☑ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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NU SKIN ENTERPRISES, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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87-0565309
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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75 West Center Street
Provo, Utah 84601
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(Address of principal executive offices, including zip code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Class A Common Stock, $.001 par value
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NUS
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New York Stock Exchange
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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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1
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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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7
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7
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14
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14
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15
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16
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ITEM 1A.
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17
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ITEM 1B.
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38
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ITEM 2.
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39
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ITEM 3.
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39
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ITEM 4.
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39
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PART II
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40
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ITEM 5.
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40
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ITEM 6.
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41
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ITEM 7.
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42
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ITEM 7A.
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53
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ITEM 8.
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55
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ITEM 9.
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86
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ITEM 9A.
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86
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ITEM 9B.
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86
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PART III
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87
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ITEM 10.
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87
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ITEM 11.
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87
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ITEM 12.
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87
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ITEM 13.
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87
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ITEM 14.
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87
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PART IV
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87
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ITEM 15.
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87
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ITEM 16.
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89
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90
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Year Ended December 31,
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|||||||||||||||||||||||
Product Category
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2020
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2019
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2018
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|||||||||||||||||||||
Personal Care(1)
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$
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1,491.8
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57.8
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%
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$
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1,423.5
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58.8
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%
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$
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1,659.7
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62.0
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%
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||||||||||||
Wellness(1)
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922.6
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35.7
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%
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863.1
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35.7
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%
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921.3
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34.4
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%
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|||||||||||||||
Other(2)
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167.5
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6.5
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%
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133.8
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5.5
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%
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98.0
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3.6
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%
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|||||||||||||||
$
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2,581.9
|
100.0
|
%
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$
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2,420.4
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100.0
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%
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$
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2,679.0
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100.0
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%
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(1) |
Includes sales of personal care and wellness products in our core Nu Skin business.
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(2) |
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.
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● |
Global consumer research to identify needs and insights and refine product concepts;
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Internal research, product development and quality testing;
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Joint research projects, collaborations and clinical studies;
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Identification and assessment of technologies for potential licensing arrangements; and
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Acquisition of technologies.
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our sales force has rapid reach to potential customers through their social networks and the social networks of those to whom they are connected;
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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;
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our distribution channel allows for product demonstrations and trial by potential consumers;
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our distribution channel allows our sales force to provide personal testimonials of product efficacy; and
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as compared to other distribution methods, our sales force has the opportunity to provide consumers higher levels of service.
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As of December 31, 2020
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As of December 31, 2019
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As of December 31, 2018
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|||||||||||||||||||||
Customers
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Sales Leaders
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Customers
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Sales Leaders
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Customers
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Sales Leaders
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|||||||||||||||||||
Mainland China
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381,460
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21,990
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292,812
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17,987
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303,789
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33,129
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||||||||||||||||||
Americas/Pacific
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404,955
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14,439
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220,216
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7,607
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248,609
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8,354
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||||||||||||||||||
South Korea
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158,953
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7,059
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168,972
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7,251
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182,026
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7,565
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||||||||||||||||||
Southeast Asia
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154,355
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8,903
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136,349
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7,480
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153,465
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8,933
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||||||||||||||||||
Japan
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128,400
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6,318
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125,557
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5,916
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130,181
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5,916
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||||||||||||||||||
EMEA
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258,587
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7,063
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153,330
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4,619
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149,085
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4,791
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||||||||||||||||||
Hong Kong/Taiwan
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70,592
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4,663
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65,669
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3,900
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76,891
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4,767
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||||||||||||||||||
Total
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1,557,302
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70,435
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1,162,905
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54,760
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1,244,046
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73,455
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● |
“Brand Affiliate-Direct Consumers”—Individuals who purchase products directly from a Brand Affiliate at a price established by the Brand Affiliate.
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“Company-Direct Consumers”—Individuals who purchase products directly from the company. These consumers are typically referred by a Brand Affiliate 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.
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“Basic Brand Affiliates”—Brand Affiliates 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 Brand Affiliates are purchasing products for personal use and not actively recruiting others.
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“Sales Leaders and Qualifiers”—Brand Affiliates who have qualified or are trying to qualify as a Sales Leader. These Brand Affiliates have elected to pursue the business opportunity as a Sales Leader and are actively recruiting consumers and Brand Affiliates and building a sales network under our global sales compensation plan and constitute our sales network.
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through retail markups on resales of products purchased from the company; and
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through sales compensation earned on the sale of products under our global sales compensation plan.
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Year Ended December 31,
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|||||||||||||||||||||||
(U.S. dollars in millions)
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2020
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2019
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2018
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|||||||||||||||||||||
Nu Skin
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||||||||||||||||||||||||
Mainland China
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$
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625.5
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24
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%
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$
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722.5
|
30
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%
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$
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886.5
|
33
|
%
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||||||||||||
Americas/Pacific
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511.9
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20
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349.1
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14
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385.0
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14
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||||||||||||||||||
South Korea
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326.5
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13
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330.0
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14
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373.4
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14
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||||||||||||||||||
Southeast Asia
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302.7
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12
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301.6
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12
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316.9
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12
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||||||||||||||||||
Japan
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273.7
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10
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260.0
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11
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254.9
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10
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||||||||||||||||||
EMEA
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230.2
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9
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167.2
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7
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182.4
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7
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||||||||||||||||||
Hong Kong/Taiwan
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161.1
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6
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166.3
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7
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185.9
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7
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||||||||||||||||||
Other
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0.1
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—
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1.7
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—
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3.4
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—
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||||||||||||||||||
Total Nu Skin
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2,431.7
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94
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2,298.4
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95
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2,588.4
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97
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||||||||||||||||||
Manufacturing
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149.3
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6
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121.9
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5
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90.6
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3
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||||||||||||||||||
Grow Tech
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0.9
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—
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0.1
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—
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—
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—
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||||||||||||||||||
Total
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$
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2,581.9
|
100
|
%
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$
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2,420.4
|
100
|
%
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$
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2,679.0
|
100
|
%
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● |
impose requirements related to order cancellations, product returns, inventory buy-backs and cooling-off periods for our sales force and consumers;
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● |
require us, or our sales force, to register with government agencies;
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impose limits on the amount of sales compensation we can pay;
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● |
impose reporting requirements; and
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● |
require that our sales force is compensated for sales of products and not for recruiting others.
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● A force for good
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● Direct and decisive
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● Accountable and empowered
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● Exceptional
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● Bold innovators
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● Fast speed
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● Customer obsessed
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● One global team
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1. |
Support the transformation of our business and culture to align with our business strategies and the Nu Skin Way;
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2. |
Leverage global diversity and build inclusion; and
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3. |
Simplify the employee experience through global alignment and optimization.
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Name
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Age
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Position
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Steven J. Lund
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67
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Executive Chairman of the Board
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Ritch N. Wood
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55
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Chief Executive Officer
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Ryan S. Napierski
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47
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President
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Mark H. Lawrence
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51
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Executive Vice President and Chief Financial Officer
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Joseph Y. Chang
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68
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Executive Vice President of Product Development and Chief Scientific Officer
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D. Matthew Dorny
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56
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Executive Vice President and General Counsel
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ITEM 1A. |
RISK FACTORS
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● |
Challenges to the form of our network marketing system could harm our business.
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Laws and regulations may prohibit or severely restrict direct selling and cause our revenue and profitability to decline, and regulators could adopt new regulations that harm our business.
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Improper sales force actions could harm our business.
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Social media platforms’ decisions to prohibit, block or decrease the prominence of our sales force’s content could harm our business.
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If our business practices or policies or the actions of our sales force are deemed to be in violation of applicable local regulations regarding foreigners, then we could be sanctioned and/or required to change our business model, which could significantly harm our business.
