Segment Information

3 Months Ended

Mar. 31, 2022

Segment Information [Abstract]

Segment Information

10. Segment Information

The Company reports revenue from nine segments, consisting of its seven geographic Nu Skin segments—Mainland China, Americas, South Korea, Southeast Asia/Pacific, Japan, EMEA, and Hong Kong/Taiwan—and two Rhyz Investments segments—Manufacturing 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.

Prior year 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 to comply with current segment presentation. Prior year segment information has also been recast to reflect the fourth quarter 2021 exit of the Grow Tech segment, which has been recast to Corporate and other expenses.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 March 31,
(U.S. dollars in thousands)	2022		2021
Nu Skin
Mainland China	$	124,495	$	149,593
Americas		123,580		133,761
Southeast Asia/Pacific		90,236		83,289
South Korea		72,133		81,131
Japan		61,791		69,864
EMEA		52,968		76,180
Hong Kong/Taiwan		38,494		36,345
Other		620		878
Total Nu Skin		564,317		631,041
Rhyz Investments
Manufacturing (1)		40,341		45,985
Rhyz other		241		—
Total Rhyz Investments		40,582		45,985
Total	$	604,899	$	677,026

(1) The Rhyz Investments Manufacturing segment had $14.6 million and $17.4 million of intersegment revenue for the three-month period ended March 31, 2022 and 2021, 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 March 31,
(U.S. dollars in thousands)	2022			2021
Nu Skin
Mainland China	$	28,995		$	39,439
Americas		25,123			28,745
Southeast Asia/Pacific		23,406			19,648
South Korea		22,743			26,525
Japan		15,313			17,981
EMEA		3,836			8,896
Hong Kong/Taiwan		8,690			7,348
Nu Skin contribution		128,106			148,582
Rhyz Investments
Manufacturing		3,292			5,826
Rhyz other		(1,046	)		—
Total Rhyz Investments		2,246			5,826
Total segment contribution		130,352			154,408
Corporate and other		(78,207	)		(91,495	)
Operating income		52,145			62,913
Other income (expense)		(1,453	)		1,582
Income before provision for income taxes	$	50,692		$	64,495

Depreciation and Amortization

	Three Months Ended March 31,
(U.S. dollars in thousands)	2022		2021
Nu Skin
Mainland China	$	2,884	$	3,339
Americas		199		231
Southeast Asia/Pacific		381		354
South Korea		388		990
Japan		277		253
EMEA		230		286
Hong Kong/Taiwan		691		885
Total Nu Skin		5,050		6,338
Rhyz Investments
Manufacturing		3,330		2,688
Rhyz other		592		—
Total Rhyz Investments		3,922		2,688
Corporate and other		8,158		9,318
Total	$	17,130	$	18,344

Capital Expenditures

	Three Months Ended March 31,
(U.S. dollars in thousands)	2022		2021
Nu Skin
Mainland China	$	4,068	$	8,517
Americas		42		112
Southeast Asia/Pacific		68		565
South Korea		362		490
Japan		—		91
EMEA		393		172
Hong Kong/Taiwan		263		—
Total Nu Skin		5,196		9,947
Rhyz Investments
Manufacturing		1,208		3,338
Rhyz other		—		—
Total Rhyz Investments		1,208		3,338
Corporate and other		3,875		6,088
Total	$	10,279	$	19,373