Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 001-12421 | |
Entity Registrant Name | NU SKIN ENTERPRISES, INC. | |
Entity Central Index Key | 0001021561 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-0565309 | |
Entity Address, Address Line One | 75 West Center Street | |
Entity Address, City or Town | Provo | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84601 | |
City Area Code | 801 | |
Local Phone Number | 345-1000 | |
Title of 12(b) Security | Class A Common Stock, $.001 par value | |
Trading Symbol | NUS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 49,823,307 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 282,412 | $ 402,683 |
Current investments | 19,190 | 21,216 |
Accounts receivable, net | 52,441 | 63,370 |
Inventories, net | 415,203 | 314,366 |
Prepaid expenses and other | 121,626 | 101,563 |
Total current assets | 890,872 | 903,198 |
Property and equipment, net | 464,049 | 468,181 |
Operating lease right-of-use assets | 128,887 | 155,104 |
Goodwill | 215,582 | 202,979 |
Other intangible assets, net | 88,497 | 89,532 |
Other assets | 186,522 | 138,082 |
Total assets | 1,974,409 | 1,957,076 |
Current liabilities: | ||
Accounts payable | 52,023 | 66,174 |
Accrued expenses | 378,573 | 446,682 |
Current portion of long-term debt | 110,000 | 30,000 |
Total current liabilities | 540,596 | 542,856 |
Operating lease liabilities | 95,741 | 112,275 |
Long-term debt | 278,563 | 305,393 |
Other liabilities | 123,032 | 102,281 |
Total liabilities | 1,037,932 | 1,062,805 |
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 | 590,678 | 579,801 |
Treasury stock, at cost - 40.5 million and 39.7 million shares | (1,518,535) | (1,461,593) |
Accumulated other comprehensive loss | (75,658) | (64,768) |
Retained earnings | 1,939,901 | 1,840,740 |
Total stockholders' equity | 936,477 | 894,271 |
Total liabilities and stockholders' equity | $ 1,974,409 | $ 1,957,076 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Stockholders' equity: | ||
Common stock, shares authorized (in shares) | 500 | 500 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 90.6 | 90.6 |
Treasury stock (in shares) | 40.5 | 39.7 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Consolidated Statements of Income (Unaudited) [Abstract] | ||||
Revenue | $ 641,152 | $ 703,347 | $ 2,022,233 | $ 1,833,741 |
Cost of sales | 158,907 | 183,374 | 501,448 | 463,277 |
Gross profit | 482,245 | 519,973 | 1,520,785 | 1,370,464 |
Operating expenses: | ||||
Selling expenses | 255,719 | 280,695 | 807,358 | 735,365 |
General and administrative expenses | 161,142 | 165,050 | 499,754 | 466,232 |
Total operating expenses | 416,861 | 445,745 | 1,307,112 | 1,201,597 |
Operating income | 65,384 | 74,228 | 213,673 | 168,867 |
Other income (expense), net | 2,781 | 525 | 351 | (4,068) |
Income before provision for income taxes | 68,165 | 74,753 | 214,024 | 164,799 |
Provision for income taxes | 18,436 | 18,446 | 57,527 | 46,911 |
Net income | $ 49,729 | $ 56,307 | $ 156,497 | $ 117,888 |
Net income per share (Note 6): | ||||
Basic (in dollars per share) | $ 0.99 | $ 1.10 | $ 3.11 | $ 2.24 |
Diluted (in dollars per share) | $ 0.97 | $ 1.08 | $ 3.03 | $ 2.23 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 50,098 | 51,308 | 50,304 | 52,741 |
Diluted (in shares) | 51,260 | 52,243 | 51,629 | 52,906 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Consolidated Statements of Comprehensive Income (Unaudited) [Abstract] | ||||
Net income | $ 49,729 | $ 56,307 | $ 156,497 | $ 117,888 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustment, net of taxes of $(1) and $(8) for the three months ended September 30, 2021 and 2020, respectively, and $1 and $(3) for the nine months ended September 30, 2021 and 2020, respectively | (7,165) | 10,022 | (13,431) | 1,873 |
Net unrealized gains/(losses) on cash flow hedges, net of taxes of $(7) and $(83) for the three months ended September 30, 2021 and 2020, respectively and $(678) and $(83) for the nine months ended September 30, 2021 and 2020, respectively. | 25 | 305 | 2,455 | 305 |
Reclassification adjustment for realized losses/(gains) in current earnings on cash flow hedges, net of taxes of $(10) and $(2) for the three months ended September 30, 2021 and 2020, respectively and $(24) and $(2) for the nine months ended September 30, 2021 and 2020, respectively | 35 | 6 | 86 | 6 |
Other comprehensive (loss) income, net of tax | (7,105) | 10,333 | (10,890) | 2,184 |
Comprehensive income | $ 42,624 | $ 66,640 | $ 145,607 | $ 120,072 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustment, tax | $ (1) | $ (8) | $ 1 | $ (3) |
Net unrealized gains/(losses) on cash flow hedges, tax | (7) | (83) | (678) | (83) |
Reclassification adjustment for realized losses/(gains) in current earnings on cash flow hedges, tax | $ (10) | $ (2) | $ (24) | $ (2) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member]Class A [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Total |
Balance at beginning of period at Dec. 31, 2019 | $ 91 | $ 557,544 | $ (1,324,826) | $ (85,292) | $ 1,727,772 | $ 875,289 |
Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 0 | 0 | 117,888 | 117,888 |
Other comprehensive (loss) income, net of tax | 0 | 0 | 0 | 2,184 | 0 | 2,184 |
Repurchase of Class A common stock (Note 6) | 0 | 0 | (127,361) | 0 | 0 | (127,361) |
Exercise of employee stock options/vesting of stock awards | 0 | (2,492) | 5,813 | 0 | 0 | 3,321 |
Stock-based compensation | 0 | 15,439 | 0 | 0 | 0 | 15,439 |
Cash dividends | 0 | 0 | 0 | 0 | (59,287) | (59,287) |
Balance at end of period at Sep. 30, 2020 | 91 | 570,491 | (1,446,374) | (83,108) | 1,786,373 | 827,473 |
Balance at beginning of period at Jun. 30, 2020 | 91 | 563,115 | (1,427,064) | (93,441) | 1,749,311 | 792,012 |
Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 0 | 0 | 56,307 | 56,307 |
Other comprehensive (loss) income, net of tax | 0 | 0 | 0 | 10,333 | 0 | 10,333 |
Repurchase of Class A common stock (Note 6) | 0 | 0 | (19,994) | 0 | 0 | (19,994) |
Exercise of employee stock options/vesting of stock awards | 0 | 261 | 684 | 0 | 0 | 945 |
Stock-based compensation | 0 | 7,115 | 0 | 0 | 0 | 7,115 |
Cash dividends | 0 | 0 | 0 | 0 | (19,245) | (19,245) |
Balance at end of period at Sep. 30, 2020 | 91 | 570,491 | (1,446,374) | (83,108) | 1,786,373 | 827,473 |
Balance at beginning of period at Dec. 31, 2020 | 91 | 579,801 | (1,461,593) | (64,768) | 1,840,740 | 894,271 |
Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 0 | 0 | 156,497 | 156,497 |
Other comprehensive (loss) income, net of tax | 0 | 0 | 0 | (10,890) | 0 | (10,890) |
Repurchase of Class A common stock (Note 6) | 0 | 0 | (70,415) | 0 | 0 | (70,415) |
Exercise of employee stock options/vesting of stock awards | 0 | (5,599) | 13,473 | 0 | 0 | 7,874 |
Stock-based compensation | 0 | 16,476 | 0 | 0 | 0 | 16,476 |
Cash dividends | 0 | 0 | 0 | 0 | (57,336) | (57,336) |
Balance at end of period at Sep. 30, 2021 | 91 | 590,678 | (1,518,535) | (75,658) | 1,939,901 | 936,477 |
Balance at beginning of period at Jun. 30, 2021 | 91 | 586,976 | (1,509,867) | (68,553) | 1,909,179 | 917,826 |
Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 0 | 0 | 49,729 | 49,729 |
Other comprehensive (loss) income, net of tax | 0 | 0 | 0 | (7,105) | 0 | (7,105) |
Repurchase of Class A common stock (Note 6) | 0 | 0 | (10,005) | 0 | 0 | (10,005) |
Exercise of employee stock options/vesting of stock awards | 0 | 609 | 1,337 | 0 | 0 | 1,946 |
Stock-based compensation | 0 | 3,093 | 0 | 0 | 0 | 3,093 |
Cash dividends | 0 | 0 | 0 | 0 | (19,007) | (19,007) |
Balance at end of period at Sep. 30, 2021 | $ 91 | $ 590,678 | $ (1,518,535) | $ (75,658) | $ 1,939,901 | $ 936,477 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stockholders' Equity [Roll Forward] | ||||
Exercise of employee stock options (in shares) | 0.1 | 0 | 0.6 | 0.3 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income | $ 156,497 | $ 117,888 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 57,858 | 55,279 |
Non-cash lease expense | 40,703 | 34,087 |
Stock-based compensation | 16,476 | 15,439 |
Foreign currency losses | 5,501 | 1,203 |
Loss on disposal of assets | 13,210 | 2,516 |
Deferred taxes | 3,846 | (7,931) |
Unrealized (gain)/losses on equity investments | (18,077) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 8,377 | (9,273) |
Inventories, net | (109,371) | 4,882 |
Prepaid expenses and other | (29,311) | 4,180 |
Other assets | (18,438) | (76,487) |
Accounts payable | (11,182) | 15,884 |
Accrued expenses | (89,993) | 99,438 |
Other liabilities | 5,977 | 27,343 |
Net cash provided by operating activities | 32,073 | 284,448 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (50,384) | (48,810) |
Proceeds on investment sales | 11,171 | 7,630 |
Purchases of investments | (14,973) | (8,759) |
Acquisitions (net of cash acquired) | (18,963) | 0 |
Net cash used in investing activities | (73,149) | (49,939) |
Cash flows from financing activities: | ||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards | 7,874 | 3,321 |
Payment of cash dividends | (57,336) | (59,287) |
Repurchases of shares of common stock | (70,415) | (127,361) |
Finance lease principal payments | (1,409) | 0 |
Payments of debt | (77,500) | (135,000) |
