☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019
|
☐ |
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)
|
(IRS Employer Identification No.)
|
75 WEST CENTER STREET
PROVO, UTAH 84601
|
||
(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
|
|||
6
|
|||
Item 2.
|
18 | ||
Item 3.
|
24 | ||
Item 4.
|
24 | ||
Part II.
|
Other Information
|
||
Item 1.
|
25 | ||
Item 1A.
|
25 | ||
Item 2.
|
26 | ||
Item 3.
|
26 | ||
Item 4.
|
26 | ||
Item 5.
|
26 | ||
Item 6.
|
26 | ||
27 |
March 31,
2019
|
December 31,
2018
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
310,288
|
$
|
386,911
|
||||
Current investments
|
8,038
|
11,346
|
||||||
Accounts receivable
|
57,390
|
53,282
|
||||||
Inventories, net
|
304,311
|
295,821
|
||||||
Prepaid expenses and other
|
67,655
|
51,877
|
||||||
Total current assets
|
747,682
|
799,237
|
||||||
Property and equipment, net
|
445,605
|
464,535
|
||||||
Right-of-use assets
|
117,329
|
—
|
||||||
Goodwill
|
196,573
|
196,573
|
||||||
Other intangible assets, net
|
86,935
|
89,989
|
||||||
Other assets
|
160,977
|
144,112
|
||||||
Total assets
|
$
|
1,755,101
|
$
|
1,694,446
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
52,273
|
$
|
47,617
|
||||
Accrued expenses
|
304,770
|
322,583
|
||||||
Current portion of long-term debt
|
45,000
|
69,455
|
||||||
Total current liabilities
|
402,043
|
439,655
|
||||||
Operating lease liabilities
|
81,075
|
—
|
||||||
Long-term debt
|
356,247
|
361,008
|
||||||
Other liabilities
|
104,541
|
111,916
|
||||||
Total liabilities
|
943,906
|
912,579
|
||||||
Commitments and contingencies (Note 11)
|
||||||||
Stockholders’ equity:
|
||||||||
Class A common stock – 500 million shares authorized, $0.001 par value, 90.6 million shares issued
|
91
|
91
|
||||||
Additional paid-in capital
|
553,270
|
552,564
|
||||||
Treasury stock, at cost – 35.0 million and 35.2 million shares
|
(1,325,251
|
)
|
(1,326,605
|
)
|
||||
Accumulated other comprehensive loss
|
(75,794
|
)
|
(79,934
|
)
|
||||
Retained earnings
|
1,658,879
|
1,635,751
|
||||||
Total stockholders’ equity
|
811,195
|
781,867
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,755,101
|
$
|
1,694,446
|
Three Months Ended
March 31,
|
||||||||
2019
|
2018
|
|||||||
Revenue
|
$
|
623,623
|
$
|
616,219
|
||||
Cost of sales
|
146,664
|
146,281
|
||||||
Gross profit
|
476,959
|
469,938
|
||||||
Operating expenses:
|
||||||||
Selling expenses
|
249,708
|
257,702
|
||||||
General and administrative expenses
|
158,598
|
153,246
|
||||||
Total operating expenses
|
408,306
|
410,948
|
||||||
Operating income
|
68,653
|
58,990
|
||||||
Other income (expense), net
|
(2,848
|
)
|
1,207
|
|||||
Income before provision for income taxes
|
65,805
|
60,197
|
||||||
Provision for income taxes
|
22,803
|
24,658
|
||||||
Net income
|
$
|
43,002
|
$
|
35,539
|
||||
Net income per share (Note 6):
|
||||||||
Basic
|
$
|
0.78
|
$
|
0.66
|
||||
Diluted
|
$
|
0.77
|
$
|
0.64
|
||||
Weighted-average common shares outstanding (000s):
|
||||||||
Basic
|
55,436
|
53,997
|
||||||
Diluted
|
56,128
