☑ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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)
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Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Class A Common Stock, $.001 par value
|
NUS
|
New York Stock Exchange
|
Large accelerated filer ☑
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Accelerated filer ☐
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|
Non-accelerated filer ☐
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Smaller reporting company ☐
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Emerging growth company ☐
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Page
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PART I
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|||
ITEM 1.
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1
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1
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3
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6
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6
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|||
12
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|||
12
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|||
12
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|||
13
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ITEM 1A.
|
14
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ITEM 1B.
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32
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ITEM 2.
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33
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ITEM 3.
|
33
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ITEM 4.
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33
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PART II
|
|||
ITEM 5.
|
34
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||
ITEM 6.
|
36
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||
ITEM 7.
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37
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||
ITEM 7A.
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50
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||
ITEM 8.
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51
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||
ITEM 9.
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83
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||
ITEM 9A.
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83
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||
ITEM 9B.
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83
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||
PART III
|
|||
ITEM 10.
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84
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||
ITEM 11.
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84
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ITEM 12.
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84
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ITEM 13.
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84
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||
ITEM 14.
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84
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PART IV
|
|||
ITEM 15.
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84
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ITEM 16.
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86
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||
87
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|
Year Ended December 31,
|
|||||||||||||||||||||||
Product Category
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
Personal Care(2)
|
$
|
1,423.5
|
58.8
|
%
|
$
|
1,659.7
|
62.0
|
%
|
$
|
1,456.4
|
63.9
|
%
|
||||||||||||
Wellness(2)
|
863.1
|
35.7
|
%
|
921.3
|
34.4
|
%
|
817.2
|
35.9
|
%
|
|||||||||||||||
Other(3)
|
133.8
|
5.5
|
%
|
98.0
|
3.6
|
%
|
5.5
|
0.2
|
%
|
|||||||||||||||
$
|
2,420.4
|
100.0
|
%
|
$
|
2,679.0
|
100.0
|
%
|
$
|
2,279.1
|
100.0
|
%
|
(1) |
In 2019, 87% of our sales were transacted in foreign currencies that were then converted to U.S. dollars for financial reporting purposes at weighted-average exchange rates. Foreign-currency fluctuations negatively impacted reported revenue by approximately 3% in 2019 compared to 2018 and positively impacted reported revenue by approximately 1% in 2018 compared to 2017.
|
(2) |
Includes sales of personal care and wellness products in our core Nu Skin business.
|
(3) |
Other includes the external revenue from our Rhyz companies along with a limited number of other products and services, including household products and technology services.
|
● |
Global consumer research to identify needs and insights and refine product concepts;
|
● |
Internal research, product development and quality testing;
|
● |
Joint research projects, collaborations and clinical studies;
|
● |
Identification and assessment of technologies for potential licensing arrangements; and
|
● |
Acquisition of technologies.
|
● |
our sales force has rapid reach to potential customers through their social networks and the social networks of those to whom they are connected;
|
● |
our sales force can personally educate consumers about our products, which we believe is more effective for differentiating our products than using traditional mass-media advertising;
|
● |
our distribution channel allows for product demonstrations and trial by potential consumers;
|
● |
our distribution channel allows our sales force to provide personal testimonials of product efficacy; and
|
● |
as compared to other distribution methods, our sales force has the opportunity to provide consumers higher levels of service.
|
|
As of December 31, 2019
|
As of December 31, 2018
|
As of December 31, 2017
|
|||||||||||||||||||||
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
|||||||||||||||||||
Mainland China
|
292,812
|
17,987
|
303,789
|
33,129
|
192,604
|
40,610
|
||||||||||||||||||
Americas/Pacific
|
220,216
|
7,607
|
248,609
|
8,354
|
244,467
|
8,871
|
||||||||||||||||||
South Korea
|
168,972
|
7,251
|
182,026
|
7,565
|
172,553
|
8,431
|
||||||||||||||||||
Southeast Asia
|
136,349
|
7,480
|
153,465
|
8,933
|
121,764
|
8,020
|
||||||||||||||||||
Japan
|
125,557
|
5,916
|
130,181
|
5,916
|
132,041
|
6,592
|
||||||||||||||||||
EMEA
|
153,330
|
4,619
|
149,085
|
4,791
|
135,051
|
4,683
|
||||||||||||||||||
Hong Kong/Taiwan
|
65,669
|
3,900
|
76,891
|
4,767
|
71,091
|
4,671
|
||||||||||||||||||
Total
|
1,162,905
|
54,760
|
1,244,046
|
73,455
|
1,069,571
|
81,878
|
(1) |
Our Velocity sales compensation program enhancements were designed to drive and reward increased productivity of our Sales Leaders, with adjusted requirements for qualifying and maintaining “Sales Leader” status, which has impacted the number of independent distributors under our global compensation program who achieve such requirements. For example, the sales volume necessary to achieve initial qualification has been increased in some markets, financial rewards have been increased for higher monthly sales productivity, and qualification requirements to maintain and advance status have been modified. The enhanced program also provides some flexibility to remain a Sales Leader with a lower sales volume for a short time. We began introducing Velocity in the fourth quarter of 2017 and continued rolling it out across our markets through the first half of 2019. We have now introduced Velocity in all of our markets other than Mainland China, which operates under a different business model and is not impacted by these changes.
|
● |
“Distributor-Direct Consumers”—Individuals who purchase products directly from an independent distributor at a price established by the distributor.
|
● |
“Company-Direct Consumers”—Individuals who purchase products directly from the company. These consumers are typically referred by a distributor and may purchase at retail price or at a discount. These individuals do not have the right to build a Nu Skin business by reselling product or by recruiting others.
|
● |
“Basic Distributors”—Distributors who purchase products for personal or family use or for resale to other consumers. These individuals are not eligible to receive compensation on a multi-level basis unless they elect to qualify as a Sales Leader under our global sales compensation plan. We consider these individuals to be part of our consumer group, as we believe a significant majority of these distributors are purchasing products for personal use and not actively recruiting others, and their purchasing levels are similar to our “Company-Direct Consumers.”
|
● |
“Sales Leaders and Qualifiers”—Distributors who have qualified or are trying to qualify as a Sales Leader. These distributors have elected to pursue the business opportunity as a Sales Leader and are actively recruiting consumers and distributors and building a sales network under our global sales compensation plan and constitute our sales network.
|
● |
by reselling products purchased from the company to consumers; and
|
● |
through sales compensation earned on the sale of products under our global sales compensation plan.
|
|
Year Ended December 31,
|
|||||||||||||||||||||||
(U.S. dollars in millions)
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
Nu Skin
|
||||||||||||||||||||||||
Mainland China
|
$
|
722.5
|
30
|
%
|
$
|
886.5
|
33
|
%
|
$
|
717.0
|
32
|
%
|
||||||||||||
Americas/Pacific
|
349.1
|
14
|
385.0
|
14
|
342.4
|
15
|
||||||||||||||||||
South Korea
|
330.0
|
14
|
373.4
|
14
|
361.7
|
16
|
||||||||||||||||||
Southeast Asia
|
301.6
|
12
|
316.9
|
12
|
268.6
|
12
|
||||||||||||||||||
Japan
|
260.0
|
11
|
254.9
|
10
|
256.1
|
11
|
||||||||||||||||||
EMEA
|
167.2
|
7
|
182.4
|
7
|
160.3
|
7
|
||||||||||||||||||
Hong Kong/Taiwan
|
166.3
|
7
|
185.9
|
7
|
166.7
|
7
|
||||||||||||||||||
Other
|
1.7
|
—
|
3.4
|
—
|
6.3
|
—
|
||||||||||||||||||
Total Nu Skin
|
2,298.4
|
95
|
2,588.4
|
97
|
2,279.1
|
100
|
||||||||||||||||||
Manufacturing
|
121.9
|
5
|
90.6
|
3
|
—
|
—
|
||||||||||||||||||
Grow Tech
|
0.1
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
$
|
2,420.4
|
100
|
%
|
$
|
2,679.0
|
100
|
%
|
$
|
2,279.1
|
100
|
%
|
● |
impose requirements related to order cancellations, product returns, inventory buy-backs and cooling-off periods for our sales force and consumers;
|
● |
require us, or our sales force, to register with government agencies;
|
● |
impose limits on the amount of sales compensation we can pay;
|
● |
impose reporting requirements; and
|
● |
require that our sales force is compensated for sales of products and not for recruiting others.
|
Name
|
Age
|
Position
|
||
Steven J. Lund
|
66
|
Executive Chairman of the Board
|
||
Ritch N. Wood
|
54
|
Chief Executive Officer
|
||
Ryan S. Napierski
|
46
|
President
|
||
Mark H. Lawrence
|
50
|
Executive Vice President and Chief Financial Officer
|
||
Joseph Y. Chang
|
67
|
Executive Vice President of Product Development and Chief Scientific Officer
|
||
D. Matthew Dorny
|
55
|
Executive Vice President, General Counsel and Secretary
|
● |
In 2015, the FTC took aggressive actions against a multi-level marketing company, alleging an illegal business model and inappropriate earnings claims.
|
● |
In 2016, the FTC entered into a settlement with a multi-level marketing company, requiring the company to modify its business model, including basing sales compensation and qualification only on sales to retail and preferred customers and on purchases by a distributor for personal consumption within allowable limits. Although this settlement does not represent judicial precedent or a new FTC rule, the FTC has indicated that the industry should look at this settlement, and the principles underlying its specific measures, for guidance.
|
● |
In September 2019, the FTC entered into a settlement with a multi-level marketing company, alleging an illegal business model and compensation structure and inappropriate earnings claims. The company agreed to a prohibition from engaging in multi-level marketing. The FTC and another multi-level company are currently in litigation, and that company has indicated the FTC is seeking to limit the levels of payment in its compensation structure as a condition to settlement.
|
● |
suspicions about the legality and ethics of network marketing;
|
● |
continued media or regulatory scrutiny regarding our business and our business model, including in Mainland China;
|
● |
the safety or effectiveness of our or our competitors’ products or the ingredients in such products;
|
● |
inquiries, investigations, fines, legal actions, or mandatory or voluntary product recalls involving us, our competitors, our business models or our respective products;
|
● |
the actions of our current or former sales force and employees, including any allegations that our sales force or employees have overstated or made false product claims or earnings representations, or engaged in unethical or illegal activity;
|
● |
misperceptions about the types and magnitude of economic benefits offered at different levels of sales engagement in our business; and
|
● |
public, governmental or media perceptions of the direct selling, nutritional supplement or personal care industries generally.