Proceeds from debt | 130,000 | 115,000 |
Net cash used in financing activities | (68,786) | (203,327) |
Effect of exchange rate changes on cash | (10,409) | (102) |
Net increase (decrease) in cash and cash equivalents | (120,271) | 31,080 |
Cash and cash equivalents, beginning of period | 402,683 | 335,630 |
Cash and cash equivalents, end of period | $ 282,412 | $ 366,710 |
The Company
The Company | 9 Months Ended |
Sep. 30, 2021 | |
The Company [Abstract] | |
The Company | 1. The Company Nu Skin Enterprises, Inc. (the “Company”) is a holding company, with Nu Skin, being the primary operating unit. Nu Skin develops and distributes premium-quality, innovative beauty and wellness products that are sold worldwide under the Nu Skin, Pharmanex and ageLOC brands and a small number of other products and services. The Company reports revenue from ten segments, consisting of its seven geographic Nu Skin segments — Canada, Latin America and the United States; South Korea; Europe, Middle East and Africa (“EMEA”), which includes markets in Europe as well as Israel, Russia and South Africa; Japan; Southeast Asia/Pacific, which includes Australia, Indonesia, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam; and Hong Kong/Taiwan, which also includes Macau—and Rhyz Investments segments—Manufacturing, which includes manufacturing and packaging subsidiaries it has acquired; Grow Tech, which focuses on developing controlled-environment agriculture technologies and Rhyz other, which includes other investments by its Rhyz strategic investment arm (the Company’s subsidiaries operating within each segment are collectively referred to as the “Subsidiaries” ). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) The unaudited consolidated financial statements include the accounts of the Company and its Subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. . Accounting Pronouncements In March the FASB issued, ASU - Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential burden in accounting for the effects of reference rate reform on financial reporting. The guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU - applies only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December The amendments in ASU - are elective and are effective upon issuance for all entities. The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. Inventory Inventories consist of the following (U.S. dollars in thousands): September 30, 2021 December 31, 2020 Raw materials $ 182,656 $ 118,877 Finished goods 232,547 195,489 Total Inventory, net $ 415,203 $ 314,366 Revenue Recognition Contract Liabilities – Customer Loyalty Programs Contract liabilities, recorded as deferred revenue within the accrued expenses line in the consolidated balance sheets, include loyalty point program deferrals with certain customers which are accounted for as a reduction in the transaction price and are generally recognized as points are redeemed for additional products. The balance of deferred revenue related to contract liabilities as of and December 31, 2020 was $ million and $ million, respectively. respectively. The impact to revenue for the nine-month periods ended September 30, 2021, and 2020 was a decrease of $ million and a decrease of $ million, Equity Investments The Company holds strategic investments in other companies. These investments are accounted for under the measurement alternative described in ASC 321, Investments - Equity Securities |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill [Abstract] | |
Goodwill | 3. Goodwill The Company’s reporting units for goodwill are its operating segments, which are also its reportable segments. The following table presents goodwill allocated to the Company’s reportable segments for the periods ended and December 31, 2020 (U.S. dollars in thousands): September 30, 2021 December 31, 2020 Nu Skin Mainland China $ 32,179 $ 32,179 Americas 9,449 9,449 South Korea 29,261 29,261 Southeast Asia/Pacific 18,537 18,537 EMEA 2,875 2,875 Japan 16,019 16,019 Hong Kong/Taiwan 6,634 6,634 Rhyz Investments Manufacturing 78,875 78,875 Grow Tech 9,150 9,150 Rhyz Other 12,603 — Total $ 215,582 $ 202,979 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt [Abstract] | |
Debt | 4. Debt Credit Agreement On April 18, 2018, the Company entered into a Credit Agreement (the “Credit Agreement”) with several financial institutions as lenders and Bank of America, N.A., as administrative agent. The Credit Agreement provides for a $400 million term loan facility and a $350 million revolving credit facility, each with a term of five years. Both facilities bear interest at the LIBOR, plus a margin based on the consolidated leverage ratio. The term loan facility amortizes in quarterly installments in amounts resulting in an annual amortization of 5.0% during the first and second years, 7.5% during the third and fourth years and 10.0% during the fifth year after the closing date of the Credit Agreement, with the remainder payable at final maturity. The Credit Agreement requires the Company to maintain a consolidated leverage ratio not exceeding 2.25 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00. As of September 30, 2021, the Company was in compliance with all covenants under the Credit Agreement. The following table summarizes the Company’s debt facilities as of September 30, 2021 and December 31, 2020: Facility or Arrangement Original Principal Amount Balance as of September 30 , 2021 (1)(2) Balance as of December 31, 2020 (1)(2) Interest Rate Repayment Terms Credit Agreement term loan facility $ 400.0 million $ 315.0 million $ 337.5 million Variable 35% of the principal amount is payable Credit Agreement revolving credit facility $ 75.0 million $ — Variable Revolving line of credit expires April 18, 2023. (1) As of September 30, 2021 and December 31, 2020, the current portion of the Company’s debt (i.e. becoming due in the next 12 months) included $35.0 million and $30.0 million, respectively, 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 $1.4 million and $ million as of and December 31, 2020, respectively, related to the Credit Agreement, which are not reflected in this table. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | 5. Leases As of . The components of lease expense were as follows (U.S. dollars in thousands): Three Months Ended September 30 Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease expense Operating lease cost $ 12,193 $ 13,038 $ 37,408 $ 39,043 Variable lease cost 1,121 678 4,145 2,062 Short-term lease cost 13 118 590 258 Sublease income (1,352 ) (1,075 ) (5,164 ) (3,264 ) Finance lease expense Amortization of right-of-use assets 594 — 1,811 — Interest on lease liabilities 77 — 248 — Total lease expense $ 12,646 $ 12,759 $ 39,038 $ 38,099 Supplemental cash flow information related to leases was as follows (U.S. dollars in thousands): Nine September 30 2021 2020 Operating cash outflow from operating leases $ 40,072 $ 40,865 Operating cash outflow from finance leases $ 250 $ — Financing cash outflow from finance leases $ 1,409 $ — Right-of-use assets obtained in exchange for operating lease obligations $ 19,120 $ 62,514 Right-of-use assets obtained in exchange for finance lease obligations $ 59 $ — Maturities of lease liabilities were as follows (U.S. dollars in thousands): Year Ending December 31 Operating Leases Finance Leases 2021 $ 11,911 $ 535 2022 35,502 2,150 2023 24,955 2,069 2024 19,610 1,958 2025 14,725 1,385 Thereafter 41,327 262 Total 148,030 8,359 Less: Finance charges 18,241 622 Total principal liability $ 129,789 $ 7,737 The Company has additional lease liabilities of $ million which have not yet commenced as of S , and as such, have not been recognized on the consolidated balance sheets. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2021 | |
Capital Stock [Abstract] | |
Capital Stock | 6. Capital Stock Net income per share Net income per share is computed based on the weighted-average number of common shares outstanding during the periods presented. Additionally, diluted earnings per share data gives effect to all potentially dilutive common shares that were outstanding during the periods presented. For the three-month periods ended September 30, 2021 and 2020, stock options of 0.1 million and 0.2 million, respectively, and for the nine-month periods ended September 30, 2021 and 2020, stock options of 0.1 million and 0.6 million, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. Dividends In February , May and August 2021 per share. These quarterly cash dividends of $ million $19.0 million and $ million were paid on , and September 8, 2021 to stockholders of record on , November 2021 Repurchase of common stock During the three-month periods ended and 2020, the Company repurchased of its Class A common stock under its stock repurchase plan for $ million and $ million, respectively. During the nine-month periods ended September 30, 2021 and 2020, the Company repurchased million shares and million shares of its Class A common stock under its stock repurchase plan for $ million and $ million, respectively. As of , $ million was available for repurchases under the Company’s stock repurchase plan. |
Fair Value and Equity Investmen