|
55,959
|
Three Months Ended
March 31,
|
||||||||
2019
|
2018
|
|||||||
Net income
|
$
|
43,002
|
$
|
35,539
|
||||
Other comprehensive income, net of tax:
|
||||||||
Foreign currency translation adjustment, net of taxes of $(145) and $854 for the three months ended March
31, 2019 and 2018, respectively
|
4,140
|
11,047
|
||||||
Net unrealized gains/(losses) on foreign currency cash flow hedges, net of taxes of zero and $28 for the
three months ended March 31, 2019 and 2018, respectively
|
—
|
(247
|
)
|
|||||
Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of zero and $(5)
for the three months ended March 31, 2019 and 2018, respectively
|
—
|
44
|
||||||
4,140
|
10,844
|
|||||||
Comprehensive income
|
$
|
47,142
|
$
|
46,383
|
Class A
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at January 1, 2018
|
$
|
91
|
$
|
466,349
|
$
|
(1,304,694
|
)
|
$
|
(66,318
|
)
|
$
|
1,609,168
|
$
|
704,596
|
||||||||||
Cumulative effect adjustment from adoption of ASC 606
|
—
|
—
|
—
|
—
|
(13,042
|
)
|
(13,042
|
)
|
||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
35,539
|
35,539
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
10,844
|
—
|
10,844
|
||||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
(17,386
|
)
|
—
|
—
|
(17,386
|
)
|
||||||||||||||||
Exercise of employee stock options (0.3 million shares)/vesting of stock awards
|
—
|
(3,199
|
)
|
3,498
|
—
|
—
|
299
|
|||||||||||||||||
Stock-based compensation
|
—
|
6,761
|
—
|
—
|
—
|
6,761
|
||||||||||||||||||
Business Acquisitions (1.4 million shares)
|
—
|
76,584
|
18,109
|
—
|
—
|
94,693
|
||||||||||||||||||
Equity component of convertible note settlement (net)
|
—
|
(23,262
|
)
|
19,887
|
—
|
—
|
(3,375
|
)
|
||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(19,801
|
)
|
(19,801
|
)
|
||||||||||||||||
Balance at March 31, 2018
|
$
|
91
|
$
|
523,233
|
$
|
(1,280,586
|
)
|
$
|
(55,474
|
)
|
$
|
1,611,864
|
$
|
799,128
|
||||||||||
Balance at January 1, 2019
|
$
|
91
|
$
|
552,564
|
$
|
(1,326,605
|
)
|
$
|
(79,934
|
)
|
$
|
1,635,751
|
$
|
781,867
|
||||||||||
Cumulative effect adjustment from adoption of ASC 842
|
—
|
—
|
—
|
—
|
657
|
657
|
||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
43,002
|
43,002
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
4,140
|
—
|
4,140
|
||||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
(825
|
)
|
—
|
—
|
(825
|
)
|
||||||||||||||||
Exercise of employee stock options (0.2 million shares)/vesting of stock awards
|
—
|
(4,335
|
)
|
2,179
|
—
|
—
|
(2,156
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
5,041
|
—
|
—
|
—
|
5,041
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(20,531
|
)
|
(20,531
|
)
|
||||||||||||||||
Balance at March 31, 2019
|
$
|
91
|
$
|
553,270
|
$
|
(1,325,251
|
)
|
$
|
(75,794
|
)
|
$
|
1,658,879
|
$
|
811,195
|
Three Months Ended
March 31,
|
||||||||
2019
|
2018
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
43,002
|
$
|
35,539
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
19,607
|
18,907
|
||||||
Equity method earnings