|
● |
any adverse publicity regarding us, our products, our distribution channel, or our competitors;
|
● |
lack of interest in, dissatisfaction with, or the technical failure of, existing or new products;
|
● |
lack of compelling products or income opportunities, including through our sales compensation plans and other incentive trips and offerings;
|
● |
negative sales force reaction to changes in our sales compensation plans;
|
● |
any negative public perception of our products and their ingredients;
|
● |
any negative public perception of our sales force and direct selling businesses in general;
|
● |
our actions to enforce our policies and procedures;
|
● |
any regulatory actions or charges against us or others in our industry;
|
● |
general economic and business conditions, including employment levels and employment trends such as the gig and sharing economies;
|
● |
recruiting efforts of our competitors; and
|
● |
potential saturation or maturity levels in a given market, which could negatively impact our ability to attract and retain our sales force in such market.
|
● |
impose requirements related to sign-up, order cancellations, product returns, inventory buy-backs and cooling-off periods for our sales force and consumers;
|
● |
require us, or our sales force, to register with government agencies;
|
● |
impose limits on the amount of sales compensation we can pay;
|
● |
impose reporting requirements; and
|
● |
require that our sales force is compensated primarily for selling products and not for recruiting others.
|
● |
the possibility that a government might ban or severely restrict our sales compensation and business models;
|
● |
the possibility that local civil unrest, political instability or changes in diplomatic or trade relationships might disrupt our operations in one or more markets—for example, the ongoing social incidents in Hong Kong, which began in 2019, have negatively affected our business in that market;
|
● |
the lack of well-established or reliable legal systems in certain areas where we operate;
|
● |
the presence of high inflation in the economies of international markets in which we operate;
|
● |
the possibility that a government authority might impose legal, tax, customs, or other financial burdens on us or our sales force, due, for example, to the structure of our operations in various markets;
|
● |
the possibility that a government authority might challenge the status of our sales force as independent contractors or impose employment or social taxes on our sales force; and
|
● |
the possibility that governments may impose currency remittance restrictions limiting our ability to repatriate cash.
|
● |
difficulties in assimilating acquired operations or products, including the loss of key employees from acquired businesses and disruption to our direct selling channel;
|
● |
diversion of management’s attention from our core business;
|
● |
increased fixed costs;
|
● |
adverse effects on existing business relationships with our suppliers, sales force or consumers; and
|
● |
risks associated with entering markets or industries in which we have limited or no prior experience, including limited expertise in running the business, developing the technology, and selling and servicing the products.
|
● |
fluctuations in our operating results;
|
● |
government investigations of our business;
|
● |
trends or adverse publicity related to our business, products, industry or competitors;
|
● |
the sale of shares of Class A common stock by significant stockholders;
|
● |
demand, and general trends in the market, for our products;
|
● |
acquisitions by us or our competitors;
|
● |
economic or currency exchange issues in markets in which we operate;
|
● |
changes in estimates of our operating performance or changes in recommendations by securities analysts;
|
● |
speculative trading, including short selling and options trading; and
|
● |
general economic, business, regulatory and political conditions.
|
|
(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)
|
||||||||||||
October 1 – 31, 2019
|
—
|
$
|
—
|
—
|
$
|
470.2
|
||||||||||
November 1 – 30, 2019
|
—
|
—
|
—
|
$
|
470.2
|
|||||||||||
December 1 – 31, 2019
|
—
|
—
|
—
|
$
|
470.2
|
|||||||||||
Total
|
—
|
$
|
—
|
—
|
(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.
|
Measured Period
|
Nu Skin
|
S&P 500 Index
|
S&P MidCap 400 Consumer Staples
Index
|
||||
December 31, 2014
|
100.00
|
100.00
|
100.00
|
||||
December 31, 2015
|
89.49
|
101.38
|
96.43
|
||||
December 31, 2016
|
116.69
|
113.51
|
109.04
|
||||
December 31, 2017
|
170.99
|
138.29
|
112.62
|
||||
December 31, 2018
|
156.76
|
132.23
|
104.57
|
||||
December 31, 2019
|
108.15
|
173.86
|
115.91
|
|
Year Ended December 31,
|
|||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
(U.S. dollars in thousands, except per share data and cash dividends)
|
||||||||||||||||||||
Income Statement Data:
|
||||||||||||||||||||
Revenue
|
$
|
2,420,416
|
$
|
2,679,008
|
$
|
2,279,099
|
$
|
2,207,797
|
$
|
2,247,047
|
||||||||||
Cost of sales
|
581,420
|
634,140
|
502,078
|
500,457
|
(1)
|
489,510
|
(2)
|
|||||||||||||
Gross profit
|
1,838,996
|
2,044,868
|
1,777,021
|
1,707,340
|
1,757,537
|
|||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Selling expenses
|
955,600
|
1,071,020
|
938,024
|
922,083
|
951,372
|
|||||||||||||||
General and administrative expenses
|
615,970
|
662,302
|
564,514
|
554,153
|
561,463
|
|||||||||||||||
Restructuring and impairment expenses(3)
|
—
|
70,686
|
—
|
—
|
—
|
|||||||||||||||
Total operating expenses
|
1,571,570
|
1,804,008
|
1,502,538
|
1,476,236
|
1,512,835
|
|||||||||||||||
Operating income
|
267,426
|
240,860
|
274,483
|
231,104
|
244,702
|
|||||||||||||||
Other income (expense), net
|
(12,254
|
)
|
(21,194
|
)
|
(8,916
|
)
|
(18,265
|
)
|
(32,743
|
)(4)
|
||||||||||
Income before provision for income taxes
|
255,172
|
219,666
|
265,567
|
212,839
|
211,959
|
|||||||||||||||
Provision for income taxes
|
81,619
|
97,779
|
136,130
|
(5)
|
69,753
|
78,913
|
||||||||||||||
Net income
|
$
|
173,553
|
$
|
121,887
|
$
|
129,437
|
$
|
143,086
|
$
|
133,046
|
||||||||||
Net income per share:
|
||||||||||||||||||||
Basic
|
$
|
3.13
|
$
|
2.21
|
$
|
2.45
|
$
|
2.58
|
$
|
2.29
|
||||||||||
Diluted
|
$
|
3.10
|
$
|
2.16
|
$
|
2.36
|
$
|
2.55
|
$
|
2.25
|
||||||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||||||||||
Basic
|
55,518
|
55,170
|
52,806
|
55,412
|
57,997
|
|||||||||||||||
Diluted
|
55,927
|
56,476
|
54,852
|
56,097
|
59,057
|
|||||||||||||||
Balance Sheet Data (at end of period):
|
||||||||||||||||||||
Cash and cash equivalents and current investments
|
$
|
344,043
|
$
|
398,257
|
$
|
438,246
|
$
|
368,126
|
$
|
303,725
|
||||||||||
Working capital
|
383,406
|
359,582
|
330,419
|
315,326
|
298,795
|
|||||||||||||||
Total assets
|
1,769,006
|
1,694,446
|
1,589,872
|
1,474,045
|
1,505,843
|
|||||||||||||||
Current portion of long-term debt
|
27,500
|
69,455
|
77,840
|
82,727
|
67,849
|
|||||||||||||||
Long-term debt
|
334,461
|
361,008
|
310,790
|
334,165
|
181,745
|
|||||||||||||||
Stockholders’ equity
|
875,289
|
781,867
|
704,596
|
664,070
|
825,621
|
|||||||||||||||
Cash dividends declared per share
|
1.48
|
1.46
|
1.44
|
1.42
|
1.40
|
|||||||||||||||
Supplemental Operating Data (at end of period):
|
||||||||||||||||||||
Approximate number of Customers(6)
|
1,162,905
|
1,244,046
|
1,069,571
|
987,563
|
993,788
|
|||||||||||||||
Number of Sales Leaders(7)
|
54,760
|
73,455
|
81,878
|
61,627
|
67,575
|
(1) |
Includes a non-cash Japan customs expense of $31.4 million.
|
(2) |
Includes write-down of inventory of $37.9 million, resulting primarily from reduced sales expectations primarily in our Greater China region.
|
(3) |
Consists of expenses incurred in connection with restructuring and exit activities.
|
(4) |
Includes $10.2 million of foreign currency charges, related to the devaluation of the Venezuela currency.
|
(5) |
Includes a negative non-cash net impact of $47.7 million from 2017 tax reform legislation in the United States.
|
(6) |
“Customers” are persons who purchased products directly from the company during the previous three months. Our Customer numbers do not include consumers who purchase products directly from members of our sales force.
|
(7) |
“Sales Leaders” are independent distributors, and sales employees and independent marketers in Mainland China, who achieve certain qualification requirements.
|
● |
developing and marketing innovative, technologically and scientifically advanced products;
|
● |
providing compelling initiatives and strong support; and
|
● |
offering an attractive sales compensation structure.
|
|
Year Ended December 31,
|
|||||||||||||||||||||||
(U.S. dollars in millions)
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
Nu Skin
|
||||||||||||||||||||||||
Mainland China
|
$
|
722.5
|
30
|
%
|
$
|
886.5
|
33
|
%
|
$
|
717.0
|
32
|
%
|
||||||||||||
Americas/Pacific
|
349.1
|
14
|
385.0
|
14
|
342.4
|
15
|
||||||||||||||||||
South Korea
|
330.0
|
14
|
373.4
|
14
|
361.7
|
16
|
||||||||||||||||||
Southeast Asia
|
301.6
|
12
|
316.9
|
12
|
268.6
|
12
|
||||||||||||||||||
Japan
|
260.0
|
11
|
254.9
|
10
|
256.1
|
11
|
||||||||||||||||||
EMEA
|
167.2
|
7
|
182.4
|
7
|
160.3
|
7
|
||||||||||||||||||
Hong Kong/Taiwan
|
166.3
|
7
|
185.9
|
7
|
166.7
|
7
|
||||||||||||||||||
Other
|
1.7
|
—
|
3.4
|
—
|
6.3
|
—
|
||||||||||||||||||
Total Nu Skin
|
2,298.4
|
95
|
2,588.4
|
97
|
2,279.1
|
100
|
||||||||||||||||||
Manufacturing
|
121.9
|
5
|
90.6
|
3
|
—
|
—
|
||||||||||||||||||
Grow Tech
|
0.1
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
$
|
2,420.4
|
100
|
%
|
$
|
2,679.0
|
100
|
%
|
$
|
2,279.1
|
100
|
%
|
● |
cost of products purchased from third-party vendors;
|
● |
costs of self-manufactured products;
|
● |
cost of adjustments to inventory carrying value;
|
● |
freight cost of shipping products to our sales force and import duties for the products; and
|
● |
royalties and related expenses for licensed technologies.
|
● |
wages and benefits;
|
● |
rents and utilities;
|
● |
depreciation and amortization;
|
● |
promotion and advertising;
|
● |
professional fees;
|
● |
travel;
|
● |
research and development; and
|
● |
other operating expenses.
