ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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(Address of principal executive offices, including zip code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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Page
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1
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ITEM 1.
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1
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1
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3
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8
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8
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14
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15
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16
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16
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ITEM 1A.
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18
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ITEM 1B.
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40
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ITEM 2.
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40
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ITEM 3.
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41
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ITEM 4.
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41
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42
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ITEM 5.
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42
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ITEM 6.
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43
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ITEM 7.
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44
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ITEM 7A.
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56
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ITEM 8.
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58
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ITEM 9.
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91
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ITEM 9A.
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91
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ITEM 9B.
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91
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ITEM 9C.
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91
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92
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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92
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ITEM 11.
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EXECUTIVE COMPENSATION
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92
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ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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92
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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92
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ITEM 14.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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92
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92
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ITEM 15.
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92
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ITEM 16.
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94
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95
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Year Ended December 31,
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Product Category
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2022
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2021
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2020
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Beauty(1)
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$
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1,069.7
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48.1
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%
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$
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1,442.7
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53.5
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%
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$
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1,491.8
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57.8
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%
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Wellness(1)
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992.3
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44.6
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%
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1,062.5
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39.4
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%
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922.6
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35.7
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%
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Other(2)
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163.7
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7.3
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%
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190.5
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7.1
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%
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167.5
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6.5
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%
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$
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2,225.7
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100.0
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%
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$
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2,695.7
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100.0
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%
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$
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2,581.9
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100.0
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%
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(1) |
Includes sales of beauty and wellness products in our core Nu Skin business. The beauty category includes $440 million, $658 million and $712 million in sales of devices and related consumables for the years ended
December 31, 2022, 2021 and 2020, respectively.
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(2) |
Other includes the external revenue from our Rhyz companies along with a limited number of other products and services, including household products and technology services.
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Global consumer research to identify needs and insights and refine product concepts;
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Internal research, product development and quality testing;
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Joint research projects, collaborations and clinical studies;
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Identification and assessment of technologies for potential licensing arrangements; and
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Acquisition of technologies.
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our sales force has rapid reach to potential customers through their social networks and the social networks of those to whom they are connected;
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our sales force can personally educate and share company content with consumers about our products, which we believe is more effective for differentiating our products than using traditional mass-media
advertising;
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our distribution channel allows for personalized product demonstrations and trial by potential consumers;
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our distribution channel allows our sales force to provide personal testimonials of product efficacy;
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as compared to other distribution methods, our sales force has the opportunity to provide consumers higher levels of personalized service based on consumers’ needs, including through providing
personalized purchasing offers, discounts and regimens; and
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as compared to other distribution methods, our sales force knows their customers and can foster loyalty through data-driven customer-relationship management and our subscription program.
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“Paid Affiliates” are any Brand Affiliates, as well as members of our sales force in Mainland China, who earned sales compensation during the previous three months. As we continue to focus on customer
acquisition, our Paid Affiliates, who primarily share products, are a bridge to attracting new customers and nurturing relationships and community. Paid Affiliates power our social commerce model and are an important indicator of consumer
purchasing activity in our business.
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“Sales Leaders” are the three-month average of our monthly Brand Affiliates, as well as sales employees and independent marketers in Mainland China, who achieved certain qualification requirements as of the end
of each month of the quarter.
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Three Months Ended
December 31,
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Customers
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2022
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2021
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2020
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Americas
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299,287
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336,564
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366,688
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Mainland China
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202,933
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315,418
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381,460
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Southeast Asia/Pacific
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141,183
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169,601
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192,622
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South Korea
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123,749
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146,354
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158,953
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Japan
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119,152
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122,813
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128,400
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EMEA
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197,917
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210,414
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258,587
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Hong Kong/Taiwan
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62,903
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66,395
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70,592
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Total
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1,147,124
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1,367,559
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1,557,302
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Three Months Ended
December 31,
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Paid Affiliates
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2022
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2021
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2020
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Americas
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42,633
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49,328
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52,821
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Mainland China
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23,436
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30,546
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48,266
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Southeast Asia/Pacific
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38,653
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44,050
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48,756
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South Korea
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45,058
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52,036
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52,526
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Japan
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38,021
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38,428
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38,973
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EMEA
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31,869
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36,482
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40,553
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Hong Kong/Taiwan
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17,286
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20,155
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18,861
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Total
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236,956
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271,025
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300,756
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Three Months Ended
December 31,
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Sales Leaders
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2022
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2021
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2020
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Americas
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9,594
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10,879
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13,252
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Mainland China(1)
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12,359
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18,207
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24,560
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Southeast Asia/Pacific
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6,999
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8,800
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10,167
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South Korea
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6,094
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8,224
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7,358
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Japan
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5,936
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5,864
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6,373
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EMEA
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4,740
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5,743
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6,650
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Hong Kong/Taiwan
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3,015
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3,666
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4,165
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Total
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48,737
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61,383
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72,525
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(1) |
The December 31, 2022 number reflects a modified Sales Leader definition. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—“Mainland China” for more information.
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“Brand Affiliate-Direct Consumers”—Individuals who purchase products directly from a Brand Affiliate at a price established by the Brand Affiliate.
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“Company-Direct Consumers”—Individuals who purchase products directly from the company. These consumers are typically referred by a Brand Affiliate and may purchase at retail price or at a discount.
These individuals do not have the right to build a Nu Skin business by reselling product or by recruiting others.
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“Basic Brand Affiliates”—Brand Affiliates who purchase products for personal or family use or for resale to other consumers. These individuals are not eligible to receive compensation on a multi-level basis unless they elect to qualify as a Sales Leader under our global sales compensation plan. We consider these individuals to be part of our consumer group, as we believe a significant majority of these Brand
Affiliates are purchasing products for personal use and not actively recruiting others.
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“Sales Leaders and Qualifiers”—Brand Affiliates who have qualified or are trying to qualify as a Sales Leader. These Brand Affiliates have elected to pursue the business opportunity as a Sales Leader and are
actively attracting consumers, recruiting Brand Affiliates and building a sales network under our global sales compensation plan and constitute our sales network.
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through retail markups on resales of products purchased from the company; and
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through sales compensation earned on the sale of products under our global sales compensation plan.
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Year Ended December 31,
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(U.S. dollars in millions)
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2022
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2021
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2020
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Nu Skin
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Americas
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$
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508.5
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23
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%
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$
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547.8
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20
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%
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$
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453.0
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18
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%
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Mainland China
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360.4
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16
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568.8
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21
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625.5
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24
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Southeast Asia/Pacific
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344.4
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16
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336.7
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13
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361.6
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14
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South Korea
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268.7
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12
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354.3
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13
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326.5
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13
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Japan
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224.9
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10
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266.2
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10
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273.7
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10
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EMEA
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204.3
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9
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283.2
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11
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230.2
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9
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Hong Kong/Taiwan
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157.2
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7
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162.6
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6
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161.1
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6
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Other
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4.0
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—
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3.5
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—
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1.0
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—
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Total Nu Skin
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2,072.4
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93
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2,523.1
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94
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2,432.6
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94
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Manufacturing
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149.5
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7
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172.1
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6
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149.3
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6
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Rhyz other
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3.8
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—
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0.5
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—
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—
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—
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Total Rhyz Investments
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153.3
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7
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172.6
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6
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149.3
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6
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Total
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$
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2,225.7
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100
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%
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$
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2,695.7
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100
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%
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$
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2,581.9
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100
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%
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impose requirements related to order cancellations, product returns, inventory buy-backs and cooling-off periods for our sales force and consumers;
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require us, or our sales force, to register with government agencies;
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impose limits on the amount of sales compensation we can pay;
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impose reporting requirements; and
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require that our sales force is compensated for sales of products and not for recruiting others.
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●
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A force for good |
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Direct and decisive | |
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Accountable and empowered |
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Exceptional | |
●
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Bold innovators |
●
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Fast speed | |
●
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Customer obsessed |
●
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One global team |
Name
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Age
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Position
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Steven J. Lund
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69
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Executive Chairman of the Board
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Ryan S. Napierski
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49
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President and Chief Executive Officer
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Connie Tang
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52
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Executive Vice President, Chief Global Growth and Customer Experience Officer
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Mark H. Lawrence
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53
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Executive Vice President and Chief Financial Officer
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Joseph Y. Chang
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70
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Executive Vice President and Chief Scientific Officer
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Chayce D. Clark
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40
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Executive Vice President and General Counsel
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Steven K. Hatchett
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51
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Executive Vice President and Chief Product Officer
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● |
Challenges to the form of our network marketing system or to our business practices could harm our business.
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Laws and regulations may prohibit or severely restrict direct selling and cause our revenue and profitability to decline, and regulators could adopt new regulations that harm our business.
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Improper sales force actions could harm our business.
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Social media platforms’ decisions to prohibit, block or decrease the prominence of our sales force’s content could harm our business.
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If our business practices or policies or the actions of our sales force are deemed to be in violation of applicable local regulations regarding foreigners, then we could be sanctioned and/or required to change
our business model, which could significantly harm our business.
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Our sales compensation plans or other incentives could be viewed negatively by some of our sales force, could be restricted by government regulators, and could fail to achieve desired long-term results and have
a negative impact on revenue.
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Limits on the amount of sales compensation we pay could inhibit our ability to attract and retain our sales force, negatively impact our revenue and cause regulatory risks.
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We may be held responsible for certain taxes, assessments and other requirements relating to the activities of our sales force, which could harm our financial condition and operating results.
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Our operations in Mainland China are subject to significant government scrutiny, and we could be subject to fines or other penalties.
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If direct selling regulations in Mainland China are modified, interpreted or enforced in a manner that results in negative changes to our business model or the imposition of a range of potential penalties, our
business could be significantly negatively impacted.
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Our ability to expand our business in Mainland China could be negatively impacted if we are unable to obtain additional necessary national and local government approvals in Mainland China.
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If we are not able to register products for sale in Mainland China, our business could be harmed.
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Our markets are intensely competitive, and market conditions and the strengths of competitors may harm our business.
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Adverse publicity concerning our business, marketing plan, products or people could harm our business and reputation.
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Inability of products, platforms, business opportunities and other initiatives to gain or maintain sales force and market acceptance could harm our business.
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Product diversion may have a negative impact on our business.
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Epidemics, including COVID-19, and other crises have and may continue to negatively impact our business.
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Our ability to conduct business in international markets may be affected by political, legal, tax and regulatory risks.
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We are subject to financial risks as a result of our international operations, including exposure to foreign-currency fluctuations, currency controls and inflation in foreign markets, all of which could impact
our financial position and results of operations.
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Potential changes to tariff and import/export regulations, and ongoing trade disputes between the United States and other jurisdictions may have a negative effect on global economic conditions and our business,
financial results and financial condition.
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If we are unable to retain our existing sales force and recruit additional people to join our sales force, our revenue may not increase and may even decline.