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Changes to our sales compensation plans or other incentives could be viewed negatively by some of our sales force, could fail to achieve desired long-term results and have a negative impact on revenue.
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Limits on the amount of sales compensation we pay could inhibit our ability to attract and retain our sales force, negatively impact our revenue and cause regulatory risks.
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We may be held responsible for certain taxes or assessments relating to the activities of our sales force, which could harm our financial condition and operating results.
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Our operations in Mainland China are subject to significant government scrutiny, and we could be subject to fines or other penalties.
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If direct selling regulations in Mainland China are modified, interpreted or enforced in a manner that results in negative changes to our business model or the imposition of a range of potential penalties, our business could be significantly negatively impacted.
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Our ability to expand our business in Mainland China could be negatively impacted if we are unable to obtain additional necessary national and local government approvals in Mainland China.
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If we are not able to register products for sale in Mainland China, our business could be harmed.
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Our markets are intensely competitive, and market conditions and the strengths of competitors may harm our business.
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Adverse publicity concerning our business, marketing plan, products or people could harm our business and reputation.
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Inability of products and other initiatives to gain or maintain sales force and market acceptance could harm our business.
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Product diversion may have a negative impact on our business.
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Epidemics, including the recent outbreak of COVID-19, and other crises have and may continue to negatively impact our business.
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Our ability to conduct business in international markets may be affected by political, legal, tax and regulatory risks.
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We are subject to financial risks as a result of our international operations, including exposure to foreign-currency fluctuations, currency controls and inflation in foreign markets, all of which could impact our financial position and results of operations.
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Potential changes to tariff and import/export regulations, and ongoing trade disputes between the United States and other jurisdictions may have a negative effect on global economic conditions and our business, financial results and financial condition.
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● |
If we are unable to retain our existing sales force and recruit additional people to join our sales force, our revenue may not increase and may even decline.
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The loss of key Sales Leaders could negatively impact our growth and our revenue.
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We depend on our key personnel, and the loss of the services provided by any of our executive officers or other key employees could harm our business and results of operations.
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The loss of suppliers or shortages in ingredients could harm our business.
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Production difficulties, quality control problems, inaccurate forecasting and reliance on third-party suppliers could harm our business.
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● |
The loss of or a disruption in our manufacturing and distribution operations, or significant expenses or violations incurred by such operations, could adversely affect our business.
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● |
Disruptions to transportation channels that we use to distribute our products to international warehouses may adversely affect our margins and profitability in those markets.
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● |
Our business could be negatively impacted if we fail to execute our product launch process or ongoing product sales due to difficulty in forecasting or increased pressure on our supply chain, information systems and management.
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● |
If we are unable to effectively manage our growth in certain markets, our operations could be harmed.
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● |
System failures, capacity constraints and other information technology difficulties could harm our business.
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● |
Any acquired companies or future acquisitions may expose us to additional risks.
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● |
Regulations governing our products, including the formulation, registration, pre-approval, marketing and sale of our products, could harm our business.
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● |
Government regulations and private party actions relating to the marketing and advertising of our products and services may restrict, inhibit or delay our ability to sell our products and harm our business.
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● |
Our operations could be harmed if we fail to comply with Good Manufacturing Practices.
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● |
If our current or any future device products are determined to be medical devices in a particular geographic market, or if our sales force uses these products for medical purposes or makes improper medical claims, our ability to continue to market and distribute such devices could be harmed, and we could face legal or regulatory actions.
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● |
We may incur product liability claims that could harm our business.
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● |
We may become involved in legal proceedings and other matters that could adversely affect our operations or financial results.
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Non-compliance with anti-corruption laws could harm our business.
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● |
A failure of our internal controls over financial reporting or our regulatory compliance efforts could harm our stock price and our financial and operating results or could result in fines or penalties.
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● |
Government authorities may question our tax or customs positions or change their laws in a manner that could increase our effective tax rate or otherwise harm our business.
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● |
We could be subject to changes in our tax rates, the adoption of new U.S. or international tax legislation or exposure to additional tax liabilities, which could have a material and adverse impact on our operating results, cash flows and financial condition.
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Transition from LIBOR to an alternative benchmark interest rate could have an adverse effect on our overall financial position.
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Our intellectual property may infringe on the rights of others, resulting in costly litigation.
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If we are unable to protect our intellectual property rights, our ability to compete could be negatively impacted.
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If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our products could be adversely affected.
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We may be subject to claims that we, or our employees, have inadvertently or otherwise used or disclosed alleged trade secrets or other proprietary information of our employees’ former employers.
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Cyber security risks and the failure to maintain the integrity of company, employee, sales force or guest data could expose us to data loss, litigation, liability and harm to our reputation.
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● |
The market price of our Class A common stock is subject to significant fluctuations due to a number of factors that are beyond our control.
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Difficult economic conditions could harm our business.
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● |
In 2015, the FTC took aggressive actions against a multi-level marketing company, alleging an illegal business model and inappropriate earnings claims.
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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.
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● |
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.
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● |
During 2020, the FTC issued letters that warned several direct-selling companies to remove and address claims that they or members of their sales force were making about their products’ ability to treat or prevent COVID-19 and/or about the earnings that people who have recently lost income could make.
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● |
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.
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● |
suspicions about the legality and ethics of network marketing;
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● |
media or regulatory scrutiny regarding our business and our business models, including in Mainland China;
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● |
the safety or effectiveness of our or our competitors’ products or the ingredients in such products;
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● |
inquiries, investigations, fines, legal actions, or mandatory or voluntary product recalls involving us, our competitors, our business models or our respective products;
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● |
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;
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● |
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.
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● |
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.
|
● |
any adverse publicity or negative public perception regarding us, our products or ingredients, our distribution channel, or our industry or 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 incentive trips and other offerings;
|
● |
negative sales force reaction to changes in our sales compensation plans;
|
● |
our actions to enforce our policies and procedures;
|
● |
any regulatory actions or charges against us or others in our industry;
|
● |
general economic, business and public health conditions, including employment levels, employment trends such as the gig and sharing economies, and pandemics or other conditions that curtail person-to-person interactions;
|
● |
changes in the policies of social media platforms used to prospect or recruit potential consumers and sales force participants;
|
● |
recruiting efforts of our competitors and changes in consumer-loyalty trends; 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.
|
● |
difficulties in assimilating acquired operations or products;
|
● |
the potential loss of key employees, customers, suppliers or distributors 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.
|
● |
delays, or altogether prohibitions, in introducing or selling a product or ingredient in one or more markets;
|
● |
delays and expenses associated with the registration and approval process for a product;
|
● |
limitations on our ability to import products into a market;
|
● |
delays and expenses associated with compliance, such as record keeping, documentation of the properties of certain products, labeling, and scientific substantiation;
|
● |
limitations on the claims we can make regarding our products; and
|
● |
product reformulations, or the recall or discontinuation of certain products that cannot be reformulated to comply with new regulations.
|
● |
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.
|
ITEM 2. |
PROPERTIES
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
(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, 2020
|
60,985
|
$
|
54.12
|
60,985
|
$
|
339.5
|
||||||||||
November 1 – 30, 2020
|
142,954
|
51.36
|
142,954
|
$
|
332.2
|
|||||||||||
December 1 – 31, 2020
|
121,540
|
52.09
|
121,540
|
$
|
325.8
|
|||||||||||
Total
|
325,479
|
$
|
52.15
|
325,479
|
(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, 2015
|
100.00
|
100.00
|
100.00
|
||||
December 31, 2016
|
130.40
|
111.96
|
113.07
|
||||
December 31, 2017
|
191.08
|
136.40
|
116.78
|
||||
December 31, 2018
|
175.17
|
130.42
|
108.44
|
||||
December 31, 2019
|
120.86
|
171.49
|
120.20
|
||||
December 31, 2020
|
167.72
|
203.04
|
146.93
|
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
● |
developing and marketing innovative, technologically and scientifically advanced products;
|
● |
providing compelling initiatives and strong support; and
|
● |
offering an attractive sales compensation structure.
