☑ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________
|
NU SKIN ENTERPRISES, INC.
|
||
(Exact name of registrant as specified in its charter)
|
Delaware
|
87-0565309
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
75 West Center Street
Provo, Utah 84601
|
||
(Address of principal executive offices, including zip code)
|
(801) 345-1000
|
||
(Registrant’s telephone number, including area code)
|
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 ☑
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
|
Page
|
||
Part I.
|
|||
Item 1.
|
3
|
||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
8
|
|||
9
|
|||
Item 2.
|
19
|
||
Item 3.
|
27
|
||
Item 4.
|
27
|
||
Part II.
|
|||
Item 1.
|
28
|
||
Item 1A.
|
28
|
||
Item 2.
|
30
|
||
Item 3.
|
31
|
||
Item 4.
|
31
|
||
Item 5.
|
31
|
||
Item 6.
|
32
|
||
33
|
|
September 30,
2020
|
December 31,
2019
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
366,710
|
$
|
335,630
|
||||
Current investments
|
11,301
|
8,413
|
||||||
Accounts receivable, net
|
60,016
|
50,378
|
||||||
Inventories, net
|
270,319
|
275,891
|
||||||
Prepaid expenses and other
|
63,916
|
69,854
|
||||||
Total current assets
|
772,262
|
740,166
|
||||||
Property and equipment, net
|
456,083
|
453,604
|
||||||
Right-of-use assets
|
165,749
|
144,326
|
||||||
Goodwill
|
196,573
|
196,573
|
||||||
Other intangible assets, net
|
74,391
|
80,321
|
||||||
Other assets
|
151,653
|
154,016
|
||||||
Total assets
|
$
|
1,816,711
|
$
|
1,769,006
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
55,298
|
$
|
38,979
|
||||
Accrued expenses
|
381,052
|
290,281
|
||||||
Current portion of long-term debt
|
30,000
|
27,500
|
||||||
Total current liabilities
|
466,350
|
356,760
|
||||||
Operating lease liabilities
|
121,439
|
105,701
|
||||||
Long-term debt
|
312,664
|
334,461
|
||||||
Other liabilities
|
88,785
|
96,795
|
||||||
Total liabilities
|
989,238
|
893,717
|
||||||
Commitments and contingencies (Note 11)
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Class A common stock – 500 million shares authorized, $0.001 par value, 90.6 million shares issued
|
91
|
91
|
||||||
Additional paid-in capital
|
570,491
|
557,544
|
||||||
Treasury stock, at cost – 39.5 million and 35.0 million shares
|
(1,446,374
|
)
|
(1,324,826
|
)
|
||||
Accumulated other comprehensive loss
|
(83,108
|
)
|
(85,292
|
)
|
||||
Retained earnings
|
1,786,373
|
1,727,772
|
||||||
Total stockholders’ equity
|
827,473
|
875,289
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,816,711
|
$
|
1,769,006
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenue
|
$
|
703,347
|
$
|
589,934
|
$
|
1,833,741
|
$
|
1,837,057
|
||||||||
Cost of sales
|
183,374
|
140,162
|
463,277
|
440,854
|
||||||||||||
Gross profit
|
519,973
|
449,772
|
1,370,464
|
1,396,203
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Selling expenses
|
280,695
|
231,937
|
735,365
|
727,473
|
||||||||||||
General and administrative expenses
|
165,050
|
147,943
|
466,232
|
455,983
|
||||||||||||
Total operating expenses
|
445,745
|
379,880
|
1,201,597
|
1,183,456
|
||||||||||||
Operating income
|
74,228
|
69,892
|
168,867
|
212,747
|
||||||||||||
Other income (expense), net
|
525
|
(4,979
|
)
|
(4,068
|
)
|
(11,153
|
)
|
|||||||||
Income before provision for income taxes
|
74,753
|
64,913
|
164,799
|
201,594
|
||||||||||||
Provision for income taxes
|
18,446
|
20,823
|
46,911
|
68,153
|
||||||||||||
Net income
|
$
|
56,307
|
$
|
44,090
|
$
|
117,888
|
$
|
133,441
|
||||||||
Net income per share (Note 6):
|
||||||||||||||||
Basic
|
$
|
1.10
|
$
|
0.79
|
$
|
2.24
|
$
|
2.40
|
||||||||
Diluted
|
$
|
1.08
|
$
|
0.79
|
$
|
2.23
|
$
|
2.39
|
||||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||||||
Basic
|
51,308
|
55,548
|
52,741
|
55,507
|
||||||||||||
Diluted
|
52,243
|
55,788
|
52,906
|
55,950
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net income
|
$
|
56,307
|
$
|
44,090
|
$
|
117,888
|
$
|
133,441
|
||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment, net of taxes of $(8) and $(31) for the three months ended September 30, 2020 and 2019, respectively, and $(3) and $186 for the nine months ended September 30, 2020 and 2019, respectively
|
10,022
|
(13,685
|
)
|
1,873
|
(15,027
|
)
|
||||||||||