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We depend on our key personnel and Sales Leaders, and the loss of the services provided by any of our executive officers, other key employees or key Sales Leaders could harm our business and results of
operations.
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Production difficulties, quality control problems, inaccurate forecasting, shortages in ingredients, and reliance on our suppliers could harm our business.
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The loss of or a disruption in our manufacturing, supply chain and distribution operations, or significant expenses or violations incurred by such operations, could adversely affect our business.
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Our business could be negatively impacted if we fail to execute our product launch process or ongoing product sales due to difficulty in forecasting or increased pressure on our supply chain, information systems
and management.
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If we are unable to effectively manage our growth in certain markets, our operations could be harmed.
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System failures, capacity constraints and other information technology difficulties could harm our business.
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Any acquired companies or future acquisitions may expose us to additional risks.
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Regulations governing our products, including the formulation, registration, pre-approval, marketing and sale of our products, could harm our business.
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Government regulations and private party actions relating to the marketing and advertising of our products and services may restrict, inhibit or delay our ability to sell our products and harm our business.
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Our operations could be harmed if we fail to comply with Good Manufacturing Practices.
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If our current or any future device products are determined to be medical devices in a particular geographic market, or if our sales force uses these products for medical purposes or makes improper medical
claims, our ability to continue to market and distribute such devices could be harmed, and we could face legal or regulatory actions.
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We may incur product liability claims that could harm our business.
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We may become involved in legal proceedings and other matters that could adversely affect our operations or financial results.
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Non-compliance with anti-corruption laws could harm our business.
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A failure of our internal controls over financial reporting or our regulatory compliance efforts could harm our stock price and our financial and operating results or could result in fines or penalties.
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We are subject to changes in tax and customs laws, changes in our tax rates, the adoption of new U.S. or international tax legislation or exposure to additional tax liabilities, which could have a material and
adverse impact on our effective tax rate, operating results, cash flows and financial condition.
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Government authorities may question our tax or customs positions or change their laws in a manner that could increase our effective tax rate or otherwise harm our business.
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A decline in our business could adversely affect our financial position and liquidity.
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We may be subject to claims of infringement on the intellectual property rights or trade secrets of others, resulting in costly litigation.
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If we are unable to protect our intellectual property rights or our proprietary information and know-how, our ability to compete could be negatively impacted and the value of our products could be adversely
affected.
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Cyber security risks and the failure to maintain the integrity of company, employee, sales force or guest data could expose us to data loss, litigation, liability and harm to our reputation.
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Our business could be negatively impacted by corporate citizenship and sustainability matters.
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The market price of our Class A common stock is subject to significant fluctuations due to a number of factors that are beyond our control.
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Difficult economic conditions could harm our business.
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● |
In 2015, the FTC took aggressive actions against a multi-level marketing company, alleging an illegal business model and inappropriate earnings claims.
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In 2016, the FTC entered into a settlement with a multi-level marketing company, requiring the company to modify its business model, including basing sales compensation and qualification only on sales to retail and preferred customers
and on purchases by a distributor for personal consumption within allowable limits. Although this settlement does not represent judicial precedent or a new FTC rule, the FTC has indicated that the industry should look at this settlement,
and the principles underlying its specific measures, for guidance.
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In 2019, the FTC entered into a settlement with a multi-level marketing company, alleging an illegal business model and compensation structure and inappropriate earnings claims. The company agreed to a prohibition from engaging in
multi-level marketing. The FTC and another multi-level marketing company are currently in litigation, and that company had indicated the FTC was seeking to limit the levels of payment in its compensation structure as a condition to
settlement.
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During 2020 to 2022, the FTC issued letters that warned several direct-selling companies to remove and address claims that they or members of their sales force were making about their products’ ability to treat or prevent COVID-19
and/or about the earnings that people who have recently lost income could make.
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In 2021, the FTC sent a notice to more than 1,100 companies, including us and two of our subsidiaries (Pharmanex, LLC and Big Planet, Inc.), that outlined several practices that the FTC determined to be unfair or deceptive in prior
administrative cases. These practices relate to earnings claims, other money-making opportunity claims, and endorsements and testimonials. Pursuant to the FTC’s “penalty offense authority,” companies that received the notice are expected
to comply with the standards set in the prior administrative cases and could incur significant civil penalties if they or their representatives fail to do so. The penalties could be up to $46,517 per violation, and there is some ambiguity
in how a “violation” would be defined for these purposes.
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● |
In 2022, the FTC issued an Advanced Notice of Proposed Rulemaking (“ANPR”) indicating that it is considering proposing a rule regarding earnings claims. The ANPR also suggested, among other things, that the FTC might not consider a
disclaimer (such as “results not typical”) to be sufficient to correct a misleading impression from an atypical earnings claim.
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impose requirements related to sign-up, order cancellations, product returns, inventory buy-backs and cooling-off periods for our sales force and consumers;
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● |
require us, or our sales force, to register with government agencies;
|
● |
impose limits on the amount of sales compensation we can pay;
|
● |
impose reporting requirements; and
|
● |
require that our sales force is compensated for selling products and not for recruiting others.
|
● |
During 2020 to 2022, the FTC issued letters that warned several direct-selling companies to remove and address claims that they or members of their sales force were making about their products’
ability to treat or prevent COVID-19 and/or about the earnings that people who have recently lost income could make.
|
● |
In 2021, the FTC sent a notice to more than 1,100 companies, including us and two of our subsidiaries (Pharmanex, LLC and Big Planet, Inc.), that outlined several practices that the FTC determined to be unfair or deceptive in prior
administrative cases. These practices relate to earnings claims, other money-making opportunity claims, and endorsements and testimonials. Pursuant to the FTC’s “penalty offense authority,” companies that received the notice are expected to comply with the standards set in the prior administrative cases and could incur significant civil penalties if they or their representatives fail to do so. The penalties could be up to $46,517
per violation, and there is some ambiguity in how a “violation” would be defined for these purposes.
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● |
The laws and interpretations regarding “independent contractor” status in certain jurisdictions, including the United States, continue to evolve, and in some cases, authorities have sought to apply
these laws unfavorably against gig economy, platform and direct selling companies. For example, in October 2022, the U.S. Department of Labor proposed a regulation that, if adopted, would alter the employee vs. independent contractor
analysis in a way that could potentially cause more workers to be classified as employees.
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● |
In addition, some jurisdictions have, without challenging the “independent contractor” status, taken the position that direct sellers must nonetheless pay certain taxes with respect to payments to their sales force.
|
● |
suspicions about the legality and ethics of network marketing;
|
● |
media or regulatory scrutiny regarding our business and our business models, including in Mainland China;
|
● |
the safety or effectiveness of our or our competitors’ products or the ingredients in such products;
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● |
inquiries, investigations, fines, legal actions, or mandatory or voluntary product recalls involving us, our competitors, our business models or our respective products;
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● |
the actions of our current or former sales force and employees, including any allegations that our sales force or employees have overstated or made false product claims or earnings representations, or engaged in
unethical or illegal activity;
|
● |
misperceptions about the types and magnitude of economic benefits offered at different levels of sales engagement in our business; and
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● |
public, governmental or media perceptions of the direct selling, beauty product, or wellness product industries generally.
|
● |
the possibility that a government might ban or severely restrict our sales compensation and business models;
|
● |
the possibility that local civil unrest, political instability, or changes in diplomatic or trade relationships might disrupt our supply chain or other operations in one or more markets—for example, the ongoing
conflict in Russia and Ukraine has caused distraction to our sales force;
|
● |
the lack of well-established or reliable legal systems in certain areas where we operate;
|
● |
the presence of high inflation in the economies of international markets in which we operate;
|
● |
the possibility that a government authority might impose legal, tax, customs, or other financial burdens on us or our sales force, due, for example, to the structure of our operations in various markets;
|
● |
the possibility that a government authority might challenge the status of our sales force as independent contractors or impose employment or social taxes on our sales force; and
|
● |
the possibility that governments may impose currency remittance restrictions limiting our ability to repatriate cash.
|
● |
any adverse publicity or negative public perception regarding us, our products or ingredients, our distribution channel, or our industry or competitors;
|
● |
lack of interest in, dissatisfaction with, or the technical failure of, our products or digital tools;
|
● |
lack of compelling products or income opportunities, including through our sales compensation plans and incentive trips and other offerings;
|
● |
negative sales force reaction to changes in our sales compensation plans or to our failure to make changes that would be necessary to keep our compensation competitive with the market;
|
● |
interactions with our company, including our actions to enforce our policies and procedures and the quality of our customer service;
|
● |
any regulatory actions or charges against us or others in our industry, as well as regulatory changes that impact product formulations and sales viability;
|
● |
general economic, business, public health and geopolitical conditions, including employment levels, employment trends such as the gig and sharing economies, pandemics or other conditions that curtail
person-to-person interactions, and the ongoing conflict in Russia and Ukraine which has caused distraction to our sales force;
|
● |
changes in the policies of social media platforms used to prospect or recruit potential consumers and sales force participants;
|
● |
recruiting efforts of our competitors and changes in consumer-loyalty trends;
|
● |
potential saturation or maturity levels in a given market, which could negatively impact our ability to attract and retain our sales force in such market;
|
● |
growing gig economy competition which may draw away potential product sellers, affiliates, and influencers;
|
● |
our sales force’s increased use of social sharing channels, which may enable them to more easily engage their consumers and sales network in other opportunities;
|
● |
lack of sufficient tools to create customer interest in our products and to manage and build a personalized business; and
|
● |
our and our sales force’s ability to implement social commerce and other selling platforms that appeal to consumers.
|
● |
difficulties in integrating acquired operations or products;
|
● |
the difficulties of imposing financial and operating controls on the acquired companies and their management and the potential costs of doing so;
|
● |
the potential loss of key employees, customers, suppliers or distributors from acquired businesses and disruption to our direct selling channel;
|
● |
diversion of management’s attention from our core business;
|
● |
the failure to achieve the strategic objectives of these acquisitions;
|
● |
increased fixed costs;
|
● |
the failure of the acquired businesses to achieve the results we have projected in either the near or long term;
|
● |
the assumption of unexpected liabilities, including litigation risks;
|
● |
adverse effects on existing business relationships with our suppliers, sales force or consumers; and
|
● |
risks associated with entering markets or industries in which we have limited or no prior experience, including limited expertise in running the business, developing the technology, and selling and servicing the
products.
|
● |
delays, or altogether prohibitions, in introducing or selling a product or ingredient in one or more markets;
|
● |
delays and expenses associated with the registration and approval process for a product;
|
● |
limitations on our ability to import products into a market;
|
● |
delays and expenses associated with compliance, such as record keeping, documentation of the properties of certain products, labeling, and scientific substantiation;
|
● |
limitations on the claims we can make regarding our products; and
|
● |
product reformulations, or the recall or discontinuation of certain products that cannot be reformulated to comply with new regulations.