|
|
Year Ended December 31,
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Cost of sales
|
24.0
|
23.7
|
22.0
|
|||||||||
Gross profit
|
76.0
|
76.3
|
78.0
|
|||||||||
Operating expenses:
|
||||||||||||
Selling expenses
|
39.5
|
40.0
|
41.1
|
|||||||||
General and administrative expenses
|
25.4
|
24.7
|
24.8
|
|||||||||
Restructuring and impairment expenses
|
—
|
2.6
|
—
|
|||||||||
Total operating expenses
|
64.9
|
67.3
|
65.9
|
|||||||||
Operating income
|
11.0
|
9.0
|
12.1
|
|||||||||
Other income (expense), net
|
(0.5
|
)
|
(0.8
|
)
|
(0.4
|
)
|
||||||
Income before provision for income taxes
|
10.5
|
8.2
|
11.7
|
|||||||||
Provision for income taxes
|
3.4
|
3.7
|
6.0
|
|||||||||
Net income
|
7.2
|
%
|
4.5
|
%
|
5.7
|
%
|
|
Constant
|
|||||||||||||||
Year Ended December 31,
|
Currency
|
|||||||||||||||
2019
|
2018
|
Change
|
Change(1)
|
|||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
722,526
|
$
|
886,472
|
(18
|
)%
|
(15
|
)%
|
||||||||
Americas/Pacific
|
349,078
|
385,034
|
(9
|
)%
|
(4
|
)%
|
||||||||||
South Korea
|
329,978
|
373,357
|
(12
|
)%
|
(6
|
)%
|
||||||||||
Southeast Asia
|
301,620
|
316,890
|
(5
|
)%
|
(5
|
)%
|
||||||||||
Japan
|
260,039
|
254,939
|
2
|
%
|
1
|
%
|
||||||||||
EMEA
|
167,165
|
182,394
|
(8
|
)%
|
(3
|
)%
|
||||||||||
Hong Kong/ Taiwan
|
166,335
|
185,893
|
(11
|
)%
|
(9
|
)%
|
||||||||||
Other
|
1,621
|
3,423
|
(53
|
)%
|
(53
|
)%
|
||||||||||
Total Nu Skin
|
2,298,362
|
2,588,402
|
(11
|
)%
|
(8
|
)%
|
||||||||||
Manufacturing
|
121,917
|
90,606
|
35
|
%
|
35
|
%
|
||||||||||
Grow Tech
|
137
|
—
|
100
|
%
|
100
|
%
|
||||||||||
Total
|
$
|
2,420,416
|
$
|
2,679,008
|
(10
|
)%
|
(7
|
)%
|
(1) |
Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.
|
|
2019
|
2018
|
Change
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
191,570
|
$
|
253,598
|
(24
|
)%
|
||||||
Americas/Pacific
|
57,090
|
52,433
|
9
|
%
|
||||||||
South Korea
|
99,892
|
107,215
|
(7
|
)%
|
||||||||
Southeast Asia
|
82,455
|
78,598
|
5
|
%
|
||||||||
Japan
|
61,081
|
56,676
|
8
|
%
|
||||||||
EMEA
|
10,195
|
14,773
|
(31
|
)%
|
||||||||
Hong Kong/Taiwan
|
33,569
|
33,392
|
1
|
%
|
||||||||
Total Nu Skin
|
535,852
|
596,685
|
(10
|
)%
|
||||||||
Manufacturing
|
15,693
|
7,754
|
102
|
%
|
||||||||
Grow Tech
|
(19,509
|
)
|
(9,228
|
)
|
(111
|
)%
|
|
As of December 31, 2019
|
As of December 31, 2018
|
% Increase (Decrease)
|
|||||||||||||||||||||
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
|||||||||||||||||||
Mainland China
|
292,812
|
17,987
|
303,789
|
33,129
|
(4
|
)%
|
(46
|
)%
|
||||||||||||||||
Americas/Pacific
|
220,216
|
7,607
|
248,609
|
8,354
|
(11
|
)%
|
(9
|
)%
|
||||||||||||||||
South Korea
|
168,972
|
7,251
|
182,026
|
7,565
|
(7
|
)%
|
(4
|
)%
|
||||||||||||||||
Southeast Asia
|
136,349
|
7,480
|
153,465
|
8,933
|
(11
|
)%
|
(16
|
)%
|
||||||||||||||||
Japan
|
125,557
|
5,916
|
130,181
|
5,916
|
(4
|
)%
|
—
|
|||||||||||||||||
EMEA
|
153,330
|
4,619
|
149,085
|
4,791
|
3
|
%
|
(4
|
)%
|
||||||||||||||||
Hong Kong/Taiwan
|
65,669
|
3,900
|
76,891
|
4,767
|
(15
|
)%
|
(18
|
)%
|
||||||||||||||||
Total
|
1,162,905
|
54,760
|
1,244,046
|
73,455
|
(7
|
)%
|
(25
|
)%
|
● |
the expansion and upgrade of facilities in our various markets;
|
● |
purchases and expenditures for computer systems and equipment, software, and application development; and
|
● |
purchases of equipment and development of our technology in our Grow Tech initiative.
|
|
Total
|
2020
|
2021 - 2022
|
2023 - 2024
|
Thereafter
|
|||||||||||||||
Long-term debt obligations(1)
|
$
|
365,000
|
$
|
27,500
|
$
|
67,500
|
$
|
270,000
|
—
|
|||||||||||
Interest payable
|
37,822
|
12,625
|
22,032
|
3,165
|
—
|
|||||||||||||||
Operating lease obligations
|
170,502
|
45,942
|
62,367
|
30,825
|
31,368
|
|||||||||||||||
Purchase obligations
|
289,776
|
209,222
|
73,258
|
7,238
|
58
|
|||||||||||||||
Other long-term liabilities reflected on the balance sheet(2)
|
96,795
|
4,098
|
7,155
|
6,573
|
78,969
|
|||||||||||||||
Total
|
$
|
959,895
|
$
|
299,387
|
$
|
232,312
|
$
|
317,801
|
$
|
110,395
|
(1) |
The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $3 million.
|
(2) |
The timing of the commitments in Other long-term liabilities reflected on the balance sheet is uncertain and represents management’s best estimate.
|
|
As of December 31, 2019
|
As of December 31, 2018
|
As of December 31, 2017
|
|||||||||||||||||||||
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
|||||||||||||||||||
Mainland China
|
292,812
|
17,987
|
303,789
|
33,129
|
192,604
|
40,610
|
||||||||||||||||||
Americas/Pacific
|
220,216
|
7,607
|
248,609
|
8,354
|
244,467
|
8,871
|
||||||||||||||||||
South Korea
|
168,972
|
7,251
|
182,026
|
7,565
|
172,553
|
8,431
|
||||||||||||||||||
Southeast Asia
|
136,349
|
7,480
|
153,465
|
8,933
|
121,764
|
8,020
|
||||||||||||||||||
Japan
|
125,557
|
5,916
|
130,181
|
5,916
|
132,041
|
6,592
|
||||||||||||||||||
EMEA
|
153,330
|
4,619
|
149,085
|
4,791
|
135,051
|
4,683
|
||||||||||||||||||
Hong Kong/Taiwan
|
65,669
|
3,900
|
76,891
|
4,767
|
71,091
|
4,671
|
||||||||||||||||||
Total
|
1,162,905
|
54,760
|
1,244,046
|
73,455
|
1,069,571
|
81,878
|
|
2019
|
2018
|
||||||||||||||||||||||||||||||
4th Quarter
|
3rd Quarter
|
2nd Quarter
|
1st Quarter
|
4th Quarter
|
3rd Quarter
|
2nd Quarter
|
1st Quarter
|
|||||||||||||||||||||||||
Revenue
|
$
|
583.4
|
$
|
589.9
|
$
|
623.5
|
$
|
623.6
|
$
|
683.3
|
$
|
675.3
|
$
|
704.2
|
$
|
616.2
|
||||||||||||||||
Gross profit
|
442.8
|
449.8
|
469.5
|
477.0
|
521.4
|
517.9
|
535.6
|
469.9
|
||||||||||||||||||||||||
Operating income
|
54.7
|
69.9
|
74.2
|
68.7
|
18.4
|
80.7
|
82.8
|
59.0
|
||||||||||||||||||||||||
Net income
|
40.1
|
44.1
|
46.3
|
43.0
|
(17.8
|
)
|
53.1
|
51.0
|
35.5
|
|||||||||||||||||||||||
Net income per share:
|
||||||||||||||||||||||||||||||||
Basic
|
0.72
|
0.79
|
0.83
|
0.78
|
(0.32
|
)
|
0.99
|
0.92
|
0.66
|
|||||||||||||||||||||||
Diluted
|
0.72
|
0.79
|
0.83
|
0.77
|
(0.32
|
)
|
0.94
|
0.90
|
0.64
|
|
2019
|
2018
|
||||||||||||||||||||||||||||||
4th Quarter
|
3rd Quarter
|
2nd Quarter
|
1st Quarter
|
4th Quarter
|
3rd Quarter
|
2nd Quarter
|
1st Quarter
|
|||||||||||||||||||||||||
Argentina
|
59.4
|
49.6
|
43.9
|
38.9
|
37.1
|
31.1
|
23.0
|
19.7
|
||||||||||||||||||||||||
Australia
|
1.5
|
1.5
|
1.4
|
1.4
|
1.4
|
1.4
|
1.3
|
1.3
|
||||||||||||||||||||||||
Canada
|
1.3
|
1.3
|
1.3
|
1.3
|
1.3
|
1.3
|
1.3
|
1.3
|
||||||||||||||||||||||||
Eurozone countries
|
0.9
|
0.9
|
0.9
|
0.9
|
0.9
|
0.9
|
0.8
|
0.8
|
||||||||||||||||||||||||
Hong Kong
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
||||||||||||||||||||||||
Indonesia
|
14,056
|
14,114
|
14,263
|
14,137
|
14,763
|
14,620
|
13,961
|
13,577
|
||||||||||||||||||||||||
Japan
|
108.7
|
107.3
|
109.9
|
110.2
|
112.8
|
111.5
|
109.2
|
108.2
|
||||||||||||||||||||||||
Mainland China
|
7.0
|
7.0
|
6.8
|
6.7
|
6.9
|
6.8
|
6.4
|
6.4
|
||||||||||||||||||||||||
Malaysia
|
4.2
|
4.2
|
4.1
|
4.1
|
4.2
|
4.1
|
4.0
|
3.9
|
||||||||||||||||||||||||
Philippines
|
51.0
|
51.8
|
52.0
|
52.4
|
53.2
|
53.5
|
52.5
|
51.6
|
||||||||||||||||||||||||
Singapore
|
1.4
|
1.4
|
1.4
|
1.4
|
1.4
|
1.4
|
1.3
|
1.3
|
||||||||||||||||||||||||
South Korea
|
1,175.0
|
1,194.4
|
1,165.8
|
1,125.0
|
1,128.3
|
1,121.1
|
1,080.4
|
1,072.7
|
||||||||||||||||||||||||
Taiwan
|
30.4
|
31.2
|
31.1
|
30.8
|
30.8
|
30.7
|
29.7
|
29.3
|
||||||||||||||||||||||||
Thailand
|
30.3
|
30.7
|
31.6
|
31.6
|
32.8
|
33.0
|
32.0
|
31.6
|
||||||||||||||||||||||||
Vietnam
|
23,191
|
23,213
|
23,314
|
23,201
|
23,318
|
23,237
|
22,808
|
22,740
|
1. |
Financial Statements. Set forth below is the index to the Financial Statements included in this Item 8:
|
|
Page
|
Consolidated Balance Sheets at December 31, 2019 and 2018
|
52
|
Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017
|
53
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
|
54
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2019, 2018 and 2017
|
55
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
56
|
Notes to Consolidated Financial Statements
|
57
|
Report of Independent Registered Public Accounting Firm
|
81
|
2. |
Financial Statement Schedules: Financial statement schedules have been omitted because they are not required or are not applicable, or because the required information is shown in the financial statements or notes thereto.