|
● |
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,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Cost of sales
|
25.5
|
24.0
|
23.7
|
|||||||||
Gross profit
|
74.5
|
76.0
|
76.3
|
|||||||||
Operating expenses:
|
||||||||||||
Selling expenses
|
39.5
|
39.5
|
40.0
|
|||||||||
General and administrative expenses
|
25.0
|
25.4
|
24.7
|
|||||||||
Restructuring and impairment expenses
|
—
|
—
|
2.6
|
|||||||||
Total operating expenses
|
64.5
|
64.9
|
67.3
|
|||||||||
Operating income
|
10.0
|
11.0
|
9.0
|
|||||||||
Other income (expense), net
|
(0.1
|
)
|
(0.5
|
)
|
(0.8
|
)
|
||||||
Income before provision for income taxes
|
9.9
|
10.5
|
8.2
|
|||||||||
Provision for income taxes
|
2.5
|
3.4
|
3.7
|
|||||||||
Net income
|
7.4
|
%
|
7.2
|
%
|
4.5
|
%
|
|
Constant
|
|||||||||||||||
Year Ended December 31,
|
Currency
|
|||||||||||||||
2020
|
2019
|
Change
|
Change(1)
|
|||||||||||||
Nu Skin
|
||||||||||||||||
Mainland China
|
$
|
625,538
|
$
|
722,526
|
(13
|
)%
|
(14
|
)%
|
||||||||
Americas/Pacific
|
511,941
|
349,078
|
47
|
%
|
53
|
%
|
||||||||||
South Korea
|
326,478
|
329,978
|
(1
|
)%
|
—
|
|||||||||||
Southeast Asia
|
302,708
|
301,620
|
—
|
1
|
%
|
|||||||||||
Japan
|
273,681
|
260,039
|
5
|
%
|
3
|
%
|
||||||||||
EMEA
|
230,246
|
167,165
|
38
|
%
|
35
|
%
|
||||||||||
Hong Kong/ Taiwan
|
161,117
|
166,335
|
(3
|
)%
|
(6
|
)%
|
||||||||||
Other
|
(17
|
)
|
1,621
|
(101
|
)%
|
(101
|
)%
|
|||||||||
Total Nu Skin
|
2,431,692
|
2,298,362
|
6
|
%
|
6
|
%
|
||||||||||
Manufacturing
|
149,339
|
121,917
|
22
|
%
|
22
|
%
|
||||||||||
Grow Tech
|
903
|
137
|
559
|
%
|
559
|
%
|
||||||||||
Total
|
$
|
2,581,934
|
$
|
2,420,416
|
7
|
%
|
7
|
%
|
(1) |
Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.
|
|
As of December 31, 2020
|
As of December 31, 2019
|
% Increase (Decrease)
|
|||||||||||||||||||||
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
Customers
|
Sales Leaders
|
|||||||||||||||||||
Mainland China
|
381,460
|
21,990
|
292,812
|
17,987
|
30
|
%
|
22
|
%
|
||||||||||||||||
Americas/Pacific
|
404,955
|
14,439
|
220,216
|
7,607
|
84
|
%
|
90
|
%
|
||||||||||||||||
South Korea
|
158,953
|
7,059
|
168,972
|
7,251
|
(6
|
)%
|
(3
|
)%
|
||||||||||||||||
Southeast Asia
|
154,355
|
8,903
|
136,349
|
7,480
|
13
|
%
|
19
|
%
|
||||||||||||||||
Japan
|
128,400
|
6,318
|
125,557
|
5,916
|
2
|
%
|
7
|
%
|
||||||||||||||||
EMEA
|
258,587
|
7,063
|
153,330
|
4,619
|
69
|
%
|
53
|
%
|
||||||||||||||||
Hong Kong/Taiwan
|
70,592
|
4,663
|
65,669
|
3,900
|
7
|
%
|
20
|
%
|
||||||||||||||||
Total
|
1,557,302
|
70,435
|
1,162,905
|
54,760
|
34
|
%
|
29
|
%
|
● |
Cash requirements for operating activities. Our operating expenses typically total approximately 85%-90% of our revenue, with compensation to our sales force constituting 40%-42% of our core Nu Skin revenue. These compensation expenses consist primarily of commission payments, which we generally pay to our sales force within approximately one to two months of the sale. Inventory purchases have historically constituted approximately 15%-20% of our revenue. On average, we purchase our inventory approximately three to six months prior to sale. While our actual cash usage may vary based on the timing of payments, we currently expect these approximate percentages and payment practices to continue in 2021. In addition we expect our 2021 operating lease payments will be approximately $49 million.
|
● |
Cash requirements for investing activities. As discussed in more detail below, our capital expenditures are expected to be $70-85 million for 2021.
|
● |
Cash requirements for financing activities. In 2021 we are obligated to make a total of $30 million in quarterly principal payments plus the associated interest on our term loan. We also anticipate paying quarterly cash dividends throughout 2021, approximating $19-20 million per quarter depending on the number of shares outstanding as of record date. Additional details about our dividends and term loan are provided below.
|
● |
the expansion and upgrade of facilities in our various markets; and
|
● |
purchases and expenditures for computer systems and equipment, software, and application development.
|
|
2020
|
2019
|
||||||||||||||||||||||||||||||
4th Quarter
|
3rd Quarter
|
2nd Quarter
|
1st Quarter
|
4th Quarter
|
3rd Quarter
|
2nd Quarter
|
1st Quarter
|
|||||||||||||||||||||||||
Argentina
|
79.5
|
73.0
|
67.4
|
61.4
|
59.4
|
49.6
|
43.9
|
38.9
|
||||||||||||||||||||||||
Australia
|
1.4
|
1.4
|
1.5
|
1.5
|
1.5
|
1.5
|
1.4
|
1.4
|
||||||||||||||||||||||||
Canada
|
1.3
|
1.3
|
1.4
|
1.3
|
1.3
|
1.3
|
1.3
|
1.3
|
||||||||||||||||||||||||
Chile
|
757.0
|
780.5
|
818.1
|
801.1
|
758.0
|
704.1
|
683.5
|
667.4
|
||||||||||||||||||||||||
Eurozone countries
|
0.8
|
0.9
|
0.9
|
0.9
|
0.9
|
0.9
|
0.9
|
0.9
|
||||||||||||||||||||||||
Hong Kong
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
||||||||||||||||||||||||
Indonesia
|
14,339
|
14,722
|
14,880
|
14,265
|
14,056
|
14,114
|
14,263
|
14,137
|
||||||||||||||||||||||||
Japan
|
104.4
|
106.1
|
107.6
|
108.9
|
108.7
|
107.3
|
109.9
|
110.2
|
||||||||||||||||||||||||
Mainland China
|
6.6
|
6.9
|
7.1
|
7.0
|
7.0
|
7.0
|
6.8
|
6.7
|
||||||||||||||||||||||||
Malaysia
|
4.1
|
4.2
|
4.3
|
4.2
|
4.2
|
4.2
|
4.1
|
4.1
|
||||||||||||||||||||||||
Mexico
|
20.6
|
22.1
|
23.2
|
19.8
|
19.3
|
19.4
|
19.1
|
19.2
|
||||||||||||||||||||||||
Philippines
|
48.3
|
48.9
|
50.4
|
50.9
|
51.0
|
51.8
|
52.0
|
52.4
|
||||||||||||||||||||||||
Singapore
|
1.3
|
1.4
|
1.4
|
1.4
|
1.4
|
1.4
|
1.4
|
1.4
|
||||||||||||||||||||||||
South Africa
|
15.6
|
16.9
|
17.7
|
15.3
|
14.7
|
14.7
|
14.4
|
14.0
|
||||||||||||||||||||||||
South Korea
|
1,117.2
|
1,188.8
|
1,219.9
|
1,192.3
|
1,175.0
|
1,194.4
|
1,165.8
|
1,125.0
|
||||||||||||||||||||||||
Taiwan
|
28.4
|
29.3
|
29.9
|
30.1
|
30.4
|
31.2
|
31.1
|
30.8
|
||||||||||||||||||||||||
Thailand
|
30.6
|
31.3
|
31.9
|
31.3
|
30.3
|
30.7
|
31.6
|
31.6
|
||||||||||||||||||||||||
Vietnam