|
● |
fluctuations in our operating results;
|
● |
government investigations of our business;
|
● |
trends or adverse publicity related to our business, products, industry or competitors;
|
● |
the sale of shares of Class A common stock by significant stockholders;
|
● |
demand, and general trends in the market, for our products;
|
● |
acquisitions by us or our competitors;
|
● |
economic or currency exchange issues in markets in which we operate;
|
● |
changes in estimates of our operating performance or changes in recommendations by securities analysts;
|
● |
speculative trading, including short selling and options trading; and
|
● |
general economic, business, regulatory and political conditions.
|
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
(a)
|
(b)
|
(c)
|
(d)
|
|||||||||||||
Period
|
Total
Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
the Plans or Programs
(in millions)(1)
|
||||||||||||
October 1 – 31, 2022
|
283,592
|
$
|
35.28
|
283,592
|
$
|
175.4
|
||||||||||
November 1 – 30, 2022
|
—
|
—
|
—
|
$
|
175.4
|
|||||||||||
December 1 – 31, 2022
|
—
|
—
|
—
|
$
|
175.4
|
|||||||||||
Total
|
283,592
|
$
|
35.28
|
283,592
|
(1) |
In August 2018, we announced that our board of directors approved a stock repurchase plan. Under this plan, our board of directors authorized the repurchase of up to $500 million of our outstanding Class A
common stock on the open market or in privately negotiated transactions.
|
Measured Period
|
Nu Skin
|
S&P 500 Index
|
S&P MidCap 400
Consumer Staples Index
|
|||
December 31, 2017
|
100.00
|
100.00
|
100.00
|
|||
December 31, 2018
|
91.68
|
95.62
|
92.85
|
|||
December 31, 2019
|
63.25
|
125.72
|
102.93
|
|||
December 31, 2020
|
87.78
|
148.85
|
125.81
|
|||
December 31, 2021
|
83.97
|
191.58
|
138.49
|
|||
December 31, 2022
|
72.27
|
156.88
|
137.43
|
● |
developing and marketing innovative, technologically and scientifically advanced products;
|
● |
providing compelling initiatives and strong support; and
|
● |
offering an attractive sales compensation structure.
|
● |
cost of products purchased from third-party vendors;
|
● |
cost of self-manufactured products;
|
● |
cost of adjustments to inventory carrying value;
|
● |
freight cost of shipping products to our sales force and import duties for the products; and
|
● |
royalties and related expenses for licensed technologies.
|
● |
wages and benefits;
|
● |
rents and utilities;
|
● |
depreciation and amortization;
|
● |
promotion and advertising;
|
● |
professional fees;
|
● |
travel;
|
● |
research and development; and
|
● |
other operating expenses.
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Cost of sales
|
28.3
|
25.0
|
25.5
|
|||||||||
Gross profit
|
71.7
|
75.0
|
74.5
|
|||||||||
Operating expenses:
|
||||||||||||
Selling expenses
|
39.5
|
40.1
|
39.8
|
|||||||||
General and administrative expenses
|
25.0
|
24.3
|
24.7
|
|||||||||
Restructuring and impairment expenses
|
2.2
|
2.0
|
—
|
|||||||||
Total operating expenses
|
66.7
|
66.3
|
64.5
|
|||||||||
Operating income
|
5.0
|
8.7
|
10.0
|
|||||||||
Other income (expense), net
|
(1.0
|
)
|
(0.1
|
)
|
(0.1
|
)
|
||||||
Income before provision for income taxes
|
4.0
|
8.6
|
9.9
|
|||||||||
Provision (benefit) for income taxes
|
(0.7
|
)
|
3.1
|
2.5
|
||||||||
Net income
|
4.7
|
%
|
5.5
|
%
|
7.4
|
%
|
Constant
|
||||||||||||||||
Year Ended December 31,
|
Currency
|
|||||||||||||||
2022
|
2021
|
Change
|
Change(1)
|
|||||||||||||
Nu Skin
|
||||||||||||||||
Americas
|
$
|
508,537
|
$
|
547,755
|
(7
|
)%
|
(5
|
)%
|
||||||||
Mainland China
|
360,389
|
568,774
|
(37
|
)%
|
(35
|
)%
|
||||||||||
Southeast Asia/Pacific
|
344,411
|
336,651
|
2
|
%
|
7
|
%
|
||||||||||
South Korea
|
268,707
|
354,252
|
(24
|
)%
|
(15
|
)%
|
||||||||||
Japan
|
224,896
|
266,216
|
(16
|
)%
|
—
|
|||||||||||
EMEA
|
204,275
|
283,200
|
(28
|
)%
|
(19
|
)%
|
||||||||||
Hong Kong/ Taiwan
|
157,197
|
162,611
|
(3
|
)%
|
1
|
%
|
||||||||||
Other
|
3,959
|
3,653
|
8
|
%
|
8
|
%
|
||||||||||
Total Nu Skin
|
2,072,371
|
2,523,112
|
(18
|
)%
|
(12
|
)%
|
||||||||||
Rhyz Investments
|
||||||||||||||||
Manufacturing
|
149,458
|
172,120
|
(13
|
)%
|
(13
|
)%
|
||||||||||
Rhyz Other
|
3,830
|
437
|
776
|
%
|
776
|
%
|
||||||||||
Total Rhyz Investments
|
153,288
|
172,557
|
(11
|
)%
|
(11
|
)%
|
||||||||||
Total
|
$
|
2,225,659
|
$
|
2,695,669
|
(17
|
)%
|
(12
|
)%
|
(1) |
Constant-currency revenue change is a non-GAAP financial measure. See “Non-GAAP Financial Measures,” below.
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
Change
|
||||||||||
Nu Skin
|
||||||||||||
Americas
|
$
|
110,522
|
$
|
116,265
|
(5
|
)%
|
||||||
Mainland China
|
72,362
|
151,645
|
(52
|
)%
|
||||||||
Southeast Asia/Pacific
|
85,827
|
81,779
|
5
|
%
|
||||||||
South Korea
|
81,804
|
114,034
|
(28
|
)%
|
||||||||
Japan
|
54,976
|
67,511
|
(19
|
)%
|
||||||||
EMEA
|
21,446
|
41,988
|
(49
|
)%
|
||||||||
Hong Kong/Taiwan
|
35,253
|
37,330
|
(6
|
)%
|
||||||||
Total Nu Skin
|
462,190
|
610,552
|
(24
|
)%
|
||||||||
Rhyz Investments
|
||||||||||||
Manufacturing
|
3,570
|
18,346
|
(81
|
)%
|
||||||||
Rhyz Other
|
(6,180
|
)
|
(1,813
|
)
|
(241
|
)%
|
||||||
Total Rhyz Investments
|
(2,610
|
)
|
16,533
|
(116
|
)%
|
● |
“Customers” are persons who have purchased directly from the Company during the three months ended as of the date indicated. Our Customer numbers include members of our sales force who made such a purchase, including Paid Affiliates and
those who qualify as Sales Leaders, but they do not include consumers who purchase directly from members of our sales force.
|
● |
“Paid Affiliates” are any Brand Affiliates, as well as members of our sales force in Mainland China, who earned sales compensation during the three-month period. In all of our markets besides Mainland China, we refer to members of our
independent sales force as “Brand Affiliates” because their primary role is to promote our brand and products through their personal social networks.
|
● |
“Sales Leaders” are the three-month average of our monthly Brand Affiliates, as well as sales employees and independent marketers in Mainland China, who achieved certain qualification requirements as of the end of each month of the
quarter.
|
Three Months Ended
December 31,
|
||||||||||||
Customers
|
2022
|
2021
|
Change
|
|||||||||
Americas
|
299,287
|
336,564
|
(11
|
)%
|
||||||||
Mainland China
|
202,933
|
315,418
|
(36
|
)%
|
||||||||
Southeast Asia/Pacific
|
141,183
|
169,601
|
(17
|
)%
|
||||||||
South Korea
|
123,749
|
146,354
|
(15
|
)%
|
||||||||
Japan
|
119,152
|
122,813
|
(3
|
)%
|
||||||||
EMEA
|
197,917
|
210,414
|
(6
|
)%
|
||||||||
Hong Kong/Taiwan
|
62,903
|
66,395
|
(5
|
)%
|
||||||||
Total
|
1,147,124
|
1,367,559
|
(16
|
)%
|
Three Months Ended
December 31,
|
||||||||||||
Paid Affiliates
|
2022
|
2021
|
Change
|
|||||||||
Americas
|
42,633
|
49,328
|
(14
|
)%
|
||||||||
Mainland China
|
23,436
|
30,546
|
(23
|
)%
|
||||||||
Southeast Asia/Pacific
|
38,653
|
44,050
|
(12
|
)%
|
||||||||
South Korea
|
45,058
|
52,036
|
(13
|
)%
|
||||||||
Japan
|
38,021
|
38,428
|
(1
|
)%
|
||||||||
EMEA
|
31,869
|
36,482
|
(13
|
)%
|
||||||||
Hong Kong/Taiwan
|
17,286
|
20,155
|
(14
|
)%
|
||||||||
Total
|
236,956
|
271,025
|
(13
|
)%
|
Three Months Ended
December 31,
|
||||||||||||
Sales Leaders
|
2022
|
2021
|
Change
|
|||||||||
Americas
|
9,594
|
10,879
|
(12
|
)%
|
||||||||
Mainland China(1)
|
12,359
|
18,207
|
(32
|
)%
|
||||||||
Southeast Asia/Pacific
|
6,999
|
8,800
|
(20
|
)%
|
||||||||
South Korea
|
6,094
|
8,224
|
(26
|
)%
|
||||||||
Japan
|
5,936
|
5,864
|
1
|
%
|
||||||||
EMEA
|
4,740
|
5,743
|
(17
|
)%
|
||||||||
Hong Kong/Taiwan
|
3,015
|
3,666
|
(18
|
)%
|
||||||||
Total
|
48,737
|
61,383
|
(21
|
)%
|
(1) |
The December 31, 2022 number reflects a modified Sales Leader definition. See “Mainland China,” below.
|
● |
Cash requirements for operating activities. Our operating expenses typically total approximately 85%-90% of our revenue, with compensation to our sales force constituting 40%-43% of our core Nu Skin revenue.