Net unrealized gains/(losses) on cash flow hedge, net of tax benefit of $(83) and zero for the three months ended September 30, 2020 and 2019, respectively and $(83) and zero for the nine months ended September 30, 2020 and 2019, respectively
|
305
|
—
|
305
|
—
|
||||||||||||
Reclassification adjustment for realized losses/(gains) in current earnings on cash flow hedge, net of taxes of $(2) and zero for the three months ended September 30, 2020 and 2019, respectively and $(2) and zero for the nine months ended September 30, 2020 and 2019, respectively
|
6
|
—
|
6
|
—
|
||||||||||||
10,333
|
(13,685
|
)
|
2,184
|
(15,027
|
)
|
|||||||||||
Comprehensive income
|
$
|
66,640
|
$
|
30,405
|
$
|
120,072
|
$
|
118,414
|
|
For the Three Months Ended September 30, 2020
|
|||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at July 1, 2020
|
$
|
91
|
$
|
563,115
|
$
|
(1,427,064
|
)
|
$
|
(93,441
|
)
|
$
|
1,749,311
|
$
|
792,012
|
||||||||||
Net income
|
—
|
—
|
—
|
—
|
56,307
|
56,307
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
—
|
—
|
—
|
10,333
|
—
|
10,333
|
||||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
(19,994
|
)
|
—
|
—
|
(19,994
|
)
|
||||||||||||||||
Exercise of employee stock options (— million shares)/vesting of stock awards
|
—
|
261
|
684
|
—
|
—
|
945
|
||||||||||||||||||
Stock-based compensation
|
—
|
7,115
|
—
|
—
|
—
|
7,115
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(19,245
|
)
|
(19,245
|
)
|
||||||||||||||||
Balance at September 30, 2020
|
$
|
91
|
$
|
570,491
|
$
|
(1,446,374
|
)
|
$
|
(83,108
|
)
|
$
|
1,786,373
|
$
|
827,473
|
|
For the Three Months Ended September 30, 2019
|
|||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at July 1, 2019
|
$
|
91
|
$
|
556,294
|
$
|
(1,324,834
|
)
|
$
|
(81,276
|
)
|
$
|
1,684,675
|
$
|
834,950
|
||||||||||
Net income
|
—
|
—
|
—
|
—
|
44,090
|
44,090
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(13,685
|
)
|
—
|
(13,685
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Exercise of employee stock options (— million shares)/vesting of stock awards
|
—
|
(26
|
)
|
8
|
—
|
—
|
(18
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
1,015
|
—
|
—
|
—
|
1,015
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(20,552
|
)
|
(20,552
|
)
|
||||||||||||||||
Balance at September 30, 2019
|
$
|
91
|
$
|
557,283
|
$
|
(1,324,826
|
)
|
$
|
(94,961
|
)
|
$
|
1,708,213
|
$
|
845,800
|
|
For the Nine Months Ended September 30, 2020
|
|||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at January 1, 2020
|
$
|
91
|
$
|
557,544
|
$
|
(1,324,826
|
)
|
$
|
(85,292
|
)
|
$
|
1,727,772
|
$
|
875,289
|
||||||||||
Net income
|
—
|
—
|
—
|
—
|
117,888
|
117,888
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
2,184
|
—
|
2,184
|
||||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
(127,361
|
)
|
—
|
—
|
(127,361
|
)
|
||||||||||||||||
Exercise of employee stock options (0.3 million shares)/vesting of stock awards
|
—
|
(2,492
|
)
|
5,813
|
—
|
—
|
3,321
|
|||||||||||||||||
Stock-based compensation
|
—
|
15,439
|
—
|
—
|
—
|
15,439
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(59,287
|
)
|
(59,287
|
)
|
||||||||||||||||
Balance at September 30, 2020
|
$
|
91
|
$
|
570,491
|
$
|
(1,446,374
|
)
|
$
|
(83,108
|
)
|
$
|
1,786,373
|
$
|
827,473
|
|
For the Nine Months Ended September 30, 2019
|
|||||||||||||||||||||||
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at January 1, 2019
|
$
|
91
|
$
|
552,564
|
$
|
(1,326,605
|
)
|
$
|
(79,934
|
)
|
$
|
1,635,751
|
$
|
781,867
|
||||||||||
Cumulative effect adjustment from adoption of ASC 842
|
—
|
—
|
—
|
—
|
657
|
657
|
||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
133,441
|
133,441
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
(15,027
|
)
|
—
|
(15,027
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 6)
|
—
|
—
|
(825
|
)
|
—
|
—
|
(825
|
)
|
||||||||||||||||
Exercise of employee stock options (0.2 million shares)/vesting of stock awards
|
—
|
(4,930
|
)
|
2,604
|
—
|
—
|
(2,326
|
)
|
||||||||||||||||
Stock-based compensation
|
—
|
9,649
|
—
|
—
|
—
|
9,649
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(61,636
|
)
|
(61,636
|
)
|
||||||||||||||||
Balance at September 30, 2019
|
$
|
91
|
$
|
557,283
|
$
|
(1,324,826
|
)
|
$
|
(94,961
|
)
|
$
|
1,708,213
|
$
|
845,800
