☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED SEPTEMBER 30, 2018
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM _____________ TO _____________
|
NU SKIN ENTERPRISES, INC.
|
||
(Exact name of registrant as specified in its charter)
|
Delaware
|
87-0565309
|
|
(State or other jurisdiction of incorporation or organization)
|
75 WEST CENTER STREET
PROVO, UTAH 84601
|
(IRS Employer Identification No.)
|
(Address of principal executive offices, including zip code)
|
(801) 345-1000
|
||
(Registrant’s telephone number, including area code)
|
Large accelerated filer ☑
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
Page
|
|||
Part I.
|
Financial Information
|
||
Item 1.
|
|||
1
|
|||
2 |
|||
3 |
|||
4 |
|||
5 |
|||
Item 2.
|
22
|
||
Item 3.
|
32
|
||
Item 4.
|
32
|
||
Part II.
|
Other Information
|
||
Item 1.
|
32
|
||
Item 1A.
|
33
|
||
Item 2.
|
35
|
||
Item 3.
|
35
|
||
Item 4.
|
35
|
||
Item 5.
|
35
|
||
Item 6.
|
35
|
||
36
|
September 30,
2018
|
December 31,
2017
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
390,066
|
$
|
426,399
|
||||
Current investments
|
11,388
|
11,847
|
||||||
Accounts receivable
|
57,175
|
33,196
|
||||||
Inventories, net
|
289,291
|
253,454
|
||||||
Prepaid expenses and other
|
78,395
|
52,893
|
||||||
826,315
|
777,789
|
|||||||
Property and equipment, net
|
496,704
|
464,587
|
||||||
Goodwill
|
187,423
|
114,954
|
||||||
Other intangible assets, net
|
91,957
|
67,647
|
||||||
Other assets
|
143,838
|
164,895
|
||||||
Total assets
|
$
|
1,746,237
|
$
|
1,589,872
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
52,843
|
$
|
50,341
|
||||
Accrued expenses
|
292,962
|
319,189
|
||||||
Current portion of long-term debt
|
82,455
|
77,840
|
||||||
428,260
|
447,370
|
|||||||
Long-term debt
|
365,767
|
310,790
|
||||||
Other liabilities
|
120,076
|
127,116
|
||||||
Total liabilities
|
914,103
|
885,276
|
||||||
Commitments and contingencies (Note 10)
|
||||||||
Stockholders’ equity:
|
||||||||
Class A common stock – 500 million shares authorized, $.001 par value, 90.6 million shares issued
|
91
|
91
|
||||||
Additional paid-in capital
|
545,234
|
466,349
|
||||||
Treasury stock, at cost – 34.9 million and 37.9 million shares
|
(1,306,012
|
)
|
(1,304,694
|
)
|
||||
Accumulated other comprehensive loss
|
(82,555
|
)
|
(66,318
|
)
|
||||
Retained earnings
|
1,675,376
|
1,609,168
|
||||||
832,134
|
704,596
|
|||||||
Total liabilities and stockholders’ equity
|
$
|
1,746,237
|
$
|
1,589,872
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Revenue
|
$
|
675,312
|
$
|
563,698
|
$
|
1,995,721
|
$
|
1,612,898
|
||||||||
Cost of sales
|
157,457
|
120,832
|
472,287
|
353,619
|
||||||||||||
Gross profit
|
517,855
|
442,866
|
1,523,434
|
1,259,279
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Selling expenses
|
271,509
|
235,285
|
801,968
|
672,646
|
||||||||||||
General and administrative expenses
|
165,671
|
143,219
|
499,037
|
411,270
|
||||||||||||
Total operating expenses
|
437,180
|
378,504
|
1,301,005
|
1,083,916
|
||||||||||||
Operating income
|
80,675
|
64,362
|
222,429
|
175,363
|
||||||||||||
Other income (expense), net
|
(6,982
|
)
|
(1,172
|
)
|
(16,940
|
)
|
(8,470
|
)
|
||||||||
Income before provision for income taxes
|
73,693
|
63,190
|
205,489
|
166,893
|
