Segment Information

6 Months Ended

Jun. 30, 2022

Segment Information [Abstract]

Segment Information

10. Segment Information

The Company reports revenue from nine segments, consisting of its seven geographic Nu Skin segments—Americas, Mainland China, Southeast Asia/Pacific, South Korea, 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 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 June 30,				Six Months Ended June 30,
(U.S. dollars in thousands)	2022		2021		2022		2021
Nu Skin
Americas	$	124,445	$	138,512	$	248,025	$	272,273
Mainland China		86,808		154,182		211,303		303,775
Southeast Asia/Pacific		94,067		83,968		184,303		167,257
South Korea		69,308		88,604		141,441		169,735
Japan		55,952		68,020		117,743		137,884
EMEA		50,871		83,115		103,839		159,295
Hong Kong/Taiwan		39,327		38,529		77,821		74,874
Nu Skin other		1,318		947		1,938		1,825
Total Nu Skin		522,096		655,877		1,086,413		1,286,918
Rhyz Investments
Manufacturing (1)		38,229		48,140		78,570		94,125
Rhyz other		290		38		531		38
Total Rhyz Investments		38,519		48,178		79,101		94,163
Total	$	560,615	$	704,055	$	1,165,514	$	1,381,081

(1) The Manufacturing segment had $16.7 million and $23.2 million of intersegment revenue for the three months ended June 30, 2022 and 2021, respectively, and $31.3 million and $40.6 million for the six months ended June 30, 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 June 30,						Six Months Ended June 30,
(U.S. dollars in thousands)	2022			2021			2022			2021
Nu Skin
Americas	$	30,026		$	28,998		$	55,149		$	57,743
Mainland China		12,945			51,480			41,940			90,919
Southeast Asia/Pacific		24,367			21,213			47,773			40,861
South Korea		20,578			28,892			43,321			55,417
Japan		13,451			16,461			28,764			34,442
EMEA		6,162			13,681			9,998			22,577
Hong Kong/Taiwan		9,161			8,560			17,851			15,908
Nu Skin contribution		116,690			169,285			244,796			317,867
Rhyz Investments
Manufacturing		1,188			6,764			4,480			12,590
Rhyz other		(1,299	)		(519	)		(2,345	)		(519	)
Rhyz Investments contribution		(111	)		6,245			2,135			12,071
Total segment contribution		116,579			175,530			246,931			329,938
Corporate and other		(65,052	)		(90,154	)		(143,259	)		(181,649	)
Operating income		51,527			85,376			103,672			148,289
Other income (expense)		(8,640	)		(4,012	)		(10,093	)		(2,430	)
Income before provision for income taxes	$	42,887		$	81,364		$	93,579		$	145,859

Depreciation and Amortization

	Three Months Ended June 30,				Six Months Ended June 30,
(U.S. dollars in thousands)	2022		2021		2022		2021
Nu Skin
Americas	$	192	$	235	$	391	$	466
Mainland China		2,676		3,276		5,560		6,615
Southeast Asia/Pacific		381		383		762		737
South Korea		372		973		760		1,963
Japan		245		226		522		479
EMEA		244		283		474		569
Hong Kong/Taiwan		718		905		1,409		1,790
Total Nu Skin		4,828		6,281		9,878		12,619
Rhyz Investments
Manufacturing		3,282		2,887		6,612		5,575
Rhyz other		592		395		1,184		395
Total Rhyz Investments		3,874		3,282		7,796		5,970
Corporate and other		9,932		10,018		18,090		19,336
Total	$	18,634	$	19,581	$	35,764	$	37,925

Capital Expenditures

	Three Months Ended June 30,				Six Months Ended June 30,
(U.S. dollars in thousands)	2022		2021		2022		2021
Nu Skin
Americas	$	87	$	87	$	129	$	199
Mainland China		2,052		3,416		6,120		11,933
Southeast Asia/Pacific		56		358		124		923
South Korea		216		18		578		508
Japan		184		—		184		91
EMEA		385		258		778		430
Hong Kong/Taiwan		536		112		799		112
Total Nu Skin		3,516		4,249		8,712		14,196
Rhyz Investments
Manufacturing		1,222		5,662		2,430		9,000
Rhyz other		—		—		—		—
Total Rhyz Investments		1,222		5,662		2,430		9,000
Corporate and other		4,801		7,565		8,676		13,653
Total	$	9,539	$	17,476	$	19,818	$	36,849