|
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
335,630
|
$
|
386,911
|
||||
Current investments
|
8,413
|
11,346
|
||||||
Accounts receivable
|
50,378
|
53,282
|
||||||
Inventories, net
|
275,891
|
295,821
|
||||||
Prepaid expenses and other
|
69,854
|
51,877
|
||||||
Total current assets
|
740,166
|
799,237
|
||||||
Property and equipment, net
|
453,604
|
464,535
|
||||||
Right-of-use assets
|
144,326
|
—
|
||||||
Goodwill
|
196,573
|
196,573
|
||||||
Other intangible assets, net
|
80,321
|
89,989
|
||||||
Other assets
|
154,016
|
144,112
|
||||||
Total assets
|
$
|
1,769,006
|
$
|
1,694,446
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
38,979
|
$
|
47,617
|
||||
Accrued expenses
|
290,281
|
322,583
|
||||||
Current portion of long-term debt
|
27,500
|
69,455
|
||||||
Total current liabilities
|
356,760
|
439,655
|
||||||
Operating lease liabilities
|
105,701
|
—
|
||||||
Long-term debt
|
334,461
|
361,008
|
||||||
Other liabilities
|
96,795
|
111,916
|
||||||
Total liabilities
|
893,717
|
912,579
|
||||||
Commitments and contingencies (Notes 7 and 19)
|
|
|
||||||
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
|
557,544
|
552,564
|
||||||
Treasury stock, at cost – 35.0 million and 35.2 million shares
|
(1,324,826
|
)
|
(1,326,605
|
)
|
||||
Accumulated other comprehensive loss
|
(85,292
|
)
|
(79,934
|
)
|
||||
Retained earnings
|
1,727,772
|
1,635,751
|
||||||
Total stockholders’ equity
|
875,289
|
781,867
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,769,006
|
$
|
1,694,446
|
|
Year Ended December 31,
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Revenue
|
$
|
2,420,416
|
$
|
2,679,008
|
$
|
2,279,099
|
||||||
Cost of sales
|
581,420
|
634,140
|
502,078
|
|||||||||
Gross profit
|
1,838,996
|
2,044,868
|
1,777,021
|
|||||||||
Operating expenses:
|
||||||||||||
Selling expenses
|
955,600
|
1,071,020
|
938,024
|
|||||||||
General and administrative expenses
|
615,970
|
662,302
|
564,514
|
|||||||||
Restructuring and impairment expenses
|
—
|
70,686
|
—
|
|||||||||
Total operating expenses
|
1,571,570
|
1,804,008
|
1,502,538
|
|||||||||
Operating income
|
267,426
|
240,860
|
274,483
|
|||||||||
Other income (expense), net (Note 20)
|
(12,254
|
)
|
(21,194
|
)
|
(8,916
|
)
|
||||||
Income before provision for income taxes
|
255,172
|
219,666
|
265,567
|
|||||||||
Provision for income taxes
|
81,619
|
97,779
|
136,130
|
|||||||||
Net income
|
$
|
173,553
|
$
|
121,887
|
$
|
129,437
|
||||||
Net income per share:
|
||||||||||||
Basic
|
$
|
3.13
|
$
|
2.21
|
$
|
2.45
|
||||||
Diluted
|
$
|
3.10
|
$
|
2.16
|
$
|
2.36
|
||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||
Basic
|
55,518
|
55,170
|
52,806
|
|||||||||
Diluted
|
55,927
|
56,476
|
54,852
|
|
Year Ended December 31,
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Net income
|
$
|
173,553
|
$
|
121,887
|
$
|
129,437
|
||||||
Other comprehensive income:
|
||||||||||||
Foreign currency translation adjustment, net of taxes of $(467), $2,275, and $(8,056) respectively
|
(5,358
|
)
|
(13,474
|
)
|
18,264
|
|||||||
Net unrealized gains/(losses) on foreign currency cash flow hedges, net of taxes of $—, $18 and $84, respectively
|
—
|
(160
|
)
|
(152
|
)
|
|||||||
Less: Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of $—, $(2), and $169, respectively
|
—
|
18
|
(308
|
)
|
||||||||
(5,358
|
)
|
(13,616
|
)
|
17,804
|
||||||||
Comprehensive income
|
$
|
168,195
|
$
|
108,271
|
$
|
147,241
|
|
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
||||||||||||||||||
Balance at January 1, 2017
|
$
|
91
|
$
|
439,635
|
$
|
(1,250,123
|
)
|
$
|
(84,122
|
)
|
$
|
1,558,589
|
$
|
664,070
|
||||||||||
Cumulative effect adjustment from adoption of ASU 2016-09
|
—
|
2,800
|
—
|
—
|
(2,800
|
)
|
—
|
|||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
129,437
|
129,437
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
17,804
|
—
|
17,804
|
||||||||||||||||||
Repurchase of Class A common stock (Note 8)
|
—
|
—
|
(71,731
|
)
|
—
|
—
|
(71,731
|
)
|
||||||||||||||||
Exercise of employee stock options (1.2 million shares)/vesting of stock awards
|
—
|
9,479
|
14,964
|
—
|
—
|
24,443
|
||||||||||||||||||
Stock-based compensation
|
—
|
19,314
|
—
|
—
|
—
|
19,314
|
||||||||||||||||||
Acquisition of noncontrolling interests
|
—
|
(11,067
|
)
|
—
|
—
|
—
|
(11,067
|
)
|
||||||||||||||||
Acquisition of equity method investment (0.2 million shares)
|
—
|
6,188
|
2,196
|
—
|
—
|
8,384
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(76,058
|
)
|
(76,058
|
)
|
||||||||||||||||
Balance at December 31, 2017
|
$
|
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
|
)
|
||||||||||||||||
Cumulative effect adjustment from adoption of ASU 2018-02
|
—
|
—
|
—
|
—
|
(1,681
|
)
|
(1,681
|
)
|
||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
121,887
|
121,887
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(13,616
|
)
|
—
|
(13,616
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 8)
|
—
|
—
|
(69,565
|
)
|
—
|
—
|
(69,565
|
)
|
||||||||||||||||
Exercise of employee stock options (0.5 million shares)/vesting of stock awards
|
—
|
2,804
|
7,973
|
—
|
—
|
10,777
|
||||||||||||||||||
Stock-based compensation
|
—
|
26,609
|
—
|
—
|
—
|
26,609
|
||||||||||||||||||
Business Acquisitions (1.5 million shares)
|
—
|
80,064
|
19,794
|
—
|
—
|
99,858
|
||||||||||||||||||
Equity component of convertible note settlement (net)
|
—
|
(23,262
|
)
|
19,887
|
—
|
—
|
(3,375
|
)
|
||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(80,581
|
)
|
(80,581
|
)
|
||||||||||||||||
Balance at December 31, 2018
|
$
|
91
|
$
|
552,564
|
$
|
(1,326,605
|
)
|
$
|
(79,934
|
)
|
$
|
1,635,751
|
$
|
781,867
|
||||||||||
Cumulative effect adjustment from adoption of ASC Topic 842
|
—
|
—
|
—
|
—
|
657
|
657
|
||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
173,553
|
173,553
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(5,358
|
)
|
—
|
(5,358
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 8)
|
—
|
—
|
(825
|
)
|
—
|
—
|
(825
|
)
|
||||||||||||||||
Exercise of employee stock options (— million shares)/vesting of stock awards
|
—
|
(4,929
|
)
|
2,604
|
—
|
—
|
(2,325
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
9,909
|
—
|
—
|
—
|
9,909
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(82,189
|
)
|
(82,189
|
)
|
||||||||||||||||
Balance at December 31, 2019
|
$
|
91
|
$
|
557,544
|
$
|
(1,324,826
|
)
|
$
|
(85,292
|
)
|
$
|
1,727,772
|
$
|
875,289
|
|
Year Ended December 31,
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
173,553
|
$
|
121,887
|
$
|
129,437
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
76,650
|
83,003
|
71,564
|
|||||||||
Impairment of fixed assets
|
—
|
48,551
|
—
|
|||||||||
Equity method earnings
|
—
|
(456
|
)
|
(1,048
|
)
|
|||||||
Gain on step acquisition
|
—
|
(13,644
|
)
|
—
|
||||||||
Loss on extinguishment of debt
|
—
|
7,220
|
—
|
|||||||||
Foreign currency (gains)/losses
|
3,829
|
16,381
|
(3,014
|
)
|
||||||||
Stock-based compensation
|
9,909
|
26,609
|
19,314
|
|||||||||
Deferred taxes
|
1,965
|
(14,929
|
)
|
39,213
|
||||||||
Non-cash lease expense
|
44,460
|
—
|
—
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
2,746
|
(10,453
|
)
|
(103
|
)
|
|||||||
Inventories, net
|
18,446
|
(33,371
|
)
|
7,537
|
||||||||
Prepaid expenses and other
|
(17,435
|
)
|
(1,536
|
)
|
14,250
|
|||||||
Other assets
|
(67,109
|
)
|
887
|
(11,658
|
)
|
|||||||
Accounts payable
|
(7,184
|
)
|
(9,164
|
)
|
6,834
|
|||||||
Accrued expenses
|
(86,997
|
)
|
(7,433
|
)
|
22,490
|
|||||||
Other liabilities
|
25,098
|
(10,814
|
)
|
7,739
|
||||||||
Net cash provided by operating activities
|
177,931
|
202,738
|
302,555
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Purchases of property and equipment
|
(66,067
|
)
|
(70,371
|
)
|
(60,156
|
)
|
||||||
Proceeds on investment sales
|
11,160
|
11,536
|
11,269
|
|||||||||
Purchases of investments
|
(8,432
|
)
|
(11,420
|
)
|
(11,332
|
)
|
||||||
Acquisitions (net of cash acquired)
|
(8,073
|
)
|
(38,506
|
)
|
(31,745
|
)
|
||||||
Net cash used in investing activities