Fair Value and Equity Investments | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value and Equity Investments [Abstract] | |
Fair Value and Equity Investments | 7. Fair Value and Equity Investments Fair Value The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximates fair values due to the short-term nature of these instruments. The carrying value of debt approximates fair value due to the variable 30-day interest rate. Fair value estimates are made at a specific point in time, based on relevant market information. The FASB Codification defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. On a quarterly basis, the Company measures at fair value certain financial assets, including cash equivalents. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy: ◾ 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. Accounting standards permit companies, at their option, to measure certain financial instruments and other eligible items at fair value. The Company has elected not to apply the fair value option to existing eligible items beyond what is required by US GAAP. The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (U.S. dollars in thousands): Fair Value at September 30, 2021 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 74,360 $ — $ — $ 74,360 Derivative financial instruments asset — 4,395 — 4,395 Life insurance contracts — — 48,625 48,625 Derivative financial instruments liability — (112 ) — (112 ) Contingent consideration — — (12,132 ) (12,132 ) Total $ 74,360 $ 4,283 $ 36,493 $ 115,136 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 The following table provides a summary of changes in fair value of the Company’s Level 3 life insurance contracts (U.S. dollars in thousands): Beginning balance at January 1, 2021 $ 45,453 Actual return on plan assets 3,172 Purchase and issuances 7,016 Sales and settlements (7,016 ) Transfers into Level 3 — Ending balance at September 30 2021 $ 48,625 Life insurance contracts: The following table provides a summary of changes in fair value of the Company’s Level 3 contingent consideration (U.S. dollars in thousands): Beginning balance at January 1, 2021 $ (3,125 ) Additions from acquisitions (8,702 ) Changes in fair value of contingent consideration (305 ) Ending balance at September 30 2021 $ (12,132 ) Contingent consideration: Equity Investments The Company maintains equity investments in companies which are accounted for under the measurement alternative described in ASC 321-10-35-2 for equity securities that lack readily determinable fair values. The carrying amount of equity securities held by the Company without readily determinable fair values was $28.1 million as of September 30, 2021 and $5.0 million as of December 31, 2021. During the three months ended September 30, 2021, the Company made an additional investment of $5.0 million. During the three months and nine months ended September 30, 2021 the Company recognized $18.1 million upward fair value adjustments, based on the valuation of additional equity issued by the investee which was deemed to be an observable transaction of a similar investment under ASC 321. The gain was recorded within Other income (expense), net on the Consolidated Statement of Comprehensive Operations. The upward fair value adjustment represents a nonrecurriing fair value measurement based on observable price changes and is classified as a level 2 fair value measurement. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | 8. Income Taxes Provision for income taxes for the three- and nine-month periods of 2021 was $18.4 million and $57.5 million, compared to $18.4 million and $46.9 million for the prior-year periods. The effective tax rates for the three- and nine-month periods were 27.0% and 26.9% of pre-tax income compared to 24.7% and 28.5% in the prior-year periods. The Company accounts for income taxes in accordance with ASC Topic 740 “Income Taxes.” These standards establish financial accounting and reporting standards for the effects of income taxes that result from an enterprise’s activities during the current and preceding years. The Company takes an asset and liability approach for financial accounting and reporting of income taxes. The Company pays 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 the Company and its foreign affiliates. Deferred tax assets and liabilities are created in this process. The Company has netted these deferred tax assets and deferred tax liabilities by jurisdiction. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized. The Company had net deferred tax assets of $25.5 million and $34.8 million as of September 30, 2021 and December 31, 2020, respectively. The Company evaluates its indefinite reinvestment assertions with respect to foreign earnings for each quarter. For all foreign earnings, the Company accrues the applicable foreign income taxes. For the earnings that have been indefinitely reinvested, the Company does not accrue foreign withholding taxes. Undistributed earnings that the Company has indefinitely reinvested, for which no foreign withholding taxes have been provided, aggregate to $60.0 million as of December 31, 2020. If the amount designated as indefinitely reinvested as of December 31, 2020 was repatriated to the United States, the amount of incremental taxes would be approximately $6.0 million. The Company intends to utilize the indefinitely reinvested offshore earnings to fund foreign investments, specifically capital expenditures. The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. The Company is no longer subject to tax examinations from the IRS for all years for which tax returns have been filed before 2020. With a few exceptions, the Company is no longer subject to state and local income tax examination by tax authorities for the years before 2017. In 2009, the Company entered into a voluntary program with the IRS called Compliance Assurance Process (“CAP”). The objective of CAP is to contemporaneously work with the IRS to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company has elected to participate in CAP for 2021 and may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. In major foreign jurisdictions, the Company is generally no longer subject to income tax examinations for years before 2015. However, statutes of limitations in certain countries may be as long as . The Company is currently under examination in certain foreign jurisdictions; however, the outcomes of those reviews are not yet determinable. The Company’s unrecognized tax benefits relate to multiple jurisdictions. Due to potential increases in unrecognized tax benefits from the multiple jurisdictions in which the Company operates, as well as the expiration of various statutes of limitations, it is reasonably possible that the Company’s gross unrecognized tax benefits, net of foreign currency adjustments, |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2021 | |
Derivatives and Hedging Activities [Abstract] | |
Derivatives and Hedging Activities | 9. Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2021, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense/income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense/income as interest payments are made/received on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $112 thousand will be reclassified as an increase to interest expense. As of September 30, 2021 and December 31, 2020, the Company had four outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk with a total notional amount of $200 million. Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet: Fair Values of Derivative Instruments Derivatives in Cash flow Hedging Relationships: Balance Sheet Location September 30, 2021 December 31, 2020 Interest Rate Swap - Asset Other Assets $ 4,395 $ 1,145 Interest Rate Swap - Liability Accrued Expenses $ 112 $ 105 Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income The tables below present the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income. Amount of Gain (Loss) Recognized in OCI on Derivative Three Months Ended Nine Months Ended Derivatives in Cash flow September 30, September 30, Hedging Relationships: 2021 2020 2021 2020 Interest Rate Swaps $ 32 $ 388 $ 3,133 $ 388 Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Three Months Ended Nine Months Ended Derivatives in Cash flow Income Statement September 30, September 30, Hedging Relationships: Location 2021 2020 2021 2020 Interest Rate Swaps Other Income (Expense), Net $ (45 ) $ (8 ) $ (110 ) $ (8 ) |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information [Abstract] | |