|
|
Nine Months Ended
September 30,
|
|||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
117,888
|
$
|
133,441
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
55,279
|
57,964
|
||||||
Non-cash lease expense
|
34,087
|
33,494
|
||||||
Stock-based compensation
|
15,439
|
9,649
|
||||||
Foreign currency losses
|
1,203
|
4,145
|
||||||
Loss on disposal of assets
|
2,516
|
—
|
||||||
Deferred taxes
|
(7,931
|
)
|
1,945
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(9,273
|
)
|
(3,981
|
)
|
||||
Inventories, net
|
4,882
|
6,775
|
||||||
Prepaid expenses and other
|
4,180
|
(21,097
|
)
|
|||||
Other assets
|
(76,487
|
)
|
(27,101
|
)
|
||||
Accounts payable
|
15,884
|
(6,609
|
)
|
|||||
Accrued expenses
|
99,438
|
(62,679
|
)
|
|||||
Other liabilities
|
27,343
|
2,082
|
||||||
Net cash provided by operating activities
|
284,448
|
128,028
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(48,810
|
)
|
(52,784
|
)
|
||||
Proceeds on investment sales
|
7,630
|
11,160
|
||||||
Purchases of investments
|
(8,759
|
)
|
(8,432
|
)
|
||||
Acquisitions and investments in equity investees
|
—
|
(8,073
|
)
|
|||||
Net cash used in investing activities
|
(49,939
|
)
|
(58,129
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards
|
3,321
|
(2,326
|
)
|
|||||
Payment of cash dividends
|
(59,287
|
)
|
(61,636
|
)
|
||||
Repurchases of shares of common stock
|
(127,361
|
)
|
(825
|
)
|
||||
Payments of debt
|
(135,000
|
)
|
(209,455
|
)
|
||||
Proceeds from debt
|
115,000
|
145,000
|
||||||
Net cash used in financing activities
|
(203,327
|
)
|
(129,242
|
)
|
||||
Effect of exchange rate changes on cash
|
(102
|
)
|
(7,534
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
31,080
|
(66,877
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
335,630
|
386,911
|
||||||
Cash and cash equivalents, end of period
|
$
|
366,710
|
$
|
320,034
|
1. |
The Company
|
2. |
Summary of Significant Accounting Policies
|
|
September 30,
2020
|
December 31,
2019
|
||||||
Raw materials
|
$
|
92,911
|
$
|
87,942
|
||||
Finished goods
|
177,408
|
187,949
|
||||||
Total Inventory, net
|
$
|
270,319
|
$
|
275,891
|
3. |
Goodwill
|
|
September 30,
2020
|
December 31,
2019
|
||||||
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
|
4. |
Debt
|
Facility or Arrangement
|
|
Original
Principal Amount
|
|
Balance as of
September 30, 2020(1)(2)
|
|
Balance as of
December 31, 2019(2)
|
|
Interest Rate
|
|
Repayment Terms
|
|||
Credit Agreement term loan facility
|
|
$
|
400.0 million
|
|
$
|
345.0 million
|
|
$
|
365.0 million
|
|
Variable 30 day: 2.40%
|
|
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
|
|
|
|
|
$
|
—
|
|
$
|
—
|
|
Variable 30 day: —
|
|
Revolving line of credit expires April 18, 2023.
|
(1) |
As of September 30, 2020, the current portion of the Company’s debt (i.e. becoming due in the next 12 months) included $30.0 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 $2.3 million and $3.0 million as of September 30, 2020 and December 31, 2019, respectively, related to the Credit Agreement, which are not reflected in this table.
|
5. |
Leases
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Operating lease cost
|
$
|
13,038
|
$
|
12,399
|
$
|
39,043
|
$
|
37,677
|
||||||||
Variable lease cost
|
678
|
732
|
2,062
|
2,889
|
||||||||||||
Short-term lease cost
|
118
|
41
|
258
|
145
|
||||||||||||
Sublease income
|
(1,075
|
)
|
(1,395
|
)
|
(3,264
|
)
|
(4,563
|
)
|
||||||||
Total lease expense
|
$
|
12,759
|
$
|
11,777
|
$
|
38,099
|
$
|
36,148
|
|
Nine Months Ended
September 30,
|
|||||||
2020
|
2019
|
|||||||
Operating cash outflow from operating leases
|
$
|
40,865
|
$
|
39,885
|
||||
Right-of-use assets obtained in exchange for lease obligations
|
$
|
62,514
|
$
|
150,127
|
Year Ending December 31,
|
Operating
Leases
|
|||
2020
|
$
|
15,631
|
||
2021
|
53,303
|
|||
2022
|
36,529
|
|||
2023
|
26,418
|
|||
2024
|
21,389
|
|||
Thereafter
|
41,468
|
|||
Total
|
194,738
|
|||
Less: Finance charges
|
26,820
|
|||
Total principal liability
|
$
|
167,918
|
6. |
Capital Stock
|
7. |
Fair Value
|
◾ |
Level 1 – quoted prices in active markets for identical assets or liabilities;
|
◾ |
Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly;
|
◾ |
Level 3 – unobservable inputs based on the Company’s own assumptions.
