhyz Investments Manufacturing segment had $11.8 million and $14.6 million of intersegment revenue for the three-month period ended March 31, 2023 and 2022, respectively.  Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above.

Segment Contribution

	Three Months Ended March 31,
(U.S. dollars in thousands)	2023			2022
Nu Skin
Americas	$	16,250		$	21,951
South Korea		23,575			21,998
Mainland China		13,612			28,995
Southeast Asia/Pacific		12,471			20,996
Japan		12,908			14,420
EMEA		3,638			2,622
Hong Kong/Taiwan		7,834			8,086
Nu Skin contribution		90,288			119,068
Rhyz Investments
Manufacturing		(1,373	)		3,292
Rhyz other		(1,960	)		(1,046	)
Total Rhyz Investments		(3,333	)		2,246
Total segment contribution		86,955			121,314
Corporate and other		(70,891	)		(69,169	)
Operating income		16,064			52,145
Other income (expense), net		(1,476	)		(1,453	)
Income before provision for income taxes	$	14,588		$	50,692

Depreciation and Amortization

	Three Months Ended March 31,
(U.S. dollars in thousands)	2023		2022
Nu Skin
Americas	$	66	$	199
South Korea		453		388
Mainland China		2,775		2,884
Southeast Asia/Pacific		280		381
Japan		1,054		277
EMEA		282		230
Hong Kong/Taiwan		453		691
Total Nu Skin		5,363		5,050
Rhyz Investments
Manufacturing		3,424		3,330
Rhyz other		592		592
Total Rhyz Investments		4,016		3,922
Corporate and other		7,604		8,158
Total	$	16,983	$	17,130

Capital Expenditures

	Three Months Ended March 31,
(U.S. dollars in thousands)	2023		2022
Nu Skin
Americas	$	100	$	42
South Korea		154		362
Mainland China		4,035		4,068
Southeast Asia/Pacific		64		68
Japan		5		—
EMEA		119		393
Hong Kong/Taiwan		260		263
Total Nu Skin		4,737		5,196
Rhyz Investments
Manufacturing		1,481		1,208
Rhyz other		—		—
Total Rhyz Investments		1,481		1,208
Corporate and other		5,269		3,875
Total	$	11,487	$	10,279