These compensation expenses consist primarily of commission payments, which we generally pay to our sales force within approximately one to two months of the sale. Inventory purchases have historically constituted approximately 15%-20% of
our revenue. On average, we purchase our inventory approximately three to six months prior to sale. While our actual cash usage may vary based on the timing of payments, we currently expect these approximate percentages and payment
practices to continue in 2023. In addition, we expect our 2023 lease payments will be approximately $29.9 million.
|
● |
Cash requirements for investing activities. As discussed in more detail below, our capital expenditures are expected to be $75-95 million for 2023.
|
● |
Cash requirements for financing activities. In 2023 we are obligated to make a total of $15.0 million in quarterly principal payments plus the associated interest on our term loan. We also anticipate paying
quarterly cash dividends throughout 2023, approximating $19-20 million per quarter depending on the number of shares outstanding as of record date. Additional details about our dividends and term loan are provided below.
|
● |
the expansion and upgrade of facilities in our various markets;
|
● |
purchases and expenditures for computer systems and equipment, software, and application development; and
|
● |
a new manufacturing plant in Mainland China.
|
2022
|
2021
|
|||||||||||||||||||||||||||||||
4th Quarter
|
3rd Quarter
|
2nd Quarter
|
1st Quarter
|
4th Quarter
|
3rd Quarter
|
2nd Quarter
|
1st Quarter
|
|||||||||||||||||||||||||
Argentina
|
162.6
|
136.8
|
118.6
|
107.0
|
100.5
|
97.4
|
93.9
|
88.8
|
||||||||||||||||||||||||
Australia
|
1.5
|
1.5
|
1.4
|
1.4
|
1.4
|
1.4
|
1.3
|
1.3
|
||||||||||||||||||||||||
Canada
|
1.4
|
1.3
|
1.3
|
1.3
|
1.3
|
1.3
|
1.2
|
1.3
|
||||||||||||||||||||||||
Colombia
|
4,826.4
|
4,379.4
|
3,929.8
|
3,891.6
|
3,882.7
|
3,840.4
|
3,690.7
|
3,560.4
|
||||||||||||||||||||||||
Chile
|
915.8
|
930.6
|
840.9
|
809.1
|
827.4
|
773.6
|
716.8
|
724.0
|
||||||||||||||||||||||||
Eurozone countries
|
1.0
|
1.0
|
0.9
|
0.9
|
0.9
|
0.8
|
0.8
|
0.8
|
||||||||||||||||||||||||
Hong Kong
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
7.8
|
||||||||||||||||||||||||
Indonesia
|
15,553
|
14,933
|
14,536
|
14,344
|
14,274
|
14,373
|
14,393
|
14,202
|
||||||||||||||||||||||||
Japan
|
140.8
|
138.1
|
129.5
|
116.2
|
113.6
|
110.1
|
109.5
|
106.0
|
||||||||||||||||||||||||
Mainland China
|
7.1
|
6.8
|
6.6
|
6.3
|
6.4
|
6.5
|
6.5
|
6.5
|
||||||||||||||||||||||||
Malaysia
|
4.6
|
4.5
|
4.3
|
4.2
|
4.2
|
4.2
|
4.1
|
4.1
|
||||||||||||||||||||||||
Mexico
|
19.7
|
20.2
|
20.0
|
20.5
|
20.7
|
20.0
|
20.0
|
20.4
|
||||||||||||||||||||||||
Philippines
|
57.2
|
56.3
|
52.7
|
51.6
|
50.4
|
50.2
|
48.2
|
48.3
|
||||||||||||||||||||||||
Singapore
|
1.4
|
1.4
|
1.4
|
1.4
|
1.4
|
1.4
|
1.3
|
1.3
|
||||||||||||||||||||||||
South Africa
|
17.6
|
17.0
|
15.5
|
15.2
|
15.4
|
14.6
|
14.1
|
15.0
|
||||||||||||||||||||||||
South Korea
|
1,358.2
|
1,342.2
|
1,262.1
|
1,206.2
|
1,183.8
|
1,159.7
|
1,121.2
|
1,115.3
|
||||||||||||||||||||||||
Taiwan
|
31.1
|
30.4
|
29.4
|
28.0
|
27.8
|
27.9
|
28.0
|
28.1
|
||||||||||||||||||||||||
Thailand
|
36.2
|
36.4
|
34.5
|
33.0
|
33.3
|
32.9
|
31.4
|
30.3
|
||||||||||||||||||||||||
Vietnam
|
24,303
|
23,463
|
23,081
|
22,770
|
22,780
|
22,889
|
23,041
|
23,052
|
1. |
Financial Statements. Set forth below is the index to the Financial Statements included in this Item 8:
|
Page
|
|
Consolidated Balance Sheets at December 31, 2022 and 2021
|
59
|
Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020
|
60
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022,
2021 and 2020
|
61
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022,
2021 and 2020
|
62
|
Consolidated Statements of Cash Flows for the years ended December 31, 2022,
2021 and 2020
|
63
|
64
|
|
89 |
2.
|
Financial Statement Schedules: Financial statement schedules have been omitted because they are not required or are not applicable, or because the required information is shown in the financial
statements or notes thereto.
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Current investments
|
|
|
||||||
Accounts receivable, net
|
|
|
||||||
Inventories, net
|
|
|
||||||
Prepaid expenses and other
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Goodwill
|
|
|
||||||
Other intangible assets, net
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Current portion of long-term debt
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Long-term debt
|
|
|
||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Notes 7 and 16)
|
|
|
||||||
Stockholders’ equity
|
||||||||
Class A common stock –
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Treasury stock, at cost –
|
(
|
)
|
(
|
)
|
||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Retained earnings
|
|
|
||||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Revenue
|
$
|
|
$
|
|
$
|
|
||||||
Cost of sales
|
|
|
|
|||||||||
Gross profit
|
|
|
|
|||||||||
Operating expenses:
|
||||||||||||
Selling expenses
|
|
|
|
|||||||||
General and administrative expenses
|
|
|
|
|||||||||
Restructuring and impairment expenses
|
|
|
|
|||||||||
Total operating expenses
|
|
|
|
|||||||||
Operating income
|
|
|
|
|||||||||
Other income (expense), net (Note 17)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income before provision for income taxes
|
|
|
|
|||||||||
Provision (benefit) for income taxes
|
(
|
)
|
|
|
||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Net income per share:
|
||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
||||||
Diluted
|
$
|
|
$
|
|
$
|
|
||||||
Weighted-average common shares outstanding (000s):
|
||||||||||||
Basic
|
|
|
|
|||||||||
Diluted
|
|
|
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Other comprehensive income (loss):
|
||||||||||||
Foreign currency translation adjustment, net of taxes of $
|
(
|
)
|
(
|
)
|
|
|||||||
Net unrealized gains/(losses) on cash flow hedges, net of taxes of $(
|
|
|
|
|||||||||
Less: Reclassification adjustment for realized losses/(gains) in current earnings on cash flow hedges, net of taxes of $
|
(
|
)
|
|
|
||||||||
(
|
)
|
(
|
)
|
|
||||||||
Comprehensive income
|
$
|
|
$
|
|
$
|
|
Class A
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock, at
cost
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||
Balance at January 1, 2020
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
||||||||||||||||||
Repurchase of Class A common stock (Note 8)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options (
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
Cash dividends
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at December 31, 2020
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 8)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options (
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
Cash dividends
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at December 31, 2021
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Repurchase of Class A common stock (Note 8)
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Exercise of employee stock options (
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
||||||||||||||||||
Cash dividends
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at December 31, 2022
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
|
|
|
|||||||||
Non-cash lease expense
|
|
|
|
|||||||||
Stock-based compensation
|
|
|
|
|||||||||
Foreign currency (gains)/losses
|
|
|
(
|
)
|
||||||||
Loss on disposal of assets
|
|
|
|
|||||||||
Impairment of fixed assets and other intangibles
|
|
|
|
|||||||||
Unrealized (gain)/losses on equity investments
|
( |
) | ||||||||||
Deferred taxes
|
(
|
)
|
|
(
|
)
|
|||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable, net
|
(
|
)
|
|
(
|
)
|
|||||||
Inventories, net
|
|
(
|
)
|
(
|
)
|
|||||||
Prepaid expenses and other
|
|
|
(
|
)
|
||||||||
Other assets
|
|
(
|
)
|
(
|
)
|
|||||||
Accounts payable
|
|
(
|
)
|
|
||||||||
Accrued expenses
|
(
|
)
|
(
|
)
|
|
|||||||
Other liabilities
|
(
|
)
|
|
|
||||||||
Net cash provided by operating activities
|
|
|
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds on investment sales
|
|
|
|
|||||||||
Purchases of investments
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Acquisitions (net of cash acquired)
|
|
(
|
)
|
(
|
)
|
|||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards
|
||||||||||||
Payment of cash dividends
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Repurchase of shares of common stock
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Finance lease principal payments
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Payment of debt issuance cost
|
( |
) | ||||||||||
Payments on debt
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds from debt
|
|
|
|
|||||||||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Effect of exchange rate changes on cash
|
(
|
)
|
(
|
)
|
|
|||||||
Net increase (decrease) in cash and cash equivalents
|
(
|
)
|
(
|
)
|
|
|||||||
Cash and cash equivalents, beginning of period
|
|
|
|
|||||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
$
|
|
1. |
The Company
|
2. |
Summary of Significant Accounting Policies
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Raw materials
|
$
|
|
$
|
|
||||
Finished goods
|
|
|
||||||
Total inventory, net
|
$
|
|
$
|
|
2022
|
2021
|
2020
|
||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
||||||
Additions
|
|
|
|
|||||||||
Write-offs
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Deferred charges
|
$
|
|
$
|
|
||||
Prepaid income tax
|
|
|
||||||
Prepaid inventory and import costs
|
|
|
||||||
Prepaid rent, insurance and other occupancy costs
|
|
|
||||||
Prepaid promotion and event cost
|
|
|
||||||
Prepaid other taxes
|
|
|
||||||
Derivative financial instruments
|
||||||||
Prepaid software license
|
|
|
||||||
Deposits
|
|
|
||||||
Other
|
|
|
||||||
Total prepaid expense and other
|
$
|
|
$
|
|
Buildings
|
|
Furniture and fixtures
|
|
Computers and equipment
|
|
Leasehold improvements
|
|
Scanners
|
|
Vehicles
|
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Deferred taxes
|
$
|
|
$
|
|
||||
Deposits for noncancelable operating leases
|
|
|
||||||
Cash surrender value for life insurance policies
|
|
|
||||||
|
|
|
||||||
Derivative financial instruments
|
||||||||
Long-term investments | ||||||||
Other
|
|
|
||||||
Total other assets
|
$
|
|
$
|
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Accrued sales force commissions and other payments
|
$
|
|
$
|
|
||||
Accrued other taxes
|
|
|
||||||
Accrued payroll and other employee expenses
|
|
|
||||||
Accrued payable to vendors
|
|
|
||||||
|
|
|
||||||
Accrued royalties
|
|
|
||||||
Sales return reserve
|
|
|
||||||
Deferred revenue
|
|
|
||||||
Other
|
|
|
||||||
Total accrued expenses
|
$
|
|
$
|
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Deferred tax liabilities
|
$
|
|
$
|
|
||||
Reserve for other tax liabilities
|
|
|
||||||
Liability for deferred compensation plan
|
|
|
||||||
Contingent consideration
|
|
|
||||||
|
|
|
||||||
Asset retirement obligation
|
|
|
||||||
Other
|
|
|
||||||
Total other liabilities
|
$
|
|
$
|
|
2022
|
2021
|
2020
|
||||||||||
Gross balance at January 1
|
$
|
|
$
|
|
$
|
|
||||||
Increases related to prior year tax positions
|
|
|
|
|||||||||
Increases related to current year tax positions
|
|
|
|
|||||||||
Settlements
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Decreases due to lapse of statutes of limitations
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Currency adjustments
|
(
|
)
|
(
|
)
|
|
|||||||
Gross balance at December 31
|
$
|
|
$
|
|
$
|
|
● |
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.