|
|
Fair Value at September 30, 2020
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
45,552
|
$
|
—
|
$
|
—
|
$
|
45,552
|
||||||||
Other long-term assets
|
1,344
|
—
|
—
|
1,344
|
||||||||||||
Derivative financial instruments asset
|
—
|
472
|
—
|
472
|
||||||||||||
Life insurance contracts
|
—
|
—
|
41,328
|
41,328
|
||||||||||||
Derivative financial instruments liability
|
—
|
(76
|
)
|
—
|
(76
|
)
|
||||||||||
Total
|
$
|
46,896
|
$
|
396
|
$
|
41,328
|
$
|
88,620
|
|
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
|
Beginning balance at January 1, 2020
|
$
|
41,707
|
||
Actual return on plan assets
|
(379
|
)
|
||
Purchase and issuances
|
—
|
|||
Sales and settlements
|
—
|
|||
Transfers into Level 3
|
—
|
|||
Ending balance at September 30, 2020
|
$
|
41,328
|
8. |
Income Taxes
|
9. |
Derivatives and Hedging Activities
|
|
Fair Values of Derivative Instruments
|
|||||||
Derivatives in Cash flow
Hedging Relationships:
|
Balance Sheet
Location
|
September 30,
2020
|
December 31,
2019
|
|||||
Interest Rate Swap - Asset
|
Other Assets
|
$
|
472
|
$
|
—
|
|||
Interest Rate Swap - Liability
|
Accrued Expenses
|
$
|
76
|
$
|
—
|
|
Amount of Gain or (Loss) Recognized in OCI on Derivative
|
|||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||
Derivatives in Cash flow
|
September 30,
|
September 30,
|
||||||||||
Hedging Relationships:
|
2020
|
2019
|
2020
|
2019
|
||||||||
Interest Rate Swaps
|
$
|
396
|
$
|
—
|
$
|
396
|
$
|
—
|
10. |
Segment Information
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
169,068
|
$
|
173,974
|
$
|
453,096
|
$
|
567,795
|
||||||||
Americas/Pacific
|
151,465
|
83,635
|
353,957
|
262,932
|
||||||||||||
South Korea
|
83,460
|
79,435
|
236,094
|
248,020
|
||||||||||||
Southeast Asia
|
84,102
|
78,963
|
220,517
|
226,853
|
||||||||||||
Japan
|
70,958
|
67,197
|
200,549
|
194,557
|
||||||||||||
EMEA
|
61,411
|
35,742
|
147,590
|
120,960
|
||||||||||||
Hong Kong/Taiwan
|
42,265
|
40,449
|
115,253
|
124,719
|
||||||||||||
Other
|
(314
|
)
|
(62
|
)
|
374
|
(239
|
)
|
|||||||||
Total Nu Skin
|
662,415
|
559,333
|
1,727,430
|
1,745,597
|
||||||||||||
Manufacturing (1)
|
40,910
|
30,601
|
105,975
|
91,430
|
||||||||||||
Grow Tech
|
22
|
—
|
336
|
30
|
||||||||||||
Total
|
$
|
703,347
|
$
|
589,934
|
$
|
1,833,741
|
$
|
1,837,057
|
(1) |
The Manufacturing segment had $10.9 million and $7.1 million of intersegment revenue for the three months ended September 30, 2020 and 2019, respectively, and $24.2 million and $19.5 million for the nine months ended September 30, 2020 and 2019, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
54,522
|
$
|
48,619
|
$
|
135,577
|
$
|
158,873
|
||||||||
Americas/Pacific
|
26,256
|
12,875
|
61,184
|
41,314
|
||||||||||||
South Korea
|
25,232
|
24,770
|
73,421
|
76,417
|
||||||||||||
Southeast Asia
|
20,426
|
22,063
|
54,121
|
60,895
|
||||||||||||
Japan
|
18,245
|
16,287
|
49,292
|
46,216
|
||||||||||||
EMEA
|
7,111
|
1,529
|
11,084
|
6,114
|
||||||||||||
Hong Kong/Taiwan
|
9,048
|
8,063
|
22,825
|
24,754
|
||||||||||||
Nu Skin contribution
|
160,840
|
134,206
|
407,504
|
414,583
|
||||||||||||
Manufacturing
|
6,749
|
4,577
|
15,000
|
11,598
|
||||||||||||
Grow Tech
|
(5,322
|
)
|
(5,822
|
)
|
(17,659
|
)
|
(14,033
|
)
|
||||||||
Total segment contribution
|
162,267
|
132,961
|
404,845
|
412,148
|
||||||||||||
Corporate and other
|
(88,039
|
)
|
(63,069
|
)
|
(235,978
|
)
|
(199,401
|
)
|
||||||||
Operating income
|
74,228
|
69,892
|
168,867
|
212,747
|
||||||||||||
Other income (expense)
|
525
|
(4,979
|
)
|
(4,068
|
)
|
(11,153
|
)
|
|||||||||
Income before provision for income taxes
|
$
|
74,753
|
$
|
64,913
|
$
|
164,799
|
$
|
201,594
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
2,649
|
$
|
2,708
|
$
|
7,631
|
$
|
8,733
|
||||||||
Americas/Pacific
|
268
|
213
|
766
|
633
|
||||||||||||
South Korea
|
756
|
1,115
|
2,731
|
3,997
|
||||||||||||
Southeast Asia
|
317
|
434
|
1,248
|
1,373
|
||||||||||||
Japan
|
296
|
938
|
1,602
|
2,943
|
||||||||||||
EMEA
|
231
|
268
|
731
|
980
|
||||||||||||
Hong Kong/Taiwan
|
691
|
547
|
1,948
|
1,600
|
||||||||||||
Total Nu Skin
|
5,208
|
6,223
|
16,657
|
20,259
|
||||||||||||
Manufacturing
|
2,077
|
1,711
|
5,954
|
4,916
|
||||||||||||
Grow Tech
|
1,302
|
1,244
|
3,775
|
3,064
|
||||||||||||
Corporate and other
|
9,333
|
10,127
|
28,893
|
29,725
|
||||||||||||
Total
|
$
|
17,920
|
$
|
19,305
|
$
|
55,279
|
$
|
57,964
