Nu Skin Enterprises Reports Record Third-Quarter Results And Raises 2013 Guidance PR Newswire PROVO, Utah, Oct. 22, 2013 PROVO, Utah, Oct. 22, 2013 /PRNewswire/ --Nu Skin Enterprises, Inc. (NYSE: NUS) today announced record third-quarter results with revenue of $927.6 million, a 76 percent increase over the prior-year period. Revenue was negatively impacted 3 percent by foreign currency fluctuations. Earnings per share for the quarter were $1.80, a 107 percent year-over-year improvement. Additionally, the company announced that it is significantly increasing its full-year 2013 revenue guidance to $3.18 billion to $3.21 billion. The new guidance includes a projected negative currency impact of 4 percent for the year. The company now expects 2013 earnings to be $5.77 to $5.82 per share. "We are extremely pleased with our third-quarter results," said Truman Hunt, president and chief executive officer. "The momentum we have established in the first half of the year has accelerated as we posted gains throughout the world, with particularly impressive results in the Greater China and South Asia/Pacific regions, as well as South Korea. "We are delighted to see such a tremendous response to the initial introduction of our ageLOC TR90 weight management system. We began the limited-time-offer of the TR90 system in September, starting in the Greater China and South Asia/Pacific regions and generated approximately $205 million in limited-time-offer sales in the quarter. We expect this momentum to continue through the fourth quarter as the rest of our regions participate in this global limited-time offer." Regional Results Greater China. In Greater China, third-quarter revenue increased 240 percent to $464.6 million, compared to $136.6 million in the prior-year period. The region's results were positively impacted 9 percent by foreign currency fluctuations. Regional revenue included $157.9 million from limited-time-offer (LTO) sales in the third quarter, while the prior year included $20.8 million in LTO revenue. The sales leader count in the region improved 255 percent, while the number of actives increased 123 percent compared to the prior year. North Asia. Third-quarter revenue in North Asia increased 11 percent to $204.7 million, compared to $184.7 million for the same period in 2012. The region's results were negatively impacted 12 percent by foreign currency fluctuations. Japan local-currency revenue declined 3 percent while South Korea generated local-currency revenue growth of 71 percent. The number of sales leaders in the region was up 15 percent and the number of actives improved 28 percent. South Asia/Pacific. Revenue in South Asia/Pacific was $127.5 million, a 40 percent improvement compared to the prior year. The region's results included $45.9 million from LTO sales in the third quarter, while the prior-year included $29.3 million in LTO revenue. The region's results were negatively impacted 6 percent by foreign currency fluctuations. The region's third-quarter sales leader count improved 58 percent and actives increased 19 percent compared to the same period in 2012. Americas. Revenue in the Americas improved 22 percent over the prior-year period to $85.7 million. The region's results were negatively impacted 7 percent by foreign currency fluctuations. The number of sales leaders in the region improved 28 percent and the number of actives increased 8 percent compared to the prior year. EMEA. Revenue in the EMEA region increased 4 percent to $45.1 million, primarily as a result of foreign currency fluctuations. The number of sales leaders declined 5 percent while actives increased 2 percent, compared to the prior year. Operational Performance The company's operating margin improved to 18.1 percent for the quarter, compared to 15.7 percent in the prior year, as a result of strong LTO sales. Gross margin during the quarter was 84.9 percent, 140 basis points above the prior year, due primarily to the TR90 launch in Greater China and South Asia/Pacific. Selling expenses, as a percent of revenue, were 49.3 percent in the third quarter, compared to 44.8 percent in the prior-year period. The increase was a result of the successful execution of the LTO, driving sales and selling expenses higher as sales leaders qualified for promotional incentives and a higher commission level. General and administrative expenses, as a percent of revenue, were 17.5 percent, a significant improvement from 23.1 percent reported in the prior-year. The company's income tax rate for the quarter was 34.3 percent compared to 35.2 percent in the prior-year period. The company's cash and short-term investment position at the end of the quarter was $566 million. Dividend payments during the quarter were $17.8 million, and the