General and administrative expenses as a percentage of revenue remained nearly constant at 30.1% for the nine-month period ended September 30, 2003, compared to 29.9% for the same period in 2002. In U.S. dollars, general and administrative expenses also remained nearly constant at $213.9 million for the nine-month period ended September 30, 2003 compared to $213.3 million for the same period in 2002. The 2002 global distributor convention expenses of $5.0 million were nearly offset by the first quarter 2003 expenses for the distributor convention held in Japan, which were approximately $4.0 million.
Restructuring and other charges of $5.6 million recorded in the third quarter of 2003 include $5.1 million of expenses resulting from an early retirement program and other employee separation charges. As a result of these employee terminations, our overall headcount was reduced by approximately 130 employees, the majority of which were employees at our U.S. headquarters. These restructuring expenses consisted primarily of severance and other compensation charges. The savings associated with these reductions in force are expected to be refocused on revenue growth initiatives throughout the company. In connection with these restructuring charges, we also completed the divestiture of our professional employer organization operated through Big Planet resulting in a charge of approximately $0.5 million.
Other income (expense), net increased approximately $0.2 million and $3.6 million for the three- and nine-month periods ended September 30, 2003, compared to the same periods in 2002. Changes in other income (expense), net are primarily impacted by foreign exchange fluctuations to the U.S. dollar on the translation of yen-based bank debt and other foreign denominated intercompany balances into U.S. dollars for financial reporting purposes, as well as interest income and interest expense.
Provision for income taxes decreased to $8.9 million and $26.3 million for the three- and nine-month periods ended September 30, 2003, compared to $9.4 million and $27.5 million for the same periods in 2002. The effective tax rate remained at 37.0% of pre-tax income for 2003 and 2002.
Net income decreased to $15.1 million and $44.7 million for the three- and nine-month periods ended September 30, 2003, compared to $15.9 million and $46.9 million for the same periods in 2002. Net income decreased primarily because of the factors noted above in “revenue” “selling expenses” and “restructuring and other charges” and was somewhat offset by the factors noted in “gross profit”, “general and administrative” and “other income (expense), net” above.
Liquidity and Capital Resources
Historically, our principal needs for funds have been for operating expenses including selling incentives, working capital (principally inventory purchases), capital expenditures and the development of operations in new markets. We have generally relied on cash flow from operations to meet our cash needs and business objectives without incurring long-term debt to fund operating activities.
We typically generate positive cash flow from operations due to favorable gross margins, the variable nature of selling expenses, which constitute a significant percentage of operating expenses, and minimal capital requirements. We generated $62.4 million in cash from operations during the nine-month period ended September 30, 2003, compared to $67.7 million during the nine-month period ended September 30, 2002. The $5.3 million decrease in cash generated from operations during the nine-month period ended September 30, 2003 is largely related to the timing of payments of a higher amount of accrued expenses, including income taxes and commissions to distributors, during the nine-month period ended September 30, 2003, compared to the same prior-year period. These accrued expenses were substantially higher at December 31, 2002 than the amounts accrued at December 31, 2001, because revenue and profitability were significantly higher in 2002 compared to 2001.
As of September 30, 2003, working capital was $209.1 million compared to $180.6 million as of December 31, 2002. Cash and cash equivalents at September 30, 2003 and December 31, 2002, were $144.4 million and $120.3 million, respectively. The increase in cash balances in 2003 was primarily due to our continued ability to generate cash from operations. Working capital increased due to certain fluctuations of deferred tax assets and liabilities as well as the increase in cash balances.
Capital expenditures, primarily for equipment, including the BioPhotonic Scanner, computer systems and software, office furniture and leasehold improvements, were $13.2 million for the nine-month period ended September 30, 2003. In addition, we anticipate capital expenditures during the remainder of 2003 of approximately $5 million to $10 million to further enhance our infrastructure, including enhancements to computer systems and software, purchases of additional BioPhotonic Scanners, which we lease to our distributors, as well as further expansion of our retail stores, manufacturing and related infrastructure in Mainland China.
Our long-term debt as of September 30, 2003 consisted of 9.7 billion Japanese yen-denominated ten-year senior notes issued to the Prudential Insurance Company of America. The notes bear interest at an effective rate of 3.03% per annum and are due October 2010, with annual principal payments beginning October 2004. As of September 30, 2003, the outstanding balance on the notes was 9.7 billion Japanese yen, or $87.1 million.