Segment Information | 10. Segment Information The Company reports revenue from ten segments, consisting of its seven geographic Nu Skin segments—Mainland China, Americas, South Korea, Southeast Asia/Pacific, Japan, EMEA, and Hong Kong/Taiwan—and three Rhyz Investments segments—Manufacturing, Grow Tech and Rhyz other. The Nu Skin other category includes miscellaneous corporate revenue and related adjustments. The Rhyz other segment includes other investments by our Rhyz strategic investment arm. These segments reflect the way the chief operating decision maker evaluates the Company’s business performance and allocates resources. Reported revenue includes only the revenue generated by sales to external customers. Profitability by segment as determined under US GAAP is driven primarily by the Company’s transfer pricing policies. Segment contribution, which is the Company’s segment profitability metric presented in the table below, excludes certain intercompany charges, specifically royalties, license fees, transfer pricing, discrete charges and other miscellaneous items. These charges have been included in Corporate and other expenses. Corporate and other expenses also include costs related to the Company’s executive and administrative offices, information technology, research and development, and marketing and supply chain functions not recorded at the segment level. In the first quarter of 2021, as a result of a change in the Company’s transfer pricing policies in the Americas, the segment contribution calculation has been adjusted. The prior year Americas and Corporate and other has been recast to conform with the new policy. Beginning in July 2021, the Company has changed how the chief operating decision maker manages and reports the Pacific market. The Pacific market will be now be reported with the Southeast Asia segment and no longer with the Americas segment. Segment information has been recast to reflect the move of the Pacific components from the "America/Pacific" operating segment to the "Southeast Asia/Pacific" operating segment. Consolidated financial information is not affected. The accounting policies of the segments are the same as those described in Note 2 – Summary of Significant Accounting Policies. The Company evaluates the performance of its segments based on revenue and segment contribution. Each segment records direct expenses related to its employees and its operations. Summarized financial information for the Company’s reportable segments is shown in the following tables. Asset information is not reviewed or included with the Company’s internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment. Revenue by Segment Three Months Ended September 30, Nine Months Ended September 30, (U.S. dollars in thousands) 2021 2020 2021 2020 Nu Skin Mainland China $ 134,291 $ 169,068 $ 438,066 $ 453,096 Americas 131,482 133,618 403,755 312,436 South Korea 91,989 83,460 261,724 236,094 Southeast Asia/Pacific 79,081 101,949 246,338 262,038 EMEA 55,839 61,411 215,134 147,590 Japan 65,117 70,958 203,001 200,549 Hong Kong/Taiwan 39,921 42,265 114,795 115,253 Nu Skin other 889 (314 ) 2,350 374 Total Nu Skin 598,609 662,415 1,885,163 1,727,430 Rhyz Investments Manufacturing (1) 41,635 40,910 135,760 105,975 Grow Tech 783 22 1,147 336 Rhyz other 125 — 163 — Total Rhyz Investments 42,543 40,932 137,070 106,311 Total $ 641,152 $ 703,347 $ 2,022,233 $ 1,833,741 (1) The Manufacturing segment had $27.4 million and $10.9 million of intersegment revenue for the three months ended September 30, 2021 and 2020, respectively, and $68.0 million and $24.2 million for the nine months ended September 30, 2021 and 2020, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above . Segment Contribution Three Months Ended September 30, Nine Months Ended September 30, (U.S. dollars in thousands) 2021 2020 2021 2020 Nu Skin Mainland China $ 30,677 $ 54,522 $ 121,596 $ 135,577 Americas 25,752 20,618 83,495 48,730 South Korea 28,984 25,232 84,401 73,421 Southeast Asia/Pacific 19,020 23,892 59,881 62,263 EMEA 6,693 7,111 29,270 11,084 Japan 16,267 18,245 50,709 49,292 Hong Kong/Taiwan 8,940 9,048 24,848 22,825 Nu Skin contribution 136,333 158,668 454,200 403,192 Rhyz Investments Manufacturing 3,059 6,749 15,649 15,000 Grow Tech (6,798 ) (5,322 ) (19,869 ) (17,659 ) Rhyz other (659 ) — (1,178 ) — Rhyz Investments contribution (4,398 ) 1,427 (5,398 ) (2,659 ) Total segment contribution 131,935 160,095 448,802 400,533 Corporate and other (66,551 ) (85,867 ) (235,129 ) (231,666 ) Operating income 65,384 74,228 213,673 168,867 Other income (expense) 2,781 525 351 (4,068 ) Income before provision for income taxes $ 68,165 $ 74,753 $ 214,024 $ 164,799 Depreciation and Amortization Three Months Ended September 30, Nine Months Ended September 30, (U.S. dollars in thousands) 2021 2020 2021 2020 Nu Skin Mainland China $ 3,253 $ 2,649 $ 9,868 $ 7,631 Americas 190 251 656 714 South Korea 805 756 2,768 2,731 Southeast Asia/Pacific 359 334 1,096 1,300 EMEA 281 231 850 731 Japan 220 296 699 1,602 Hong Kong/Taiwan 1,004 691 2,794 1,948 Total Nu Skin 6,112 5,208 18,731 16,657 Rhyz Investments Manufacturing 3,069 2,077 8,644 5,954 Grow Tech 1,303 1,302 4,002 3,775 Rhyz other 592 — 987 — Total Rhyz Investments 4,964 3,379 13,633 9,729 Corporate and other 8,857 9,333 25,494 28,893 Total $ 19,933 $ 17,920 $ 57,858 $ 55,279 Capital Expenditures Three Months Ended September 30, Nine Months Ended September 30, (U.S. dollars in thousands) 2021 2020 2021 2020 Nu Skin Mainland China $ 3,237 $ 9,000 $ 15,170 $ 12,577 Americas 95 123 294 885 South Korea — 173 508 537 Southeast Asia/Pacific 92 1,256 1,015 1,899 EMEA 391 718 821 1,378 Japan 3 1,484 94 3,132 Hong Kong/Taiwan 110 7 222 23 Total Nu Skin 3,928 12,761 18,124 20,431 Rhyz Investments Manufacturing 2,604 2,113 11,604 13,221 Grow Tech 212 343 1,215 760 Rhyz other — — — — Total Rhyz Investments 2,816 2,456 12,819 13,981 Corporate and other 6,791 4,901 19,441 14,398 Total $ 13,535 $ 20,118 $ 50,384 $ 48,810 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies The Company is subject to government regulations pertaining to product formulation, labeling and packaging, product claims and advertising, and the Company’s direct selling system. The Company is also subject to the jurisdiction of numerous foreign tax and customs authorities. Any assertions or determination that either the Company or the Company’s sales force is not in compliance with existing statutes, laws, rules or regulations could have a material adverse effect on the Company’s operations. In addition, in any country or jurisdiction, the adoption of new statutes, laws, rules or regulations or changes in the interpretation of existing statutes, laws, rules or regulations could have a material adverse effect on the Company and its operations. No assurance can be given that the Company’s compliance with applicable statutes, laws, rules and regulations will not be challenged by foreign authorities or that such challenges will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company and its Subsidiaries are defendants in litigation, investigations and other proceedings involving various matters. Management believes that the ultimate liability arising from such claims and contingencies, if any, is not likely to have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. The Company is subject to regular audits by federal, state and foreign tax authorities. These audits may result in additional tax liabilities. The Company believes it has appropriately provided for income taxes for all years. Several factors drive the calculation of its tax reserves. Some of these factors include: (i) the expiration of various statutes of limitations; (ii) changes in tax law and regulations; (iii) issuance of tax rulings; and (iv) settlements with tax authorities. Changes in any of these factors may result in adjustments to the Company’s reserves, which would impact its reported financial results. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2021 | |
Acquisitions [Abstract] | |
Acquisitions | 12. Acquisitions In December 2020, the Company acquired 100% of the outstanding equity interest of Ingredient Innovations International Company (“3i”). The purchase price for 3i was $15.7 million, net of cash acquired of $2.1 million and $0.8 million to be paid within six months, all payable in cash. In addition, there is potential for an incremental $7.0 million in contingent consideration, which becomes payable if certain performance targets are reached in 2021 and 2022. The fair value of the contingent consideration recorded on the acquisition date was $3.1 million. The Company allocated the gross purchase price of $24.5 million to the assets acquired and liabilities assumed at estimated fair values. The estimated fair value of assets acquired included $14.4 million of intangible assets, $0.3 million of property and equipment, $2.1 million of cash, $0.8 million of accounts receivable and less than $0.3 million of inventory, and the acquisition also included approximately $0.3 million of current liabilities and resulted in a deferred tax liability of $3.1 million. The excess purchase price over the aggregate fair value of assets acquired less liabilities assumed of $6.4 million was recorded as goodwill. The intangible assets acquired were comprised of $3.7 million for Customer relationships, $10.0 million for technology and $0.7 million for other intangibles, all with an assigned estimated useful life of approximately 8 years. All the goodwill was assigned to our Manufacturing segment. The allocation of the fair value of assets acquired and liabilities assumed for the acquisition was finalized during the three months ended March 31, 2021 . In April 2021, the Company acquired 100% ownership in MyFavoriteThings, Inc. (“Mavely”) making Mavely a wholly owned subsidiary of the Company. The acquisition enables the Company to continue to expand its digital tools. The purchase price