|
23,154
|
23,182
|
23,353
|
23,235
|
23,191
|
23,213
|
23,314
|
23,201
|
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
1. |
Financial Statements. Set forth below is the index to the Financial Statements included in this Item 8:
|
|
Page
|
56
|
|
57
|
|
58
|
|
59
|
|
60
|
|
61
|
|
84
|
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,
|
|||||||
2020
|
2019
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
402,683
|
$
|
335,630
|
||||
Current investments
|
21,216
|
8,413
|
||||||
Accounts receivable, net
|
63,370
|
50,378
|
||||||
Inventories, net
|
314,366
|
275,891
|
||||||
Prepaid expenses and other
|
101,563
|
69,854
|
||||||
Total current assets
|
903,198
|
740,166
|
||||||
Property and equipment, net
|
468,181
|
453,604
|
||||||
Operating lease right-of-use assets
|
155,104
|
144,326
|
||||||
Goodwill
|
202,979
|
196,573
|
||||||
Other intangible assets, net
|
89,532
|
80,321
|
||||||
Other assets
|
138,082
|
154,016
|
||||||
Total assets
|
$
|
1,957,076
|
$
|
1,769,006
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
66,174
|
$
|
38,979
|
||||
Accrued expenses
|
446,682
|
290,281
|
||||||
Current portion of long-term debt
|
30,000
|
27,500
|
||||||
Total current liabilities
|
542,856
|
356,760
|
||||||
Operating lease liabilities
|
112,275
|
105,701
|
||||||
Long-term debt
|
305,393
|
334,461
|
||||||
Other liabilities
|
102,281
|
96,795
|
||||||
Total liabilities
|
1,062,805
|
893,717
|
||||||
Commitments and contingencies (Notes 7 and 16)
|
|
|
||||||
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
|
579,801
|
557,544
|
||||||
Treasury stock, at cost – 39.7 million and 35.0 million shares
|
(1,461,593
|
)
|
(1,324,826
|
)
|
||||
Accumulated other comprehensive loss
|
(64,768
|
)
|
(85,292
|
)
|
||||
Retained earnings
|
1,840,740
|
1,727,772
|
||||||
Total stockholders’ equity
|
894,271
|
875,289
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,957,076
|
$
|
1,769,006
|
|
Year Ended December 31,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Revenue
|
$
|
2,581,934
|
$
|
2,420,416
|
$
|
2,679,008
|
||||||
Cost of sales
|
658,028
|
581,420
|
634,140
|
|||||||||
Gross profit
|
1,923,906
|
1,838,996
|
2,044,868
|
|||||||||
Operating expenses:
|
||||||||||||
Selling expenses
|
1,019,494
|
955,600
|
1,071,020
|
|||||||||
General and administrative expenses
|
646,848
|
615,970
|
662,302
|
|||||||||
Restructuring and impairment expenses
|
—
|
—
|
70,686
|
|||||||||
Total operating expenses
|
1,666,342
|
1,571,570
|
1,804,008
|
|||||||||
Operating income
|
257,564
|
267,426
|
240,860
|
|||||||||
Other income (expense), net (Note 17)
|
(1,332
|
)
|
(12,254
|
)
|
(21,194
|
)
|
||||||
Income before provision for income taxes
|
256,232
|
255,172
|
219,666
|
|||||||||
Provision for income taxes
|
64,877
|
81,619
|
97,779
|
|||||||||
Net income
|
$
|
191,355
|
$
|
173,553
|
$
|
121,887
|
||||||
Net income per share:
|
||||||||||||
Basic
|
$
|
3.66
|
$
|
3.13
|
$
|
2.21
|
||||||
Diluted
|
$
|
3.63
|
$
|
3.10
|
$
|
2.16
|
||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||
Basic
|
52,296
|
55,518
|
55,170
|
|||||||||
Diluted
|
52,765
|
55,927
|
56,476
|
|
Year Ended December 31,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Net income
|
$
|
191,355
|
$
|
173,553
|
$
|
121,887
|
||||||
Other comprehensive income:
|
||||||||||||
Foreign currency translation adjustment, net of taxes of $(299), $(467), and $2,275 respectively
|
19,708
|
(5,358
|
)
|
(13,474
|
)
|
|||||||
Net unrealized gains/(losses) on foreign currency cash flow hedges, net of taxes of $(220), $— and $18, respectively
|
797
|
—
|
(160
|
)
|
||||||||
Less: Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of $(5), $—, and $(2), respectively
|
19
|
—
|
18
|
|||||||||
20,524
|
(5,358
|
)
|
(13,616
|
)
|
||||||||
Comprehensive income
|
$
|
211,879
|
$
|
168,195
|
$
|
108,271
|
|
Class A
Common Stock
|
Additional
Paid-in Capital
|
Treasury
Stock
|
Accumulated Other
Comprehensive Loss
|
Retained
Earnings
|
Total
|
||||||||||||||||||
Balance at January 1, 2018
|
$
|
91
|
$
|
466,349
|
$
|
(1,304,694
|
)
|
$
|
(66,318
|
)
|
$
|
1,609,168
|
$
|
704,596
|
||||||||||
Cumulative effect adjustment from adoption of ASC Topic 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 Acquisition (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
|
||||||||||
Net income
|
—
|
—
|
—
|
—
|
191,355
|
191,355
|
||||||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
20,524
|
—
|
20,524
|
||||||||||||||||||
Repurchase of Class A common stock (Note 8)
|
—
|
—
|
(144,334
|
)
|
—
|
—
|
(144,334
|
)
|
||||||||||||||||
Exercise of employee stock options (0.4 million shares)/vesting of stock awards
|
—
|
(1,803
|
)
|
7,567
|
—
|
—
|
5,764
|
|||||||||||||||||
Stock-based compensation
|
—
|
24,060
|
—
|
—
|
—
|
24,060
|
||||||||||||||||||
Cash dividends
|
—
|
—
|
—
|
—
|
(78,387
|
)
|
(78,387
|
)
|
||||||||||||||||
Balance at December 31, 2020
|
$
|
91
|
$
|
579,801
|
$
|
(1,461,593
|
)
|
$
|
(64,768
|
)
|
$
|
1,840,740
|
$
|
894,271
|
|
Year Ended December 31,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
191,355
|
$
|
173,553
|
$
|
121,887
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
73,991
|
76,650
|
83,003
|
|||||||||
Non-cash lease expense
|
46,163
|
44,460
|
—
|
|||||||||
Stock-based compensation
|
24,060
|
9,909
|
26,609
|
|||||||||
Foreign currency (gains)/losses
|
(287
|
)
|
3,829
|
16,381
|
||||||||
Loss on disposal of assets
|
3,209
|
—
|
—
|
|||||||||
Impairment of fixed assets
|
—
|
—
|
48,551
|
|||||||||
Equity method earnings
|
—
|
—
|
(456
|
)
|
||||||||
Gain on step acquisition
|
—
|
—
|
(13,644
|
)
|
||||||||
Loss on extinguishment of debt
|
—
|
—
|
7,220
|
|||||||||
Deferred taxes
|
(11,914
|
)
|
1,965
|
(14,929
|
)
|
|||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
(11,207
|
)
|
2,746
|
(10,453
|
)
|
|||||||
Inventories, net
|
(31,137
|
)
|
18,446
|
(33,371
|
)
|
|||||||
Prepaid expenses and other
|
(153
|
)
|
(17,435
|
)
|
(1,536