|
3. |
Property and Equipment
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Land
|
$
|
|
$
|
|
||||
Buildings
|
|
|
||||||
Construction in progress(1)
|
|
|
||||||
Furniture and fixtures
|
|
|
||||||
Computers and equipment
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
Scanners
|
|
|
||||||
Vehicles
|
|
|
||||||
|
|
|||||||
Less: accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
$
|
|
$
|
|
(1) |
|
4. |
Goodwill
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Nu Skin
|
||||||||
Americas
|
$
|
|
$
|
|
||||
Mainland China
|
|
|
||||||
Southeast Asia/Pacific
|
|
|
||||||
South Korea
|
|
|
||||||
Japan
|
|
|
||||||
EMEA
|
|
|
||||||
Hong Kong/Taiwan
|
|
|
||||||
Rhyz Investments
|
||||||||
Manufacturing
|
|
|
||||||
Rhyz Other
|
|
|
||||||
Total
|
$
|
|
$
|
|
5. |
Other Intangible Assets
|
Carrying Amount at December 31,
|
||||||||
2022
|
2021
|
|||||||
Indefinite life intangible assets:
|
||||||||
Trademarks and trade names
|
$
|
|
$
|
|
December 31, 2022
|
December 31, 2021
|
||||||||||||||||
Finite life intangible assets:
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Weighted-
average
Amortization
Period
|
||||||||||||
Scanner technology
|
$
|
|
$
|
|
$
|
|
$
|
|
|
||||||||
Developed technology
|
|
|
|
|
|
||||||||||||
Sales force network
|
|
|
|
|
|
||||||||||||
Trademarks
|
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
|
||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
|
Year Ending December 31,
|
||||
2023
|
$
|
|
||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
2027
|
|
6. |
Long-Term Debt
|
Facility or
Arrangement
|
Original
Principal
Amount
|
Balance as of
December 31,
2022 (1)(2)
|
Balance as of
December 31,
2021 (1)(2)
|
Interest
Rate
|
Repayment
Terms
|
|||||
2018 Credit Agreement term loan facility
|
$ |
$ |
||||||||
2018 Credit Agreement revolving credit facility
|
$ |
|
||||||||
Credit Agreement term loan facility
|
$
|
$
|
|
|
|
|||||
Credit Agreement revolving credit facility
|
$
|
|
|
|
(1) |
|
(2) |
|
Year Ending December 31,
|
||||
2023
|
$
|
|
||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
Thereafter
|
|
|||
Total (1)
|
$
|
|
(1) |
|
7. |
Leases
|
Year Ended December 31, | ||||||||||||
2022
|
2021 |
2020 |
||||||||||
Operating lease expense
|
||||||||||||
Operating lease cost
|
$ |
$
|
|
$
|
|
|||||||
Variable lease cost
|
|
|
||||||||||
Short-term lease cost
|
|
|
||||||||||
Sublease income
|
(
|
)
|
(
|
)
|
||||||||
Finance lease expense
|
||||||||||||
Amortization of right-of-use assets
|
|
|
||||||||||
Interest on lease liabilities
|
|
|
||||||||||
Total lease expense
|
$ |
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2022 |
2021
|
2020
|
||||||||||
Operating cash outflow from operating leases
|
$ |
$
|
|
$
|
|
|||||||
Operating cash outflow from finance leases
|
$ |
$
|
|
$
|
|
|||||||
Financing cash outflow from finance leases
|
$ |
$
|
|
$
|
|
|||||||
Right-of-use assets obtained in exchange for operating lease obligations
|
$ |
$
|
|
$
|
|
|||||||
Right-of-use assets obtained in exchange for finance lease obligations
|
$ |
$
|
|
$
|
|
Year Ending December 31,
|
Operating
Leases
|
Finance Leases
|
||||||
2023
|
$
|
|
$
|
|
||||
2024
|
|
|
||||||
2025
|
|
|
||||||
2026
|
|
|
||||||
2027
|
|
|
||||||
Thereafter
|
|
|
||||||
Total
|
|
|
||||||
Less: Finance charges
|
|
|
||||||
Total principal liability
|
$
|
|
$
|
|
8. |
Capital Stock
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Basic weighted-average common shares outstanding
|
|
|
|
|||||||||
Effect of dilutive securities: | ||||||||||||
Stock awards and options
|
||||||||||||
Diluted weighted-average common shares outstanding
|
|
|
|
9. |
Stock–Based Compensation
|
December 31,
|
||||||||
Stock Options:
|
2021
|
2020
|
||||||
Weighted-average grant date fair value of grants
|
$
|
|
$
|
|
||||
Risk-free interest rate(1)
|
|
%
|
|
%
|
||||
Dividend yield(2)
|
|
%
|
|
%
|
||||
Expected volatility(3)
|
|
%
|
|
%
|
||||
Expected life in months(4)
|
|
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
Shares
(in thousands)
|
Weighted-
average
Exercise
Price
|
Weighted-
average
Remaining
Contractual
Term (in years)
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||||||||||
Options activity – service based
|
||||||||||||||||
Outstanding at December 31, 2021
|
|
$
|
|
|||||||||||||
Granted
|
|
|
||||||||||||||
Exercised
|
(
|
)
|
|
|||||||||||||
Forfeited/cancelled/expired
|
(
|
)
|
|
|||||||||||||
Outstanding at December 31, 2022
|
|
|
|
$
|
|
|||||||||||
Exercisable at December 31, 2022
|
|
|
|
|
||||||||||||
Options activity – performance based
|
||||||||||||||||
Outstanding at December 31, 2021
|
|
$
|
|
|||||||||||||
Granted
|
|
|
||||||||||||||
Exercised
|
(
|
)
|
|
|||||||||||||
Forfeited/cancelled/expired
|
(
|
)
|
|
|||||||||||||
Outstanding at December 31, 2022
|
|
|
|
$
|
|
|||||||||||
Exercisable at December 31, 2022
|
|
|
|
|
||||||||||||
Options activity – all options
|
||||||||||||||||
Outstanding at December 31, 2021
|
|
$
|
|
|||||||||||||
Granted
|
|
|
||||||||||||||
Exercised
|
(
|
)
|
|
|||||||||||||
Forfeited/cancelled/expired
|
(
|
)
|
|
|||||||||||||
Outstanding at December 31, 2022
|
|
|
|
$
|
|
|||||||||||
Exercisable at December 31, 2022
|
|
|
|
|
December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Cash proceeds from stock options exercised
|
$
|
|
$
|
|
$
|
|
||||||
Tax benefit / (expense) realized for stock options exercised
|
|
|
(
|
)
|
||||||||
Intrinsic value of stock options exercised
|
|
|
|
Number
of Shares
(in thousands)
|
Weighted-
average
Grant Date
Fair Value
|
|||||||
Nonvested at December 31, 2021
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited
|
(
|
)
|
|
|||||
Nonvested at December 31, 2022
|
|
$
|
|
Number
of Shares
(in thousands)
|
Weighted-
average
Grant Date
Fair Value
|
|||||||
Nonvested at December 31, 2021
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Vested
|
|
|
||||||
Forfeited
|
(
|
)
|
|
|||||
Nonvested at December 31, 2022
|
|
$
|
|
10. |
Fair Value and Equity Investments
|
Fair Value at December 31, 2022
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Derivative financial instruments asset
|
|
|
|
|
||||||||||||
Life insurance contracts
|
|
|
|
|
||||||||||||
Contingent consideration
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Total
|
$
|
|
$
|
|
|
|
$
|
|
Fair Value at December 31, 2021
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Financial assets (liabilities):
|
||||||||||||||||
Cash equivalents and current investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Derivative financial instruments asset | ||||||||||||||||
Life insurance contracts
|
|
|
|
|
||||||||||||
Contingent consideration | ( |
) | ( |
) | ||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
|
2022
|
2021
|
||||||
Beginning balance at January 1
|
$
|
|
$
|
|
||||
Actual return on plan assets
|
(
|
)
|
|
|||||
Purchases and issuances
|
|
|
||||||
Sales and settlements
|
(
|
)
|
(
|
)
|
||||
Ending balance at December 31
|
$
|
|
$
|
|
|
2022
|
2021
|
||||||
Beginning balance at January 1
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Additions from acquisitions
|
|
(
|
)
|
|||||
Changes in fair value of contingent consideration
|
|
|
||||||
Ending balance at December 31
|
$
|
(
|
)
|
$
|
(
|
)
|
11. |
Income Taxes
|
2022
|
2021
|
2020
|
||||||||||
U.S.
