Nu Skin's Q4 net income rose 31% year-over-year to US$49.5M, due in part to success of ageLOC products, robust sales in greater China, South Asia/Pacific regions, South Korea; revenue for the quarter was US$495.3M, a 23% jump over prior year
February 2, 2012
– Nu Skin Enterprises, Inc. (NYSE: NUS) today announced record fourth-quarter and annual results. Revenue for the quarter was $495.3 million, a 23 percent improvement over the prior year. Quarterly revenue was positively impacted 2 percent by foreign currency fluctuations. Earnings per share for the quarter increased 31 percent to $0.76, compared to $0.58 in the prior year.
The company reported annual revenue of $1.74 billion, a 13 percent year-over-year improvement. Annual revenue was positively impacted 6 percent by foreign currency fluctuations. Earnings per share for the year were $2.38, a 13 percent increase over 2010, or $2.69, a 27 percent improvement, when excluding non-cash charges of $32.8 million associated with a Japan customs ruling during the year.
"We are extremely pleased with our quarterly and 2011 results," said Truman Hunt, president and chief executive officer. "By all measures, 2011 was a record year. We're also optimistic that our momentum will continue into 2012 as we roll out our latest product innovations globally. Our ageLOC super-class of anti-aging products continues to be a growth catalyst as demonstrated by the tremendously successful limited-time offers of the ageLOC Galvanic Body Spa and ageLOC R2 (R-squared) in the fourth quarter.
"In addition to the energy surrounding ageLOC, we are pleased with growth in the sales force, particularly in the Greater China and South Asia/Pacific regions, as well as in South Korea.
"Additionally, as we announced in another release earlier this morning, based on our 2011 growth and strong balance sheet, we are raising our quarterly dividend by 25 percent," continued Hunt.
North Asia. Fourth-quarter revenue in North Asia grew 13 percent to $204.3 million, compared to $180.6 million for the same period in 2010. Revenue was positively impacted 4 percent by foreign currency fluctuations. Local-currency revenue increased 49 percent in South Korea, offsetting an 8 percent local-currency decline in Japan. The number of executive and active distributors in the region increased 4 and 3 percent, respectively, compared to the prior year.
Greater China. Revenue in Greater China improved 66 percent to $110.6 million for the quarter, and was positively impacted 3 percent by foreign currency fluctuations. The executive distributor count in the region increased 47 percent and the number of active distributors improved 21 percent.
Americas. Fourth-quarter revenue in the Americas increased 25 percent to $76.9 million, compared to $61.4 million for the prior year. Regional results were boosted by approximately $13 million of convention sales to distributors from outside the region. The number of executive and active distributors in the region increased 1 and 3 percent, respectively.
South Asia/Pacific. Revenue in South Asia/Pacific was $65.2 million for the fourth quarter, a 27 percent improvement over the prior year. Currency negatively impacted results by approximately 1 percent. The region's fourth-quarter executive count improved 43 percent, while the active distributor count increased 18 percent.
Europe. Fourth-quarter revenue in Europe was $38.3 million, an 8 percent decrease over the prior year. Results in the region were negatively impacted approximately 2 percent by foreign currency fluctuations. Executive distributor counts in the region remained even with the prior year, while the number of active distributors improved 2 percent.
The company's operating margin improved to 15.3 percent, compared to 14.7 percent in the prior year. Gross margin for the quarter was 83.8 percent, a 150 basis point improvement over the prior year. Selling expenses, as a percent of revenue, were 43.3 percent, compared to 42.1 percent in 2010. The increase is attributed to a higher number of distributors qualifying for promotional sales incentives. General and administrative expenses, as a percent of revenue, were 25.2 percent, a 30 basis-point improvement over the prior-year period.
The company's income tax rate for the quarter was 34.9 percent, compared to 34.3 percent in the prior year. Dividend payments during the quarter were $10.0 million and the company repurchased $16.1 million of its shares outstanding.
For 2011, increased revenue and a higher level of profitability resulted in cash from operations improving to $224 million. During the year, the company paid $37 million in dividends and repurchased approximately $67 million of its stock. The company ended the year with $291 million in cash and current investments and $137 million of debt.
"We closed out 2011 on a high note and anticipate another record year in 2012," said Hunt. "Our primary growth driver for 2012 will be the global roll out of our new ageLOC products. We launched these products in the Americas, North Asia and Europe regions in January and will continue the roll outs in the Greater China and South Asia/Pacific regions in the second and third quarters.
"Emerging markets continue to generate strong results with particularly impressive growth in the Greater China and South Asia/Pacific regions. Our initiatives are driving solid growth in our distributor force as evidenced by healthy gains in both our active and executive distributor numbers, reflecting our compelling business opportunity and fueling our optimism for the future. Overall, we are pleased with the continued positive direction of the business and we believe that we are on track to produce another record year in 2012," concluded Hunt.
"Although we recently provided 2012 guidance, based upon a solid start to this year as well as higher expectations for our regional product launches, we are increasing our annual revenue guidance to $1.81 billion to $1.84 billion," said Ritch Wood, chief financial officer. "We continue to see currency negatively impacting 2012 revenue by 1 percent. In addition, we are increasing our earnings guidance to $2.84 to $2.94 per share. We project first-quarter revenue of $437 to $447 million with earnings per share in the $0.68 to $0.71 range. We expect currency impact to be neutral for the first quarter," concluded Wood.
The company's management will host a webcast with the investment community on Feb. 2, 2012, at 11 a.m. (EST). Those wishing to access the webcast, as well as the financial information presented during the call, can visit the Investor Relations page on Nu Skin Enterprises' Web site, http://ir.nuskin.com. An archive of the webcast will be available at this same URL through Feb. 17, 2012.
About Nu Skin Enterprises, Inc.
Nu Skin Enterprises, Inc. demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives. The company's scientific leadership in both skin care and nutrition has established Nu Skin as a premier anti-aging company, evidenced in its unique ageLOC™ science that addresses aging at its source. The company's anti-aging products feature the new ageLOC suite of products including the ageLOC R2 (R-squared) nutritional supplement, ageLOC Galvanic Spa System and Galvanic Body Spa™, as well as the ageLOC Transformation daily skin care system. A global direct selling company, Nu Skin operates in 52 markets worldwide and has more than 850,000 independent distributors. Nu Skin is traded on the New York Stock Exchange under the symbol "NUS." More information is available at http://www.nuskin.com.
Industry Intelligence Editor's Note: In an omitted table, Nu Skin reported Q4 net income of US$49.5 million compared with US$37.3 million during the same period a year ago.