|
)
|
||||||
Other assets
|
(31,616
|
)
|
(67,109
|
)
|
887
|
|||||||
Accounts payable
|
24,836
|
(7,184
|
)
|
(9,164
|
)
|
|||||||
Accrued expenses
|
87,452
|
(86,997
|
)
|
(7,433
|
)
|
|||||||
Other liabilities
|
14,389
|
25,098
|
(10,814
|
)
|
||||||||
Net cash provided by operating activities
|
379,141
|
177,931
|
202,738
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Purchases of property and equipment
|
(63,823
|
)
|
(66,067
|
)
|
(70,371
|
)
|
||||||
Proceeds on investment sales
|
14,037
|
11,160
|
11,536
|
|||||||||
Purchases of investments
|
(14,693
|
)
|
(8,432
|
)
|
(11,420
|
)
|
||||||
Acquisitions (net of cash acquired)
|
(14,949
|
)
|
(8,073
|
)
|
(38,506
|
)
|
||||||
Net cash used in investing activities
|
(79,428
|
)
|
(71,412
|
)
|
(108,761
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Payment of cash dividends
|
(78,387
|
)
|
(82,189
|
)
|
(80,581
|
)
|
||||||
Repurchase of shares of common stock
|
(144,334
|
)
|
(825
|
)
|
(69,565
|
)
|
||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards
|
5,764
|
(2,325
|
)
|
10,777
|
||||||||
Finance lease principal payments
|
(709
|
)
|
—
|
—
|
||||||||
Payment of debt issuance costs
|
—
|
—
|
(7,243
|
)
|
||||||||
Payments on long-term debt
|
(142,500
|
)
|
(214,455
|
)
|
(552,500
|
)
|
||||||
Proceeds from long-term debt
|
115,000
|
145,000
|
582,398
|
|||||||||
Net cash used in financing activities
|
(245,166
|
)
|
(154,794
|
)
|
(116,714
|
)
|
||||||
Effect of exchange rate changes on cash
|
12,506
|
(3,006
|
)
|
(16,751
|
)
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
67,053
|
(51,281
|
)
|
(39,488
|
)
|
|||||||
Cash and cash equivalents, beginning of period
|
335,630
|
386,911
|
426,399
|
|||||||||
Cash and cash equivalents, end of period
|
$
|
402,683
|
$
|
335,630
|
$
|
386,911
|
1. |
The Company
|
2. |
Summary of Significant Accounting Policies
|
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Raw materials
|
$
|
118,877
|
$
|
87,942
|
||||
Finished goods
|
195,489
|
187,949
|
||||||
Total inventory, net
|
$
|
314,366
|
$
|
275,891
|
|
2020
|
2019
|
2018
|
|||||||||
Beginning balance
|
$
|
12,295
|
$
|
14,149
|
$
|
8,081
|
||||||
Additions
|
15,952
|
14,931
|
23,940
|
|||||||||
Write-offs
|
(13,998
|
)
|
(16,785
|
)
|
(17,872
|
)
|
||||||
Ending balance
|
$
|
14,249
|
$
|
12,295
|
$
|
14,149
|
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Deferred charges
|
$
|
10,540
|
$
|
8,142
|
||||
Prepaid income tax
|
—
|
8,905
|
||||||
Prepaid inventory and import costs
|
4,123
|
4,277
|
||||||
Prepaid rent, insurance and other occupancy costs
|
9,182
|
12,516
|
||||||
Prepaid promotion and event cost
|
10,002
|
7,159
|
||||||
Prepaid other taxes
|
10,565
|
7,965
|
||||||
Prepaid software license
|
9,107
|
3,317
|
||||||
Deposits (1)
|
33,312
|
1,208
|
||||||
Other
|
14,732
|
16,365
|
||||||
Total prepaid expense and other
|
$
|
101,563
|
$
|
69,854
|
(1) |
During 2020, a deposit related to a long-term lease was reclassified to short term as we expect to convert to cash within the next twelve months.
|
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,
|
|||||||
2020
|
2019
|
|||||||
Deferred taxes
|
$
|
35,414
|
$
|
30,780
|
||||
Deposits for noncancelable operating leases
|
20,783
|
46,894
|
||||||
Cash surrender value for life insurance policies
|
45,453
|
41,707
|
||||||
Right-of-use assets, Financing, net
|
9,385
|
—
|
||||||
Other
|
27,047
|
34,635
|
||||||
Total other assets
|
$
|
138,082
|
$
|
154,016
|
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Accrued sales force commissions and other payments
|
$
|
149,481
|
$
|
103,532
|
||||
Accrued income taxes
|
13,921
|
—
|
||||||
Accrued other taxes
|
45,018
|
29,657
|
||||||
Accrued payroll and other employee expenses
|
65,272
|
30,610
|
||||||
Accrued payable to vendors
|
47,201
|
34,760
|
||||||
Short-term operating lease liability
|
44,981
|
39,349
|
||||||
Accrued royalties
|
1,008
|
514
|
||||||
Sales return reserve
|
3,978
|
3,903
|
||||||
Deferred revenue
|
35,054
|
20,162
|
||||||
Other
|
40,768
|
27,794
|
||||||
Total accrued expenses
|
$
|
446,682
|
$
|
290,281
|
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Deferred tax liabilities
|
$
|
626
|
$
|
10,741
|
||||
Reserve for other tax liabilities
|
22,731
|
17,121
|
||||||
Liability for deferred compensation plan
|
47,543
|
43,238
|
||||||
Pension plan benefits reserve
|
2,981
|
3,454
|
||||||
Finance lease liabilities
|
7,728
|
—
|
||||||
Asset retirement obligation
|
6,717
|
6,631
|
||||||
Other
|
13,955
|
15,610
|
||||||
Total other liabilities
|
$
|
102,281
|
$
|
96,795
|
|
2020
|
2019
|
2018
|
|||||||||
Gross balance at January 1
|
$
|
13,507
|
$
|
11,456
|
$
|
5,514
|
||||||
Increases related to prior year tax positions
|
2,958
|
775
|
5,161
|
|||||||||
Increases related to current year tax positions
|
3,302
|
2,273
|
3,704
|
|||||||||
Settlements
|
(1,091
|
)
|
—
|
(956
|
)
|
|||||||
Decreases due to lapse of statutes of limitations
|
(1,377
|
)
|
(1,051
|
)
|
(1,483
|
)
|
||||||
Currency adjustments
|
321
|
54
|
(484
|
)
|
||||||||
Gross balance at December 31
|
$
|
17,620
|
$
|
13,507
|
$
|
11,456
|
● |
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,
|
|||||||
2020
|
2019
|
|||||||
Land
|
$
|
45,242
|
$
|
44,532
|
||||
Buildings
|
278,779
|
273,264
|
||||||
Construction in progress(1)
|
34,954
|
17,707
|
||||||
Furniture and fixtures
|
146,413
|
130,591
|
||||||
Computers and equipment
|
137,914
|
147,806
|
||||||
Leasehold improvements
|
164,963
|
160,623
|
||||||
Scanners
|
8,119
|
8,040
|
||||||
Vehicles
|
2,112
|
2,081
|
||||||
818,496
|
784,644
|
|||||||
Less: accumulated depreciation
|
(350,315
|
)
|
(331,040
|
)
|
||||
$
|
468,181
|
$
|
453,604
|
(1) |
Construction in progress includes $13.6 million and $10.8 million as of December 31, 2020 and 2019, respectively, of eligible capitalized internal-use software development costs which will be reclassified to computers and equipment when placed into service.