|
$
|
|
$
|
|
$
|
|
||||||
Foreign
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
2022
|
2021
|
2020
|
||||||||||
Current
|
||||||||||||
Federal
|
$
|
|
$
|
|
$
|
|
||||||
State
|
|
|
|
|||||||||
Foreign
|
|
|
|
|||||||||
|
|
|
||||||||||
Deferred
|
||||||||||||
Federal
|
(
|
)
|
|
(
|
)
|
|||||||
State
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Foreign
|
|
|
|
|||||||||
(
|
)
|
|
(
|
)
|
||||||||
Provision for income taxes
|
$
|
(
|
)
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||
2022
|
2021
|
|||||||
Deferred tax assets:
|
||||||||
Inventory differences
|
$
|
|
$
|
|
||||
Foreign tax credit and other foreign benefits
|
|
|
||||||
Stock-based compensation
|
|
|
||||||
Accrued expenses not deductible until paid
|
|
|
||||||
Foreign currency exchange
|
|
|
||||||
Net operating losses
|
|
|
||||||
Capitalized research and development
|
|
|
||||||
R&D credit carryforward
|
|
|
||||||
Other
|
|
|
||||||
Gross deferred tax assets
|
|
|
||||||
Deferred tax liabilities:
|
||||||||
Foreign currency exchange
|
||||||||
Foreign withholding taxes
|
|
|
||||||
Intangibles step-up
|
|
|
||||||
Overhead allocation to inventory
|
|
|
||||||
Amortization of intangibles
|
|
|
||||||
Other
|
|
|
||||||
Gross deferred tax liabilities
|
|
|
||||||
Valuation allowance
|
(
|
)
|
(
|
)
|
||||
Deferred taxes, net
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Balance at the beginning of period
|
$
|
|
$
|
|
$
|
|
||||||
Additions charged to cost and expenses
|
|
(1)
|
|
(4)
|
|
(6)
|
||||||
Decreases
|
(
|
)(2)
|
|
(5)
|
(
|
)(7)
|
||||||
Adjustments
|
|
(3)
|
|
(3)
|
|
(3)
|
||||||
Balance at the end of the period
|
$
|
|
$
|
|
$
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
(7)
|
|
Year Ended December 31,
|
||||||||
2022
|
2021
|
|||||||
Net noncurrent deferred tax assets
|
$
|
|
$
|
|
||||
Net noncurrent deferred tax liabilities
|
|
|
||||||
Deferred taxes, net
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Income taxes at statutory rate
|
|
%
|
|
%
|
|
%
|
||||||
Excess tax benefit from equity award
|
(
|
)%
|
(
|
)%
|
|
%
|
||||||
Deferred compensation |
% | ( |
)% | ( |
)% | |||||||
Executive salary limitation |
% | % | % | |||||||||
Non-U.S. income taxed at different rates
|
|
%
|
|
%
|
|
%
|
||||||
Foreign withholding taxes
|
(
|
)%
|
|
%
|
|
%
|
||||||
Change in reserve for uncertain tax positions
|
|
%
|
(
|
)%
|
|
%
|
||||||
Valuation allowance recognized foreign tax credit & others
|
(
|
)%
|
|
%
|
(
|
)%
|
||||||
Foreign-Derived Intangible Income (FDII)
|
(
|
)%
|
(
|
)%
|
(
|
)%
|
||||||
Other
|
(
|
)%
|
|
%
|
|
%
|
||||||
(
|
)%
|
|
%
|
|
%
|
12. |
Employee Benefit Plan
|
13. |
Deferred Compensation Plan
|
14. |
Derivative Financial Instruments
|
Fair Values of
Derivative Instruments
|
||||||||||
December 31, |
||||||||||
Derivatives in Cash Flow Hedging Relationships:
|
Balance Sheet Location
|
2022
|
2021
|
|||||||
Interest Rate Swap - Asset
|
Prepaid expenses and other
|
$ | $ | |||||||
Interest Rate Swap - Asset
|
Other assets
|
$
|
|
$
|
|
Amount of Gain (Loss)
Recognized in OCI on Derivatives
|
||||||||||||
|
Year Ended December 31,
|
|||||||||||
Derivatives in Cash Flow Hedging Relationships:
|
2022
|
2021
|
2020
|
|||||||||
Interest Rate Swaps
|
$
|
|
$
|
|
$
|
|
Amount of Gain (Loss)
Reclassified from Accumulated
Other Comprehensive Loss into Income
|
||||||||||||||
Year Ended December 31,
|
||||||||||||||
Derivatives in Cash Flow Hedging Relationships:
|
Income Statement Location
|
2022
|
2021
|
2020
|
||||||||||
Interest Rate Swaps
|
Other income (expense), net
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
15. |
Segment Information
|
Year Ended December 31,
|
||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2020
|
|||||||||
Nu Skin
|
||||||||||||
Americas
|
$
|
|
$
|
|
$
|
|
||||||
Mainland China
|
|
|
|
|||||||||
Southeast Asia/Pacific
|
|
|
|
|||||||||
South Korea
|
|
|
|
|||||||||
Japan
|
|
|
|
|||||||||
EMEA
|
|
|
|
|||||||||
Hong Kong/Taiwan
|
|
|
|
|||||||||
Nu Skin Other
|
|
|
|
|||||||||
Total Nu Skin
|
|
|
|
|||||||||
Rhyz Investments
|
||||||||||||
Manufacturing (1)
|
|
|
|
|||||||||
Rhyz Other
|
|
|
|
|||||||||
Total Rhyz Investments
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
(1) |
|
Year Ended December 31,
|
||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2020
|
|||||||||
Nu Skin
|
||||||||||||
Americas
|
$
|
|
$
|
|
$
|
|
||||||
Mainland China
|
|
|
|
|||||||||
Southeast Asia/Pacific
|
|
|
|
|||||||||
South Korea
|
|
|
|
|||||||||
Japan
|
|
|
|
|||||||||
EMEA
|
|
|
|
|||||||||
Hong Kong/Taiwan
|
|
|
|
|||||||||
Nu Skin contribution
|
|
|
|
|||||||||
Rhyz Investments
|
||||||||||||
Manufacturing
|
|
|
|
|||||||||
Rhyz Other
|
(
|
)
|
(
|
)
|
|
|||||||
Rhyz Investments contribution
|
(
|
)
|
|
|
||||||||
Total segment contribution
|
|
|
|
|||||||||
Corporate and other
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Operating income
|
|
|
|
|||||||||
Other income (expense)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income before provision for income taxes
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2020
|
|||||||||
Nu Skin
|
||||||||||||
Americas
|
$
|
|
$
|
|
$
|
|
||||||
Mainland China
|
|
|
|
|||||||||
Southeast Asia/Pacific
|
|
|
|
|||||||||
South Korea
|
|
|
|
|||||||||
Japan
|
|
|
|
|||||||||
EMEA
|
|
|
|
|||||||||
Hong Kong/Taiwan
|
|
|
|
|||||||||
Total Nu Skin
|
|
|
|
|||||||||
Rhyz Investments
|
||||||||||||
Manufacturing
|
|
|
|
|||||||||
Rhyz Other
|
|
|
|
|||||||||
Total Rhyz Investments
|
|
|
|
|||||||||
Corporate and other
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2020
|
|||||||||
Nu Skin
|
||||||||||||
Americas
|
$
|
|
$
|
|
$
|
|
||||||
Mainland China
|
|
|
|
|||||||||
Southeast Asia/Pacific
|
|
|
|
|||||||||
South Korea
|
|
|
|
|||||||||
Japan
|
|
|
|
|||||||||
EMEA
|
|
|
|
|||||||||
Hong Kong/Taiwan
|
|
|
|
|||||||||
Total Nu Skin
|
|
|
|
|||||||||
Rhyz Investments
|
||||||||||||
Manufacturing
|
|
|
|
|||||||||
Rhyz Other
|
|
|
|
|||||||||
Total Rhyz Investments
|
|
|
|
|||||||||
Corporate and other
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2020
|
|||||||||
United States
|
$
|
|
$
|
|
$
|
|
||||||
Mainland China
|
|
|
|
|||||||||
South Korea
|
|
|
|
|||||||||
Japan
|
|
|
|
|||||||||
All others
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2020
|
|||||||||
Beauty
|
$
|
|
$
|
|
$
|
|
||||||
Wellness
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
(U.S. dollars in thousands)
|
2022
|
2021
|
2020
|
|||||||||
United States
|
$
|
|
$
|
|
$
|
|
||||||
Mainland China
|
|
|
|
|||||||||
South Korea
|
|
|
|
|||||||||
Japan
|
|
|
|
|||||||||
All others
|
|
|
|
|||||||||
Total
|
$
|
|
$
|
|
$
|
|
16. |
Commitments and Contingencies
|
17. |
Other Income (Expense), Net
|
18. |
Supplemental Cash Flow Information
|
19. |
Acquisitions
|
20. |
Restructuring and Severance Charges
|
(U.S. dollars in thousands)
|
Year Ended
December 31, 2022
|
|||
|
||||
Nu Skin
|
||||
Americas
|
$
|
|
||
Mainland China
|
|
|||
Southeast Asia/Pacific
|
|
|||
South Korea
|
|
|||
Japan
|
|
|||
EMEA
|
|
|||
Hong Kong/Taiwan
|
|
|||
Total Nu Skin
|
|
|||
Rhyz Investments
|
||||
Manufacturing
|
|
|||
Rhyz other
|
|
|||
Total Rhyz Investments
|
|
|||
Corporate and other
|
|
|||
Total
|
$
|
|
● |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
● |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and
expenditures are being made only in accordance with authorization of management and directors; and
|
● |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
1. |
Financial Statements. See Index to Consolidated Financial Statements under Item 8 of Part II.
|
2. |
Financial Statement Schedules. N/A
|
3. |
Exhibits. References to the “Company” shall mean Nu Skin Enterprises, Inc. Unless otherwise noted, the SEC file number for exhibits incorporated by reference is 001-12421.
|
3.1
|
|
3.2
|
|
3.3
|
|
3.4
|
|
*4.1
|
|
4.2
|
|
10.1
|
|
#10.2
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#10.3
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#10.4
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#10.5
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#10.6
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#10.7
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#10.8
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#10.9
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#10.10
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*#10.11
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*#10.12
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*#10.13
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#10.14
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#10.15
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#10.16
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#10.17
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*#10.18
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#10.19
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*21.1
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*23.1
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*31.1
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*31.2
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*32.1
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*32.2
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*101.INS
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Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
*101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
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*101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
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*101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
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*101.LAB
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Inline XBRL Taxonomy Extension Label Linkbase Document.
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*101.PRE
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Inline XBRL Taxonomy Extension Presentation Linkbase Document.
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*104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
* |
Filed or furnished herewith.
|
# |
Management contract or compensatory plan or arrangement.
|
NU SKIN ENTERPRISES, INC.
|
||
By:
|
/s/ Ryan. S. Napierski
|
|
Ryan S. Napierski
|
||
President and Chief Executive Officer
|
Signatures
|
Capacity in Which Signed
|
|
/s/ Steven J. Lund
|
Executive Chairman of the Board
|
|
Steven J. Lund
|
||
/s/ Ryan S. Napierski
|
President, Chief Executive Officer and Director
|
|
Ryan S. Napierski
|
(Principal Executive Officer)
|
|
/s/ Mark H. Lawrence
|
Chief Financial Officer
|
|
Mark H. Lawrence
|
(Principal Financial Officer)
|
|
/s/ James D. Thomas
|
Chief Accounting Officer
|
|
James D. Thomas
|
(Principal Accounting Officer)
|
|
/s/ Emma S. Battle
|
Director
|
|
Emma S. Battle
|
||
/s/ Daniel W. Campbell
|
Director
|
|
Daniel W. Campbell
|
||
/s/ Andrew D. Lipman
|
Director
|
|
Andrew D. Lipman
|
||
/s/ Laura Nathanson
|
Director
|
|
Laura Nathanson
|
||
/s/ Thomas R. Pisano
|
Director
|
|
Thomas R. Pisano
|
||
/s/ Zheqing Shen
|
Director
|
|
Zheqing Shen
|
||
/s/ Edwina D. Woodbury
|
Director
|
|
Edwina D. Woodbury
|
CLASS A COMMMON STOCK
NUMBER
|
CLASS A COMMON STOCK
SHARES
|
||||
CUSIP 67018T 10 5
SEE REVERSE FOR CERTAIN DEFINITIONS
|
|||||
NU SKIN ENTERPRISES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
|
|||||
This Certifies That
|
|||||
is the owner of
|
|||||
FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK OF THE PAR VALUE OF $.001 EACH OF
|
|||||
NU SKIN ENTERPRISES
|
|||||
transferable only on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon
surrender of this Certificate properly endorsed.
This Certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Corporation and the signatures of its duly authorized officers.
|
|||||
Dated:
|
|||||
[Seal]
|
|||||
PRESIDENT & CEO
|
CHAIRMAN OF THE BOARD
|
||||
COUNTERSIGNED AND REGISTERED:
EQUINITI TRUST COMPANY, LLC
TRANSFER AGENT AND REGISTRAR
BY
AUTHORIZED SIGNATURE
|
TEN COM -
|
as tenants in common
|
UNIF GIFT MIN ACT- ________________Custodian __________________
(Cust) (Minor)
under Uniform Gifts to Minors
Act _______________________
(State)
|
||
TEN ENT -
|
as tenants by the entireties
|
|||
JT TEN -
|
as joint tenants with right of survivorship
and not as tenants in common
|
|
|
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
|
|
|
Dated, | X | ||||
X
|
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICAE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER. |
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
|
Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data, as described in
this Agreement and any other Restricted Stock Unit grant materials by and among, as applicable, the Employer, the Company and Subsidiaries for the exclusive purpose of implementing, administering and managing Participant’s participation in
the Plan.
Participant understands that the Employer, the Company and Subsidiaries may hold certain personal information about Participant, including, but not limited to,
Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock
Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”). The Data is supplied by
the Employer and also by me through information collected in connection with the Agreement and the Plan.
Participant understands that Data will be transferred to Morgan Stanley, or such other stock plan service provider as may be selected by the Company in the future, which
is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g.,
the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any
potential recipients of the Data by contacting his or her local human resources representative at +60-03-2170-7700. Participant authorizes the Company, Morgan Stanley and any other possible recipients which may assist the Company (presently
or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s
participation in the Plan, including any transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon vesting of Restricted Stock Units may be deposited. Participant understands
that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. Participant understands that if he or she resides outside the United States, he or she may, at any time, view Data,
request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources
representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her
employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant Participant Restricted Stock
Units or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan. For more information on the
consequences of his or her refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.
|
Peserta dengan ini secara eksplisit dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi
Peserta seperti yang diterangkan dalam Perjanjian dan bahan-bahan geran Unit Saham Terbatas yang lain oleh dan di antara, seperti yang berkenaan, Majikan, Syarikat dan Anak-anak Syarikat untuk tujuan yang eksklusif bagi melaksanakan,
mentadbir dan menguruskan penyertaan Peserta di dalam Pelan.
Peserta memahami bahawa Majikan, Syarikat and Anak-anak Syarikat mungkin memegang maklumat peribadi tertentu tentang Peserta, termasuk, tetapi tidak terhad kepada, nama
Peserta, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa Syer atau jawatan pengarah yang dipegang dalam Syarikat, butir-butir semua Unit Saham
Terbatas, atau apa-apa hak lain atas Syer yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah Peserta, untuk tujuan eksklusif bagi melaksanakan, mentadbir dan menguruskan
Pelan tersebut ("Data"). Data tersebut dibekalkan oleh Majikan dan juga oleh saya berkenaan dengan Perjanjian dan Pelan.
Peserta memahami bahawa Data ini akan dipindahkan kepada Morgan Stanley, atau mana-mana pembekal perkhidmatan pelan saham lain sebagaimana yang dipilih oleh Syarikat pada
masa depan, yang membantu Syarikat dengan pelaksanaan, pentadbiran dan pengurusan Pelan. Peserta memahami bahawa penerima-penerima Data mungkin berada di Amerika Syarikat atau mana-mana tempat lain, dan bahawa negara penerima-penerima
(contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Peserta. Peserta memahami bahawa sekiranya Peserta menetap di luar Amerika Syarikat, Peserta boleh meminta satu senarai
yang mengandungi nama-nama dan alamat-alamat penerima-penerima Data yang berpotensi dengan menghubungi wakil sumber manusia tempatan peserta di +60-03-2170-7700. Peserta memberi kuasa kepada Syarikat, Morgan Stanley dan mana-mana
penerima-penerima kemungkinan lain yang mungkin akan membantu Syarikat (pada masa sekarang atau pada masa depan) dengan melaksanakan, mentadbir dan menguruskan Pelan untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data,
dalam bentuk elektronik atau lain-lain, bagi tujuan-tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan, termasuk segala pemindahan Data tersebut sebagaimana yang dikehendaki kepada broker, egen eskrow atau
pihak ketiga dengan siapa Saham diterima semasa peletakhakan Unit Saham Terbatas mungkin didepositkan. Peserta memahami bahawa Data hanya akan disimpan selagi ia adalah diperlukan untuk melaksanakan, mentadbir, dan menguruskan penyertaan
peserta dalam Pelan. Peserta memahami bahawa sekiranya peserta menetap di luar Amerika Syarikat, peserta boleh, pada bila-bila masa, melihat Data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa
pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatan. Selanjutnya, Peserta memahami bahawa peserta
memberikan persetujuan di sini secara sukarela semata-mata. Sekiranya Peserta tidak bersetuju, atau sekiranya Peserta kemudian membatalkan persetujuannya, status pekerjaan atau perkhidmatan dan kerjaya Peserta dengan Majikan tidak akan
terjejas; satu-satunya akibat buruk sekiranya Peserta tidak bersetuju atau menarik balik persetujuan Peserta adalah bahawa Syarikat tidak akan dapat memberikan Unit Saham Terbatas atau anugerah ekuiti lain atau mentadbir atau mengekalkan
anugerah-anugerah tersebut kepada Peserta. Oleh itu, Peserta memahami bahawa keengganan atau penarikan balik persetujuan peserta boleh menjejaskan keupayaan Peserta untuk mengambil bahagian dalam Pelan. Untuk maklumat lebih lanjut mengenai
akibat-akibat keengganan Peserta untuk memberikan keizinan atau penarikan balik keizinan, Peserta memahami bahawa Peserta boleh menghubungi wakil sumber manusia tempatan.
|
Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or
other form, of Participant’s personal data, as described in this Agreement and any other Performance Restricted Stock Unit grant materials by and among, as applicable, the Employer, the Company and Subsidiaries for the exclusive purpose of
implementing, administering and managing Participant’s participation in the Plan.
Participant understands that the Employer, the Company and Subsidiaries may hold certain personal information
about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held
in the Company, details of all Performance Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing,
administering and managing the Plan (“Data”). The Data is supplied by the Employer and also by me through information collected in connection with the Agreement and the Plan.
Participant understands that Data will be transferred to Morgan Stanley, or such other stock plan service
provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the
United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United
States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative at +60-03-2170-7700. Participant authorizes the Company, Morgan Stanley
and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing Participant’s participation in the Plan, including any transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon vesting
of Performance Restricted Stock Units may be deposited. Participant understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. Participant understands that if
he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein,
in any case without cost, by contacting in writing his or her local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not
consent, or if Participant later seeks to revoke his or her consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s
consent is that the Company may not be able to grant Participant Performance Restricted Stock Units or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her
consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of his or her refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local
human resources representative.
|
Peserta dengan ini secara eksplisit dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan
pemindahan, dalam bentuk elektronik atau lain-lain, data peribadi Peserta seperti yang diterangkan dalam Perjanjian dan bahan-bahan geran Unit Saham Terbatas yang lain oleh dan di antara, seperti yang berkenaan, Majikan, Syarikat dan
Anak-anak Syarikat untuk tujuan yang eksklusif bagi melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan.
Peserta memahami bahawa Majikan, Syarikat and Anak-anak Syarikat mungkin memegang maklumat peribadi tertentu
tentang Peserta, termasuk, tetapi tidak terhad kepada, nama Peserta, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa Syer atau jawatan pengarah yang
dipegang dalam Syarikat, butir-butir semua Unit Saham Terbatas, atau apa-apa hak lain atas Syer yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun yang belum dijelaskan bagi faedah Peserta, untuk tujuan
eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan tersebut ("Data"). Data tersebut dibekalkan oleh Majikan dan juga oleh saya berkenaan dengan Perjanjian dan Pelan.
Peserta memahami bahawa Data ini akan dipindahkan kepada Morgan Stanley, atau mana-mana pembekal perkhidmatan
pelan saham lain sebagaimana yang dipilih oleh Syarikat pada masa depan, yang membantu Syarikat dengan pelaksanaan, pentadbiran dan pengurusan Pelan. Peserta memahami bahawa penerima-penerima Data mungkin berada di Amerika Syarikat atau
mana-mana tempat lain, dan bahawa negara penerima-penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Peserta. Peserta memahami bahawa sekiranya Peserta menetap
di luar Amerika Syarikat, Peserta boleh meminta satu senarai yang mengandungi nama-nama dan alamat-alamat penerima-penerima Data yang berpotensi dengan menghubungi wakil sumber manusia tempatan peserta di +60-03-2170-7700. Peserta memberi
kuasa kepada Syarikat, Morgan Stanley dan mana-mana penerima-penerima kemungkinan lain yang mungkin akan membantu Syarikat (pada masa sekarang atau pada masa depan) dengan melaksanakan, mentadbir dan menguruskan Pelan untuk menerima,
memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, bagi tujuan-tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaan Peserta di dalam Pelan, termasuk segala pemindahan Data tersebut
sebagaimana yang dikehendaki kepada broker, egen eskrow atau pihak ketiga dengan siapa Saham diterima semasa peletakhakan Unit Saham Terbatas mungkin didepositkan. Peserta memahami bahawa Data hanya akan disimpan selagi ia adalah
diperlukan untuk melaksanakan, mentadbir, dan menguruskan penyertaan peserta dalam Pelan. Peserta memahami bahawa sekiranya peserta menetap di luar Amerika Syarikat, peserta boleh, pada bila-bila masa, melihat Data, meminta maklumat
tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil
sumber manusia tempatan. Selanjutnya, Peserta memahami bahawa peserta memberikan persetujuan di sini secara sukarela semata-mata. Sekiranya Peserta tidak bersetuju, atau sekiranya Peserta kemudian membatalkan persetujuannya, status
pekerjaan atau perkhidmatan dan kerjaya Peserta dengan Majikan tidak akan terjejas; satu-satunya akibat buruk sekiranya Peserta tidak bersetuju atau menarik balik persetujuan Peserta adalah bahawa Syarikat tidak akan dapat memberikan Unit
Saham Terbatas atau anugerah ekuiti lain atau mentadbir atau mengekalkan anugerah-anugerah tersebut kepada Peserta. Oleh itu, Peserta memahami bahawa keengganan atau penarikan balik persetujuan peserta boleh menjejaskan keupayaan Peserta
untuk mengambil bahagian dalam Pelan. Untuk maklumat lebih lanjut mengenai akibat-akibat keengganan Peserta untuk memberikan keizinan atau penarikan balik keizinan, Peserta memahami bahawa Peserta boleh menghubungi wakil sumber manusia
tempatan.