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
9,000
|
$
|
10,614
|
$
|
12,577
|
$
|
13,328
|
||||||||
Americas/Pacific
|
125
|
337
|
891
|
1,084
|
||||||||||||
South Korea
|
173
|
972
|
537
|
1,051
|
||||||||||||
Southeast Asia
|
1,254
|
140
|
1,893
|
459
|
||||||||||||
Japan
|
1,484
|
267
|
3,132
|
1,385
|
||||||||||||
EMEA
|
718
|
16
|
1,378
|
92
|
||||||||||||
Hong Kong/Taiwan
|
7
|
99
|
23
|
1,653
|
||||||||||||
Total Nu Skin
|
12,761
|
12,445
|
20,431
|
19,052
|
||||||||||||
Manufacturing
|
2,113
|
1,100
|
13,221
|
4,281
|
||||||||||||
Grow Tech
|
343
|
2,577
|
760
|
7,628
|
||||||||||||
Corporate and other
|
4,901
|
7,448
|
14,398
|
21,823
|
||||||||||||
Total
|
$
|
20,118
|
$
|
23,570
|
$
|
48,810
|
$
|
52,784
|
11. |
Commitments and Contingencies
|
12. |
Restructuring
|
Beginning balance at January 1, 2019
|
$
|
15,462
|
||
Amounts paid
|
(15,046
|
)
|
||
Adjustments
|
(416
|
)
|
||
Ending balance at March 31, 2019
|
$
|
—
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three Months Ended
September 30,
|
Constant-
Currency
|
Nine Months Ended
September 30,
|
Constant-
Currency
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
Change(1)
|
2020
|
2019
|
Change
|
Change(1)
|
|||||||||||||||||||||||||
Nu Skin
|
||||||||||||||||||||||||||||||||
Mainland China
|
$
|
169,068
|
$
|
173,974
|
(3
|
)%
|
(4
|
)%
|
$
|
453,096
|
$
|
567,795
|
(20
|
)%
|
(19
|
)%
|
||||||||||||||||
Americas/Pacific
|
151,465
|
83,635
|
81
|
%
|
90
|
%
|
353,957
|
262,932
|
35
|
%
|
43
|
%
|
||||||||||||||||||||
South Korea
|
83,460
|
79,435
|
5
|
%
|
5
|
%
|
236,094
|
248,020
|
(5
|
)%
|
(2
|
)%
|
||||||||||||||||||||
Southeast Asia
|
84,102
|
78,963
|
7
|
%
|
8
|
%
|
220,517
|
226,853
|
(3
|
)%
|
(1
|
)%
|
||||||||||||||||||||
Japan
|
70,958
|
67,197
|
6
|
%
|
4
|
%
|
200,549
|
194,557
|
3
|
%
|
2
|
%
|
||||||||||||||||||||
EMEA
|
61,411
|
35,742
|
72
|
%
|
67
|
%
|
147,590
|
120,960
|
22
|
%
|
23
|
%
|
||||||||||||||||||||
Hong Kong/Taiwan
|
42,265
|
40,449
|
4
|
%
|
—
|
115,253
|
124,719
|
(8
|
)%
|
(10
|
)%
|
|||||||||||||||||||||
Other
|
(314
|
)
|
(62
|
)
|
(406
|
)%
|
(403
|
)%
|
374
|
(239
|
)
|
256
|
%
|
256
|
%
|
|||||||||||||||||
Total Nu Skin
|
662,415
|
559,333
|
18
|
%
|
19
|
%
|
1,727,430
|
1,745,597
|
(1
|
)%
|
1
|
%
|
||||||||||||||||||||
Manufacturing
|
40,910
|
30,601
|
34
|
%
|
34
|
%
|
105,975
|
91,430
|
16
|
%
|
16
|
%
|
||||||||||||||||||||
Grow Tech
|
22
|
—
|
100
|
%
|
100
|
%
|
336
|
30
|
1,020
|
%
|
1,020
|
%
|
||||||||||||||||||||
Total
|
$
|
703,347
|
$
|
589,934
|
19
|
%
|
19
|
%
|
$
|
1,833,741
|
$
|
1,837,057
|
—
|
2
|
%
|
(1) |
Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||
Nu Skin
|
||||||||||||||||||||||||
Mainland China
|
$
|
54,522
|
$
|
48,619
|
12
|
%
|
$
|
135,577
|
$
|
158,873
|
(15
|
)%
|
||||||||||||
Americas/Pacific
|
26,256
|
12,875
|
104
|
%
|
61,184
|
41,314
|
48
|
%
|
||||||||||||||||
South Korea
|
25,232
|
24,770
|
2
|
%
|
73,421
|
76,417
|
(4
|
)%
|
||||||||||||||||
Southeast Asia
|
20,426
|
22,063
|
(7
|
)%
|
54,121
|
60,895
|
(11
|
)%
|
||||||||||||||||
Japan
|
18,245
|
16,287
|
12
|
%
|
49,292
|
46,216
|
7
|
%
|
||||||||||||||||
EMEA
|
7,111
|
1,529
|
365
|
%
|
11,084
|
6,114
|
81
|
%
|
||||||||||||||||
Hong Kong/Taiwan
|
9,048
|
8,063
|
12
|
%
|
22,825
|
24,754
|
(8
|
)%
|
||||||||||||||||
Total Nu Skin
|
160,840
|
134,206
|
20
|
%
|
407,504
|
414,583
|
(2
|
)%
|
||||||||||||||||
Manufacturing
|
6,749
|
4,577
|
47
|
%
|
15,000
|
11,598
|
29
|
%
|
||||||||||||||||
Grow Tech
|
(5,322
|
)
|
(5,822
|
)
|
9
|
%
|
(17,659
|
)
|
(14,033
|
)
|
(26
|
)%
|
|
As of
September 30, 2020
|
As of
September 30, 2019
|
% Increase (Decrease)
|
||||||||||||||
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
||||||||||||
Mainland China
|
341,386
|
20,970
|
317,257
|
23,776
|
8%
|
(12)%
|
|||||||||||
Americas/Pacific
|
438,889
|
14,400
|
229,013
|
7,760
|
92%
|
86%
|
|||||||||||
South Korea
|
164,256
|
7,973
|
169,589
|
7,363
|
(3)%
|
8%
|
|||||||||||
Southeast Asia
|
163,536
|
8,357
|
145,845
|
7,936
|
12%
|
5%
|
|||||||||||
Japan
|
126,896
|
6,523
|
128,373
|
5,964
|
(1)%
|
9%
|
|||||||||||
EMEA
|
235,202
|
6,226
|
147,758
|
4,060
|
59%
|
53%
|
|||||||||||
Hong Kong/Taiwan
|
69,346
|
4,067
|
68,862
|
4,231
|
1%
|
(4)%
|
|||||||||||
Total
|
1,539,511
|
68,516
|
1,206,697
|
61,090
|
28%
|
12%
|
● |
the expansion and upgrade of our facilities and equipment;
|
● |
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.