|
4. |
Goodwill
|
(1) |
The increase in manufacturing goodwill relates to a manufacturing company acquired during 2020, see Note 19 - Acquisitions for additional information.
|
5. |
Other Intangible Assets
|
|
Carrying Amount at December 31,
|
|||||||
2020
|
2019
|
|||||||
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, 2020
|
December 31, 2019
|
|||||||||||||||
Finite life intangible assets:
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Weighted-average
Amortization Period
|
||||||||||||
Scanner technology
|
$
|
40,716
|
$
|
40,716
|
$
|
46,482
|
$
|
45,724
|
18 years
|
||||||||
Developed technology
|
32,546
|
21,680
|
22,500
|
20,856
|
16 years
|
||||||||||||
Sales force network
|
11,598
|
11,598
|
11,598
|
11,598
|
15 years
|
||||||||||||
Trademarks
|
6,145
|
2,938
|
5,938
|
2,462
|
11 years
|
||||||||||||
Other
|
71,095
|
23,998
|
92,331
|
46,250
|
10 years
|
||||||||||||
$
|
162,100
|
$
|
100,930
|
$
|
178,849
|
$
|
126,890
|
14 years
|
Year Ending December 31,
|
||||
2021
|
$
|
11,227
|
||
2022
|
10,090
|
|||
2023
|
9,495
|
|||
2024
|
8,512
|
|||
2025
|
7,420
|
6. |
Long-Term Debt
|
Facility or
Arrangement
|
Original
Principal Amount
|
Balance as of
December 31, 2020 (1)(2)
|
Balance as of
December 31, 2019 (2)
|
Interest Rate
|
Repayment Terms
|
|||||
Credit Agreement term loan facility
|
$400.0 million
|
$337.5 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 December 31, 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 $2.1 million and $3.0 million as of December 31, 2020 and 2019, respectively, related to the Credit Agreement, which are not reflected in this table.
|
Year Ending December 31,
|
||||
2021
|
$
|
30,000
|
||
2022
|
37,500
|
|||
2023
|
270,000
|
|||
2024
|
—
|
|||
2025
|
—
|
|||
Thereafter
|
—
|
|||
Total(1)
|
$
|
337,500
|
(1) |
The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $2.1 million, which is not reflected in this table.
|
7. |
Leases
|
|
Year Ended December 31,
|
|||||||
2020
|
2019
|
|||||||
Operating lease expense
|
||||||||
Operating lease cost
|
$
|
51,828
|
$
|
51,072
|
||||
Variable lease cost
|
4,366
|
3,387
|
||||||
Short-term lease cost
|
1,056
|
169
|
||||||
Sublease income
|
(5,052
|
)
|
(5,743
|
)
|
||||
Finance lease expense
|
||||||||
Amortization of right-of-use assets
|
1,023
|
—
|
||||||
Interest on lease liabilities
|
154
|
—
|
||||||
Total lease expense
|
$
|
53,375
|
$
|
48,885
|
|
Year Ended December 31,
|
|||||||
2020
|
2019
|
|||||||
Operating cash outflow from operating leases
|
$
|
56,395
|
$
|
54,993
|
||||
Operating cash outflow from finance leases
|
$
|
138
|
$
|
—
|
||||
Financing cash outflow from finance leases
|
$
|
709
|
$
|
—
|
||||
Right-of-use assets obtained in exchange for operating lease obligations
|
$
|
82,662
|
$
|
184,502
|
||||
Right-of-use assets obtained in exchange for finance lease obligations
|
$
|
9,206
|
$
|
—
|
Year Ending December 31,
|
Operating Leases
|
Finance Leases
|
||||||
2021
|
$
|
49,045
|
$
|
2,270
|
||||
2022
|
34,617
|
2,267
|
||||||
2023
|
23,948
|
2,183
|
||||||
2024
|
19,064
|
2,085
|
||||||
2025
|
14,152
|
1,469
|
||||||
Thereafter
|
36,898
|
313
|
||||||
Total
|
177,724
|
10,587
|
||||||
Less: Finance charges
|
22,116
|
911
|
||||||
Total principal liability
|
$
|
155,608
|
$
|
9,676
|
8. |
Capital Stock
|
|
Year Ended December 31,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Basic weighted-average common shares outstanding
|
52,296
|
55,518
|
55,170
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Stock awards and options
|
469
|
409
|
1,061
|
|||||||||
Convertible note
|
—
|
—
|
245
|
|||||||||
Diluted weighted-average common shares outstanding
|
52,765
|
55,927
|
56,476
|
9. |
Stock–Based Compensation
|
|
December 31,
|
|||||||||||
Stock Options:
|
2020
|
2019
|
2018
|
|||||||||
Weighted-average grant date fair value of grants
|
$
|
8.59
|
$
|
19.72
|
$
|
24.72
|
||||||
Risk-free interest rate (1)
|
1.4
|
%
|
2.5
|
%
|
2.6
|
%
|
||||||
Dividend yield (2)
|
2.9
|
%
|
2.7
|
%
|
2.6
|
%
|
||||||
Expected volatility (3)
|
40.7
|
%
|
42.4
|
%
|
45.6
|
%
|
||||||
Expected life in months (4)
|
59 months
|
60 months
|
66 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, 2019
|
962.5
|
$
|
41.11
|
|||||||||||||
Granted
|
—
|
—
|
||||||||||||||
Exercised
|
(114.7
|
)
|
32.82
|
|||||||||||||
Forfeited/cancelled/expired
|
(77.2
|
)
|
77.39
|
|||||||||||||
Outstanding at December 31, 2020
|
770.6
|
38.71
|
2.06
|
$
|
13,410
|
|||||||||||
Exercisable at December 31, 2020
|
770.6
|
38.71
|
2.06
|
13,410
|
||||||||||||
Options activity – performance based
|
||||||||||||||||
Outstanding at December 31, 2019
|
2,158.4
|
$
|
61.75
|
|||||||||||||
Granted
|
1,079.3
|
30.45
|
||||||||||||||
Exercised
|
(116.2
|
)
|
31.13
|
|||||||||||||
Forfeited/cancelled/expired
|
(723.5
|
)
|
69.82
|
|||||||||||||
Outstanding at December 31, 2020
|
2,398.0
|
46.71
|
4.89
|
$
|
31,720
|
|||||||||||
Exercisable at December 31, 2020
|
565.6
|
49.26
|
3.05
|
5,713
|
||||||||||||
Options activity – all options
|
||||||||||||||||
Outstanding at December 31, 2019
|
3,120.9
|
$
|
55.38
|
|||||||||||||
Granted
|
1,079.3
|
30.45
|
||||||||||||||
Exercised
|
(230.9
|
)
|
31.97
|
|||||||||||||
Forfeited/cancelled/expired
|
(800.7
|
)
|
70.55
|
|||||||||||||
Outstanding at December 31, 2020
|
3,168.6
|
44.76
|
4.20
|
$
|
45,130
|
|||||||||||
Exercisable at December 31, 2020
|
1,336.3
|
43.18
|
2.48
|
19,124
|
|
December 31,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Cash proceeds from stock options exercised
|
$
|
7,419
|
$
|
368
|
$
|
13,908
|
||||||
Tax (expense) / benefit realized for stock options exercised
|
(459
|
)
|
430
|
3,217
|
||||||||
Intrinsic value of stock options exercised
|
5,232
|
934
|
11,855
|
|
Number
of Shares
(in thousands)
|
Weighted-average
Grant Date
Fair Value
|
||||||
Nonvested at December 31, 2019
|
573.1
|
$
|
58.99
|
|||||
Granted
|
614.6
|
38.58
|
||||||
Vested
|
(220.1
|
)
|
56.50
|
|||||
Forfeited
|
(36.5
|
)
|
51.98
|
|||||
Nonvested at December 31, 2020
|
931.1
|
$
|
46.38
|
10. |
Fair Value
|
|
Fair Value at December 31, 2020
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
56,628
|
$
|
—
|
$
|
—
|
$
|
56,628
|
||||||||
Derivative financial instruments asset
|
—
|
1,145
|
—
|
1,145
|
||||||||||||
Life insurance contracts
|
—
|
—
|
45,453
|
45,453
|
||||||||||||
Derivative financial instruments liability
|
—
|
(105
|
)
|
—
|
(105
|
)
|
||||||||||
Contingent consideration
|
—
|
—
|
(3,125
|
)
|
(3,125
|
)
|
||||||||||
Total
|
$
|
56,628
|
$
|
1,040
|
$
|
42,328
|
$
|
99,996
|
|
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
|
Life Insurance Contracts
|
2020
|
2019
|
||||||
Beginning balance at January 1
|
$
|
41,707
|
$
|
35,590
|
||||
Actual return on plan assets
|
3,746
|
5,688
|
||||||
Purchases and issuances
|
—
|
2,003
|
||||||
Sales and settlements
|
—
|
(1,574
|
)
|
|||||
Transfers into Level 3
|
—
|
—
|
||||||
Ending balance at December 31
|
$
|
45,453
|
$
|
41,707
|
11. |
Income Taxes
|
|
2020
|
2019
|
2018
|
|||||||||
U.S.