We also maintain a $30.0 million revolving credit facility with Bank of America, N.A. and Bank One, N.A. for which Bank of America, N.A. acted as agent. Drawings on this revolving credit facility may be used for working capital, capital expenditures and other purposes including repurchases of our outstanding shares of Class A common stock. The revolving credit facility is set to expire on May 10, 2004. In August 2003, we also entered into a $125.0 million multi-currency private uncommitted shelf facility with the Prudential Investment Management, Inc. There were no outstanding balances relating to the revolving credit facility or this shelf facility as of September 30, 2003. However, subsequent to September 30, 2003, we utilized a portion of
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this shelf facility and a portion of the revolving credit facility in a transaction involving the repurchase of our shares of common stock. See “Subsequent Events” below. The Japanese notes and the revolving and shelf credit facilities are secured by guarantees issued by our material Subsidiaries and by a pledge of 65% of the outstanding stock of Nu Skin Japan Company Limited, our operating subsidiary in Japan.
Since August 1998, our board of directors has authorized us to repurchase up to $90.0 million of our outstanding shares of Class A common stock. The repurchases are used primarily to fund our equity incentive plans. During the three- and nine-month periods ended September 30, 2003, we repurchased approximately 17,000 shares and 811,000 shares of Class A common stock for an aggregate amount of approximately $0.2 million and $8.4 million. As of September 30, 2003, we had repurchased a total of approximately 8.7 million shares of Class A common stock for an aggregate price of approximately $81.6 million.
In July 2003, our board of directors declared a quarterly cash dividend of $0.07 per share for all classes of common stock. This quarterly cash dividend of $5.6 million was paid on September 24, 2003, to stockholders of record on September 5, 2003. The board of directors also recently declared a quarterly cash dividend of $0.07 per share for all classes of common stock to be paid in December 2003. We anticipate that our board of directors will continue to declare quarterly cash dividends and that the cash flows from operations will be sufficient to fund our future dividend payments. However, the declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors deemed relevant by our board of directors.
We believe we have sufficient liquidity to be able to meet our obligations on both a short-and long-term basis. We currently believe that existing cash balances together with future cash flows from operations will be adequate to fund the cash needs relating to the implementation of our strategic plans. The majority of our expenses are variable in nature and as such, a potential reduction in the level of revenue would reduce our cash flow needs. However, in the event that our current cash balances, future cash flow from operations and current lines of credit are not sufficient to meet our obligations or strategic needs, we would consider raising additional funds in the debt or equity markets or restructuring our current debt obligations. Additionally, we would consider realigning our strategic plans including a reduction in capital spending and a reduction in the level of stock repurchases or dividend payments.
Subsequent Events
In October 2003, we repurchased approximately 10.8 million shares of common stock for approximately $140.0 million from certain members of our original shareholder group. These shareholders also sold approximately 6.2 million additional shares of common stock to third-party investors. The transaction also included the agreement to convert all shares of outstanding super-voting Class B common stock to Class A common stock. We financed the repurchase with $45.0 million from existing cash balances, approximately $20.0 million from our revolving credit facility and $75.0 million in new long-term debt under the $125.0 million shelf facility noted above. The long-term debt is U.S. dollar denominated, bears interest of approximately 4.5% per annum and will be amortized in two tranches over five and seven years. The terms and conditions of the repurchase were approved by a special committee of our board of directors comprised solely of independent directors. The special committee engaged its own financial and legal advisors in connection with the repurchase transaction.
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Critical Accounting Policies
The following critical accounting policies and estimates should be read in conjunction with our audited consolidated financial statements and related notes thereto. Management considers the most critical accounting policies to be the recognition of revenue, accounting for income taxes, accounting for intangible assets and accounting for the impact of foreign currencies. In each of these areas, management makes estimates based on historical results, current trends and future projections.
Revenue. We recognize revenue when products are shipped, which is when title passes to our independent distributors. We offer a return policy whereby distributors can generally return unopened and unused product for up to 12 months subject to a 10% restocking fee. Reported revenue is net of returns, which have historically been less than 5.0% of gross sales. A reserve for product returns is accrued based on historical experience. In the event that certain expenses, including our selling expenses, were deemed to be reductions of revenue (under the provisions of EITF 01-09) rather than operating expenses, our reported revenue would be reduced as would our operating expenses. However, since our global compensation plan for our distributors does not provide rebates or selling discounts to distributors who purchase our products and services, we believe our current classification is correct and that no adjustment to reported revenue and operating expenses is necessary.
