Restructuring and Severance Charges

12 Months Ended

Dec. 31, 2023

Restructuring and Severance Charges [Abstract]

Restructuring and Severance Charges

20. Restructuring and Severance Charges

In 2021, the Company determined to exit the Grow Tech segment to better align its resources on key strategic initiatives to achieve the future growth objectives and priorities of the core Nu Skin business. The Grow Tech segment was pursuing the commercialization of controlled-environment agriculture for use in the agriculture feed industry. This segment operated as part of the Company’s Rhyz strategic investment arm. As a result of the restructuring program, the Company recorded a non-cash charge of $38.5 million in 2021, including $9.2 million for impairment of goodwill, $9.0 million for impairment of intangibles, $13.7 million of fixed asset impairments and $6.6 million for inventory write-off, and $20.0 million of cash charges, including $6.5 million for employee severance and $13.5 million for other related cash charges with our restructuring. The restructuring charges were recorded in the Grow Tech segment. During 2022, the Company incurred $5.0 million in incremental cash charges associated with the exit activities and legal settlements. During 2022, the Company made cash payments of $20.0 million, leaving a restructuring accrual of $5.0 million as of December 31, 2022. The Company paid this amount during 2023, leaving no restructuring accrual related to our exit of the Grow Tech segment as of December 31, 2023.

In the third quarter of 2022, the Company adopted a strategic plan (“2022 Plan”) to focus resources on the Company’s strategic priorities and optimize future growth and profitability. The global program includes workforce reductions and footprint optimization. The Company incurred total charges under the program of approximately $53.3 million, with $40.8 million in cash charges of severance and lease termination cost and approximately $12.5 million of non-cash charges of impairment of fixed assets, acceleration of depreciation and impairment of other intangibles related to the footprint optimization. During 2022, the Company incurred charges to be settled in cash of $20.1 million in severance charges, $7.4 million in lease termination cost, and $5.2 million in other associated cost, and non-cash charges of $8.2 million in fixed asset impairments, $0.9 million in accelerated depreciation and $1.7 million in impairment of other intangibles. During 2022, the Company made cash payments of $21.0 million related to this global program, leaving an ending restructuring accrual of $11.7 million. During 2023, the Company incurred charges to be settled in cash of $4.0 million in severance charges, $1.9 million in lease termination cost, and $2.2 million in other associated cost, and non-cash charges of $1.7 million in accelerated depreciation. In 2023, the Company made cash payments of $19.8 million, leaving no restructuring accrual related to this plan as of December 31, 2023.

Restructuring expense by segment – 2022 Plan

	Year Ended December 31,
(U.S. dollars in thousands)	2023			2022
Nu Skin
Americas	$	918		$	1,687
Mainland China		1,352			13,181
Southeast Asia/Pacific		131			1,809
South Korea		422			1,533
Japan		1,515			699
Europe & Africa		(113	)		2,143
Hong Kong/Taiwan		(201	)		2,464
Total Nu Skin		4,024			23,516
Rhyz
Manufacturing		13			401
Rhyz other		—			—
Total Rhyz		13			401
Corporate and other		5,750			19,577
Total	$	9,787		$	43,494

In the fourth quarter of 2023, the Company adopted another strategic plan (“2023 Plan”) to focus resources on the Company’s global priorities and optimize future growth and profitability. The global program includes workforce reductions. The Company estimates total charges under the program will approximate $15–$25 million in cash charges of severance. The Company expects to substantially complete the program during the first half of 2024. During the fourth quarter of 2023 the Company incurred charges to be settled in cash of $10.0 million in severance charges. During the fourth quarter of 2023, the Company made cash payments of $0.3 million, leaving an ending restructuring accrual of $9.7 million.

Restructuring expense by segment – 2023 Plan

(U.S. dollars in thousands)	Year Ended December 31, 2023
Nu Skin
Americas	$	598
Mainland China		2,910
Southeast Asia/Pacific		862
South Korea		—
Japan		—
Europe & Africa		554
Hong Kong/Taiwan		432
Total Nu Skin		5,356
Rhyz
Manufacturing		—
Rhyz other		—
Total Rhyz		—
Corporate and other		4,647
Total	$	10,003