for Mavely was $16.8 million, net of cash acquired of $0.4 million and $0.9 million to be paid within six months, all payable in cash. In addition, there is potential for an incremental $24.0 million in contingent consideration, which becomes payable if certain revenue and profitability targets are reached in 2021, 2022 and 2023. The fair value of the contingent consideration recorded on the acquisition date was $8.7 million. The Company allocated the gross purchase price of $29.4 million to the assets acquired and liabilities assumed at estimated fair values. The estimated fair value of assets acquired included $16.4 million of intangible assets, $0.4 million of cash, $0.1 million of accounts receivable, and also resulted in a deferred tax liability of $3.5 million. The excess purchase price over the aggregate fair value of assets acquired less liabilities assumed of $12.6 million was recorded as goodwill. The goodwill recognized is attributable primarily to expected synergies. None of the goodwill is expected to be deductible for income tax purposes. The intangible assets acquired were comprised of $2.0 million for customer relationships, $11.3 million for technology, $2.8 million for trademarks and $0.3 million for other intangibles. The intangibles were assigned useful lives of 8 years for the technology and tradename, approximately 4 years for the customer relationships and 3 years for the other intangibles. All the goodwill was assigned to our Rhyz other segment. The allocation of the fair value of assets acquired and liabilities assumed for the acquisition was finalized during the three months ended September 30, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) |
Consolidation | The unaudited consolidated financial statements include the accounts of the Company and its Subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. |
Accounting Pronouncements | Accounting Pronouncements In March the FASB issued, ASU - Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential burden in accounting for the effects of reference rate reform on financial reporting. The guidance provides optional expedients and exceptions for applying US GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU - applies only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December The amendments in ASU - are elective and are effective upon issuance for all entities. The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Inventory | Inventory Inventories consist of the following (U.S. dollars in thousands): September 30, 2021 December 31, 2020 Raw materials $ 182,656 $ 118,877 Finished goods 232,547 195,489 Total Inventory, net $ 415,203 $ 314,366 |
Revenue Recognition | Revenue Recognition Contract Liabilities – Customer Loyalty Programs Contract liabilities, recorded as deferred revenue within the accrued expenses line in the consolidated balance sheets, include loyalty point program deferrals with certain customers which are accounted for as a reduction in the transaction price and are generally recognized as points are redeemed for additional products. The balance of deferred revenue related to contract liabilities as of and December 31, 2020 was $ million and $ million, respectively. respectively. The impact to revenue for the nine-month periods ended September 30, 2021, and 2020 was a decrease of $ million and a decrease of $ million, |
Equity Investments | Equity Investments The Company holds strategic investments in other companies. These investments are accounted for under the measurement alternative described in ASC 321, Investments - Equity Securities |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies [Abstract] | |
Inventories | Inventories consist of the following (U.S. dollars in thousands): September 30, 2021 December 31, 2020 Raw materials $ 182,656 $ 118,877 Finished goods 232,547 195,489 Total Inventory, net $ 415,203 $ 314,366 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill [Abstract] | |
Goodwill | The following table presents goodwill allocated to the Company’s reportable segments for the periods ended and December 31, 2020 (U.S. dollars in thousands): September 30, 2021 December 31, 2020 Nu Skin Mainland China $ 32,179 $ 32,179 Americas 9,449 9,449 South Korea 29,261 29,261 Southeast Asia/Pacific 18,537 18,537 EMEA 2,875 2,875 Japan 16,019 16,019 Hong Kong/Taiwan 6,634 6,634 Rhyz Investments Manufacturing 78,875 78,875 Grow Tech 9,150 9,150 Rhyz Other 12,603 — Total $ 215,582 $ 202,979 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt [Abstract] | |
Debt Facilities | The following table summarizes the Company’s debt facilities as of September 30, 2021 and December 31, 2020: Facility or Arrangement Original Principal Amount Balance as of September 30 , 2021 (1)(2) Balance as of December 31, 2020 (1)(2) Interest Rate Repayment Terms Credit Agreement term loan facility $ 400.0 million $ 315.0 million $ 337.5 million Variable 35% of the principal amount is payable Credit Agreement revolving credit facility $ 75.0 million $ — Variable Revolving line of credit expires April 18, 2023. (1) As of September 30, 2021 and December 31, 2020, the current portion of the Company’s debt (i.e. becoming due in the next 12 months) included $35.0 million and $30.0 million, respectively, 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 $1.4 million and $ million as of and December 31, 2020, respectively, related to the Credit Agreement, which are not reflected in this table. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows (U.S. dollars in thousands): Three Months Ended September 30 Nine Months Ended September 30, 2021 2020 2021 2020 Operating lease expense Operating lease cost $ 12,193 $ 13,038 $ 37,408 $ 39,043 Variable lease cost 1,121 678 4,145 2,062 Short-term lease cost 13 118 590 258 Sublease income (1,352 ) (1,075 ) (5,164 ) (3,264 ) Finance lease expense Amortization of right-of-use assets 594 — 1,811 — Interest on lease liabilities 77 — 248 — Total lease expense $ 12,646 $ 12,759 $ 39,038 $ 38,099 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows (U.S. dollars in thousands): Nine September 30 2021 2020 Operating cash outflow from operating leases $ 40,072 $ 40,865 Operating cash outflow from finance leases $ 250 $ — Financing cash outflow from finance leases $ 1,409 $ — Right-of-use assets obtained in exchange for operating lease obligations $ 19,120 $ 62,514 Right-of-use assets obtained in exchange for finance lease obligations $ 59 $ — |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows (U.S. dollars in thousands): Year Ending December 31 Operating Leases Finance Leases 2021 $ 11,911 $ 535 2022 35,502 2,150 2023 24,955 2,069 2024 19,610 1,958 2025 14,725 1,385 Thereafter 41,327 262 Total 148,030 8,359 Less: Finance charges 18,241 622 Total principal liability $ 129,789 $ 7,737 |
Fair Value and Equity Investm_2
Fair Value and Equity Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value and Equity Investments [Abstract] | |
Assets (Liabilities) Measured at Fair Value on a Recurring Basis | The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (U.S. dollars in thousands): Fair Value at September 30, 2021 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 74,360 $ — $ — $ 74,360 Derivative financial instruments asset — 4,395 — 4,395 Life insurance contracts — — 48,625 48,625 Derivative financial instruments liability — (112 ) — (112 ) Contingent consideration — — (12,132 ) (12,132 ) Total $ 74,360 $ 4,283 $ 36,493 $ 115,136 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 |
Changes in Fair Value of Level 3 Marketable Securities | The following table provides a summary of changes in fair value of the Company’s Level 3 life insurance contracts (U.S. dollars in thousands): Beginning balance at January 1, 2021 $ 45,453 Actual return on plan assets 3,172 Purchase and issuances 7,016 Sales and settlements (7,016 ) Transfers into Level 3 — Ending balance at September 30 2021 $ 48,625 |
Changes in Fair Value of Level 3 Contingent Consideration | The following table provides a summary of changes in fair value of the Company’s Level 3 contingent consideration (U.S. dollars in thousands): Beginning balance at January 1, 2021 $ (3,125 ) Additions from acquisitions (8,702 ) Changes in fair value of contingent consideration (305 ) Ending balance at September 30 2021 $ (12,132 ) |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivatives and Hedging Activities [Abstract] | |
Fair Values of Derivative Instruments on the Balance Sheet | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet: Fair Values of Derivative Instruments Derivatives in Cash flow Hedging Relationships: Balance Sheet Location September 30, 2021 December 31, 2020 Interest Rate Swap - Asset Other Assets $ 4,395 $ 1,145 Interest Rate Swap - Liability Accrued Expenses $ 112 $ 105 |
Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income | The tables below present the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income. Amount of Gain (Loss) Recognized in OCI on Derivative Three Months Ended Nine Months Ended Derivatives in Cash flow September 30, September 30, Hedging Relationships: 2021 2020 2021 2020 Interest Rate Swaps $ 32 $ 388 $ 3,133 $ 388 Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Three Months Ended Nine Months Ended Derivatives in Cash flow Income Statement September 30, September 30, Hedging Relationships: Location 2021 2020 2021 2020 Interest Rate Swaps Other Income (Expense), Net $ (45 ) $ (8 ) $ (110 ) $ (8 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information [Abstract] | |