Income Taxes. We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” This statement establishes financial accounting and reporting standards for the effects of income taxes that result from an enterprise’s activities during the current and preceding years. It requires an asset and liability approach for financial accounting and reporting of income taxes. We pay income taxes in many foreign jurisdictions based on the profits realized in those jurisdictions, which can be significantly impacted by terms of intercompany transactions between us and our foreign affiliates. Deferred tax assets and liabilities are created in this process. As of September 30, 2003, we had net deferred tax assets of $60.3 million. These net deferred tax assets assume sufficient future earnings will exist for their realization, as well as the continued application of current tax rates. We have considered projected future taxable income and ongoing tax planning strategies in determining that no valuation allowance is required. In the event we were to determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to earnings in the period such determination was made.
Intangible Assets. As of September 30, 2003, we had approximately $157.9 million of unamortized goodwill and other indefinite-life intangible assets. Under the provisions of SFAS No. 142, we are required to test these assets for impairment at least annually. The annual impairment tests have been completed for the year ended December 31, 2002 and did not result in an impairment charge. To the extent an impairment is identified in the future, we will record the amount of the impairment as an operating expense in the period in which it is identified.
Foreign Currency Fluctuations. We operate in more than 30 countries and generate the majority of our revenue and income in foreign currencies in international markets. Consequently, significant fluctuations in foreign currencies, particularly the Japanese yen, will have an impact on reported results. We seek to reduce our exposure to fluctuations in foreign currency exchange rates through intercompany loans of foreign currency, our Japanese yen denominated debt, and the use of derivative financial instruments to hedge certain forecasted
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transactions as well as receivables and payables denominated in foreign currencies. We currently account for derivative financial instruments in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” We do not utilize derivatives for trading or speculative purposes. Hedge effectiveness is documented, assessed and monitored.
Seasonality
In addition to general economic factors, we are impacted by seasonal factors and trends such as major cultural events and vacation patterns. For example, most Asian markets
celebrate their respective local New Year in the first quarter, which generally has a negative impact on that quarter. We believe that direct selling in Japan, the United States and Europe is also generally negatively impacted during the month of August, which is in our third quarter, when many individuals, including our distributors, traditionally take vacations.
Distributor Information
The following table provides information concerning the number of active and executive distributors as of the dates indicated. Active distributors are those distributors and preferred customers who were resident in the countries in which we operated and purchased products for resale or personal consumption during the three months ended as of the date indicated. An executive distributor is an active distributor who has achieved required monthly personal and group sales volumes.
| As of September 30, 2003
| | As of September 30, 2002
| | |
|---|
| Active
| | Executive
| | Active
| | Executive
| |
|---|
| Region: | | | | | | | | | |
| North Asia | | 311,000 | | 16,852 | | 315,000 | | 17,388 | |
| North America | | 70,000 | | 2,657 | | 72,000 | | 2,461 | |
| Greater China* | | 131,000 | | 4,508 | | 73,000 | | 2,959 | |
| South Asia/Pacific | | 69,000 | | 2,060 | | 72,000 | | 2,826 | |
| Other Markets | | 29,000 | | 999 | | 26,000 | | 963 | |
|
| |
| |
| |
| |
| Totals | | 610,000 | | 27,076 | | 558,000 | | 26,597 | |
|
| |
| |
| |
| |
|
| |
| |
| |
| |
| | * | | Following the opening of 100 retail stores in Mainland China in 2003, active distributors includes 62,000 preferred customers and executive distributors includes 1,832 employed, full-time sales representatives in Mainland China. |
Currency Risk and Exchange Rate Information
A majority of our revenue and many of our expenses are recognized primarily outside of the United States, except for inventory purchases which are primarily transacted in U.S. dollars from vendors in the United States. The local currency of each of our subsidiary’s primary markets is considered the functional currency. All revenue and expenses are translated at weighted average exchange rates for the periods reported. Therefore, our reported revenue and earnings will be positively impacted by a weakening of the U.S. dollar and will be negatively impacted by a strengthening of the U.S. dollar. Given the uncertainty of exchange rate fluctuations, we cannot estimate the effect of these fluctuations on our future business, product pricing, results of operations or financial condition.