company repurchased $76 million of its outstanding shares. Outlook "Our optimism is a product of robust sales force growth and our innovative product portfolio," said Hunt. "Our sales force has built strong consumer demand for our ageLOC TR90 system, with a very positive initial response to our product release. We continue to improve our execution as we strategically develop and launch innovative products, ensuring a vibrant business opportunity for our sales leaders. "We have high expectations for our business in the fourth quarter and in 2014 as we continue to execute the rollout of TR90. More than 15,000 people will join us in Salt Lake City this week for our bi-annual global convention. We also look forward to sharing our business plan and financial projections for 2014 at our analyst day on Nov. 21." Hunt concluded. "Given the tremendous quarter, as well as our outlook for the remainder of the year, we are significantly raising our 2013 guidance," said Ritch Wood, chief financial officer. "We project the fourth quarter will be our first billion-dollar quarter, with anticipated revenue of $1.02 to $1.05 billion. We estimate a negative currency impact of approximately 6 percent in the fourth quarter, with projected earnings per share of $1.85 to $1.90. This forecast includes projected sales of TR90 in the fourth quarter of approximately $350 million." The company's management will host a webcast with the investment community on Oct. 22, 2013, at 11 a.m. EDT. Those wishing to access the webcast, as well as the financial information presented during the call, can visit the Investor Relations page on Nu Skin Enterprises' website, http://ir.nuskin.com. An archive of the webcast will be available at this same URL through Nov. 8, 2013. About Nu Skin Enterprises, Inc. Nu Skin Enterprises, Inc. demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives. The company's scientific leadership in both skin care and nutrition has established Nu Skin as a premier anti-aging company. The company's anti-aging products feature the new ageLOC^® suite of products including the ageLOC^® R^2 nutritional supplement,ageLOC^® Galvanic Body Spa™, as well as the ageLOC^® Transformation daily skin care system. A global direct selling company, Nu Skin operates in 53 markets worldwide and is traded on the New York Stock Exchange under the symbol "NUS." More information is available at http://www.nuskin.com. Please Note: This press release, particularly the "Outlook" section, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that represent the company's current expectations and beliefs. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws and include, but are not limited to, statements of management's expectations regarding the company's performance, initiatives, strategies and new product introductions; statements of projections regarding revenue, operating margin, earnings per share, foreign currency impact and other financial items; statements of belief; and statements of assumptions underlying any of the foregoing. In some cases, you can identify these statements by forward-looking words such as "believe," "expect," "project," "anticipate," "estimate," "intend," "plan," "targets," "likely," "will," "would," "could," "may," "might," the negative of these words and other similar words. The forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements or views expressed herein. These risks and uncertainties include, but are not limited to, the following: oany failure of current or planned initiatives or products to generate interest among distributors and customers and generate sponsoring and selling activities on a sustained basis; orisks 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. orisks related to accurately predicting, delivering or maintaining sufficient quantities of products to support our planned initiatives or launch strategies, including possible ingredient supply limitations; orisk of foreign currency fluctuations and the currency translation impact on the company's business associated with these fluctuations; ounpredictable economic conditions and events globally; ocontinued regulatory scrutiny and investigations in Mainland China, which have from time to time in the past, and could in the future, negatively impact the company's business, including the interruption of sales activities in stores, loss of licenses, and the imposition of fines; orisks associated with general inquiries and complaints to consumer protection agencies in Japan regarding the activities of some distributors; oregulatory 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; oadverse publicity related to the company's business, products, industry or any legal actions or complaints by distributors or others; oany 