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
● |
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;
|
● |
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.
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
(a)
|
(b)
|
(c)
|
(d)
|
|||||||||||||
Period
|
Total
Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
the Plans or Programs
(in millions)(1)
|
||||||||||||
July 1 - 31, 2020
|
72,166
|
$
|
44.65
|
72,166
|
$
|
359.6
|
||||||||||
August 1 - 31, 2020
|
72,061
|
46.94
|
72,061
|
$
|
356.2
|
|||||||||||
September 1 - 30, 2020
|
276,272
|
48.46
|
276,272
|
$
|
342.8
|
|||||||||||
Total
|
420,499
|
$
|
47.55
|
420,499
|
(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.
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
ITEM 6. |
EXHIBITS
|
Exhibits
Regulation S-K
Number
|
Description
|
|
Third Amended and Restated Nu Skin Enterprises, Inc. Deferred Compensation Plan, effective as of January 1, 2021.
|
||
Employment Agreement between the Company and Joseph Y. Chang, effective as of October 15, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 20, 2020).
|
||
Nu Skin Enterprises, Inc. Executive Severance Policy, amended and restated effective as of October 15, 2020 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 20, 2020).
|
||
Certification by Ritch N. Wood, Chief Executive Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification by Mark H. Lawrence, Chief Financial Officer, pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification by Ritch N. Wood, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
Certification by Mark H. Lawrence, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101.INS
|
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/ Mark H. Lawrence
|
|
Mark H. Lawrence
|
||
Chief Financial Officer
|
||
(Duly Authorized Officer and Principal Financial Officer)
|
(i) |
A Participant’s Restricted Stock Unit deferrals will be automatically and irrevocably allocated to a Fund that tracks the performance of the Company’s Stock (the “Company Stock Unit Fund”).
Participants may not select any other Fund to be used to determine the amounts to be credited or debited to their Restricted Stock Unit deferrals. Furthermore, no other portion of the Participant’s Accounts can be either initially allocated
or re-allocated to the Company Stock Unit Fund. Amounts allocated to the Company Stock Unit Fund shall only be distributable in actual shares of Stock.
|
|
(ii) |
Any stock dividends, cash dividends or other non-cash dividends that would have been payable on the Stock credited to a Participant’s Accounts shall be credited to the Participant’s Accounts in the form of additional shares of Stock and
shall automatically and irrevocably be deemed to be re-invested in the Company Stock Unit Fund until such amounts are distributed to the Participant. The number of shares credited to the Participant for a particular stock dividend shall be
equal to (A) the number of shares of Stock credited to the Participant’s Account as of the payment date for such dividend in respect of each share of Stock, multiplied by (B) the number of additional or fractional shares of Stock actually
paid as a dividend in respect of each share of Stock. The number of shares credited to the Participant for a particular cash dividend or other non-cash dividend shall be equal to (A) the number of shares of Stock credited to the
Participant’s Account as of the payment date for such dividend in respect of each share of Stock, multiplied by (B) the fair market value of the dividend, divided by (C) the “fair market value” of the Stock on the payment date for such
dividend.
|
|
(iii) |
The number of shares of Stock credited to the Participant’s Account may be adjusted by the Committee, in its sole discretion, to prevent dilution or enlargement of Participants’ rights with respect to the portion of his or her Account
allocated to the Company Stock Unit Fund in the event of any reorganization, reclassification, stock split, or other unusual corporate transaction or event which affects the value of the Stock, provided
that any such adjustment shall be made taking into account any crediting of shares of Stock to the Participant under this Section.
|
|
(iv) |
For purposes of this Section 3.3.3, the fair market value of the Stock shall be, in the event the Stock is traded on a recognized securities exchange, an amount equal to the closing price of the Stock on such exchange on the date set for
valuation or, if no sales of Stock were made on said exchange on that date, the closing price of the Stock on the next preceding day on which sales were made on such exchange; or, if the Stock is not so traded, the value determined, in its
sole discretion, by the Committee in compliance with Section 409A.
|
|
(a) |
Service as a full‑time missionary for any legally recognized ecclesiastical organization, or
|
|
(b) |
United States Military duty.