|
(71,412
|
)
|
(108,761
|
)
|
(91,964
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Payment of cash dividends
|
(82,189
|
)
|
(80,581
|
)
|
(76,058
|
)
|
||||||
Repurchase of shares of common stock
|
(825
|
)
|
(69,565
|
)
|
(71,731
|
)
|
||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards
|
(2,325
|
)
|
10,777
|
24,443
|
||||||||
Payments on long-term debt
|
(214,455
|
)
|
(552,500
|
)
|
(103,226
|
)
|
||||||
Payment of debt issuance costs
|
—
|
(7,243
|
)
|
—
|
||||||||
Proceeds from long-term debt
|
145,000
|
582,398
|
67,000
|
|||||||||
Net cash used in financing activities
|
(154,794
|
)
|
(116,714
|
)
|
(159,572
|
)
|
||||||
Effect of exchange rate changes on cash
|
(3,006
|
)
|
(16,751
|
)
|
18,134
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
(51,281
|
)
|
(39,488
|
)
|
69,153
|
|||||||
Cash and cash equivalents, beginning of period
|
386,911
|
426,399
|
357,246
|
|||||||||
Cash and cash equivalents, end of period
|
$
|
335,630
|
$
|
386,911
|
$
|
426,399
|
1. |
The Company
|
2. |
Summary of Significant Accounting Policies
|
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Raw materials
|
$
|
87,942
|
$
|
91,610
|
||||
Finished goods
|
187,949
|
204,211
|
||||||
Total inventory, net
|
$
|
275,891
|
$
|
295,821
|
|
2019
|
2018
|
2017
|
|||||||||
Beginning balance
|
$
|
14,149
|
$
|
8,081
|
$
|
7,995
|
||||||
Additions
|
14,931
|
23,940
|
16,382
|
|||||||||
Write-offs
|
(16,785
|
)
|
(17,872
|
)
|
(16,296
|
)
|
||||||
Ending balance
|
$
|
12,295
|
$
|
14,149
|
$
|
8,081
|
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Deferred charges
|
$
|
8,142
|
$
|
6,703
|
||||
Prepaid income tax
|
8,905
|
—
|
||||||
Prepaid inventory and import costs
|
4,277
|
2,808
|
||||||
Prepaid rent, insurance and other occupancy costs
|
12,516
|
8,799
|
||||||
Prepaid promotion and event cost
|
7,159
|
6,013
|
||||||
Prepaid other taxes
|
7,965
|
6,268
|
||||||
Prepaid software license
|
3,317
|
4,006
|
||||||
Deposits
|
1,208
|
1,470
|
||||||
Other
|
16,365
|
15,810
|
||||||
Total prepaid expenses and other
|
$
|
69,854
|
$
|
51,877
|
Buildings
|
39 years
|
Furniture and fixtures
|
5 - 7 years
|
Computers and equipment
|
3 - 5 years
|
Leasehold improvements
|
Shorter of estimated useful life or lease term
|
Scanners
|
3 years
|
Vehicles
|
3 - 5 years
|
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Deferred taxes
|
$
|
30,780
|
$
|
37,332
|
||||
Deposits for noncancelable operating leases
|
46,894
|
41,986
|
||||||
Cash surrender value for life insurance policies
|
41,707
|
35,590
|
||||||
Other
|
34,635
|
29,204
|
||||||
Total other assets
|
$
|
154,016
|
$
|
144,112
|
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Accrued sales force commissions and other payments
|
$
|
103,532
|
$
|
128,022
|
||||
Accrued income taxes
|
—
|
6,674
|
||||||
Accrued other taxes
|
29,657
|
38,693
|
||||||
Accrued payroll and other employee expenses
|
30,610
|
68,155
|
||||||
Accrued payable to vendors
|
34,760
|
34,539
|
||||||
Short-term lease liability
|
39,349
|
—
|
||||||
Accrued royalties
|
514
|
3,899
|
||||||
Sales return reserve
|
3,903
|
3,577
|
||||||
Deferred revenue
|
20,162
|
20,104
|
||||||
Other
|
27,794
|
18,920
|
||||||
Total accrued expenses
|
$
|
290,281
|
$
|
322,583
|
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Deferred tax liabilities
|
$
|
10,741
|
$
|
18,236
|
||||
Reserve for other tax liabilities
|
17,121
|
14,382
|
||||||
Liability for deferred compensation plan
|
43,238
|
36,398
|
||||||
Pension plan benefits reserve
|
3,454
|
3,023
|
||||||
Build to suit – financing obligation
|
—
|
9,332
|
||||||
Deferred rent and deferred tenant incentives
|
—
|
5,665
|
||||||
Asset retirement obligation
|
6,631
|
6,444
|
||||||
Other
|
15,610
|
18,436
|
||||||
Total other liabilities
|
$
|
96,795
|
$
|
111,916
|
|
2019
|
2018
|
2017
|
|||||||||
Gross balance at January 1
|
$
|
11,456
|
$
|
5,514
|
$
|
5,290
|
||||||
Increases related to prior year tax positions
|
775
|
5,161
|
—
|
|||||||||
Decreases related to prior year tax positions
|
—
|
—
|
(277
|
)
|
||||||||
Increases related to current year tax positions
|
2,273
|
3,704
|
669
|
|||||||||
Settlements
|
—
|
(956
|
)
|
(159
|
)
|
|||||||
Decreases due to lapse of statutes of limitations
|
(1,051
|
)
|
(1,483
|
)
|
(187
|
)
|
||||||
Currency adjustments
|
54
|
(484
|
)
|
178
|
||||||||
Gross balance at December 31
|
$
|
13,507
|
$
|
11,456
|
$
|
5,514
|
● |
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.
|
3. |
Property and Equipment
|
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
Land
|
$
|
44,532
|
$
|
35,709
|
||||
Buildings
|
273,264
|
295,748
|
||||||
Construction in progress(1)
|
17,707
|
18,153
|
||||||
Furniture and fixtures
|
130,591
|
118,149
|
||||||
Computers and equipment
|
147,806
|
160,873
|
||||||
Leasehold improvements
|
160,623
|
147,604
|
||||||
Scanners
|
8,040
|
8,986
|
||||||
Vehicles
|
2,081
|
2,312
|
||||||
784,644
|
787,534
|
|||||||
Less: accumulated depreciation
|
(331,040
|
)
|
(322,999
|
)
|
||||
$
|
453,604
|
$
|
464,535
|
(1) |
Construction in progress includes $10.8 million and $8.7 million as of December 31, 2019 and 2018, respectively, of eligible capitalized internal-use software development costs which will be reclassified to computers and equipment when placed into service.
|
4. |
Goodwill
|
|
December 31, 2019
|
December 31, 2018 (1)
|
||||||
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
|
||||||
EMEA
|
2,875
|
2,875
|
||||||
Hong Kong/Taiwan
|
6,634
|
6,634
|
||||||
Manufacturing
|
72,469
|
72,469
|
||||||
Grow Tech
|
9,150
|
9,150
|
||||||
Total
|
$
|
196,573
|
$
|
196,573
|
(1) |
Goodwill for December 31, 2018 has been recast to reflect the separate disclosure of Manufacturing and Grow Tech.
|
5. |
Other Intangible Assets
|
|
Carrying Amount at December 31,
|
|||||||
2019
|
2018
|
|||||||
Indefinite life intangible assets:
|
||||||||
Trademarks and trade names
|
$
|
24,599
|
$
|
24,599
|
||||
Other indefinite lived intangibles
|
3,763
|
3,763
|
||||||
$
|
28,362
|
$
|
28,362
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||||
Finite life intangible assets:
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Weighted-average
Amortization Period
|
||||||||||||
Scanner technology
|
$
|
46,482
|
$
|
45,724
|
$
|
46,482
|
$
|
42,690
|
18 years
|
||||||||
Developed technology
|
22,500
|
20,856
|
22,500
|
20,032
|
20 years
|
||||||||||||
Distributor network
|
11,598
|
11,598
|
11,598
|
11,598
|
15 years
|
||||||||||||
Trademarks
|
5,938
|
2,462
|
5,823
|
1,812
|
11 years
|
||||||||||||
Other
|
92,331
|
46,250
|
95,150
|
43,794
|
10 years
|
||||||||||||
$
|
178,849
|
$
|
126,890
|
$
|
181,553
|
$
|
119,926
|
14 years
|
Year Ending December 31,
|
||||
2020
|
$
|
9,445
|
||
2021
|
7,945
|
|||
2022
|
6,899
|
|||
2023
|
6,759
|
|||
2024
|
6,268
|
6. |
Long-Term Debt
|
Facility or
Arrangement
|
Original
Principal Amount
|
Balance as of
December 31, 2019 (1)(2)
|
Balance as of
December 31, 2018 (2)
|
Interest Rate
|
Repayment Terms
|
|||||
Credit Agreement term loan facility
|
$400.0 million
|
$365.0 million
|
$385.0 million
|
Variable 30 day: 3.55%
|
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.
|
|||||
Credit Agreement revolving credit facility
|
—
|
$49.5 million
|
Revolving line of credit expires April 18, 2023.
|
(1) |
As of December 31, 2019, the current portion of the Company’s debt (i.e. becoming due in the next 12 months) included $27.5 million of the balance of its term loan under the Credit Agreement.
|
(2) |
The carrying value of the debt reflects the amounts stated in the above table, less debt issuance costs of $3.0 million and $4.0 million as of December 31, 2019 and 2018, respectively, related to the Credit Agreement, which are not reflected in this table.
|
Year Ending December 31,
|
||||
2020
|
$
|
27,500
|
||
2021
|
30,000
|
|||
2022
|
37,500
|
|||
2023
|
270,000
|
|||
2024
|
—
|
|||
Thereafter
|
—
|
|||
Total(1)
|
$
|
365,000
|
(1) |
The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $3.0 million, which is not reflected in this table.