||||||||||||
Provision for income taxes
|
20,547
|
21,518
|
65,843
|
55,691
|
||||||||||||
Net income
|
$
|
53,146
|
$
|
41,672
|
$
|
139,646
|
$
|
111,202
|
||||||||
Net income per share (Note 2):
|
||||||||||||||||
Basic
|
$
|
0.96
|
$
|
0.79
|
$
|
2.54
|
$
|
2.10
|
||||||||
Diluted
|
$
|
0.94
|
$
|
0.76
|
$
|
2.47
|
$
|
2.04
|
||||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||||||
Basic
|
55,603
|
52,873
|
55,075
|
52,834
|
||||||||||||
Diluted
|
56,704
|
54,834
|
56,539
|
54,519
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net income
|
$
|
53,146
|
$
|
41,672
|
$
|
139,646
|
$
|
111,202
|
||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment, net of taxes of $(346) and $(3,054) for the three months ended September 30, 2018 and 2017, respectively, and $(51) and $(1,376) for the nine months ended September 30, 2018 and 2017, respectively
|
(7,095
|
)
|
5,497
|
(16,095
|
)
|
15,273
|
||||||||||
Net unrealized gains/(losses) on foreign currency cash flow
hedges, net of taxes of zero and $15 for the three months ended September 30, 2018 and 2017, respectively, and $18 and
$114 for the nine months ended September 30, 2018 and 2017, respectively
|
—
|
(27
|
)
|
(160
|
)
|
(207
|
)
|
|||||||||
Reclassification adjustment for realized losses/(gains) in current
earnings, net of taxes of zero and $(22) for the three months ended September 30, 2018 and 2017, respectively, and
$(2) and $97 for the nine months ended September 30, 2018 and 2017, respectively
|
—
|
40
|
18
|
(177
|
)
|
|||||||||||
(7,095
|
)
|
5,510
|
(16,237
|
)
|
14,889
|
|||||||||||
Comprehensive income
|
$
|
46,051
|
$
|
47,182
|
$
|
123,409
|
$
|
126,091
|
Nine Months Ended
September 30,
|
||||||||
2018
|
2017
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
139,646
|
$
|
111,202
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
62,833
|
52,525
|
||||||
Equity method earnings
|
(456
|
)
|
(655
|
)
|
||||
Gain on step acquisitions
|
(13,644
|
)
|
—
|
|||||
Loss on extinguishment of debt
|
7,220
|
—
|
||||||
Foreign currency losses
|
14,960
|
(2,381
|
)
|
|||||
Stock-based compensation
|
20,311
|
14,493
|
||||||
Deferred taxes
|
(658
|
)
|
6,711
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(14,345
|
)
|
(5,115
|
)
|
||||
Inventories, net
|
(26,865
|
)
|
5,039
|
|||||
Prepaid expenses and other
|
(28,387
|
)
|
(16,455
|
)
|
||||
Other assets
|
(2,150
|
)
|
(3,960
|
)
|
||||
Accounts payable
|
(3,821
|
)
|
(906
|
)
|
||||
Accrued expenses
|
(33,178
|
)
|
(9,701
|
)
|
||||
Other liabilities
|
(7,616
|
)
|
5,009
|
|||||
Net cash provided by operating activities
|
113,850
|
155,806
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(42,293
|
)
|
(38,965
|
)
|
||||
Proceeds on investment sales
|
11,536
|
11,269
|
||||||
Purchases of investments
|
(11,420
|
)
|
(8,244
|
)
|
||||
Acquisitions (net of cash acquired)
|
(28,311
|
)
|
—
|
|||||
Investment in equity investee
|
(4,750
|
)
|
(31,745
|
)
|
||||
Net cash used in investing activities
|
(75,238
|
)
|
(67,685
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards
|
8,993
|
16,377
|
||||||
Payments on long-term debt
|
(534,341
|
)
|
(72,260
|
)
|
||||
Payment of cash dividends
|
(60,395
|
)
|
(57,065
|
)
|
||||
Payment of debt issuance costs
|
(7,243
|
)
|
—
|
|||||
Proceeds from debt
