UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________

Commission File Number: 001-12421

	NU SKIN ENTERPRISES, INC.
	(Exact name of registrant as specified in its charter)

Delaware		87-0565309
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

	75 West Center Street Provo, Utah 84601
	(Address of principal executive offices, including zip code)

	(801) 345-1000
	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock, $.001 par value		NUS		New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 30, 2022, 50,208,228 shares of the registrant’s Class A common stock, $.001 par value per share, were outstanding.

NU SKIN ENTERPRISES, INC.

QUARTERLY REPORT ON FORM 10-Q – FIRST QUARTER 2022

TABLE OF CONTENTS

			Page
Part I.	Financial Information
	Item 1.	Financial Statements (Unaudited):
		Consolidated Balance Sheets	1
		Consolidated Statements of Income	2
		Consolidated Statements of Comprehensive Income	3
		Consolidated Statements of Stockholders’ Equity	4
		Consolidated Statements of Cash Flows	5
		Notes to Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25
	Item 4.	Controls and Procedures	25

Part II.	Other Information
	Item 1.	Legal Proceedings	26
	Item 1A.	Risk Factors	26
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
	Item 3.	Defaults Upon Senior Securities	26
	Item 4.	Mine Safety Disclosures	26
	Item 5.	Other Information	26
	Item 6.	Exhibits	27

	Signature		28

In this Quarterly Report on Form 10-Q, references to “dollars” and “$” are to United States (“U.S.”) dollars.

Nu Skin, Pharmanex, and ageLOC are our trademarks. The italicized product names used in this Quarterly Report on Form 10-Q are product names and also, in certain cases, our trademarks.

Table of contents

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

NU SKIN ENTERPRISES, INC.

Consolidated Balance Sheets (Unaudited)

(U.S. dollars in thousands)

	March 31, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	302,216		$	339,593
Current investments		15,313			15,221
Accounts receivable, net		52,171			41,299
Inventories, net		381,585			399,931
Prepaid expenses and other		97,923			76,906
Total current assets		849,208			872,950

Property and equipment, net		448,822			453,674
Operating lease right-of-use assets		132,949			120,973
Goodwill		206,432			206,432
Other intangible assets, net		74,874			76,991
Other assets		179,964			175,460
Total assets	$	1,892,249		$	1,906,480

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	40,719		$	49,993
Accrued expenses		343,737			372,201
Current portion of long-term debt		110,000			107,500
Total current liabilities		494,456			529,694

Operating lease liabilities		100,844			88,759
Long-term debt		258,995			268,781
Other liabilities		103,754			106,474
Total liabilities		958,049			993,708

Commitments and contingencies (Notes 5 and 11)

Stockholders’ equity:
Class A common stock – 500 million shares authorized, $0.001 par value, 90.6 million shares issued		91			91
Additional paid-in capital		599,258			601,703
Treasury stock, at cost – 40.4 million and 40.7 million shares		(1,526,778	)		(1,526,860	)
Accumulated other comprehensive loss		(69,528	)		(73,896	)
Retained earnings		1,931,157			1,911,734
Total stockholders’ equity		934,200			912,772
Total liabilities and stockholders’ equity	$	1,892,249		$	1,906,480

The accompanying notes are an integral part of these consolidated financial statements.

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NU SKIN ENTERPRISES, INC.

Consolidated Statements of Income (Unaudited)

(U.S. dollars in thousands, except per share amounts)

	Three Months Ended March 31,
	2022			2021
Revenue	$	604,899		$	677,026
Cost of sales		161,499			170,566
Gross profit		443,400			506,460

Operating expenses:
Selling expenses		242,699			275,965
General and administrative expenses		148,556			167,582
Total operating expenses		391,255			443,547

Operating income		52,145			62,913
Other income (expense), net		(1,453	)		1,582

Income before provision for income taxes		50,692			64,495
Provision for income taxes		11,976			17,065

Net income	$	38,716		$	47,430

Net income per share (Note 6):
Basic	$	0.77		$	0.94
Diluted	$	0.76		$	0.91

Weighted-average common shares outstanding (000s):
Basic		49,991			50,706
Diluted		51,066			52,172

The accompanying notes are an integral part of these consolidated financial statements.

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NU SKIN ENTERPRISES, INC.

Consolidated Statements of Comprehensive Income (Unaudited)

(U.S. dollars in thousands)

	Three Months Ended March 31,
	2022			2021
Net income	$	38,716		$	47,430

Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of taxes of $(7) and $(2) for the three months ended March 31, 2022 and 2021, respectively		(1,960	)		(9,919	)
Net unrealized gains/(losses) on foreign currency cash flow hedges, net of taxes of $(1,743) and $(839) for the three months ended March 31, 2022 and 2021, respectively		6,314			3,040
Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of $(4) and $(6) for the three months ended March 31, 2022 and 2021, respectively		14			21
		4,368			(6,858	)
Comprehensive income	$	43,084		$	40,572

The accompanying notes are an integral part of these consolidated financial statements.

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NU SKIN ENTERPRISES, INC.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(U.S. dollars in thousands)

	For the Three Months Ended March 31, 2022
	Class A Common Stock		Additional Paid-in Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings		Total
Balance at January 1, 2022	$	91	$	601,703		$	(1,526,860	)	$	(73,896	)	$	1,911,734	$	912,772

Net income		—		—			—			—			38,716		38,716
Other comprehensive income, net of tax		—		—			—			4,368			—		4,368
Repurchase of Class A common stock (Note 6)		—		—			(10,006	)		—			—		(10,006	)
Exercise of employee stock options (0.4 million shares)/vesting of stock awards		—		(6,572	)		10,088			—			—		3,516
Stock-based compensation		—		4,127			—			—			—		4,127
Cash dividends		—

SEC Form 10-Q filed by Nu Skin Enterprises Inc.