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, 2023

☐	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, 2023, 49,905,275 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 2023

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, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	229,941		$	264,725
Current investments		16,774			13,784
Accounts receivable, net		60,008			47,360
Inventories, net		366,537			346,183
Prepaid expenses and other		100,302			87,816
Total current assets		773,562			759,868

Property and equipment, net		437,986			444,806
Operating lease right-of-use assets		98,683			98,734
Goodwill		206,432			206,432
Other intangible assets, net		64,711			66,701
Other assets		243,271			244,429
Total assets	$	1,824,645		$	1,820,970

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	49,494		$	53,963
Accrued expenses		275,774			280,280
Current portion of long-term debt		47,500			25,000
Total current liabilities		372,768			359,243

Operating lease liabilities		78,776			76,540
Long-term debt		372,609			377,466
Other liabilities		107,522			110,425
Total liabilities		931,675			923,674

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		611,483			613,278
Treasury stock, at cost – 40.7 million and 41.1 million shares		(1,559,080	)		(1,569,061	)
Accumulated other comprehensive loss		(91,005	)		(86,509	)
Retained earnings		1,931,481			1,939,497
Total stockholders’ equity		892,970			897,296
Total liabilities and stockholders’ equity	$	1,824,645		$	1,820,970

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,
	2023			2022
Revenue	$	481,462		$	604,899
Cost of sales		133,588			161,499
Gross profit		347,874			443,400

Operating expenses:
Selling expenses		188,124			242,699
General and administrative expenses		133,899			148,556
Restructuring and impairment expenses		9,787			—
Total operating expenses		331,810			391,255

Operating income		16,064			52,145
Other income (expense), net		(1,476	)		(1,453	)

Income before provision for income taxes		14,588			50,692
Provision for income taxes		3,212			11,976

Net income	$	11,376		$	38,716

Net income per share (Note 6):
Basic	$	0.23		$	0.77
Diluted	$	0.23		$	0.76

Weighted-average common shares outstanding (000s):
Basic		49,644			49,991
Diluted		50,058			51,066

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,
	2023			2022
Net income	$	11,376		$	38,716

Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of taxes of $(68) and $(7) for the three months ended March 31, 2023 and 2022, respectively		(2,139	)		(1,960	)
Net unrealized gains/(losses) on cash flow hedges, net of taxes of $175 and $(1,743) for the three months ended March 31, 2023 and 2022, respectively		(635	)		6,314
Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of $475 and $(4) for the three months ended March 31, 2023 and 2022, respectively		(1,722	)		14
		(4,496	)		4,368
Comprehensive income	$	6,880		$	43,084

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, 2023
	Class A Common Stock		Additional Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings		Total
Balance at January 1, 2023	$	91	$	613,278	$	(1,569,061	)	$	(86,509	)	$	1,939,497	$	897,296

Net income		—		—		—			—			11,376		11,376
Other comprehensive loss, net of tax		—		—		—			(4,496	)		—		(4,496	)
Repurchase of Class A common stock (Note 6)		—