|
—
|
(456
|
)
|
|||||
Gain on step acquisitions
|
—
|
(13,644
|
)
|
|||||
Loss on extinguishment of debt
|
—
|
7,220
|
||||||
Foreign currency losses
|
458
|
1,764
|
||||||
Stock-based compensation
|
5,041
|
6,761
|
||||||
Deferred taxes
|
1,668
|
10,062
|
||||||
Non-cash lease expense
|
11,375
|
—
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(4,145
|
)
|
(8,589
|
)
|
||||
Inventories, net
|
(7,271
|
)
|
(6,624
|
)
|
||||
Prepaid expenses and other
|
(15,540
|
)
|
(12,915
|
)
|
||||
Other assets
|
(180
|
)
|
(974
|
)
|
||||
Accounts payable
|
5,157
|
2,179
|
||||||
Accrued expenses
|
(68,842
|
)
|
(36,230
|
)
|
||||
Other liabilities
|
1,484
|
(4,113
|
)
|
|||||
Net cash provided by operating activities
|
(8,186
|
)
|
(1,113
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(13,765
|
)
|
(12,652
|
)
|
||||
Proceeds on investment sales
|
7,444
|
7,781
|
||||||
Purchases of investments
|
(4,321
|
)
|
(4,539
|
)
|
||||
Acquisitions and investments in equity investees
|
(7,500
|
)
|
(33,061
|
)
|
||||
Net cash used in investing activities
|
(18,142
|
)
|
(42,471
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards
|
(2,156
|
)
|
299
|
|||||
Payments of debt
|
(134,455
|
)
|
(9,094
|
)
|
||||
Payment of cash dividends
|
(20,531
|
)
|
(19,801
|
)
|
||||
Proceeds from debt
|
105,000
|
75,943
|
||||||
Repurchases of shares of common stock
|
(825
|
)
|
(17,386
|
)
|
||||
Net cash used in financing activities
|
(52,967
|
)
|
29,961
|
|||||
Effect of exchange rate changes on cash
|
2,672
|
8,708
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(76,623
|
)
|
(4,915
|
)
|
||||
Cash and cash equivalents, beginning of period
|
386,911
|
426,399
|
||||||
Cash and cash equivalents, end of period
|
$
|
310,288
|
$
|
421,484
|
1. |
The Company
|
2. |
Summary of Significant Accounting Policies
|
March 31,
2019
|
December 31,
2018
|
|||||||
Raw materials
|
$
|
89,984
|
$
|
91,610
|
||||
Finished goods
|
214,327
|
204,211
|
||||||
Total Inventory, net
|
$
|
304,311
|
$
|
295,821
|
3. |
Goodwill
|
March 31,
2019
|
December 31,
2018
|
|||||||
Nu Skin
|
||||||||
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
|
||||||
Manufacturing
|
72,469
|
72,469
|
||||||
Grow Tech
|
9,150
|
9,150
|
||||||
Total
|
$
|
196,573
|
$
|
196,573
|
4. |
Debt
|
Facility or
Arrangement
|
Original
Principal
Amount
|
Balance as of
March 31,
2019(1)(2)
|
Balance as of
December 31,
2018(2)
|
Interest
Rate
|
Repayment
Terms
|
||||||||||
April 2018 Credit Agreement term loan facility
|
$ |
400.0 million
|
$ |
380.0 million
|
$ |
385.0 million
|
Variable 30 day: 4.75%
|
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
|
$ |
25.0 million
|
$ |
49.5 million
|
Variable 30 day: 4.82%
|
Revolving line of credit expires April 18, 2023.
|
(1) |
As of March 31, 2019, 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 term loan under the
Existing Credit Agreement facility. The Company has classified the $25.0 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 $3.8 million as of March 31, 2019 related to the credit agreement.