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We seek to reduce our exposure to fluctuations in foreign currency exchange rates through the use of foreign currency exchange contracts, through intercompany loans of foreign currency and through our Japanese yen denominated debt. We do not use derivative financial instruments for trading or speculative purposes. We regularly monitor our foreign currency risks and periodically take measures to reduce the impact of foreign exchange fluctuations on our operating results.
Our foreign currency derivatives are comprised of over-the-counter forward contracts with major international financial institutions. As of September 30, 2003, we had $78.0 million of these contracts with expiration dates through September 2004. All of these contracts were denominated in Japanese yen. For the three- and nine-month periods ended September 30, 2003, we recorded losses of $0.9 million and $3.7 million in operating income related to the fair market valuation on our outstanding forward contracts. Based on our foreign exchange contracts at September 30, 2003, the impact of a 10% appreciation or 10% depreciation of the U.S. dollar against the Japanese yen would not represent a material potential loss in fair value, earnings or cash flows against these contracts. This potential loss does not consider the underlying foreign currency transaction or translation exposures to which we are subject.
Note Regarding Forward-Looking Statements
With the exception of historical facts, the statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”) which reflect our current expectations and beliefs regarding our future results of operations, performance and achievements. These statements are subject to risks and uncertainties and are based upon assumptions and beliefs that may not materialize. These forward-looking statements include, but are not limited to, statements concerning:
| | | • | | our belief that strategic initiatives related to the divestiture of our professional employer organization and the transition from low-margin Big Planet products will have a positive impact on gross and operating margins going forward; |
| | | • | | our anticipation that we will be opening stores in new cities in Mainland China during the fourth quarter of 2003; |
| | | • | | our intention to contest any conclusion by the FDA that the Pharmanex BioPhotonic Scanner must be cleared as a medical device; |
| | | • | | our belief that we have sufficient liquidity to meet our obligations on both a short-and long-term basis and that existing cash balances together with future cash flows from operations will be adequate to fund our strategic plans; |
| | | • | | our plans to reinvest savings associated with recent reductions in force on revenue-growing initiatives throughout the Company; |
| | | • | | the expectation that we will spend $5 million to $10 million for capital expenditures during the remainder of 2003; and |
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| | | • | | the anticipation that our board of directors will continue to declare cash dividends and that our cash flows from operations will be sufficient to pay future dividends. |
In addition, when used in this report, the words or phrases, “will likely result,” “expect,” “anticipate,” “will continue,” “intend,” “plan,” “believe,” and similar expressions are intended to help identify forward-looking statements.
We wish to caution readers that our operating results are subject to various risks and uncertainties that could cause our actual results and outcomes to differ materially from those discussed or anticipated. Reference is made to the risks and uncertainties incorporated by reference into Item 5 of this report, which contains a more detailed discussion of the risks and uncertainties related to our business. We also wish to advise readers not to place any undue reliance on the forward-looking statements contained in this report, which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances or any changes in our beliefs or expectations. Some of the risks and uncertainties that might cause actual results to differ from those anticipated include, but are not limited to, the following:
| (a) | | Our expansion of operations in Mainland China is subject to risks and uncertainties. We have been subject to significant regulatory scrutiny and have experienced challenges including interruption of sales activities at certain stores. Because of restrictions on direct selling activities, we have implemented a modified business model for this market using retail stores and an employed sales force. We have at times received guidance from local regulators on conducting our operations including limiting the size of our training meetings, controlling the activities of our sales employees, controlling the distribution of product outside of our stores, keeping the number of sales employees at reasonable levels and limiting the involvement of our overseas distributors. While we continuously update our operating model to address these concerns, we believe we could experience similar challenges in the future as we expand operations in Mainland China and continue to work with regulators to help them understand our business model. Our operations in Mainland China may be modified or otherwise harmed by regulatory changes, subjective interpretations of laws or an inability to work effectively with national and local government agencies. In addition, actions by overseas distributors or local sales employees in violation of local laws could harm our efforts. |