|
7. |
Leases
|
|
Year Ended
December 31, 2019
|
|||
Operating lease cost
|
$
|
51,072
|
||
Variable lease cost
|
3,387
|
|||
Short-term lease cost
|
169
|
|||
Sublease income
|
(5,743
|
)
|
||
Total lease expense
|
$
|
48,885
|
|
Year Ended
December 31, 2019
|
|||
Operating cash outflow
|
$
|
54,993
|
||
ROU assets obtained in exchange for lease liabilities
|
$
|
184,502
|
Year Ending December 31,
|
Operating
Leases
|
|||
2020
|
$
|
45,942
|
||
2021
|
38,545
|
|||
2022
|
23,822
|
|||
2023
|
17,949
|
|||
2024
|
12,876
|
|||
Thereafter
|
31,368
|
|||
Total
|
170,502
|
|||
Less: Imputed interest
|
25,452
|
|||
Total lease liability
|
$
|
145,050
|
Year Ending December 31,
|
Operating
Leases
|
Financing
Obligations
|
||||||
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
|
8. |
Capital Stock
|
|
Year Ended December 31,
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Basic weighted-average common shares outstanding
|
55,518
|
55,170
|
52,806
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Stock awards and options
|
409
|
1,061
|
1,110
|
|||||||||
Convertible note
|
—
|
245
|
936
|
|||||||||
Diluted weighted-average common shares outstanding
|
55,927
|
56,476
|
54,852
|
|
December 31,
|
|||||||||||
Stock Options:
|
2019
|
2018
|
2017
|
|||||||||
Weighted-average grant date fair value of grants
|
$
|
19.72
|
$
|
24.72
|
$
|
18.84
|
||||||
Risk-free interest rate(1)
|
2.5
|
%
|
2.6
|
%
|
2.1
|
%
|
||||||
Dividend yield(2)
|
2.7
|
%
|
2.6
|
%
|
2.5
|
%
|
||||||
Expected volatility(3)
|
42.4
|
%
|
45.6
|
%
|
48.2
|
%
|
||||||
Expected life in months(4)
|
60 months
|
66 months
|
68 months
|
(1) |
The risk-free interest rate is based upon the rate on a zero-coupon U.S. Treasury bill, for periods within the contractual life of the option, in effect at the time of the grant.
|
(2) |
The dividend yield is based on the average of historical stock prices and actual dividends paid.
|
(3) |
Expected volatility is based on the historical volatility of the Company’s stock price, over a period similar to the expected life of the option.
|
(4) |
The expected term of the option is based on the historical employee exercise behavior, the vesting terms of the respective option, and a contractual life of either seven or ten years.
|
|
Shares
(in thousands)
|
Weighted-
average
Exercise
Price
|
Weighted-
average
Remaining
Contractual
Term (in years)
|
Aggregate
Intrinsic
Value
(in thousands)
|
||||||||||||
Options activity – service based
|
||||||||||||||||
Outstanding at December 31, 2018
|
1,046.5
|
$
|
40.53
|
|||||||||||||
Granted
|
—
|
—
|
||||||||||||||
Exercised
|
(70.2
|
)
|
32.38
|
|||||||||||||
Forfeited/cancelled/expired
|
(13.8
|
)
|
41.49
|
|||||||||||||
Outstanding at December 31, 2019
|
962.5
|
41.11
|
2.87
|
$
|
5,234
|
|||||||||||
Exercisable at December 31, 2019
|
775.4
|
42.59
|
2.77
|
4,000
|
||||||||||||
Options activity – performance based
|
||||||||||||||||
Outstanding at December 31, 2018
|
2,370.8
|
$
|
64.00
|
|||||||||||||
Granted
|
496.6
|
63.09
|
||||||||||||||
Exercised
|
(46.0
|
)
|
50.79
|
|||||||||||||
Forfeited/cancelled/expired
|
(663.0
|
)
|
71.73
|
|||||||||||||
Outstanding at December 31, 2019
|
2,158.4
|
61.75
|
4.16
|
$
|
2,997
|
|||||||||||
Exercisable at December 31, 2019
|
698.1
|
46.06
|
3.82
|
2,997
|
||||||||||||
Options activity – all options
|
||||||||||||||||
Outstanding at December 31, 2018
|
3,417.3
|
$
|
56.81
|
|||||||||||||
Granted
|
496.6
|
63.09
|
||||||||||||||
Exercised
|
(116.2
|
)
|
39.67
|
|||||||||||||
Forfeited/cancelled/expired
|
(676.8
|
)
|
71.11
|
|||||||||||||
Outstanding at December 31, 2019
|
3,120.9
|
55.38
|
3.76
|
$
|
8,231
|
|||||||||||
Exercisable at December 31, 2019
|
1,473.4
|
44.23
|
3.26
|
6,997
|
|
December 31,
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Cash proceeds from stock options exercised
|
$
|
368
|
$
|
13,908
|
$
|
26,980
|
||||||
Tax benefit realized for stock options exercised
|
430
|
3,217
|
6,457
|
|||||||||
Intrinsic value of stock options exercised
|
934
|
11,855
|
42,749
|
|
Number
of Shares
(in thousands)
|
Weighted-
average Grant
Date Fair
Value
|
||||||
Nonvested at December 31, 2018
|
467.5
|
$
|
57.61
|
|||||
Granted
|
341.9
|
59.59
|
||||||
Vested
|
(196.6
|
)
|
56.72
|
|||||
Forfeited
|
(39.7
|
)
|
59.17
|
|||||
Nonvested at December 31, 2019
|
573.1
|
$
|
58.99
|
10. |
Fair Value
|
|
Fair Value at December 31, 2019
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets:
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
54,642
|
$
|
—
|
$
|
—
|
$
|
54,642
|
||||||||
Other long-term assets
|
3,216
|
—
|
—
|
3,216
|
||||||||||||
Life insurance contracts
|
—
|
—
|
41,707
|
41,707
|
||||||||||||
Total
|
$
|
57,858
|
$
|
—
|
$
|
41,707
|
$
|
99,565
|
|
Fair Value at December 31, 2018
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets:
|
||||||||||||||||
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
|
Life Insurance Contracts
|
2019
|
2018
|
||||||
Beginning balance at January 1
|
$
|
35,590
|
$
|
37,737
|
||||
Actual return on plan assets
|
5,688
|
(1,788
|
)
|
|||||
Purchases and issuances
|
2,003
|
—
|
||||||
Sales and settlements
|
(1,574
|
)
|
(359
|
)
|
||||
Transfers into Level 3
|
—
|
—
|
||||||
Ending balance at December 31
|
$
|
41,707
|
$
|
35,590
|
11. |
Income Taxes
|
|
2019
|
2018
|
2017
|
|||||||||
U.S.
|
$
|
24,211
|
$
|
(67,087
|
)
|
$
|
1,135
|
|||||
Foreign
|
230,961
|
286,753
|
264,432
|
|||||||||
Total
|
$
|
255,172
|
$
|
219,666
|
$
|
265,567
|
|
2019
|
2018
|
2017
|
|||||||||
Current
|
||||||||||||
Federal
|
$
|
—
|
$
|
—
|
$
|
(14,358
|
)
|
|||||
State
|
2,213
|
652
|
1,814
|
|||||||||
Foreign
|
79,694
|
116,303
|
104,688
|
|||||||||
81,907
|
116,955
|
92,144
|
||||||||||
Deferred
|
||||||||||||
Federal
|
(8,878
|
)
|
(17,836
|
)
|
45,593
|
|||||||
State
|
(473
|
)
|
(1,974
|
)
|
(2,273
|
)
|
||||||
Foreign
|
9,063
|
634
|
666
|
|||||||||
(288
|
)
|
(19,176
|
)
|
43,986
|
||||||||
Provision for income taxes
|
$
|
81,619
|
$
|
97,779
|
$
|
136,130
|
|
Year Ended December 31,
|
|||||||
2019
|
2018
|
|||||||
Deferred tax assets:
|
||||||||
Inventory differences
|
$
|
5,040
|
$
|
4,257
|
||||
Foreign tax credit and other foreign benefits
|
69,820
|
62,521
|
||||||
Stock-based compensation
|
7,441
|
7,893
|
||||||
Accrued expenses not deductible until paid
|
35,374
|
40,509
|
||||||
Foreign currency exchange
|
163
|
1,023
|
||||||
Net operating losses
|
6,341
|
4,522
|
||||||
Capitalized research and development
|
18,716
|
11,988
|
||||||
Interest expense limitation – 163(j)
|
—
|
847
|
||||||
R&D credit carryforward
|
881
|
807
|
||||||
Other
|
37
|
339
|
||||||
Gross deferred tax assets
|
143,813
|
134,706
|
||||||
Deferred tax liabilities:
|
||||||||
Foreign currency exchange
|
721
|
124
|
||||||
Foreign withholding taxes
|
20,986
|
21,524
|
||||||
Intangibles step-up
|
4,958
|
5,763
|
||||||
Overhead allocation to inventory
|
3,611
|
2,857
|
||||||
Amortization of intangibles
|
15,393
|
15,812
|
||||||
Other
|
1,063
|
833
|
||||||
Gross deferred tax liabilities
|
46,732
|
46,913
|
||||||
Valuation allowance
|
(77,042
|
)
|
(68,697
|
)
|
||||
Deferred taxes, net
|
$
|
20,039
|
$
|
19,096
|
|
Year Ended December 31,
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Balance at the beginning of period
|
$
|
68,697
|
$
|
56,906
|
$
|
9,137
|
||||||
Additions charged to cost and expenses
|
10,913
|
(1)
|
27,902
|
(4)
|
53,983
|
(6)
|
||||||
Decreases
|
(3,343
|
)(2)
|
(16,215
|
)(5)
|
(6,400
|
)(7)
|
||||||
Adjustments
|
775
|
(3)
|
104
|
(3)
|
186
|
(3)
|
||||||
Balance at the end of the period
|
$
|
77,042
|
$
|
68,697
|
$
|
56,906
|
(1) |
Increase in valuation is due primarily to $9.8 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets.
|
(2) |
The decrease was due primarily to the utilization of foreign tax credits, and expiration of foreign net operating losses.
|
(3) |
Represents the net currency effects of translating valuation allowances at current rates of exchange.
|
(4) |
Increase in valuation is due primarily to the $27.2 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets
|
(5) |
The decrease was due primarily to the utilization of foreign tax credits. Decrease is due primarily to the write-off of Brazil deferred tax assets, which had no impact to the income statement, as a valuation allowance had been previously recorded against the asset.
|
(6) |
Increase in valuation allowance is due primarily to the $52.0 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets.
|
(7) |
Decrease is due primarily to the write-off of Brazil deferred tax assets, which had no impact to the income statement, as a valuation allowance had been previously recorded against the asset.