|
5. |
Leases
|
Three Months
Ended March 31,
2019
|
||||
Operating lease cost
|
$
|
12,861
|
||
Short-term lease cost
|
52
|
|||
Variable lease cost
|
1,052
|
|||
$
|
13,965
|
Three Months
Ended March 31,
2019
|
||||
Operating cash outflow from operating leases
|
$
|
14,377
|
||
ROU assets obtained in exchange for lease obligations
|
128,704
|
Year Ending December 31,
|
Operating
leases
|
|||
2019
|
$
|
43,686
|
||
2020
|
33,522
|
|||
2021
|
23,544
|
|||
2022
|
13,187
|
|||
2023
|
8,542
|
|||
Thereafter
|
10,398
|
|||
Total
|
132,879
|
|||
Less: Finance charges
|
12,899
|
|||
Total principal liability
|
$
|
119,980
|
Year Ending December 31,
|
Operating
leases
|
Finance
leases
|
||||||
2019
|
$
|
39,358
|
$
|
726
|
||||
2020
|
27,553
|
748
|
||||||
2021
|
20,266
|
757
|
||||||
2022
|
11,723
|
770
|
||||||
2023
|
9,950
|
794
|
||||||
Thereafter
|
7,628
|
1,148
|
||||||
Total minimum lease payments
|
$
|
116,478
|
$
|
4,943
|
6. |
Capital Stock
|
7. |
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 March 31, 2019
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
32,326
|
$
|
—
|
$
|
—
|
$
|
32,326
|
||||||||
Other long-term assets
|
3,496
|
—
|
—
|
3,496
|
||||||||||||
Life insurance contracts
|
—
|
—
|
38,516
|
38,516
|
||||||||||||
Total
|
$
|
35,822
|
$
|
—
|
$
|
38,516
|
$
|
74,338
|
Fair Value at December 31, 2018
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
35,260
|
$
|
—
|
$
|
—
|
$
|
35,260
|
||||||||
Other long-term assets
|
3,568
|
—
|
—
|
3,568
|
||||||||||||
Life insurance contracts
|
—
|
—
|
35,590
|
35,590
|
||||||||||||
Total
|
$
|
38,828
|
$
|
—
|
$
|
35,590
|
$
|
74,418
|
Beginning balance at January 1, 2019
|
$
|
35,590
|
||
Actual return on plan assets
|
2,441
|
|||
Purchase and issuances
|
2,003
|
|||
Sales and settlements
|
(1,518
|
)
|
||
Transfers into Level 3
|
—
|
|||
Ending balance at March 31, 2019
|
$
|
38,516
|
8. |
Income Taxes
|
9. |
Derivative Financial Instruments
|
Amount of Gain (Loss)
Recognized in Income
|
||||||||||
Derivatives not Designated
|
Location of Gain (Loss)
|
Three Months Ended
March 31,
|
||||||||
as Hedging Instruments:
|
Recognized in Income
|
2019
|
2018
|
|||||||
Foreign currency contracts
|
Other income (expense)
|
$
|
—
|
$
|
—
|
Amount of Gain (Loss) Recognized
in Other Comprehensive Loss
|
||||||||
Derivatives Designated
|
Three Months Ended
March 31,
|
|||||||
as Hedging Instruments:
|
2019
|
2018
|
||||||
Foreign currency forward contracts related to intercompany license fee, product sales, and selling expense
hedges
|
$
|
—
|
$
|
(247
|
)
|
Amount of Gain (Loss)
Reclassified from Accumulated
Other Comprehensive Loss into Income
|
||||||||||
Derivatives Designated
|
Location of Gain (Loss)
Reclassified from Accumulated
|
Three Months Ended
March 31,
|
||||||||
as Hedging Instruments:
|
Other Comprehensive Loss into Income
|
2019
|
2018
|
|||||||
Foreign currency forward contracts related to intercompany license fees and product sales hedges
|
Revenue
|
$
|
—
|
$
|
(49
|
)
|
||||
Foreign currency forward contracts related to intercompany selling expense hedges
|
Selling expenses
|
$
|
—
|
$
|
—
|
10. |
Segment Information
|
Three Months Ended
March 31,
|
||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
||||||
Nu Skin
|
||||||||
Mainland China
|
$
|
208,488
|
$
|
197,531
|
||||
Americas/Pacific
|
86,456
|
92,289
|
||||||
South Korea
|
83,853
|
88,930
|
||||||
Southeast Asia
|
72,495
|
70,860
|
||||||
Japan
|
62,109
|
63,224
|
||||||
Hong Kong/Taiwan
|
40,558
|
40,992
|
||||||
EMEA
|
41,818
|
44,981
|
||||||
Other
|
(1,426
|
)
|
235
|
|||||
Total Nu Skin
|
594,351
|
599,042
|
||||||
Manufacturing (1)
|
29,272
|
17,177
|
||||||
Grow Tech
|
—
|
—
|
||||||
Total
|
$
|
623,623
|
$
|
616,219
|
(1)
|
The Manufacturing segment had $5.9 million and $3.2 million of intersegment revenue for the three-month period ended March 31, 2019 and 2018,
respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above.