| (b) | | The Pharmanex BioPhotonic Scanner is still in the final development stages of a large scale production model. As with any new technology, we have experienced delays and technical and production cost issues in developing a final large scale production model. In addition, the FDA has questioned its status as a non-medical device, and we are facing similar uncertainties and regulatory issues in other markets, including Japan, with respect to the status of the scanner as a non-medical device, which could delay or negatively impact our plans for the scanner in these markets. If the full launch or use of this tool is delayed or otherwise inhibited by production or development issues, or if the FDA or other domestic or foreign government agency takes formal action to prevent us from distributing the scanner as a non-medical device, this could delay our distribution of the scanner and harm our business. |
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| (c) | | Because a substantial majority of our sales are generated from the Asian regions, particularly Japan, significant variations in operating results including revenue, gross margin and earnings from those expected could be caused by: |
| | | • | | renewed or sustained weakness of Asian economies or consumer confidence; |
| | | • | | weakening of foreign currencies, particularly the Japanese yen; |
| | | • | | political unrest or uncertainty; |
| | | • | | failure of planned initiatives to generate continued interest and enthusiasm among distributors in these markets or to attract new distributors; or |
| | | • | | any problems with our expansion of operations in Mainland China into new cities, increasing product offerings and attracting additional sales representatives. |
| (d) | | The network marketing and nutritional supplement industries are subject to various laws and regulations throughout our markets, many of which involve a high level of subjectivity and are inherently fact based and subject to interpretation. Recent negative publicity concerning stimulant-based supplements has spurred efforts to change existing regulations or adopt new regulations in order to impose further restrictions and regulatory control over the nutritional supplement industry. If our existing business practices or products, or any new initiatives or products, are challenged or found to contravene any of these laws by any governmental agency or other third party, or if there are any changes in regulations applicable to our business, our revenue and profitability may be harmed. |
| (e) | | There is uncertainty whether the SARS epidemic could return this winter, particularly in those Asian markets most affected by the epidemic earlier in 2003. It is difficult to predict the impact, if any, of a recurrence of SARS on our business. Although such an event could generate increased sales of health/immune supplements and personal care products, our direct selling and retail activities and results of operations could be harmed if the fear of SARS causes people to avoid public places and interaction with one another. |
| (f) | | Many countries have banned the importation of products that contain bovine materials sourced from locations where Bovine Spongiform Encephalopathy (BSE), commonly referred to as “mad cow disease”, has been identified. We currently source all of our bovine materials, used primarily in the gel capsules of our nutritional supplements, from BSE-free countries. However, if BSE spreads to additional countries where we currently source our bovine materials, this could negatively impact our ability to import products into our markets until we change sources or ingredients. |
| (g) | | Our ability to retain key and executive level distributors or to sponsor new executive distributors is critical to our success. Because our products are distributed exclusively through our distributors and we compete with other direct selling companies in attracting distributors, our operating results could be adversely affected if our existing and new business opportunities and products do not generate sufficient enthusiasm |
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| | | and economic incentive to retain our existing distributors or to sponsor new distributors on a sustained basis. |
| ITEM 3. | | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
The information required by Item 3 of Part I of Form 10-Q is incorporated herein by reference from the section entitled “Currency Risk and Exchange Rate Information” in “Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Part I and also in Note 5 to the Financial Statements contained in Item 1 of Part I.
| ITEM 4. | | CONTROLS AND PROCEDURES |
Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in timely alerting them to the material information relating to us (or our consolidated Subsidiaries) required to be included in the reports we file or submit under the Exchange Act.
Changes in internal control over financial reporting.
During the most recent fiscal quarter covered by this report, there has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
| ITEM 1. | | LEGAL PROCEEDINGS |
None.
| ITEM 2. | | CHANGES IN SECURITIES |
On July 25, 2003, we issued 250,825 shares of its Class A common stock to the CEO, M. Truman Hunt, pursuant to the exercise of a stock option by Mr. Hunt at an exercise price of $1.87 per share. The shares were issued in reliance on the exemption from registration under Rule 701 of the Securities Act of 1933, as amended. The Rule 701 exemption was available for this issuance because the underlying stock option was granted to Mr. Hunt pursuant to a written compensatory benefit plan at a time when we were not subject to the reporting requirements of section 13 of 15(d) of the Securities Exchange Act of 1934.