|
582,398
|
67,000
|
||||||
Repurchases of shares of common stock
|
(48,222
|
)
|
(47,835
|
)
|
||||
Net cash used in financing activities
|
(58,810
|
)
|
(93,783
|
)
|
||||
Effect of exchange rate changes on cash
|
(16,135
|
)
|
12,185
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(36,333
|
)
|
6,523
|
|||||
Cash and cash equivalents, beginning of period
|
426,399
|
357,246
|
||||||
Cash and cash equivalents, end of period
|
$
|
390,066
|
$
|
363,769
|
2. |
NET INCOME PER SHARE
|
3. |
DIVIDENDS PER SHARE
|
4. |
DERIVATIVE FINANCIAL INSTRUMENTS
|
Derivatives not
designated as
hedging instruments:
|
Location of
Gain (Loss)
Recognized
in Income
|
Amount of Gain (Loss) Recognized in Income
|
||||||||||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||||
|
2018
|
2017
|
2018
|
2017 | ||||||||||||||||
Foreign currency contracts
|
Other income (expense)
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
(485
|
) |
|
Derivatives
designated as
hedging instruments:
|
Amount of Gain (Loss)
Recognized in Other Comprehensive Loss
|
|||||||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Foreign currency forward contracts related to intercompany
license fee, product sales, and selling expense hedges
|
$
|
—
|
$
|
(27
|
)
|
$
|
(160
|
)
|
$
|
(207
|
)
|
Derivatives designated as
hedging instruments:
|
Location of
Gain (Loss)
Reclassified from
Accumulated
Other
Comprehensive
Loss into Income
|
Amount of Gain (Loss) Reclassified from
Accumulated Other Comprehensive Loss into Income
|
||||||||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||||
Foreign currency forward contracts related to intercompany license fees and product sales hedges
|
Revenue
|
$
|
—
|
$
|
(67
|
)
|
$
|
18
|
$
|
42
|
||||||||
Foreign currency forward contracts related to intercompany selling expense hedges
|
Selling expenses
|
$
|
—
|
$
|
5
|
$
|
—
|
$
|
233
|
5. |
REPURCHASES OF COMMON STOCK
|
6. |
SEGMENT INFORMATION
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(U.S. dollars in thousands)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Mainland China
|
$
|
226,645
|
$
|
172,556
|
$
|
669,432
|
$
|
494,658
|
||||||||
Americas/Pacific
|
93,580
|
85,672
|
289,859
|
240,094
|
||||||||||||
South Korea
|
89,963
|
89,238
|
270,517
|
258,626
|
||||||||||||
Southeast Asia
|
86,307
|
71,141
|
236,390
|
194,711
|
||||||||||||
Japan
|
63,649
|
62,513
|
190,986
|
188,465
|
||||||||||||
Hong Kong/Taiwan
|
44,949
|
41,050
|
138,147
|
120,069
|
||||||||||||
EMEA
|
42,819
|
40,133
|
131,810
|
112,385
|
||||||||||||
Other
|
27,400
|
1,395
|
68,580
|
3,890
|
||||||||||||
Total
|
$
|
675,312
|
$
|
563,698
|
$
|
1,995,721
|
$
|
1,612,898
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(U.S. dollars in thousands)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Mainland China
|
$
|
71,185
|
$
|
42,375
|
$
|
189,901
|
$
|
130,085
|
||||||||
Americas/Pacific
|
11,848
|
14,106
|
38,088
|
37,884
|
||||||||||||
South Korea
|
24,754
|
23,713
|
75,836
|
70,503
|
||||||||||||
Southeast Asia
|
21,204
|
17,380
|
58,245
|
43,763
|
||||||||||||
Japan
|
15,162
|
12,786
|
41,777
|
36,134
|
||||||||||||
Hong Kong/Taiwan
|
8,100
|
8,096
|
23,781
|
20,945
|
||||||||||||
EMEA
|
2,614
|
2,896
|
10,438
|
8,304
|
||||||||||||
Total segment contribution
|
154,867 |
121,352