Revenue by Segment | Revenue by Segment Three Months Ended September 30, Nine Months Ended September 30, (U.S. dollars in thousands) 2021 2020 2021 2020 Nu Skin Mainland China $ 134,291 $ 169,068 $ 438,066 $ 453,096 Americas 131,482 133,618 403,755 312,436 South Korea 91,989 83,460 261,724 236,094 Southeast Asia/Pacific 79,081 101,949 246,338 262,038 EMEA 55,839 61,411 215,134 147,590 Japan 65,117 70,958 203,001 200,549 Hong Kong/Taiwan 39,921 42,265 114,795 115,253 Nu Skin other 889 (314 ) 2,350 374 Total Nu Skin 598,609 662,415 1,885,163 1,727,430 Rhyz Investments Manufacturing (1) 41,635 40,910 135,760 105,975 Grow Tech 783 22 1,147 336 Rhyz other 125 — 163 — Total Rhyz Investments 42,543 40,932 137,070 106,311 Total $ 641,152 $ 703,347 $ 2,022,233 $ 1,833,741 (1) The Manufacturing segment had $27.4 million and $10.9 million of intersegment revenue for the three months ended September 30, 2021 and 2020, respectively, and $68.0 million and $24.2 million for the nine months ended September 30, 2021 and 2020, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above . |
Segment Contribution | Segment Contribution Three Months Ended September 30, Nine Months Ended September 30, (U.S. dollars in thousands) 2021 2020 2021 2020 Nu Skin Mainland China $ 30,677 $ 54,522 $ 121,596 $ 135,577 Americas 25,752 20,618 83,495 48,730 South Korea 28,984 25,232 84,401 73,421 Southeast Asia/Pacific 19,020 23,892 59,881 62,263 EMEA 6,693 7,111 29,270 11,084 Japan 16,267 18,245 50,709 49,292 Hong Kong/Taiwan 8,940 9,048 24,848 22,825 Nu Skin contribution 136,333 158,668 454,200 403,192 Rhyz Investments Manufacturing 3,059 6,749 15,649 15,000 Grow Tech (6,798 ) (5,322 ) (19,869 ) (17,659 ) Rhyz other (659 ) — (1,178 ) — Rhyz Investments contribution (4,398 ) 1,427 (5,398 ) (2,659 ) Total segment contribution 131,935 160,095 448,802 400,533 Corporate and other (66,551 ) (85,867 ) (235,129 ) (231,666 ) Operating income 65,384 74,228 213,673 168,867 Other income (expense) 2,781 525 351 (4,068 ) Income before provision for income taxes $ 68,165 $ 74,753 $ 214,024 $ 164,799 |
Depreciation and Amortization and Capital Expenditures | Depreciation and Amortization Three Months Ended September 30, Nine Months Ended September 30, (U.S. dollars in thousands) 2021 2020 2021 2020 Nu Skin Mainland China $ 3,253 $ 2,649 $ 9,868 $ 7,631 Americas 190 251 656 714 South Korea 805 756 2,768 2,731 Southeast Asia/Pacific 359 334 1,096 1,300 EMEA 281 231 850 731 Japan 220 296 699 1,602 Hong Kong/Taiwan 1,004 691 2,794 1,948 Total Nu Skin 6,112 5,208 18,731 16,657 Rhyz Investments Manufacturing 3,069 2,077 8,644 5,954 Grow Tech 1,303 1,302 4,002 3,775 Rhyz other 592 — 987 — Total Rhyz Investments 4,964 3,379 13,633 9,729 Corporate and other 8,857 9,333 25,494 28,893 Total $ 19,933 $ 17,920 $ 57,858 $ 55,279 Capital Expenditures Three Months Ended September 30, Nine Months Ended September 30, (U.S. dollars in thousands) 2021 2020 2021 2020 Nu Skin Mainland China $ 3,237 $ 9,000 $ 15,170 $ 12,577 Americas 95 123 294 885 South Korea — 173 508 537 Southeast Asia/Pacific 92 1,256 1,015 1,899 EMEA 391 718 821 1,378 Japan 3 1,484 94 3,132 Hong Kong/Taiwan 110 7 222 23 Total Nu Skin 3,928 12,761 18,124 20,431 Rhyz Investments Manufacturing 2,604 2,113 11,604 13,221 Grow Tech 212 343 1,215 760 Rhyz other — — — — Total Rhyz Investments 2,816 2,456 12,819 13,981 Corporate and other 6,791 4,901 19,441 14,398 Total $ 13,535 $ 20,118 $ 50,384 $ 48,810 |
The Company (Details)
The Company (Details) | 9 Months Ended |
Sep. 30, 2021Segment | |
The Company [Abstract] | |
Number of reportable segments | 10 |
Number of geographic segments | 7 |
Number of Rhyz Investments segments | 3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventories [Abstract] | ||
Raw materials | $ 182,656 | $ 118,877 |
Finished goods | 232,547 | 195,489 |
Total Inventory, net | $ 415,203 | $ 314,366 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Contract Liabilities - Customer Loyalty Programs [Abstract] | |||||
Contract liabilities for customer loyalty programs | $ 24.5 | $ 24.5 | $ 18.2 | ||
Contract liabilities impact to revenue | $ (0.7) | $ (1.8) | $ (6.3) | $ (5.3) |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill [Abstract] | ||
Goodwill | $ 215,582 | $ 202,979 |
Mainland China [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 32,179 | 32,179 |
Americas [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 9,449 | 9,449 |
South Korea [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 29,261 | 29,261 |
Southeast Asia/Pacific [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 18,537 | 18,537 |
EMEA [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 2,875 | 2,875 |
Japan [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 16,019 | 16,019 |
Hong Kong/Taiwan [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 6,634 | 6,634 |
Manufacturing [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 78,875 | 78,875 |
Grow Tech [Member] | ||
Goodwill [Abstract] | ||
Goodwill | 9,150 | 9,150 |
Rhyz Other [Member] | ||
Goodwill [Abstract] | ||
Goodwill | $ 12,603 | $ 0 |
Debt, Credit Agreement (Details
Debt, Credit Agreement (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Apr. 18, 2018 | |
Credit Agreement [Member] | Maximum [Member] | ||
Debt [Abstract] | ||
Consolidated leverage ratio | 2.25 | |
Credit Agreement [Member] | Minimum [Member] | ||
Debt [Abstract] | ||
Consolidated interest coverage ratio | 3 | |
Term Loan Facility [Member] | ||
Debt [Abstract] | ||
Original principal amount | $ 400 | $ 400 |
Term of loan | 5 years | |
Term Loan Facility [Member] | First Year [Member] | ||
Debt [Abstract] | ||
Annual amortization percentage | 5.00% | |
Term Loan Facility [Member] | Second Year [Member] | ||
Debt [Abstract] | ||
Annual amortization percentage | 5.00% | |
Term Loan Facility [Member] | Third Year [Member] | ||
Debt [Abstract] | ||
Annual amortization percentage | 7.50% | |
Term Loan Facility [Member] | Fourth Year [Member] | ||
Debt [Abstract] | ||
Annual amortization percentage | 7.50% | |
Term Loan Facility [Member] | Fifth Year [Member] | ||
Debt [Abstract] | ||
Annual amortization percentage | 10.00% | |
Revolving Credit Facility [Member] | ||
Debt [Abstract] | ||
Borrowing capacity | $ 350 | |
Term of loan | 5 years |
Debt, Debt Facilities (Details)
Debt, Debt Facilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | Apr. 18, 2018 | ||
Debt [Abstract] | ||||
Term of variable rate | 30 days | |||
Current portion of long-term debt | $ 110,000 | $ 30,000 | ||
Credit Agreement [Member] | ||||
Debt [Abstract] | ||||
Unamortized debt issuance costs | 1,400 | 2,100 | ||
Credit Agreement Term Loan Facility [Member] | ||||
Debt [Abstract] | ||||
Original principal amount | 400,000 | $ 400,000 | ||
Balance | [1],[2] | $ 315,000 | 337,500 | |
Interest rate | Variable 30 day: 2.33% | |||
Interest rate | 2.33% | |||
Term of variable rate | 30 days | |||
Repayment terms | 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. | |||
Percentage of principal payable in installments | 35.00% | |||
Term of loan | 5 years | |||
Current portion of long-term debt | $ 35,000 | 30,000 | ||
Credit Agreement Revolving Credit Facility [Member] | ||||
Debt [Abstract] | ||||
Balance | [1],[2] | $ 75,000 | $ 0 | |
Interest rate | Variable 30 day: 2.33% | |||
Interest rate | 2.33% | |||
Term of variable rate | 30 days | |||
Repayment terms | Revolving line of credit expires April 18, 2023. | |||
Term of loan | 5 years | |||
[1] | As of September 30, 2021 and December 31, 2020, the current portion of the Company’s debt (i.e. becoming due in the next 12 months) included $35.0 million and $30.0 million, respectively, 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 $1.4 million and $2.1 million as of September 30, 2021 and December 31, 2020, respectively, related to the Credit Agreement, which are not reflected in this table. |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Weighted average remaining lease term for operating leases | 6 years 8 months 12 days | 6 years 8 months 12 days | ||
Weighted average remaining lease term for finance leases | 4 years | 4 years | ||
Weighted average discount rate for operating leases | 4.00% | 4.00% | ||
Weighted average discount rate for finance leases | 3.80% | 3.80% | ||
Operating Lease Expense [Abstract] | ||||
Operating lease cost | $ 12,193 | $ 13,038 | $ 37,408 | $ 39,043 |
Variable lease cost | 1,121 | 678 | 4,145 | 2,062 |
Short-term lease cost | 13 | 118 | 590 | 258 |
Sublease income | (1,352) | (1,075) | (5,164) | (3,264) |
Finance Lease Expense [Abstract] | ||||
Amortization of right-of-use assets | 594 | 0 | 1,811 | 0 |
Interest on lease liabilities | 77 | 0 | 248 | 0 |
Total lease expense | 12,646 | $ 12,759 | 39,038 | 38,099 |
Supplemental Cash Flow Information Related to Leases [Abstract] | ||||
Operating cash outflow from operating leases | 40,072 | 40,865 | ||
Operating cash outflow from finance leases | 250 | 0 | ||