|
|
Year Ended December 31,
|
|||||||
2019
|
2018
|
|||||||
Net noncurrent deferred tax assets
|
$
|
30,780
|
$
|
37,332
|
||||
Net noncurrent deferred tax liabilities
|
10,741
|
18,236
|
||||||
Deferred taxes, net
|
$
|
20,039
|
$
|
19,096
|
|
Year Ended December 31,
|
|||||||||||
2019
|
2018
|
2017
|
||||||||||
Income taxes at statutory rate
|
21.00
|
%
|
21.00
|
%
|
35.00
|
%
|
||||||
Indefinite reinvestment
|
—
|
(2.73
|
)%
|
2.75
|
%
|
|||||||
Excess tax benefit from equity award
|
0.02
|
%
|
(1.41
|
)%
|
(2.38
|
)%
|
||||||
Non-U.S. income taxed at different rates
|
3.09
|
%
|
7.37
|
%
|
—
|
|||||||
Foreign withholding taxes
|
4.10
|
%
|
7.68
|
%
|
—
|
|||||||
Change in reserve for uncertain tax positions
|
1.07
|
%
|
3.68
|
%
|
—
|
|||||||
Non-deductible expenses
|
—
|
—
|
0.17
|
%
|
||||||||
Controlled foreign corporation losses
|
—
|
—
|
(0.13
|
)%
|
||||||||
Valuation allowance recognized foreign tax credit & others
|
2.56
|
%
|
5.54
|
%
|
19.59
|
%
|
||||||
Write-off outside basis DTL
|
—
|
—
|
(2.89
|
)%
|
||||||||
Revaluation of deferred taxes
|
—
|
1.61
|
%
|
(1.28
|
)%
|
|||||||
Foreign-Derived Intangible Income (FDII)
|
(0.70
|
)%
|
—
|
—
|
||||||||
Other
|
0.85
|
%
|
1.77
|
%
|
0.43
|
%
|
||||||
31.99
|
%
|
44.51
|
%
|
51.26
|
%
|
12. |
Employee Benefit Plan
|
13. |
Executive Deferred Compensation Plan
|
15. |
Supplemental Cash Flow Information
|
16. |
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
|
||||||||||||
Net assets acquired:
|
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
|
17. |
Restructuring and Severance Charges
|
Restructuring, severance and impairment charges incurred
|
$
|
70,686
|
||
Non-cash impairment charges
|
(48,551
|
)
|
||
Amounts paid
|
(6,673
|
)
|
||
Adjustments
|
—
|
|||
Balance December 31, 2018
|
$
|
15,462
|
||
Amounts Paid
|
(15,046
|
)
|
||
Adjustments
|
(416
|
)
|
||
Balance December 31, 2019
|
$
|
—
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
722,526
|
$
|
886,472
|
$
|
716,991
|
||||||
Americas/Pacific
|
349,078
|
385,034
|
342,429
|
|||||||||
South Korea
|
329,978
|
373,357
|
361,692
|
|||||||||
Southeast Asia
|
301,620
|
316,890
|
268,631
|
|||||||||
Japan
|
260,039
|
254,939
|
256,085
|
|||||||||
EMEA
|
167,165
|
182,394
|
160,275
|
|||||||||
Hong Kong/Taiwan
|
166,335
|
185,893
|
166,696
|
|||||||||
Other
|
1,621
|
3,423
|
6,300
|
|||||||||
Total Nu Skin
|
2,298,362
|
2,588,402
|
2,279,099
|
|||||||||
Manufacturing (1)
|
121,917
|
90,606
|
—
|
|||||||||
Grow Tech
|
137
|
—
|
—
|
|||||||||
Total
|
$
|
2,420,416
|
$
|
2,679,008
|
$
|
2,279,099
|
(1) |
The Manufacturing segment had $25.7 million, $23.5 million and zero of intersegment revenue for the years ended December 31, 2019, 2018 and 2017, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above.
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
191,570
|
$
|
253,598
|
$
|
211,625
|
||||||
Americas/Pacific
|
57,090
|
52,433
|
51,885
|
|||||||||
South Korea
|
99,892
|
107,215
|
100,964
|
|||||||||
Southeast Asia
|
82,455
|
78,598
|
63,296
|
|||||||||
Japan
|
61,081
|
56,676
|
51,372
|
|||||||||
EMEA
|
10,195
|
14,773
|
11,749
|
|||||||||
Hong Kong/Taiwan
|
33,569
|
33,392
|
27,958
|
|||||||||
Nu Skin contribution
|
535,852
|
596,685
|
518,849
|
|||||||||
Manufacturing
|
15,693
|
7,754
|
—
|
|||||||||
Grow Tech
|
(19,509
|
)
|
(9,228
|
)
|
—
|
|||||||
Total segment contribution
|
532,036
|
595,211
|
518,849
|
|||||||||
Corporate and other
|
(264,610
|
)
|
(354,351
|
)
|
(244,366
|
)
|
||||||
Operating income
|
267,426
|
240,860
|
274,483
|
|||||||||
Other income (expense)
|
(12,254
|
)
|
(21,194
|
)
|
(8,916
|
)
|
||||||
Income before provision for income taxes
|
$
|
255,172
|
$
|
219,666
|
$
|
265,567
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
10,496
|
$
|
13,036
|
$
|
15,122
|
||||||
Americas/Pacific
|
864
|
988
|
1,746
|
|||||||||
South Korea
|
5,093
|
6,266
|
6,499
|
|||||||||
Southeast Asia
|
1,915
|
2,123
|
2,234
|
|||||||||
Japan
|
3,866
|
3,604
|
3,554
|
|||||||||
EMEA
|
1,260
|
847
|
985
|
|||||||||
Hong Kong/Taiwan
|
2,310
|
1,316
|
1,395
|
|||||||||
Total Nu Skin
|
25,804
|
28,180
|
31,535
|
|||||||||
Manufacturing
|
6,689
|
11,281
|
—
|
|||||||||
Grow Tech
|
4,008
|
1,885
|
—
|
|||||||||
Corporate and other
|
40,149
|
41,657
|
40,029
|
|||||||||
Total
|
$
|
76,650
|
$
|
83,003
|
$
|
71,564
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
14,814
|
$
|
11,658
|
$
|
4,539
|
||||||
Americas/Pacific
|
1,340
|
974
|
800
|
|||||||||
South Korea
|
1,223
|
285
|
469
|
|||||||||
Southeast Asia
|
759
|
1,120
|
1,753
|
|||||||||
Japan
|
1,528
|
788
|
994
|
|||||||||
EMEA
|
364
|
734
|
1,168
|
|||||||||
Hong Kong/Taiwan
|
3,203
|
4,113
|
1,350
|
|||||||||
Total Nu Skin
|
23,231
|
19,672
|
11,073
|
|||||||||
Manufacturing
|
6,595
|
5,486
|
—
|
|||||||||
Grow Tech
|
6,938
|
14,591
|
—
|
|||||||||
Corporate and other
|
29,303
|
30,622
|
49,083
|
|||||||||
Total
|
$
|
66,067
|
$
|
70,371
|
$
|
60,156
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Mainland China
|
$
|
722,526
|
$
|
886,472
|
$
|
716,991
|
||||||
South Korea
|
329,978
|
373,357
|
361,692
|
|||||||||
Japan
|
260,039
|
254,939
|
256,085
|
|||||||||
United States
|
324,727
|
311,436
|
218,734
|
|||||||||
All others
|
783,146
|
852,804
|
725,597
|
|||||||||
Total
|
$
|
2,420,416
|
$
|
2,679,008
|
$
|
2,279,099
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Personal Care
|
$
|
1,423,485
|
$
|
1,659,737
|
$
|
1,456,386
|
||||||
Wellness
|
863,125
|
921,328
|
817,230
|
|||||||||
Other
|
133,806
|
97,943
|
5,483
|
|||||||||
Total
|
$
|
2,420,416
|
$
|
2,679,008
|
$
|
2,279,099
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2019
|
2018
|
2017
|
|||||||||
United States
|
$
|
354,410
|
$
|
317,516
|
$
|
302,884
|
||||||
Mainland China
|
136,845
|
89,447
|
97,046
|
|||||||||
South Korea
|
35,286
|
36,325
|
42,211
|
|||||||||
Japan
|
12,015
|
6,864
|
9,342
|
|||||||||
All others
|
59,374
|
14,383
|
13,104
|
|||||||||
Total
|
$
|
597,930
|
$
|
464,535
|
$
|
464,587
|
19. |
Commitments and Contingencies
|
20. |
Other Income (Expense), Net
|
21. |
Subsequent Events
|
● |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
● |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of management and directors; and
|
● |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
1. |
Financial Statements. See Index to Consolidated Financial Statements under Item 8 of Part II.
|
2. |
Financial Statement Schedules. N/A
|
3. |
Exhibits. References to the “Company” shall mean Nu Skin Enterprises, Inc. Unless otherwise noted, the SEC file number for exhibits incorporated by reference is 001-12421.
|
3.1
|
|
3.2
|
|
3.3
|
|
3.4
|
|
4.1
|
|
*4.2
|
|
10.1
|
|
#10.2
|
|
#10.3
|
|
#10.4
|
|
#10.5
|
|
#10.6
|
|
#10.7
|
#10.8
|
|
#10.9
|
|
#10.10
|
|
#10.11
|
|
*#10.12
|
|
*#10.13
|
|
#10.14
|
|
*#10.15
|
|
#10.16
|
|
#10.17
|
|
#10.18
|
|
#10.19
|
|
#10.20
|
|
#10.21
|
|
*21.1
|
|
*23.1
|
|
*31.1
|
|
*31.2
|
*32.1
|
|
*32.2
|
|
*101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
*101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
*101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
*101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
*101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
*101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
*104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
NU SKIN ENTERPRISES, INC.
|
||
By:
|
/s/ Ritch N. Wood
|
|
Ritch N. Wood
|
||
Chief Executive Officer
|
Signatures
|
Capacity in Which Signed
|
|
/s/ Steven J. Lund
|
Executive Chairman of the Board
|
|
Steven J. Lund
|
||
/s/ Ritch N. Wood
|
Chief Executive Officer and Director
|
|
Ritch N. Wood
|
(Principal Executive Officer)
|
|
/s/ Mark H. Lawrence
|
Chief Financial Officer
|
|
Mark H. Lawrence
|
(Principal Financial Officer)
|
|
/s/ James D. Thomas
|
Chief Accounting Officer
|
|
James D. Thomas
|
(Principal Accounting Officer)
|
|
/s/ Daniel W. Campbell
|
Director
|
|
Daniel W. Campbell
|
||
/s/ Andrew D. Lipman
|
Director
|
|
Andrew D. Lipman
|
||
/s/ Laura Nathanson
|
Director
|
|
Laura Nathanson
|
||
/s/ Thomas R. Pisano
|
Director
|
|
Thomas R. Pisano
|
||
/s/ Zheqing Shen
|
Director
|
|
Zheqing Shen
|
||
/s/ Edwina D. Woodbury
|
Director
|
|
Edwina D. Woodbury
|
|
• |
the proposed transaction is approved by a vote of not less than a majority of our directors who are neither affiliated nor associated with the related person or the seller of
shares to the related person as described above; or
|
|
• |
in the case of a transaction pursuant to which the holders of common stock are entitled to receive cash, property, securities or other consideration, the cash or fair market value
of the property, securities or other consideration to be received per share in the transaction is not less than the higher of:
|
|
• |
the highest price per share paid by the related person for any of its holdings of common stock within the two-year period immediately prior to the announcement of the proposed
transaction; or
|
|
• |
the highest closing sale price during the 30-day period immediately preceding that date or during the 30-day period immediately preceding the date on which the related person
became a related person, whichever is higher.
|
|
• |
provide for the issuance of shares of preferred stock in one or more series;
|
|
• |
establish from time to time the number of shares to be included in each series;
|
|
• |
fix the rights, powers, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions on such shares; and
|
|
• |
increase or decrease the number of shares of each series, without any further vote or action by the stockholders.
|
Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data, as described in
this Agreement and any other Restricted Stock Unit grant materials by and among, as applicable, the Employer, the Company and Subsidiaries for the exclusive purpose of implementing, administering and managing Participant’s participation in
the Plan.