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 ocontinued competitive pressures in the company's markets. The company's financial performance and the forward-looking statements contained herein are further qualified by a detailed discussion of associated risks set forth in the documents filed by the company with the Securities and Exchange Commission. The forward-looking statements set forth the company's beliefs as of the date that such information was first provided and the company assumes no duty to update the forward-looking statements contained in this release to reflect any change except as required by law. NU SKIN ENTERPRISES, INC. Consolidated Statements of Income (Unaudited) For the Third Quarters Ended September 30, 2013 and 2012 (in thousands, except per share amounts) 2013 2012 Revenue: Greater China $ 464,605 $ 136,633 North Asia 204,714 184,743 South Asia/Pacific 127,545 91,124 Americas 85,654 70,479 EMEA 45,094 43,203 Total revenue 927,612 526,182 Cost of sales 139,816 86,768 Gross profit 787,796 439,414 Operating expenses: Selling expenses 456,975 235,701 General and administrative expenses 162,546 121,346 Total operating expenses 619,521 357,047 Operating income 168,275 82,367 Other income (expense), net 504 1,239 Income before provision for income taxes 168,779 83,606 Provision for income taxes 57,879 29,430 Net income $ 110,900 $ 54,176 Net income per share: Basic $ 1.89 $ 0.91 Diluted $ 1.80 $ 0.87 Weighted average common shares outstanding: Basic 58,661 59,780 Diluted 61,508 62,060 NU SKIN ENTERPRISES, INC. Consolidated Statements of Income (Unaudited) For the Nine-Month Periods Ended September 30, 2013 and 2012 (in thousands, except per share amounts) 2013 2012 Revenue: Greater China $ 909,457 $ 428,972 North Asia 589,664 544,638 South Asia/Pacific 280,703 266,789 Americas 246,484 208,585 EMEA 134,325 132,435 Total revenue 2,160,633 1,581,419 Cost of sales 341,134 258,108 Gross profit 1,819,499 1,323,311 Operating expenses: Selling expenses 1,007,627 705,599 General and administrative expenses 446,355 365,770 Total operating expenses 1,453,982 1,071,369 Operating income 365,517 251,942 Other income (expense), net (571) 1,505 Income before provision for income taxes 364,946 253,447 Provision for income taxes 125,329 91,035 Net income $ 239,617 $ 162,412 Net income per share: Basic $ 4.09 $ 2.65 Diluted $ 3.91 $ 2.55 Weighted average common shares outstanding: Basic 58,544 61,265 Diluted 61,234 63,742 NU SKIN ENTERPRISES, INC. Consolidated Balance Sheets (Unaudited) (in thousands) September 30, 2013 December 31, 2012 ASSETS Current assets: Cash and cash equivalents $ 553,499 $ 320,025 Current investments 12,099 13,378 Accounts receivable 50,506 36,850 Inventories, net 254,187 135,874 Prepaid expenses and other 143,066 93,276 1,013,357 599,403 Property and equipment, net 352,709 229,787 Goodwill 112,446 112,446 Other intangible assets, net 85,901 92,518 Other assets 124,074 118,753 Total assets $ 1,688,487 $ 1,152,907 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 67,516 $ 47,882 Accrued expenses 572,432 233,202 Current portion of long-term 68,562 39,019 debt 708,510 320,103 Long-term debt 120,606 154,963 Other liabilities 116,942 87,229 Total liabilities 946,058 562,295 Stockholders' equity: Class A common stock 91 91 Additional paid-in capital 357,701 317,293 Treasury stock, at cost (788,128) (714,853) Retained earnings 1,226,629 1,039,903 Accumulated other comprehensive (53,864) (51,822) loss 742,429 590,612 Total liabilities and $ 1,688,487 $ 1,152,907 stockholders' equity NU SKIN ENTERPRISES, INC. Actives/Sales Leaders Statistics As of September 30, As of September 30, % Increase 2013 2012 (Decrease) Actives Sales Actives Sales Actives Sales Leaders Leaders Leaders Greater China 418,000 57,780 188,000 16,269 122.3% 255.2% North Asia 430,000 17,994 336,000 15,603 28.0% 15.3% South 125,000 9,280 105,000 5,880 19.0% 57.8% Asia/Pacific Americas 179,000 7,461 166,000 5,831 7.8% 28.0% EMEA 121,000 4,375 118,000 4,581 2.5% (4.5%) Total 1,273,000 96,890 913,000 48,164 39.4% 101.2% "Actives" are persons who purchased products directly from the company during the three months ended as of the date indicated. "Sales Leaders" include our independent distributors who have completed and who maintain specified sales requirements, and our sales employees and contractual sales promoters in China, who have completed certain qualification requirements. SOURCE Nu Skin Enterprises, Inc. Website: http://www.nuskin.com Contact: Investors, Scott Pond, +1-801-345-2657, firstname.lastname@example.org, Media, Kara Schneck, + (801) 345-2116, email@example.com
Nu Skin Enterprises Reports Record Third-Quarter Results And Raises 2013 Guidance
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