|
438,066
|
347,618
|
||||||||||||
Corporate and other
|
(74,192
|
)
|
(56,990
|
)
|
(215,637
|
)
|
(172,255
|
)
|
||||||||
Operating income
|
80,675
|
64,362
|
222,429
|
175,363
|
||||||||||||
Other income (expense)
|
(6,982
|
)
|
(1,172
|
)
|
(16,940
|
)
|
(8,470
|
)
|
||||||||
Income before provision for income taxes
|
$
|
73,693
|
$
|
63,190
|
$
|
205,489
|
$
|
166,893
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(U.S. dollars in thousands)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Mainland China
|
$
|
3,132
|
$
|
3,550
|
$
|
10,063
|
$
|
11,202
|
||||||||
Americas/Pacific
|
229
|
375
|
722
|
1,425
|
||||||||||||
South Korea
|
1,421
|
1,586
|
4,664
|
4,872
|
||||||||||||
Southeast Asia
|
525
|
551
|
1,648
|
1,628
|
||||||||||||
Japan
|
873
|
898
|
2,688
|
2,677
|
||||||||||||
Hong Kong/Taiwan
|
279
|
353
|
923
|
999
|
||||||||||||
EMEA
|
238
|
226
|
589
|
820
|
||||||||||||
Other
|
15,994
|
9,906
|
41,536
|
28,902
|
||||||||||||
Total
|
$
|
22,691
|
$
|
17,455
|
$
|
62,833
|
$
|
52,525
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(U.S. dollars in thousands)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Mainland China
|
$
|
2,117
|
$
|
688
|
$
|
5,015
|
$
|
2,351
|
||||||||
Americas/Pacific
|
223
|
136
|
652
|
697
|
||||||||||||
South Korea
|
135
|
—
|
179
|
464
|
||||||||||||
Southeast Asia
|
357
|
281
|
552
|
814
|
||||||||||||
Japan
|
125
|
109
|
508
|
206
|
||||||||||||
Hong Kong/Taiwan
|
31
|
2
|
629
|
1,119
|
||||||||||||
EMEA
|
348
|
571
|
425
|
882
|
||||||||||||
Other
|
10,528
|
9,427
|
34,333
|
32,432
|
||||||||||||
Total
|
$
|
13,864
|
$
|
11,214
|
$
|
42,293
|
$
|
38,965
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Nu Skin
|
$
|
384,635
|
$
|
338,305
|
$
|
1,237,547
|
$
|
985,465
|
||||||||
Pharmanex
|
261,892
|
224,031
|
687,789
|
623,046
|
||||||||||||
Other
|
28,785
|
1,362
|
70,385
|
4,387
|
||||||||||||
Totals
|
$
|
675,312
|
$
|
563,698
|
$
|
1,995,721
|
$
|
1,612,898
|
September 30,
2018
|
December 31,
2017
|
|||||||
United States
|
$
|
357,426
|
$
|
302,884
|
||||
Mainland China
|
84,680
|
97,046
|
||||||
South Korea
|
36,609
|
42,211
|
||||||
Japan
|
7,195
|
9,342
|
||||||
All others
|
10,794
|
13,104
|
||||||
Total
|
$
|
496,704
|
$
|
464,587
|
7. |
GOODWILL
|
September 30,
2018
|
December 31,
2017
|
|||||||
Mainland China
|
$
|
32,179
|
$
|
32,179
|
||||
Americas/Pacific
|
9,449
|
9,449
|
||||||
South Korea
|
29,261
|
29,261
|
||||||
Southeast Asia
|
18,537
|
18,537
|
||||||
Japan
|
16,019
|
16,019
|
||||||
Hong Kong/Taiwan
|
6,634
|
6,634
|
||||||
EMEA
|
2,875
|
2,875
|
||||||
Other
|
72,469
|
—
|
||||||
Total
|
$
|
187,423
|
$
|
114,954
|
8. |
INVENTORY
|
September 30,
2018
|
December 31,
2017
|
|||||||
Raw materials
|
$
|
89,830
|
$
|
87,683
|
||||
Finished goods
|
199,461
|
165,771
|
||||||
$
|
289,291
|
$
|
253,454
|
9. |
INCOME TAXES
|
10. |
COMMITMENTS AND CONTINGENCIES
|
11. |
DEBT
|
Facility or
Arrangement
|
Original
Principal
Amount
|
Balance as of
September 30,
2018(1)(2)
|
Balance as of
December 31,
2017(2)
|
Interest
Rate
|
Repayment terms
|
|||||
October 2014 Credit Agreement term loan facility:
|
||||||||||
U.S. dollar denominated:
|
$127.5 million
|
—
|
$94.8 million
|
Variable
30 day:
4.627%
|
Principal amount was paid in full during April 2018.