Financing cash outflow from finance leases | 1,409 | 0 | ||
Right-of-use assets obtained in exchange for operating lease obligations | 19,120 | 62,514 | ||
Right-of-use assets obtained in exchange for finance lease obligations | 59 | $ 0 | ||
Maturities of Operating Lease Liabilities [Abstract] | ||||
2021 | 11,911 | 11,911 | ||
2022 | 35,502 | 35,502 | ||
2023 | 24,955 | 24,955 | ||
2024 | 19,610 | 19,610 | ||
2025 | 14,725 | 14,725 | ||
Thereafter | 41,327 | 41,327 | ||
Total | 148,030 | 148,030 | ||
Less: Finance charges | 18,241 | 18,241 | ||
Total principal liability | 129,789 | 129,789 | ||
Maturities of Financing Lease Liabilities [Abstract] | ||||
2021 | 535 | 535 | ||
2022 | 2,150 | 2,150 | ||
2023 | 2,069 | 2,069 | ||
2024 | 1,958 | 1,958 | ||
2025 | 1,385 | 1,385 | ||
Thereafter | 262 | 262 | ||
Total | 8,359 | 8,359 | ||
Less: Finance charges | 622 | 622 | ||
Total principal liability | 7,737 | 7,737 | ||
Additional lease liabilities not yet commenced | $ 100 | $ 100 |
Capital Stock, Net Income per S
Capital Stock, Net Income per Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Options [Member] | ||||
Net Income per Share [Abstract] | ||||
Anti-dilutive shares excluded from calculation of diluted earnings per share (in shares) | 0.1 | 0.2 | 0.1 | 0.6 |
Capital Stock, Dividends (Detai
Capital Stock, Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 03, 2021 | Sep. 08, 2021 | Jun. 09, 2021 | Mar. 10, 2021 | Aug. 31, 2021 | May 31, 2021 | Feb. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Dividends per Share [Abstract] | |||||||||
Payment of cash dividends | $ 57,336 | $ 59,287 | |||||||
Dividend Declared 2021-Q1 [Member] | |||||||||
Dividends per Share [Abstract] | |||||||||
Dividend payable, date declared | 2021-02 | ||||||||
Dividend payable per share (in dollars per share) | $ 0.38 | ||||||||
Payment of cash dividends | $ 19,300 | ||||||||
Dividend payable, date paid | Mar. 10, 2021 | ||||||||
Dividend payable, date of record | Feb. 26, 2021 | ||||||||
Dividend Declared 2021-Q2 [Member] | |||||||||
Dividends per Share [Abstract] | |||||||||
Dividend payable, date declared | 2021-05 | ||||||||
Dividend payable per share (in dollars per share) | $ 0.38 | ||||||||
Payment of cash dividends | $ 19,000 | ||||||||
Dividend payable, date paid | Jun. 9, 2021 | ||||||||
Dividend payable, date of record | May 28, 2021 | ||||||||
Dividend Declared 2021-Q3 [Member] | |||||||||
Dividends per Share [Abstract] | |||||||||
Dividend payable, date declared | 2021-08 | ||||||||
Dividend payable per share (in dollars per share) | $ 0.38 | ||||||||
Payment of cash dividends | $ 19,000 | ||||||||
Dividend payable, date paid | Sep. 8, 2021 | ||||||||
Dividend payable, date of record | Aug. 27, 2021 | ||||||||
Dividend Declared 2021-Q4 [Member] | Subsequent Event [Member] | |||||||||
Dividends per Share [Abstract] | |||||||||
Dividend payable, date declared | 2021-11 | ||||||||
Dividend payable per share (in dollars per share) | $ 0.38 | ||||||||
Dividend payable, date paid | Dec. 8, 2021 | ||||||||
Dividend payable, date of record | Nov. 26, 2021 |
Capital Stock, Repurchase of Co
Capital Stock, Repurchase of Common Stock (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Repurchases of Common Stock [Abstract] | ||||
Class A common stock repurchased | $ 10,005 | $ 19,994 | $ 70,415 | $ 127,361 |
Amount available for repurchases | $ 255,400 | $ 255,400 | ||
Treasury Stock [Member] | ||||
Repurchases of Common Stock [Abstract] | ||||
Class A common stock repurchased (in shares) | 0.2 | 0.4 | 1.4 | 4.8 |
Class A common stock repurchased | $ 10,005 | $ 19,994 | $ 70,415 | $ 127,361 |
Fair Value and Equity Investm_3
Fair Value and Equity Investments, Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value and Equity Investments [Abstract] | ||
Term of variable rate | 30 days | |
Contingent Consideration [Member] | ||
Changes in Fair Value of Level 3 Contingent Consideration [Roll Forward] | ||
Beginning balance | $ (3,125) | |
Additions from acquisitions | (8,702) | |
Changes in fair value of contingent consideration | (305) | |
Ending balance | (12,132) | |
Fair Value on a Recurring Basis [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 74,360 | $ 56,628 |
Derivative financial instruments asset | 4,395 | 1,145 |
Life insurance contracts | 48,625 | 45,453 |
Derivative financial instruments liability | (112) | (105) |
Contingent consideration | (12,132) | (3,125) |
Financial assets (liabilities) | 115,136 | 99,996 |
Fair Value on a Recurring Basis [Member] | Level 1 [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 74,360 | 56,628 |
Derivative financial instruments asset | 0 | 0 |
Life insurance contracts | 0 | 0 |
Derivative financial instruments liability | 0 | 0 |
Contingent consideration | 0 | 0 |
Financial assets (liabilities) | 74,360 | 56,628 |
Fair Value on a Recurring Basis [Member] | Level 2 [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 0 | 0 |
Derivative financial instruments asset | 4,395 | 1,145 |
Life insurance contracts | 0 | 0 |
Derivative financial instruments liability | (112) | (105) |
Contingent consideration | 0 | 0 |
Financial assets (liabilities) | 4,283 | 1,040 |
Fair Value on a Recurring Basis [Member] | Level 3 [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 0 | 0 |
Derivative financial instruments asset | 0 | 0 |
Life insurance contracts | 48,625 | 45,453 |
Derivative financial instruments liability | 0 | 0 |
Contingent consideration | (12,132) | (3,125) |
Financial assets (liabilities) | 36,493 | $ 42,328 |
Life Insurance Contracts [Member] | ||
Changes in Fair Value of Level 3 Marketable Securities [Roll Forward] | ||
Beginning balance | 45,453 | |
Actual return on plan assets | 3,172 | |
Purchase and issuances | 7,016 | |
Sales and settlements | (7,016) | |
Transfers into Level 3 | 0 | |
Ending balance | $ 48,625 |
Fair Value and Equity Investm_4
Fair Value and Equity Investments, Equity Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Upward fair value adjustments on equity securities | $ 18,077 | $ 0 | ||
Equity Securities [Member] | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Carrying amount of equity securities without readily determinable fair values | $ 28,100 | 28,100 | $ 5,000 | |
Additional investment made | 5,000 | |||
Equity Securities [Member] | Other Income (Expense), Net [Member] | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Upward fair value adjustments on equity securities | $ 18,100 | $ 18,100 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Taxes [Abstract] | |||||
Provision for income taxes | $ 18,436 | $ 18,446 | $ 57,527 | $ 46,911 | |
Effective tax rate | 27.00% | 24.70% | 26.90% | 28.50% | |
Net deferred tax assets | $ 25,500 | $ 25,500 | $ 34,800 | ||
Undistributed earnings of non-U.S. subsidiaries | 60,000 | ||||
Incremental taxes if undistributed earnings on non-U.S. subsidiaries were repatriated | $ 6,000 | ||||
Minimum [Member] | |||||
Income Taxes [Abstract] | |||||
Decrease in unrecognized tax benefits within the next 12 months that is reasonably possible | (3,000) | $ (3,000) | |||
Maximum [Member] | |||||
Income Taxes [Abstract] | |||||
Statute of limitations related to income tax examinations | 10 years | ||||
Income Taxes [Abstract] | |||||
Decrease in unrecognized tax benefits within the next 12 months that is reasonably possible | $ (4,000) | $ (4,000) |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities, Fair Value of Derivative Instruments on the Balance Sheet (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)Derivatives | Dec. 31, 2020USD ($)Derivatives | |
Derivatives and Hedging Activities [Abstract] | ||
Gain to be reclassified to interest expense during next twelve months | $ 112 | |
Number of outstanding derivatives held | Derivatives | 4 | 4 |
Notional amount | $ 200,000 | $ 200,000 |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | ||
Derivatives and Hedging Activities [Abstract] | ||
Fair value, asset | 4,395 | 1,145 |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Accrued Expenses [Member] | ||
Derivatives and Hedging Activities [Abstract] | ||
Fair value, liability | $ 112 | $ 105 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities, Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Details) - Interest Rate Swaps [Member] - Designated as Hedging Instrument [Member] - Cash Flow Hedges [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Other Income (Expense), Net [Member] | ||||
Derivatives and Hedging Activities [Abstract] | ||||
Gain (loss) reclassified from accumulated other comprehensive loss into income | $ (45) | $ (8) | $ (110) | $ (8) |
Other Comprehensive Loss [Member] | ||||
Derivatives and Hedging Activities [Abstract] | ||||
Gain (loss) recognized in OCI | $ 32 | $ 388 | $ 3,133 | $ 388 |
Segment Information, Revenue by
Segment Information, Revenue by Segment (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)Segment | Sep. 30, 2020USD ($) | ||
Segment Information [Abstract] | |||||
Number of reportable segments | Segment | 10 | ||||
Number of geographic segments | Segment | 7 | ||||
Number of Rhyz Investments segments | Segment | 3 | ||||
Revenue by Segment [Abstract] | |||||
Revenue | $ 641,152 | $ 703,347 | $ 2,022,233 | $ 1,833,741 | |