|
$
|
71,138
|
$
|
24,211
|
$
|
(67,087
|
)
|
|||||
Foreign
|
185,094
|
230,961
|
286,753
|
|||||||||
Total
|
$
|
256,232
|
$
|
255,172
|
$
|
219,666
|
|
2020
|
2019
|
2018
|
|||||||||
Current
|
||||||||||||
Federal
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
State
|
1,629
|
2,213
|
652
|
|||||||||
Foreign
|
77,079
|
79,694
|
116,303
|
|||||||||
78,708
|
81,907
|
116,955
|
||||||||||
Deferred
|
||||||||||||
Federal
|
(14,430
|
)
|
(8,878
|
)
|
(17,836
|
)
|
||||||
State
|
(563
|
)
|
(473
|
)
|
(1,974
|
)
|
||||||
Foreign
|
1,162
|
9,063
|
634
|
|||||||||
(13,831
|
)
|
(288
|
)
|
(19,176
|
)
|
|||||||
Provision for income taxes
|
$
|
64,877
|
$
|
81,619
|
$
|
97,779
|
|
Year Ended December 31,
|
|||||||
2020
|
2019
|
|||||||
Deferred tax assets:
|
||||||||
Inventory differences
|
$
|
6,181
|
$
|
5,040
|
||||
Foreign tax credit and other foreign benefits
|
57,720
|
69,820
|
||||||
Stock-based compensation
|
8,925
|
7,441
|
||||||
Accrued expenses not deductible until paid
|
42,694
|
35,374
|
||||||
Foreign currency exchange
|
1,403
|
163
|
||||||
Net operating losses
|
8,667
|
6,341
|
||||||
Capitalized research and development
|
23,019
|
18,716
|
||||||
R&D credit carryforward
|
1,229
|
881
|
||||||
Other
|
45
|
37
|
||||||
Gross deferred tax assets
|
149,883
|
143,813
|
||||||
Deferred tax liabilities:
|
||||||||
Foreign currency exchange
|
—
|
721
|
||||||
Foreign withholding taxes
|
20,207
|
20,986
|
||||||
Intangibles step-up
|
4,623
|
4,958
|
||||||
Overhead allocation to inventory
|
2,684
|
3,611
|
||||||
Amortization of intangibles
|
18,551
|
15,393
|
||||||
Other
|
1,690
|
1,063
|
||||||
Gross deferred tax liabilities
|
47,755
|
46,732
|
||||||
Valuation allowance
|
(67,340
|
)
|
(77,042
|
)
|
||||
Deferred taxes, net
|
$
|
34,788
|
$
|
20,039
|
|
Year Ended December 31,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Balance at the beginning of period
|
$
|
77,042
|
$
|
68,697
|
$
|
56,906
|
||||||
Additions charged to cost and expenses
|
2,154
|
(1)
|
10,913
|
(4)
|
27,902
|
(6)
|
||||||
Decreases
|
(12,100
|
)(2)
|
(3,343
|
)(5)
|
(16,215
|
)(7)
|
||||||
Adjustments
|
244
|
(3)
|
775
|
(3)
|
104
|
(3)
|
||||||
Balance at the end of the period
|
$
|
67,340
|
$
|
77,042
|
$
|
68,697
|
(1) |
Increase in valuation is due primarily to net operating losses in foreign markets.
|
(2) |
The decrease was due to the utilization of prior year foreign tax credits that had previously had a valuation allowance recorded against the asset.
|
(3) |
Represents the net currency effects of translating valuation allowances at current rates of exchange.
|
(6) |
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
|
(7) |
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.
|
|
Year Ended December 31,
|
|||||||
2020
|
2019
|
|||||||
Net noncurrent deferred tax assets
|
$
|
35,414
|
$
|
30,780
|
||||
Net noncurrent deferred tax liabilities
|
626
|
10,741
|
||||||
Deferred taxes, net
|
$
|
34,788
|
$
|
20,039
|
|
Year Ended December 31,
|
|||||||||||
2020
|
2019
|
2018
|
||||||||||
Income taxes at statutory rate
|
21.00
|
%
|
21.00
|
%
|
21.00
|
%
|
||||||
Indefinite reinvestment
|
—
|
—
|
(2.73
|
)%
|
||||||||
Excess tax benefit from equity award
|
0.70
|
%
|
0.02
|
%
|
(1.41
|
)%
|
||||||
Non-U.S. income taxed at different rates
|
3.37
|
%
|
3.09
|
%
|
7.37
|
%
|
||||||
Foreign withholding taxes
|
5.21
|
%
|
4.10
|
%
|
7.68
|
%
|
||||||
Change in reserve for uncertain tax positions
|
1.98
|
%
|
1.07
|
%
|
3.68
|
%
|
||||||
Valuation allowance recognized foreign tax credit & others
|
(4.59
|
)%
|
2.56
|
%
|
5.54
|
%
|
||||||
Revaluation of deferred taxes
|
—
|
—
|
1.61
|
%
|
||||||||
Foreign-Derived Intangible Income (FDII)
|
(2.78
|
)%
|
(0.70
|
)%
|
—
|
|||||||
Other
|
0.43
|
%
|
0.85
|
%
|
1.77
|
%
|
||||||
25.32
|
%
|
31.99
|
%
|
44.51
|
%
|
12. |
Employee Benefit Plan
|
13. |
Deferred Compensation Plan
|
14. |
Derivative Financial Instruments
|
|
Fair Values of Derivative Instruments
|
||||||||
Derivatives in Cash flow
|
Balance Sheet
|
December 31,
|
|||||||
Hedging Relationships:
|
Location
|
2020
|
2019
|
||||||
Interest Rate Swap - Asset
|
Other Assets
|
$
|
1,145
|
$
|
—
|
||||
Interest Rate Swap - Liability
|
Accrued Expenses
|
$
|
105
|
$
|
—
|
|
Amount of Gain (Loss) Recognized in OCI on Derivative
|
|||||||||||
Derivatives in Cash Flow
|
Year Ended December 31,
|
|||||||||||
Hedging Instruments:
|
2020
|
2019
|
2018
|
|||||||||
Interest Rate Swaps
|
$
|
1,041
|
$
|
—
|
$
|
—
|
||||||
Foreign currency forward contracts related to intercompany license fee and product sales hedges
|
$
|
—
|
$
|
—
|
$
|
(160
|
)
|
|
Amount of Gain (Loss) Reclassified from
Accumulated Other Comprehensive Loss into Income
|
||||||||||||
Derivatives designated as
|
Income Statement
|
Year Ended December 31,
|
|||||||||||
Hedging Instruments:
|
Location
|
2020
|
2019
|
2018
|
|||||||||
Interest Rate Swaps
|
Other Income
|
$
|
(25
|
)
|
$
|
—
|
$
|
—
|
|||||
Foreign currency forward contracts related to intercompany license fees and product sales hedges
|
Revenue
|
$
|
—
|
$
|
—
|
$
|
18
|
15. |
Segment Information
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2018
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
625,538
|
$
|
722,526
|
$
|
886,472
|
||||||
Americas/Pacific
|
511,941
|
349,078
|
385,034
|
|||||||||
South Korea
|
326,478
|
329,978
|
373,357
|
|||||||||
Southeast Asia
|
302,708
|
301,620
|
316,890
|
|||||||||
Japan
|
273,681
|
260,039
|
254,939
|
|||||||||
EMEA
|
230,246
|
167,165
|
182,394
|
|||||||||
Hong Kong/Taiwan
|
161,117
|
166,335
|
185,893
|
|||||||||
Other
|
(17
|
)
|
1,621
|
3,423
|
||||||||
Total Nu Skin
|
2,431,692
|
2,298,362
|
2,588,402
|
|||||||||
Manufacturing (1)
|
149,339
|
121,917
|
90,606
|
|||||||||
Grow Tech
|
903
|
137
|
—
|
|||||||||
Total
|
$
|
2,581,934
|
$
|
2,420,416
|
$
|
2,679,008
|
(1) |
The Manufacturing segment had $39.4 million, $25.7 million and $23.5 million of intersegment revenue for the years ended December 31, 2020, 2019 and 2018, respectively. Intersegment revenue is eliminated in the consolidated financial statements and in the table above.