|
|||||
Japanese yen denominated:
|
6.6 billion yen
|
—
|
4.9 billion yen ($43.5 million as of December 31, 2017)
|
Variable
30 day:
2.7595%
|
Principal amount was paid in full during April 2018.
|
|||||
October 2014 Credit Agreement revolving credit facility:
|
—
|
$47.5 million
|
Variable
30 day:
4.594%
|
Principal amount was paid in full during April 2018 and credit line was closed.
|
||||||
April 2018 Credit Agreement term loan facility:
|
||||||||||
U.S. dollar denominated:
|
$400.0 million
|
$390.0 million
|
—
|
Variable
30 day:
4.49%
|
35% of the principal amount is payable in increasing quarterly installments over a five-year period that began on June 30, 2018, with the remainder payable at
the end of the five-year term.
|
|||||
April 2018 Credit Agreement revolving credit facility:
|
$62.5 million
|
—
|
Variable
30 day:
4.49%
|
Revolving line of credit expires April 18, 2023.
|
||||||
Japan subsidiary loan:
|
2.1 billion yen
|
—
|
0.7 billion yen ($5.9 million as of December 31, 2017)
|
0.66%
|
Principal amount was paid in full during July 2018.
|
|||||
Convertible note:
|
$210.0 million
|
—
|
$210.0 million
|
4.75%
|
Principal amount was paid in full during April 2018.
|
(1) |
As of September 30, 2018, the current portion of the Company’s debt (i.e. becoming due in the next 12 months) included $20.0 million of the balance of its U.S. dollar denominated
debt under the New Credit Agreement facility. The Company has classified the $62.5 million borrowed under the revolving line of credit as short-term debt because it is the Company’s intention to use the line of credit to borrow and
pay back funds over short periods of time.
|
(2) |
The carrying value of the debt reflects the amounts stated in the above table less debt issuance costs of $4.2 million as of September 30, 2018 related to the credit agreement; and
a debt discount of $9.1 million and debt issuance costs of $4.0 million (consisting of $11.1 million related to the Convertible Note and $2.0 million related to the credit agreement) as of December 31, 2017, which is not reflected
in this table.
|
12. |
FAIR VALUE
|
▪
|
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;
|
▪
|
Level 3 – unobservable inputs based on the Company’s own assumptions.
|
Fair Value at September 30, 2018
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
38,282
|
$
|
—
|
$
|
—
|
$
|
38,282
|
||||||||
Other long-term assets
|
3,582
|
—
|
—
|
3,582
|
||||||||||||
Forward contracts
|
—
|
—
|
—
|
—
|
||||||||||||
Life insurance contracts
|
—
|
—
|
39,248
|
39,248
|
||||||||||||
Total
|
$
|
41,864
|
$
|
—
|
$
|
39,248
|
$
|
81,112
|
Fair Value at December 31, 2017
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
36,531
|
$
|
—
|
$
|
—
|
$
|
36,531
|
||||||||
Other long-term assets
|
3,726
|
—
|
—
|
3,726
|
||||||||||||
Forward contracts
|
—
|
158
|
—
|
158
|
||||||||||||
Life insurance contracts
|
—
|
—
|
37,737
|
37,737
|
||||||||||||
Total
|
$
|
40,257
|
$
|
158
|
$
|
37,737
|
$
|
78,152
|
Life Insurance Contracts
|
||||
Beginning balance at January 1, 2018
|
$
|
37,737
|
||
Actual return on plan assets