|
Three Months Ended
March 31,
|
||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
||||||
Nu Skin
|
||||||||
Mainland China
|
$
|
59,167
|
$
|
44,817
|
||||
Americas/Pacific
|
12,019
|
9,172
|
||||||
South Korea
|
25,668
|
26,201
|
||||||
Southeast Asia
|
17,992
|
16,402
|
||||||
Japan
|
14,106
|
13,238
|
||||||
Hong Kong/Taiwan
|
7,474
|
7,846
|
||||||
EMEA
|
1,351
|
4,754
|
||||||
Nu Skin contribution
|
137,777
|
122,430
|
||||||
Manufacturing
|
3,646
|
(354
|
)
|
|||||
Grow Tech
|
(3,629
|
)
|
(1,260
|
)
|
||||
Total segment contribution
|
137,794
|
120,816
|
||||||
Corporate and other
|
(69,141
|
)
|
(61,826
|
)
|
||||
Operating income
|
68,653
|
58,990
|
||||||
Other income (expense)
|
(2,848
|
)
|
1,207
|
|||||
Income before provision for income taxes
|
$
|
65,805
|
$
|
60,197
|
Three Months Ended
March 31,
|
||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
||||||
Nu Skin
|
||||||||
Mainland China
|
$
|
3,116
|
$
|
3,487
|
||||
Americas/Pacific
|
214
|
214
|
||||||
South Korea
|
1,524
|
1,667
|
||||||
Southeast Asia
|
477
|
559
|
||||||
Japan
|
1,048
|
915
|
||||||
Hong Kong/Taiwan
|
516
|
323
|
||||||
EMEA
|
440
|
176
|
||||||
Total Nu Skin
|
7,335
|
7,341
|
||||||
Manufacturing
|
1,574
|
2,825
|
||||||
Grow Tech
|
875
|
218
|
||||||
Corporate and other
|
9,823
|
8,523
|
||||||
Total
|
$
|
19,607
|
$
|
18,907
|
Three Months Ended
March 31,
|
||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
||||||
Nu Skin
|
||||||||
Mainland China
|
$
|
1,681
|
$
|
1,869
|
||||
Americas/Pacific
|
274
|
189
|
||||||
South Korea
|
49
|
—
|
||||||
Southeast Asia
|
94
|
51
|
||||||
Japan
|
172
|
311
|
||||||
Hong Kong/Taiwan
|
463
|
482
|
||||||
EMEA
|
34
|
35
|
||||||
Total Nu Skin
|
2,767
|
2,937
|
||||||
Manufacturing
|
1,602
|
749
|
||||||
Grow Tech
|
2,985
|
2,587
|
||||||
Corporate and other
|
6,411
|
6,379
|
||||||
Total
|
$
|
13,765
|
$
|
12,652
|
11. |
Commitments and Contingencies
|
12. |
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
|
13. |
Restructuring
|
Beginning balance at January 1, 2019
|
$
|
15,462
|
||
Amounts paid
|
(15,046
|
)
|
||
Adjustments
|
(416
|
)
|
||
Ending balance at March 31, 2019
|
$
|
—
|
Three Months Ended
March 31,
|
Constant-Currency
|
|||||||||||||||
2019
|
2018
|
Change
|
Change(1)
|
|||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
208,488
|
$
|
197,531
|
6
|
%
|
12
|
%
|
||||||||
Americas/Pacific
|
86,456
|
92,289
|
(6
|
)%
|
2
|
%
|
||||||||||
South Korea
|
83,853
|
88,930
|
(6
|
)%
|
(1
|
)%
|
||||||||||
Southeast Asia
|
72,495
|
70,860
|
2
|
%
|
5
|
%
|
||||||||||
Japan
|
62,109
|
63,224
|
(2
|
)%
|
—
|
|||||||||||
Hong Kong/Taiwan
|
40,558
|
40,992
|
(1
|
)%
|
2
|
%
|
||||||||||
EMEA
|
41,818
|
44,981
|
(7
|
)%
|
1
|
%
|
||||||||||
Other
|
(1,426
|
)
|
235
|
(707
|
)%
|
(707
|
)%
|
|||||||||
Total Nu Skin
|
594,351
|
599,042
|
(1
|
)%
|
5
|
%
|
||||||||||
Manufacturing
|
29,272
|
17,177
|
70
|
%
|
70
|
%
|
||||||||||
Grow Tech
|
—
|
—
|
—
|
—
|
||||||||||||
Total
|
$
|
623,623
|
$
|
616,219
|
1
|
%
|
7
|
%
|
(1) |
Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.