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2018
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
181,024
|
$
|
191,570
|
$
|
253,598
|
||||||
Americas/Pacific
|
91,627
|
57,090
|
52,433
|
|||||||||
South Korea
|
100,933
|
99,892
|
107,215
|
|||||||||
Southeast Asia
|
75,538
|
82,455
|
78,598
|
|||||||||
Japan
|
68,027
|
61,081
|
56,676
|
|||||||||
EMEA
|
24,078
|
10,195
|
14,773
|
|||||||||
Hong Kong/Taiwan
|
33,466
|
33,569
|
33,392
|
|||||||||
Nu Skin contribution
|
574,693
|
535,852
|
596,685
|
|||||||||
Manufacturing
|
21,168
|
15,693
|
7,754
|
|||||||||
Grow Tech
|
(22,430
|
)
|
(19,509
|
)
|
(9,228
|
)
|
||||||
Total segment contribution
|
573,431
|
532,036
|
595,211
|
|||||||||
Corporate and other
|
(315,867
|
)
|
(264,610
|
)
|
(354,351
|
)
|
||||||
Operating income
|
257,564
|
267,426
|
240,860
|
|||||||||
Other income (expense)
|
(1,332
|
)
|
(12,254
|
)
|
(21,194
|
)
|
||||||
Income before provision for income taxes
|
$
|
256,232
|
$
|
255,172
|
$
|
219,666
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2018
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
11,056
|
$
|
10,496
|
$
|
13,036
|
||||||
Americas/Pacific
|
1,054
|
864
|
988
|
|||||||||
South Korea
|
3,620
|
5,093
|
6,266
|
|||||||||
Southeast Asia
|
1,600
|
1,915
|
2,123
|
|||||||||
Japan
|
1,876
|
3,866
|
3,604
|
|||||||||
EMEA
|
1,017
|
1,260
|
847
|
|||||||||
Hong Kong/Taiwan
|
2,912
|
2,310
|
1,316
|
|||||||||
Total Nu Skin
|
23,135
|
25,804
|
28,180
|
|||||||||
Manufacturing
|
8,081
|
6,689
|
11,281
|
|||||||||
Grow Tech
|
5,092
|
4,008
|
1,885
|
|||||||||
Corporate and other
|
37,683
|
40,149
|
41,657
|
|||||||||
Total
|
$
|
73,991
|
$
|
76,650
|
$
|
83,003
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2018
|
|||||||||
Nu Skin
|
||||||||||||
Mainland China
|
$
|
19,363
|
$
|
14,814
|
$
|
11,658
|
||||||
Americas/Pacific
|
1,090
|
1,340
|
974
|
|||||||||
South Korea
|
1,420
|
1,223
|
285
|
|||||||||
Southeast Asia
|
2,168
|
759
|
1,120
|
|||||||||
Japan
|
3,128
|
1,528
|
788
|
|||||||||
EMEA
|
1,875
|
364
|
734
|
|||||||||
Hong Kong/Taiwan
|
708
|
3,203
|
4,113
|
|||||||||
Total Nu Skin
|
29,752
|
23,231
|
19,672
|
|||||||||
Manufacturing
|
14,366
|
6,595
|
5,486
|
|||||||||
Grow Tech
|
2,499
|
6,938
|
14,591
|
|||||||||
Corporate and other
|
17,206
|
29,303
|
30,622
|
|||||||||
Total
|
$
|
63,823
|
$
|
66,067
|
$
|
70,371
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2018
|
|||||||||
Mainland China
|
$
|
625,538
|
$
|
722,526
|
$
|
886,472
|
||||||
South Korea
|
326,478
|
329,978
|
373,357
|
|||||||||
Japan
|
273,681
|
260,039
|
254,939
|
|||||||||
United States
|
425,155
|
324,727
|
311,436
|
|||||||||
All others
|
931,082
|
783,146
|
852,804
|
|||||||||
Total
|
$
|
2,581,934
|
$
|
2,420,416
|
$
|
2,679,008
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2018
|
|||||||||
Personal Care
|
$
|
1,491,803
|
$
|
1,423,485
|
$
|
1,659,737
|
||||||
Wellness
|
922,553
|
863,125
|
921,328
|
|||||||||
Other
|
167,578
|
133,806
|
97,943
|
|||||||||
Total
|
$
|
2,581,934
|
$
|
2,420,416
|
$
|
2,679,008
|
|
Year Ended December 31,
|
|||||||||||
(U.S. dollars in thousands)
|
2020
|
2019
|
2018
|
|||||||||
United States
|
$
|
348,028
|
$
|
354,410
|
$
|
317,516
|
||||||
Mainland China
|
152,312
|
136,845
|
89,447
|
|||||||||
South Korea
|
39,104
|
35,286
|
36,325
|
|||||||||
Japan
|
31,085
|
12,015
|
6,864
|
|||||||||
All others
|
62,141
|
59,374
|
14,383
|
|||||||||
Total
|
$
|
632,670
|
$
|
597,930
|
$
|
464,535
|
16. |
Commitments and Contingencies
|
17. |
Other Income (Expense), Net
|
18. |
Supplemental Cash Flow Information
|
19. |
Acquisitions
|
20. |
Restructuring and Severance Charges
|
Beginning Balance at January 1, 2019
|
$
|
15,462
|
||
Amounts Paid
|
(15,046
|
)
|
||
Adjustments
|
(416
|
)
|
||
Balance December 31, 2019
|
$
|
—
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
● |
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
|
Subsidiaries of the Company.
|
|
Consent of PricewaterhouseCoopers LLP.
|
|
|
|
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/ 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
|
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.
|
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.
|
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.
|
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.
|
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.
|
|
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.
|
1. |
I have reviewed this annual report on Form 10-K 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;
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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 11, 2021
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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;
|
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: February 11, 2021
|
/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: February 11, 2021
|
/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: February 11, 2021
|
/s/ Mark H. Lawrence
|
|
Mark H. Lawrence
|
||
Chief Financial Officer
|