|
1,746
|
|||
Purchases and issuances
|
—
|
|||
Sales and settlements
|
(235
|
)
|
||
Transfers into Level 3
|
—
|
|||
Ending balance at September 30, 2018
|
$
|
39,248
|
13. |
ACCOUNTING PRONOUNCEMENTS
|
14. |
COST OF SALES
|
15. |
ACQUISITIONS
|
Innuvate
|
Treviso
|
L&W
Holdings
|
Total
|
|||||||||||||
Total cash consideration
|
$
|
17,587
|
$
|
14,648
|
$
|
—
|
$
|
32,235
|
||||||||
Shares issued in conjunction with acquisition
|
5,863
|
69,252
|
25,000
|
100,115
|
||||||||||||
Total consideration
|
$
|
23,450
|
$
|
83,900
|
$
|
25,000
|
132,350
|
|||||||||
Previously held equity interest in equity method Investments(1)
|
8,748
|
30,281
|
—
|
39,029
|
||||||||||||
Total
|
$
|
32,198
|
$
|
114,181
|
$
|
25,000
|
$
|
171,379
|
(1) |
The acquisitions of Innuvate and Treviso are considered step acquisitions, and accordingly, the Company remeasured its pre-existing 27% equity interest in
Innuvate and 35% of Treviso immediately prior to completion of the acquisition to its estimated fair value of approximately $39.0 million. As a result of the remeasurement, the Company recorded a gain of approximately $13.6 million
within other income (expense), during the first quarter of 2018, representing the excess of the approximate $39.0 million estimated fair value of its pre-existing 27% equity interest in Innuvate and 35% equity interest of Treviso over
its transaction date carrying value of approximately $25.4 million.
|
Innuvate
|
Treviso
|
L&W Holdings
|
||||||||||||||
|
Life
|
Amount
|
Life
|
Amount
|
Life
|
Amount
|
||||||||||
Total current assets
|
$
|
6,219
|
$
|
19,659
|
$
|
7,353
|
||||||||||
Fixed assets
|
9,291
|
33,282
|
114
|
|||||||||||||
Customer list
|
9 years
|
5,100
|
9 years
|
16,500
|
7 years
|
6,500
|
||||||||||
Order backlog
|
5 months
|
200
|
10 months
|
4,700
|
4 months
|
900
|
||||||||||
Trademarks
|
7 years
|
900
|
6 years
|
1,300
|
5 years
|
600
|
||||||||||
Total current liabilities
|
(3,942
|
)
|
(3,740
|
)
|
(1,495
|
)
|
||||||||||
Other non-current liabilities
|
—
|
—
|
(1,731
|
)
|
||||||||||||
Total identifiable net assets acquired
|
17,768
|
71,701
|
12,241
|
|||||||||||||
Goodwill
|
17,230
|
42,480
|
12,759
|
|||||||||||||
Fair value of noncontrolling interest
|
(2,800
|
)
|
—
|
—
|
||||||||||||
Total consideration and value to be allocated to net assets
|
$
|
32,198
|
$
|
114,181
|
$
|
25,000
|
16. |
REVENUE RECOGNITION
|
Three Months Ended
September 30,
|
Change
|
|
Constant
Currency
Change(1)
|
Nine Months Ended
September 30,
|
Change
|
Constant
Currency
Change(1)
|
||||||||||||||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||||||||||||||||||
Mainland China
|
$
|
226,645
|
$
|
172,556
|
31
|
%
|
34
|
%
|
$
|
669,432
|
$
|
494,658
|
35
|
%
|
30
|
%
|
||||||||||||||||
Americas/Pacific
|
93,580
|
85,672
|
9
|
%
|
20
|
%
|
289,859
|
240,094
|
21
|
%
|
27
|
%
|
||||||||||||||||||||
South Korea
|
89,963
|
89,238
|
1
|
%
|
- |
|
270,517
|
258,626
|
5
|
%
|
- |
|
||||||||||||||||||||
Southeast Asia
|
86,307
|
71,141
|
21
|
%
|
24
|
%
|
236,390
|
194,711
|
21
|
%
|
20
|
%
|
||||||||||||||||||||