|
When Participant Has
Completed the Following Additional
Years of Employment following the
Respective Company Contribution:
|
The Vested Portion of Participant’s
Yearly Company Contribution
under Section 3.2 Will Be:
|
|
Less than 1 year
|
0%
|
|
1 year but less than 2 years
|
20%
|
|
2 years but less than 3 years
|
40%
|
|
3 years but less than 4 years
|
60%
|
|
4 years but less than 5 years
|
80%
|
|
5 years or more
|
100%
|
When the Participant Has
Completed the Following Years
Employment:
|
The Vested Portion of
Participant’s Company Contribution of
Account under Section 3.2.1 Will Be:
|
|
Less than 10 years
|
0%
|
|
10 years but less than 11 years
|
50%
|
|
11 years but less than 12 years
|
55%
|
|
12 years but less than 13 years
|
60%
|
|
13 years but less than 14 years
|
65%
|
|
14 years but less than 15 years
|
70%
|
|
15 years but less than 16 years
|
75%
|
|
16 years but less than 17 years
|
80%
|
|
17 years but less than 18 years
|
85%
|
|
18 years but less than 19 years
|
90%
|
|
19 years but less than 20 years
|
95%
|
|
20 years or more
|
100%
|
|
(a) |
Participant attains 60 years of age;
|
|
(b) |
Participant’s death or Disability as defined in the Plan;
|
|
(c) |
The Plan Administrator may, in its discretion, accelerate vesting of a Participant’s Company Contribution Account; or
|
|
(d) |
For Company Contributions credited to the Plan after January 1, 2021, Participant has completed 10 years of employment with the Company as a grade 17 or above employee (or equivalent).
|
|
(a) |
the Participant’s employment or service is terminated for Cause; or
|
|
(b) |
the Participant, directly or indirectly, enters into the employment of, owns any interest in, or engages or participates in (individually or as an officer, director, shareholder, consultant, partner, member, joint venturer, agent, equity
owner, distributor or in any other capacity whatsoever) any company, corporation or business in the direct selling or multi-level marketing industry (including any subsidiary or affiliate thereof) that operates in any territory where the
Company or any of its affiliates or subsidiaries engages in business;
|
|
(a) |
Plan Years Prior to 2015. In regard to amounts attributable to Plan Years prior to 2015, a Participant who separates from service with
the Company or an Affiliate due to Disability and who has satisfied all of the covenants, conditions and promises contained in this Plan (to the extent applicable) is entitled to a distribution of amounts vested and credited to
Participant’s Account as provided in Section 6.5. Subject to Section 6.5, the payments attributable to Plan Years prior to 2015 may commence as of the date of Separation from Service due to Disability.
|
|
(b) |
Plan Years On or After 2015. In regard to amounts attributable to Plan Years commencing on or after 2015, a Participant experiences a
Disability and who has satisfied all of the covenants, conditions and promises contained in this Plan (to the extent applicable) is entitled to a distribution of amounts vested and credited to Participant’s Account as provided in Section
6.5. Subject to Section 6.5, the payments attributable to Plan Years commencing on or after 2015 may commence as of the date of the Participant’s Disability.
|
|
(1) |
the amount of Participant’s Deferral Account, including any earnings thereon; and
|
|
(a) |
Termination.
|
|
(1) |
Distribution of Deferral Account. Other than Restricted Stock Units, payment of amounts vested and credited in a Deferral Account other
than the portion attributable to deferrals of Restricted Stock Units to a Participant who is entitled to benefits under Section 6.1 will commence within a Reasonable Time following the Participant’s Separation from Service (except that, in
the event that the Participant is a “Specified Employee,” as defined under Treasury Regulation § 1.409A‑1(i), payment to the Participant will begin no earlier than six months following Participant’s Separation from Service (or upon the
Participant’s death, if earlier)).
|
|
(2) |
Distribution of Restricted Stock Units. Payment of amounts vested and credited in a Deferral Account that are attributable to deferrals of
Restricted Stock Units to a Participant who is entitled to benefits under Section 6.1 will commence within a Reasonable Time following the one-year anniversary of the Participant’s Separation from Service, subject to the requirements under
Section 5.3.
|
|
(3) |
Distribution of Company Contribution Account. Payment of amounts vested and credited in a Company Contribution Account to a Participant
who is entitled to benefits under Section 6.1 (subject to any forfeiture under Section 5.3) will commence within a Reasonable Time following the one-year anniversary of the Participant’s Separation from Service. Notwithstanding the
foregoing, if the Participant’s Separation from Service occurs at or after the Participant’s attainment of age 60 or after the Participant has completed twenty years of employment, then payment will commence within a Reasonable Time
following the Participant’s Separation from Service (except that, in the event that the Participant is a “Specified Employee,” as defined under Treasury Regulation § 1.409A‑1(i), payment to the Participant will begin no earlier than six
months following Participant’s Separation from Service (or upon the Participant’s death, if earlier)).
|
|
(4) |
Distribution Following Change in Control. Notwithstanding any Participant election under Section 6.5(e) below to the contrary, in the
event that a Participant’s Separation from Service occurs within two (2) years following a Change in Control, such Participant’s Accounts shall be distributed in the form of a lump sum without regard to any election as to the form of
payment that may have been submitted in accordance with Section 6.5(e) below.
|
|
(b) |
Disability.