Other [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 889 | (314) | 2,350 | 374 | |
Operating Segment [Member] | Nu Skin [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 598,609 | 662,415 | 1,885,163 | 1,727,430 | |
Operating Segment [Member] | Mainland China [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 134,291 | 169,068 | 438,066 | 453,096 | |
Operating Segment [Member] | Americas [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 131,482 | 133,618 | 403,755 | 312,436 | |
Operating Segment [Member] | South Korea [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 91,989 | 83,460 | 261,724 | 236,094 | |
Operating Segment [Member] | Southeast Asia/Pacific [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 79,081 | 101,949 | 246,338 | 262,038 | |
Operating Segment [Member] | EMEA [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 55,839 | 61,411 | 215,134 | 147,590 | |
Operating Segment [Member] | Japan [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 65,117 | 70,958 | 203,001 | 200,549 | |
Operating Segment [Member] | Hong Kong/Taiwan [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 39,921 | 42,265 | 114,795 | 115,253 | |
Operating Segment [Member] | Rhyz Investments [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 42,543 | 40,932 | 137,070 | 106,311 | |
Operating Segment [Member] | Manufacturing [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | [1] | 41,635 | 40,910 | 135,760 | 105,975 |
Operating Segment [Member] | Grow Tech [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 783 | 22 | 1,147 | 336 | |
Operating Segment [Member] | Rhyz Other [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 125 | 0 | 163 | 0 | |
Intersegment [Member] | Manufacturing [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | $ 27,400 | $ 10,900 | $ 68,000 | $ 24,200 | |
[1] | The Manufacturing segment had $27.4 million and $10.9 million of intersegment revenue for the three months ended September 30, 2021 and 2020, respectively, and $68.0 million and $24.2 million for the nine months ended September 30, 2021 and 2020, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above. |
Segment Information, Segment Co
Segment Information, Segment Contribution (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Contribution [Abstract] | ||||
Operating income | $ 65,384 | $ 74,228 | $ 213,673 | $ 168,867 |
Other income (expense) | 2,781 | 525 | 351 | (4,068) |
Income before provision for income taxes | 68,165 | 74,753 | 214,024 | 164,799 |
Operating Segment [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 131,935 | 160,095 | 448,802 | 400,533 |
Operating Segment [Member] | Nu Skin [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 136,333 | 158,668 | 454,200 | 403,192 |
Operating Segment [Member] | Mainland China [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 30,677 | 54,522 | 121,596 | 135,577 |
Operating Segment [Member] | Americas [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 25,752 | 20,618 | 83,495 | 48,730 |
Operating Segment [Member] | South Korea [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 28,984 | 25,232 | 84,401 | 73,421 |
Operating Segment [Member] | Southeast Asia/Pacific [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 19,020 | 23,892 | 59,881 | 62,263 |
Operating Segment [Member] | EMEA [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 6,693 | 7,111 | 29,270 | 11,084 |
Operating Segment [Member] | Japan [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 16,267 | 18,245 | 50,709 | 49,292 |
Operating Segment [Member] | Hong Kong/Taiwan [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 8,940 | 9,048 | 24,848 | 22,825 |
Operating Segment [Member] | Rhyz Investments [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | (4,398) | 1,427 | (5,398) | (2,659) |
Operating Segment [Member] | Manufacturing [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | 3,059 | 6,749 | 15,649 | 15,000 |
Operating Segment [Member] | Grow Tech [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | (6,798) | (5,322) | (19,869) | (17,659) |
Operating Segment [Member] | Rhyz Other [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | (659) | 0 | (1,178) | 0 |
Corporate and Other [Member] | ||||
Segment Contribution [Abstract] | ||||
Operating income | $ (66,551) | $ (85,867) | $ (235,129) | $ (231,666) |
Segment Information, Depreciati
Segment Information, Depreciation and Amortization and Capital Expenditures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | $ 19,933 | $ 17,920 | $ 57,858 | $ 55,279 |
Capital expenditures | 13,535 | 20,118 | 50,384 | 48,810 |
Operating Segments [Member] | Nu Skin [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 6,112 | 5,208 | 18,731 | 16,657 |
Capital expenditures | 3,928 | 12,761 | 18,124 | 20,431 |
Operating Segments [Member] | Mainland China [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 3,253 | 2,649 | 9,868 | 7,631 |
Capital expenditures | 3,237 | 9,000 | 15,170 | 12,577 |
Operating Segments [Member] | Americas [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 190 | 251 | 656 | 714 |
Capital expenditures | 95 | 123 | 294 | 885 |
Operating Segments [Member] | South Korea [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 805 | 756 | 2,768 | 2,731 |
Capital expenditures | 0 | 173 | 508 | 537 |
Operating Segments [Member] | Southeast Asia/Pacific [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 359 | 334 | 1,096 | 1,300 |
Capital expenditures | 92 | 1,256 | 1,015 | 1,899 |
Operating Segments [Member] | EMEA [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 281 | 231 | 850 | 731 |
Capital expenditures | 391 | 718 | 821 | 1,378 |
Operating Segments [Member] | Japan [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 220 | 296 | 699 | 1,602 |
Capital expenditures | 3 | 1,484 | 94 | 3,132 |
Operating Segments [Member] | Hong Kong/Taiwan [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 1,004 | 691 | 2,794 | 1,948 |
Capital expenditures | 110 | 7 | 222 | 23 |
Operating Segments [Member] | Rhyz Investments [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 4,964 | 3,379 | 13,633 | 9,729 |
Capital expenditures | 2,816 | 2,456 | 12,819 | 13,981 |
Operating Segments [Member] | Manufacturing [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 3,069 | 2,077 | 8,644 | 5,954 |
Capital expenditures | 2,604 | 2,113 | 11,604 | 13,221 |
Operating Segments [Member] | Grow Tech [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 1,303 | 1,302 | 4,002 | 3,775 |
Capital expenditures | 212 | 343 | 1,215 | 760 |
Operating Segments [Member] | Rhyz Other [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 592 | 0 | 987 | 0 |
Capital expenditures | 0 | 0 | 0 | 0 |
Corporate and Other [Member] | ||||
Summarized Financial Information [Abstract] | ||||
Depreciation and amortization | 8,857 | 9,333 | 25,494 | 28,893 |
Capital expenditures | $ 6,791 | $ 4,901 | $ 19,441 | $ 14,398 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Apr. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Acquisitions [Abstract] | ||||
Purchase price, net of cash acquired | $ 18,963 | $ 0 | ||
Fair Value of Assets Acquired [Abstract] | ||||
Goodwill | $ 202,979 | $ 215,582 | ||
3i [Member] | ||||
Acquisitions [Abstract] | ||||
Percentage of entity acquired | 100.00% | |||
Purchase price, net of cash acquired | $ 15,700 | |||
Cash acquired | 2,100 | |||
Accrued liability | 800 | |||
Incremental contingent consideration | 7,000 | |||
Contingent consideration | 3,100 | |||
Gross purchase price | 24,500 | |||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | 14,400 | |||
Property and equipment | 300 | |||
Cash | 2,100 | |||
Accounts receivable | 800 | |||
Inventory | 300 | |||
Current liabilities | 300 | |||
Deferred tax liability | 3,100 | |||
Goodwill | 6,400 | |||
Useful life | 8 years | |||
3i [Member] | Customer Relationships [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | 3,700 | |||
3i [Member] | Technology [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | 10,000 | |||
3i [Member] | Other Intangibles [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | $ 700 | |||
Mavely [Member] | ||||
Acquisitions [Abstract] | ||||
Percentage of entity acquired | 100.00% | |||
Purchase price, net of cash acquired | $ 16,800 | |||
Cash acquired | 400 | |||
Accrued liability | 900 | |||
Incremental contingent consideration | 24,000 | |||
Contingent consideration | 8,700 | |||
Gross purchase price | 29,400 | |||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | 16,400 | |||
Cash | 400 | |||
Accounts receivable | 100 | |||
Deferred tax liability | 3,500 | |||
Goodwill | 12,600 | |||
Mavely [Member] | Customer Relationships [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | 2,000 | |||
Useful life | 4 years | |||
Mavely [Member] | Technology [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | 11,300 | |||
Useful life | 8 years | |||
Mavely [Member] | Trademarks [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | 2,800 | |||
Mavely [Member] | Tradenames [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Useful life | 8 years | |||
Mavely [Member] | Other Intangibles [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | $ 300 | |||
Useful life | 3 years |