Japan
|
63,649
|
62,513
|
2
|
%
|
2
|
%
|
190,986
|
188,465
|
1
|
%
|
(1
|
%)
|
||||||||||||||||||||
Hong Kong/Taiwan
|
44,949
|
41,050
|
9
|
%
|
10
|
%
|
138,147
|
120,069
|
15
|
%
|
14
|
%
|
||||||||||||||||||||
EMEA
|
42,819
|
40,133
|
7
|
%
|
8
|
%
|
131,810
|
112,385
|
17
|
%
|
10
|
%
|
||||||||||||||||||||
Other
|
27,400
|
1,395
|
1864
|
%
|
1864
|
%
|
68,580
|
3,890
|
1663
|
%
|
1663
|
%
|
||||||||||||||||||||
Total
|
$
|
675,312
|
$
|
563,698
|
20
|
%
|
23
|
%
|
$
|
1,995,721
|
$
|
1,612,898
|
24
|
%
|
21
|
%
|
(1) |
Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|||||||||||||
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Mainland China
|
$
|
71,185
|
|
|
$
|
42,375
|
|
|
$
|
189,901
|
|
|
$
|
130,085
|
||
Americas/Pacific
|
|
11,848 |
|
|
|
14,106
|
|
|
|
38,088 |
|
|
|
37,884
|
||
South Korea
|
24,754
|
23,713
|
75,836
|
70,503
|
||||||||||||
Southeast Asia
|
21,204
|
17,380
|
58,245
|
43,763
|
||||||||||||
Japan
|
15,162
|
12,786
|
41,777
|
36,134
|
||||||||||||
Hong Kong/Taiwan
|
8,100
|
8,096
|
23,781
|
20,945
|
||||||||||||
EMEA
|
2,614
|
2,896
|
10,438
|
8,304
|
As of
September 30, 2018
|
As of
September 30, 2017
|
% Increase (Decrease)
|
||||||||||||||||||||||
Customers
|
Sales
Leaders
|
Customers
|
Sales
Leaders
|
Customers
|
Sales
Leaders
|
|||||||||||||||||||
Mainland China
|
210,000
|
33,300
|
190,000
|
25,600
|
11
|
%
|
30
|
%
|
||||||||||||||||
Americas/Pacific
|
277,000
|
8,500
|
237,000
|
8,000
|
17
|
%
|
6
|
%
|
||||||||||||||||
South Korea
|
180,000
|
7,700
|
185,000
|
8,400
|
(3
|
%)
|
(8
|
%)
|
||||||||||||||||
Southeast Asia
|
147,000
|
8,700
|
127,000
|
7,100
|
16
|
%
|
23
|
%
|
||||||||||||||||
Japan
|
131,000
|
6,200
|
131,000
|
6,500
|
-
|
|
(5
|
%)
|
||||||||||||||||
Hong Kong/Taiwan
|
76,000
|
4,400
|
71,000
|
4,300
|
7
|
%
|
2
|
%
|
||||||||||||||||
EMEA
|
145,000
|
4,300
|
128,000
|
4,300
|
13
|
%
|
- |
|
||||||||||||||||
Total
|
1,166,000
|
73,100
|
1,069,000
|
64,200
|
9
|
%
|
14
|
%
|
• |
the expansion and upgrade of facilities in our various markets; and
|
• |
purchases and expenditures for computer systems and equipment, software and application development, including for digital experience, social selling and technology modernization
initiatives.
|
(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)
|
||||||||||||
July 1 – 31, 2018
|
68,819
|
$
|
76.25
|
68,819
|
$
|
499.6
|
||||||||||
August 1 – 31, 2018
|
54,997
|
79.20
|
54,997
|
$
|
495.2
|
|||||||||||
September 1 – 30, 2018
|
34,230
|
81.67
|
34,230
|
$
|
492.4
|
|||||||||||
Total
|
158,046
|
$
|
78.45
|
158,046
|
(1) |
In October 2015, 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. In July 2018, our board terminated the 2015 stock repurchase plan and approved a new repurchase plan with an initial authorization amount
of $500 million.
|
Exhibits
Regulation S-K
Number
|
Description
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
NU SKIN ENTERPRISES, INC.
|
||
By:
|
/s/ Mark H. Lawrence
|
|
Mark H. Lawrence
|
||
Chief Financial Officer
|
||
(Duly Authorized Officer and Principal Financial and Accounting Officer)
|