|
Three Months Ended
March 31,
|
||||||||
2019
|
2018
|
|||||||
Nu Skin
|
||||||||
Mainland China
|
$
|
59,167
|
$
|
44,817
|
||||
Americas/Pacific
|
12,019
|
9,172
|
||||||
South Korea
|
25,668
|
26,201
|
||||||
Southeast Asia
|
17,992
|
16,402
|
||||||
Japan
|
14,106
|
13,238
|
||||||
Hong Kong/Taiwan
|
7,474
|
7,846
|
||||||
EMEA
|
1,351
|
4,754
|
||||||
Total Nu Skin
|
137,777
|
122,430
|
||||||
Manufacturing
|
3,646
|
(354
|
)
|
|||||
Grow Tech
|
(3,629
|
)
|
(1,260
|
)
|
As of
March 31, 2019
|
As of
March 31, 2018
|
% Increase (Decrease)
|
||||||||||||||||||||||
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
|||||||||||||||||||
Mainland China
|
272,053
|
26,986
|
200,231
|
27,045
|
36
|
%
|
—
|
|||||||||||||||||
Americas/Pacific
|
242,925
|
7,862
|
245,588
|
8,248
|
(1
|
)%
|
(5
|
)%
|
||||||||||||||||
South Korea
|
181,150
|
6,671
|
179,384
|
7,338
|
1
|
%
|
(9
|
)%
|
||||||||||||||||
Southeast Asia
|
138,112
|
7,071
|
117,689
|
6,559
|
17
|
%
|
8
|
%
|
||||||||||||||||
Japan
|
126,526
|
5,840
|
128,598
|
6,198
|
(2
|
)%
|
(6
|
)%
|
||||||||||||||||
Hong Kong/Taiwan
|
70,354
|
3,959
|
72,401
|
3,864
|
(3
|
)%
|
2
|
%
|
||||||||||||||||
EMEA
|
162,086
|
4,859
|
141,673
|
4,246
|
14
|
%
|
14
|
%
|
||||||||||||||||
Total
|
1,193,206
|
63,248
|
1,085,564
|
63,498
|
10
|
%
|
—
|
● |
the expansion and upgrade of facilities in our various markets;
|
● |
purchases and expenditures for computer systems and equipment, software, application development and the migration of legacy systems to cloud-based systems; and
|
● |
purchases of equipment and development of our technology in our Grow Tech initiative.
|
(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)
|
||||||||||||
January 1 - 31, 2019
|
—
|
$
|
—
|
—
|
$
|
471.0
|
||||||||||
February 1 - 28, 2019
|
—
|
—
|
—
|
$
|
471.0
|
|||||||||||
March 1 - 31, 2019
|
13,610
|
60.61
|
13,610
|
$
|
470.2
|
|||||||||||
Total
|
13,610
|
$
|
60.61
|
13,610
|
(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.
|
Exhibits
Regulation S-K
Number
|
Description
|
|
Certification by Ritch N. Wood, 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 Ritch N. Wood, 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
|
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)
|