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| ITEM 3. | | DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. | | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
None.
| ITEM 5. | | OTHER INFORMATION |
Exhibit 99.1 contains updated risk factors related to our business and is incorporated herein by reference.
| ITEM 6. | | EXHIBITS AND REPORTS ON FORM 8-K |
| (a) | | Exhibits
Regulation S-K
Number |
Description |
| |
| | | 10.1 | Amended and Restated Registration Rights Agreement, dated as of September 18, 2003, by and among Nu Skin Enterprises, Inc., Sandra N. Tillotson, The Sandra N. Tillotson Family Trust and the Purchasers signatory thereto (incorporated by reference to Exhibit No. 4.7 to the Company's Registration Statement on Form S-3 filed October 20, 2003). |
| |
| | | 10.2 | Private Shelf Agreement, dated as of August 26, 2003, between Nu Skin Enterprises, Inc. and Prudential Investment Management, Inc. |
| |
| | | 10.3 | Amended and Restated Collateral Agency and Intercreditor Agreement, dated as of August 26, 2003, by and among Nu Skin Enterprises, Inc. and various of its subsidiaries, U.S. Bank National Association, as Collateral Agent, and various lending institutions. |
| |
| | | 10.4 | Stock Acquisition Agreement, dated as of August 1, 2003, by and among Nu Skin Enterprises, Inc., Orrin T. Colby, III and Cygnus Resources, Inc. |
| |
| | | 10.5 | Amendment No. 1 to the Master Lease Agreement, effective as of July 1, 2003, between Nu Skin International, Inc. and Aspen Country, LLC. |
| |
| | | 10.6 | Amendment No. 1 to the Master Lease Agreement, effective as of July 1, 2003, between Nu Skin International, Inc. and Scrub Oak, LLC. |
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| | | | |
| | | 10.7 | Nu Skin Enterprises, Inc. Executive Incentive Plan, last updated July 1, 2003. |
| |
| | | 31.1 | Certification by M. Truman Hunt, President and 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. |
| |
| | | 31.2 | Certification by Ritch N. Wood, 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. |
| |
| | | 32.1 | Certification by M. Truman Hunt, President and 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. |
| |
| | | 32.2 | Certification by Ritch N. Wood, 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. |
| |
| | | 99.1 | Risk factors. |
| |
| (b) | | The Company filed a Current Report on Form 8-K on July 29, 2003, wherein the Company furnished its earnings release for the second quarter of 2003 under Item 12, “Results of Operations and Financial Condition.” |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
November 13, 2003
| | NU SKIN ENTERPRISES, INC.
By: /s/ Ritch N. Wood
Ritch N. Wood
Its: Chief Financial Officer
(Principal Financial and
Accounting Officer) |
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EXHIBIT INDEX
| 10.1 | | Amended and Restated Registration Rights Agreement, dated as of September 18, 2003, by and among Nu Skin Enterprises, Inc., Sandra N. Tillotson, The Sandra N. Tillotson Family Trust and the Purchasers signatory thereto (incorporated by reference to Exhibit No. 4.7 to the Company's Registration Statement on Form S-3 filed October 20, 2003). |
| 10.2 | | Private Shelf Agreement, dated as of August 26, 2003, between Nu Skin Enterprises, Inc. and Prudential Investment Management, Inc. |
| 10.3 | | Amended and Restated Collateral Agency and Intercreditor Agreement, dated as of August 26, 2003, by and among Nu Skin Enterprises, Inc. and various of its subsidiaries, U.S. Bank National Association, as Collateral Agent, and various lending institutions. |
| 10.4 | | Stock Acquisition Agreement, dated as of August 1, 2003, by and among Nu Skin Enterprises, Inc., Orrin T. Colby, III and Cygnus Resources, Inc. |
| 10.5 | | Amendment No. 1 to the Master Lease Agreement, effective as of July 1, 2003, between Nu Skin International, Inc. and Aspen Country, LLC. |
| 10.6 | | Amendment No. 1 to the Master Lease Agreement, effective as of July 1, 2003, between Nu Skin International, Inc. and Scrub Oak, LLC. |
| 10.7 | | Nu Skin Enterprises, Inc. Executive Incentive Plan, last updated July 1, 2003. |
| 31.1 | | Certification by M. Truman Hunt, President and 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. |
| 31.2 | | Certification by Ritch N. Wood, 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. |
| 32.1 | | Certification by M. Truman Hunt, President and 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. |
| 32.2 | | Certification by Ritch N. Wood, 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. |
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