Participant understands that the Employer, the Company and Subsidiaries may hold certain personal information about Participant, including, but not limited to,
Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock
Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”). The Data is supplied by
the Employer and also by me through information collected in connection with the Agreement and the Plan.
|
Peserta dengan ini secara eksplisit dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi
Peserta seperti yang diterangkan dalam Perjanjian dan bahan-bahan geran Unit Saham Terbatas yang lain oleh dan di antara, seperti yang berkenaan, Majikan, Syarikat dan Anak-anak Syarikat untuk tujuan yang eksklusif bagi melaksanakan,
mentadbir dan menguruskan penyertaan Peserta di dalam Pelan.
Peserta memahami bahawa Majikan, Syarikat and Anak-anak Syarikat mungkin memegang maklumat peribadi tertentu tentang Peserta, termasuk, tetapi tidak terhad kepada, nama
Peserta, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa Syer atau jawatan pengarah yang dipegang dalam Syarikat, butir-butir semua Unit Saham
Terbatas, atau apa-apa hak lain atas Syer yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah Peserta, untuk tujuan eksklusif bagi melaksanakan, mentadbir dan menguruskan
Pelan tersebut ("Data"). Data tersebut dibekalkan oleh Majikan dan juga oleh saya berkenaan dengan Perjanjian dan Pelan.
|
Participant understands that Data will be transferred to Morgan Stanley, or such other stock plan service provider as may be selected by the Company in the future, which
is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g.,
the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of
any potential recipients of the Data by contacting his or her local human resources representative at +60-03-2170-7700. Participant authorizes the Company, Morgan Stanley and any other possible recipients which may assist the Company
(presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing
Participant’s participation in the Plan, including any transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon vesting of Restricted Stock Units may be deposited.
Participant understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. Participant understands that if he or she resides outside the United States, he or she
may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his
or her local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or
her consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant
Participant Restricted Stock Units or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the
Plan. For more information on the consequences of his or her refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.
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Peserta memahami bahawa Data ini akan dipindahkan kepada Morgan Stanley, atau mana-mana pembekal perkhidmatan pelan saham lain sebagaimana yang dipilih oleh Syarikat
pada masa depan, yang membantu Syarikat dengan pelaksanaan, pentadbiran dan pengurusan Pelan. Peserta memahami bahawa penerima-penerima Data mungkin berada di Amerika Syarikat atau mana-mana tempat lain, dan bahawa negara penerima-penerima
(contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Peserta. Peserta memahami bahawa sekiranya Peserta menetap di luar Amerika Syarikat, Peserta boleh meminta satu senarai
yang mengandungi nama-nama dan alamat-alamat penerima-penerima Data yang berpotensi dengan menghubungi wakil sumber manusia tempatan peserta di +60-03-2170-7700. Peserta memberi kuasa kepada Syarikat, Morgan Stanley dan mana-mana
penerima-penerima kemungkinan lain yang mungkin akan membantu Syarikat (pada masa sekarang atau pada masa depan) dengan melaksanakan, mentadbir dan menguruskan Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data,
dalam bentuk elektronik atau lain-lain, bagi tujuan-tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan, termasuk segala pemindahan Data tersebut sebagaimana yang dikehendaki kepada broker, egen eskrow
atau pihak ketiga dengan siapa Saham diterima semasa peletakhakan Unit Saham Terbatas mungkin didepositkan. Peserta memahami bahawa Data hanya akan disimpan selagi ia adalah diperlukan untuk melaksanakan, mentadbir, dan menguruskan
penyertaan peserta dalam Pelan. Peserta memahami bahawa sekiranya peserta menetap di luar Amerika Syarikat, peserta boleh, pada bila-bila masa, melihat Data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta
bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan. Selanjutnya, Peserta memahami bahawa
peserta memberikan persetujuan di sini secara sukarela semata-mata. Sekiranya Peserta tidak bersetuju, atau sekiranya Peserta kemudian membatalkan persetujuannya, status pekerjaan atau perkhidmatan dan kerjaya Peserta dengan Majikan tidak
akan terjejas; satu-satunya akibat buruk sekiranya Peserta tidak bersetuju atau menarik balik persetujuan Peserta adalah bahawa Syarikat tidak akan dapat memberikan Unit Saham Terbatas atau anugerah ekuiti lain atau mentadbir atau
mengekalkan anugerah-anugerah tersebut kepada Peserta. Oleh itu, Peserta memahami bahawa keengganan atau penarikan balik persetujuan peserta boleh menjejaskan keupayaan Peserta untuk mengambil bahagian dalam Pelan. Untuk maklumat lebih
lanjut mengenai akibat-akibat keengganan Peserta untuk memberikan keizinan atau penarikan balik keizinan, Peserta memahami bahawa Peserta boleh menghubungi wakil sumber manusia tempatan.
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Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data, as described in
this Agreement and any other Performance Stock Option grant materials by and among, as applicable, the Employer, the Company and Subsidiaries for the exclusive purpose of implementing, administering and managing Participant’s participation in
the Plan.
Participant understands that the Employer, the Company and Subsidiaries may hold certain personal information about Participant, including, but not limited to,
Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Performance Stock
Options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”). The Data is supplied by
the Employer and also by me through information collected in connection with the Agreement and the Plan.
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Peserta dengan ini secara eksplisit dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi Peserta seperti yang diterangkan dalam
Perjanjian dan apa-apa bahan Opsyen yang lain oleh dan di antara, seperti yang berkenaan, Majikan, Syarikat dan Anak-anak Syarikat untuk tujuan yang eksklusif bagi melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan.
Peserta memahami bahawa Majikan, Syarikat and Anak-anak Syarikat mungkin memegang maklumat peribadi tertentu tentang Peserta, termasuk, tetapi tidak terhad kepada, nama Peserta, alamat rumah dan nombor telefon,
tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa Syer atau jawatan pengarah yang dipegang dalam Syarikat, butir-butir semua Opsyen, atau apa-apa hak lain atas Syer yang dianugerahkan,
dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah Peserta, untuk tujuan eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan tersebut ("Data"). Data tersebut dibekalkan oleh Majikan
dan juga oleh saya berkenaan dengan Perjanjian dan Pelan.
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Participant understands that Data will be transferred to Morgan Stanley, or such other stock plan service provider as may be selected by the Company in the future, which
is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the
United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any
potential recipients of the Data by contacting his or her local human resources representative at +60-03-2170-7700. Participant authorizes the Company, Morgan Stanley and any other possible recipients which may assist the Company (presently
or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s
participation in the Plan, including any transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon exercise of Performance Stock Options may be deposited. Participant
understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. Participant understands that if he or she resides outside the United States, he or she may, at any time,
view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human
resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her
employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant Participant Performance Stock
Options or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan. For more information on the
consequences of his or her refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.
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Peserta memahami bahawa Data ini akan dipindahkan kepada Morgan Stanley, atau mana-mana pembekal perkhidmatan pelan saham lain sebagaimana yang dipilih oleh Syarikat pada masa depan, yang membantu Syarikat
dengan pelaksanaan, pentadbiran dan pengurusan Pelan. Peserta memahami bahawa penerima-penerima Data mungkin berada di Amerika Syarikat atau mana-mana tempat lain, dan bahawa negara penerima-penerima (contohnya, Amerika Syarikat) mungkin
mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Peserta. Peserta memahami bahawa sekiranya Peserta menetap di luar Amerika Syarikat, Peserta boleh meminta satu senarai yang mengandungi nama-nama dan
alamat-alamat penerima-penerima Data yang berpotensi dengan menghubungi wakil sumber manusia tempatan peserta di +60-03-2170-7700. Peserta memberi kuasa kepada Syarikat, Morgan Stanley dan mana-mana penerima-penerima kemungkinan lain yang
mungkin akan membantu Syarikat (pada masa sekarang atau pada masa depan) dengan melaksanakan, mentadbir dan menguruskan Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain,
bagi tujuan melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan, termasuk segala pemindahan Data tersebut sebagaimana yang dikehendaki kepada broker, egen eskrow atau pihak ketiga dengan siapa Saham diterima semasa
peletakhakan Opsyen mungkin didepositkan. Peserta memahami bahawa Data hanya akan disimpan selagi ia adalah diperlukan untuk melaksanakan, mentadbir, dan menguruskan penyertaan peserta dalam Pelan. Peserta memahami bahawa sekiranya peserta
menetap di luar Amerika Syarikat, peserta boleh, pada bila-bila masa, melihat Data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik
persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan. Selanjutnya, Peserta memahami bahawa peserta memberikan persetujuan di sini secara sukarela semata-mata. Sekiranya
Peserta tidak bersetuju, atau sekiranya Peserta kemudian membatalkan persetujuannya, status pekerjaan atau perkhidmatan dan kerjaya Peserta dengan Majikan tidak akan terjejas; satu-satunya akibat buruk sekiranya Peserta tidak bersetuju atau
menarik balik persetujuan Peserta adalah bahawa Syarikat tidak akan dapat memberikan Opsyen atau anugerah ekuiti lain atau mentadbir atau mengekalkan anugerah-anugerah tersebut kepada Peserta. Oleh itu, Peserta memahami bahawa keengganan atau
penarikan balik persetujuan peserta boleh menjejaskan keupayaan Peserta untuk mengambil bahagian dalam Pelan. Untuk maklumat lebih lanjut mengenai akibat-akibat keengganan Peserta untuk memberikan keizinan atau penarikan balik keizinan,
Peserta memahami bahawa Peserta boleh menghubungi wakil sumber manusia tempatan.
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1. |
I have reviewed this annual report on Form 10-K of Nu Skin Enterprises, Inc.;
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
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(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over
financial reporting; and
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5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.
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Date: February 12, 2020
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/s/ Ritch N. Wood
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Ritch N. Wood
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Chief Executive Officer
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1. |
I have reviewed this annual report on Form 10-K of Nu Skin Enterprises, Inc.;
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
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(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over
financial reporting; and
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5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.
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Date: February 12, 2020
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/s/ Mark H. Lawrence
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Mark H. Lawrence
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Chief Financial Officer
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 12, 2020
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/s/ Ritch N. Wood
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Ritch N. Wood
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Chief Executive Officer
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 12, 2020
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/s/ Mark H. Lawrence
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Mark H. Lawrence
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Chief Financial Officer
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