|
|
(1) |
For amounts attributable to Plan Years that commenced prior to January 1, 2015, payment to a Participant who is entitled to benefits under Section 6.2 will commence within a Reasonable Time after the Participant’s Separation from Service
due to a Disability. In the event that Participant is a “Specified Employee,” as defined under Treasury Regulation § 1.409A‑1(i), payment to Participant will begin no earlier than six months following Participant’s Separation from Service
(or upon the Participant’s death, if earlier).
|
|
(2) |
For amounts attributable to Plan Years commencing on or after January 1, 2015, Participants may make an election as to the form of payment that will be applicable in the event of the Participant’s Disability. The form of payment shall be
elected in accordance with Section 6.5(e) below and a separate election may be submitted that will apply to each Plan Year. A Participant who experiences a Disability and is entitled to benefits under Section 6.2 shall receive such benefits
within a Reasonable Time after the Participant’s Disability.
|
|
(c) |
Death. Payment to the Beneficiary of a Participant who is entitled to benefits under Section 6.3 will commence within a
Reasonable Time after the Participant’s death.
|
|
(d) |
Death After Commencement of Payments. If a Participant dies after the day on which his or her benefit payments commence but
before the complete distribution to such Participant of the benefits payable to him under the Plan, any remaining benefits will continue to be distributed to the Participant’s Beneficiary in the same manner as elected by the Participant
under Section 6.5(e). Payments to the Beneficiaries entitled to payments pursuant to Section 6.3 will be made within a Reasonable Time following the death of Participant.
|
|
(c) |
The decision of the Plan Administrator upon all matters within the scope of its authority shall be binding and conclusive upon all persons.
|
|
(a) |
the specific reason(s) for denial of the claim;
|
|
(b) |
reference to the specific Plan provisions upon which the determination is based;
|
|
(c) |
a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and
|
|
(d) |
an explanation of the Plan’s appeal procedures, and an explanation of the time limits applicable to the Plan’s appeal procedures.
|
|
(a) |
Within 60 days after receiving the written notice of the disposition of the claim described in paragraph (a), the Claimant, or the Claimant’s authorized representative, may appeal such denied claim. The Claimant may submit a written
statement of his or her claim (including any written comments, documents, records and other information relating to the claim) and the reasons for granting the claim to the Plan Administrator. The Plan Administrator shall have the right to
request of and receive from the Claimant such additional information, documents or other evidence as the Plan Administrator may reasonably require. If the Claimant does not request an appeal of the denied claim within 60 days after receiving
written notice of the disposition of the claim as described in paragraph (a), the Claimant shall be deemed to have accepted the disposition of the claim and such written disposition will be final and binding on the Claimant and anyone
claiming benefits through the Claimant, unless the Claimant shall have been physically or mentally incapacitated so as to be unable to request review within the 60‑day period. The appeal shall take into account all comments, documents,
records and other information submitted by the Claimant relating to the claim, without regard to whether such documents, records or other information were submitted or considered in the initial benefit determination or the initial review.
|
|
(b) |
A decision on appeal to the Plan Administrator shall be rendered in writing by the Plan Administrator ordinarily not later than 60 days after the Claimant requests review. A written copy of the decision shall be delivered to the
Claimant. If special circumstances require an extension of the ordinary period, the Plan Administrator shall so notify the Claimant of the extension with such notice containing an explanation of the special circumstances requiring the
extension and the date by which the Plan Administrator expects to render a decision. Any such extension shall not extend beyond 60 days after the ordinary period. The period of time within which a benefit determination on review is required
to be made shall begin at the time an appeal is filed in accordance with the provisions of paragraph (b)(1) above, without regard to whether all the information necessary to make a decision on appeal accompanies the filing.
|
|
(1) |
the specific reason(s) for denial of the claim;
|
|
(2) |
reference to the specific Plan provisions upon which the determination is based;
|
|
(3) |
a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant’s claim for benefits; and
|
|
(4) |
a statement of the Claimant’s right to bring a civil action.
|
|
(a) |
were relied upon in making the benefit determination;
|
|
(b) |
were submitted, considered, or generated in the course of making the benefit determination, without regard to whether such documents, records or other information were relied upon in making the benefit determination; or
|
|
(c) |
demonstrate compliance with the administrative processes and safeguards required pursuant to this Section regarding the making of the benefit determination.
|
NU SKIN ENTERPRISES, INC.
|
By:
|
/s/ Ritch N. Wood
|
|
Its:
|
Chief Executive Officer
|
1. |
I have reviewed this quarterly report on Form 10-Q of Nu Skin Enterprises, Inc.;
|
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;
|
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;
|
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;
|
|
(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;
|
|
(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
|
|
(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
|
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):
|
|
(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
|
|
(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.
|
Date: November 4, 2020
|
/s/ Ritch N. Wood
|
|
Ritch N. Wood
|
||
Chief Executive Officer
|
1. |
I have reviewed this quarterly report on Form 10-Q of Nu Skin Enterprises, Inc.;
|
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;
|
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;
|
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;
|
|
(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;
|
|
(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
|
|
(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
|
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):
|
|
(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
|
|
(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.
|
/s/ Mark H. Lawrence
|
||
Mark H. Lawrence
|
||
Chief Financial Officer
|
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 4, 2020
|
/s/ Ritch N. Wood
|
|
Ritch N. Wood
|
||
Chief Executive Officer
|
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 4, 2020
|
/s/ Mark H. Lawrence
|
|
Mark H. Lawrence
|
||
Chief Financial Officer
|