|
PAGE | ||
SECTION 1.
|
DEFINITIONS
|
1
|
SECTION 2.
|
TERM OF POLICY
|
5
|
SECTION 3.
|
TERMINATION BY COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON
|
5
|
SECTION 4.
|
TERMINATION BY REASON OF DEATH OR DISABILITY
|
7
|
SECTION 5.
|
TERMINATION BY THE COMPANY FOR CAUSE
|
7
|
SECTION 6.
|
VOLUNTARY TERMINATION WITHOUT GOOD REASON; RETIREMENT
|
8 |
SECTION 7.
|
SEPARATION AND RELEASE AGREEMENT
|
8
|
SECTION 8.
|
RESTRICTIVE COVENANTS
|
8
|
SECTION 9.
|
COMPLIANCE WITH SECTION 409A
|
8 |
SECTION 10.
|
WITHHOLDING TAXES
|
10
|
SECTION 11.
|
PARACHUTE PAYMENTS
|
10
|
SECTION 12.
|
ADMINISTRATION
|
10
|
SECTION 13.
|
AMENDMENT AND TERMINATION
|
10
|
SECTION 14.
|
OTHER PROVISIONS
|
11
|
EXHIBIT A
|
EXHIBIT B
|
(i) |
Termination without Cause or for Good Reason in Connection with Change in Control.
|
Name and Title of Executive
|
Multiplier for
Section 3.1(i)
|
Multiplier for
Section 3.1(ii)
|
|
• Ryan Napierski, President and Chief Executive Officer
|
2
|
1.5
|
|
• Connie Tang, Executive Vice President and Chief Global Growth and Customer Experience Officer
• Mark Lawrence, Executive Vice President and Chief Financial Officer
• Chayce Clark, Executive Vice President and General Counsel
• Joseph Chang, Executive Vice President and Chief Scientific Officer
• Steven Hatchett, Executive Vice President and Chief Product Officer
|
1.5
|
1.25
|
A. |
Employee’s employment with Company terminated on or about _________ (the “Employment Termination Date”).
|
B. |
Company and Employee mutually agree it is in the best interests of both to enter a mutual understanding and compromise of all claims and disputes, if any, between them.
|
(a) |
Title VII of the Civil Rights Acts of 1964 and 1991, as amended, which prohibit discrimination on the basis of race, color, sex, religion, or national origin;
|
(b) |
Section 1981 of the Civil Rights Act of 1866, which prohibits discrimination on the basis of race;
|
(c) |
The Employee Retirement Income Security Act as of the Effective Date of this Agreement;
|
(d) |
The Worker Adjustment and Retraining Notification Act, whether such claim exists at or before Employee’s execution of this Agreement, or arises in the future after Employee’s execution of this Agreement as a result of Employee’s
termination being aggregated with the terminations of other employees;
|
(e) |
The Family and Medical Leave Act;
|
(f) |
The Americans with Disabilities Act;
|
(g) |
The Age Discrimination in Employment Act of 1967, as amended (the “ADEA”);
|
(h) |
The Utah Antidiscrimination Act;
|
(i) |
any state or federal laws against discrimination;
|
(j) |
any claims for compensation of any type whatsoever, including but not limited to claims for salary, wages, bonuses, commissions, incentive compensation, vacation, sick pay, or severance;
|
(k) |
any other foreign, federal, state, or local statute or common law relating to employment; and
|
(l)
|
any claim for attorneys’ fees or other costs or expenses. |
(a) |
Employee should consult with Employee’s own attorney prior to executing this Agreement;
|
(b) |
Employee has at least 45 calendar days from the Employment Termination Date within which to consider this Agreement, although Employee may accept the terms of this Agreement at any time within those 45 days provided the acceptance
occurs after the Employment Termination Date;
|
(c) |
If Employee signs this Agreement before 45 days have passed, Employee acknowledges and agrees that Employee has signed this Agreement knowingly and voluntarily, without coercion to do so by Company;
|
(d) |
Employee and Company agree that immaterial or material changes to this Agreement do not restart the running of the 45-day period;
|
(e) | Employee has 7 days following Employee’s signing of this Agreement to revoke it; and |
(f) |
This Agreement is effective and enforceable on the eighth calendar day after the date it is signed by Employee. This Agreement may be revoked by Employee by providing written notice of revocation to Company at any time during the
seven-day period following the date Employee executes this Agreement. Any such revocation must be sent to Employment Counsel, Legal Department, Nu Skin Enterprises, Inc., 75 West Center Street, Provo, UT 84601, and must be received
within the seven calendar days. Employee understands that Employee has no right to the consideration specified in this Agreement if Employee revokes this Agreement and Employee further understands that if any consideration is provided to
Employee prior to Employee’s revocation, Employee must promptly return any such consideration to Company.
|
NU SKIN ENTERPRISES, INC.
|
||
BY:
|
||
EMPLOYEE:
|
1. |
Conflict of Interest: During employment with Company, Employee shall not have any personal interest that is
incompatible with the loyalty and responsibility Employee owes to Company. Employee must discharge Employee’s responsibility solely on the basis of what is in the best interest of Company and independent of personal considerations or
relationships. Employee shall maintain impartial relationships with vendors, suppliers and distributors. Should Employee have any questions regarding this matter, Employee should consult with Employee’s director or supervisor or with
the Human Resources Department (“HR”). If any actual or potential conflict of interest arises, the Employee must notify Employee’s director or supervisor and HR as promptly as possible after such conflict of interest arises, and seek
an appropriate waiver or resolution of such conflict of interest. Although it is difficult to identify every activity that might give rise to a conflict of interest, the following provisions address some examples of conflicts of
interest:
|
1.1 |
Related Party Transactions. Employee shall not have a direct or indirect ownership or financial interest in vendors or
suppliers of Company or in any person or entity doing or seeking to do business with Company. Employee shall also not have a direct or indirect financial or other interest in any transaction involving the Company. In the event such a
conflict arises, Employee must notify Employee’s director or supervisor and HR, and Company may not do business with such vendor or supplier, or enter into any such transaction, unless it has been approved (a) in accordance with
Company’s policy with respect to related party transactions; or, if such policy does not apply, (b) by Employee’s manager.
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1.2 |
Other Employment. Employee shall not be employed by, or perform services of any kind, whether compensated or not, for any
person or entity doing or seeking to do business with Company. Employee shall not be employed by, or perform services of any kind, whether compensated or not, for any person or entity that competes with Company. Employee shall not allow
employment by, or performance of services for, any other person or entity to detract from Employee’s job performance; use Company’s time, resources, or personnel in connection therewith; or expend such long hours in connection therewith
as to adversely affect Employee’s physical or mental effectiveness. Further, neither Employee’s spouse, nor any member of Employee’s household, shall be employed by another direct sales or multilevel marketing company without the prior
written consent of Company.
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1.3 |
Distributorships. While employed by Company and for a period of three months after termination of an employment
relationship with Company for any reason, Employee shall not have a direct or indirect ownership or financial interest in a Company distributorship or similar account. Additionally, during the course of employment, neither Employee’s
spouse, nor any member of Employee’s household, shall have a direct or indirect ownership or financial interest in, or otherwise be affiliated with, a Company distributorship without the prior written consent of Company. Further,
neither Employee’s spouse, nor any member of Employee’s household, shall have a direct or indirect ownership or financial interest in, or otherwise be affiliated with, another direct sales or multilevel marketing distributorship without
the prior written consent of Company. Any pre-existing ownership, financial interests, or employment covered in these subparagraphs must be disclosed to Company at the time of the execution of this Agreement.
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2. |
Inventions:
|
2.1 |
Attached hereto as Exhibit A is a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were conceived, developed, reduced to practice, or created by Employee prior to
Employee’s employment with Company, which belong to Employee, and which are not assigned to Company hereunder (collectively referred to as “Prior Inventions”). If nothing is listed on Exhibit A, or if no such list is attached, Employee
represents that there are no such Prior Inventions. If, in the course of Employee’s employment with Company, Employee incorporates into a Company product, process, service, or other work a Prior Invention owned by Employee or in which
Employee has an interest, Employee hereby grants to Company and Company shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use, sell, offer to sell, copy, reproduce, distribute,
make derivative works of and publicly display or perform such Prior Invention as part of or in connection with such product, process, service, or other work and to practice any method related thereto and to sublicense the foregoing
rights.
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2.2 |
Employee agrees to promptly make full written disclosure to Company, will hold in trust for the sole right and benefit of Company, and hereby assigns to Company, or its designee, all of Employee’s right, title, and interest in and to
any and all inventions, original works of authorship, developments, improvements, concepts, processes, designs, discoveries, ideas, technology advances, unique solutions to business problems, trademarks, or trade secrets, whether or not
patentable, and whether or not registrable under copyright or other federal or state laws, which Employee may solely or jointly conceive, develop, create, or reduce to practice, or cause to be conceived, developed, created or reduced to
practice, and which also satisfy any one of the following: (i) was within the scope of Employee’s employment; (ii) was on Company’s time; (iii) was with the aid, assistance, or use of any of Company’s property, equipment, facilities,
supplies, resources, or intellectual property; (iv) was the result of any work, services, or duties performed by Employee for Company; (v) was related to Company’s industry or trade; and/or (vi) was related to the current or demonstrably
anticipated business, research, or development of Company (collectively referred to as “Inventions”).
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2.3 |
Employee further acknowledges that all original works of authorship that are made by Employee (solely or jointly with others) within the scope of and during the period of employment with Company and that are protectable by copyright
are “works made for hire,” as that term is defined in the United States Copyright Act.
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2.4 |
Employee understands and agrees that the decision whether or not to commercialize or market any Inventions developed by Employee solely or jointly with others is within Company’s sole discretion and for Company’s sole benefit and that
no royalty will be due to Employee as a result of Company’s efforts to commercialize or market any such Invention.
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2.5 |
Employee agrees to keep and maintain adequate and current written records of all Inventions made by Employee (solely or jointly with others) during the term of employment with Company. The records will be in the form of notes,
sketches, drawings, and any other format that may be specified by Company. The records will be available to and remain the sole property of Company at all times.
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2.6 |
Employee agrees to assist Company, or its designee, at Company’s expense, in every proper way to secure, obtain, maintain, reissue, defend, and enforce Company’s rights in the Inventions and any copyrights, patents, trademarks, trade
secrets, mask work rights or any other intellectual property rights whatsoever relating thereto in any and all countries, including the disclosure to Company of all pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments, and all other instruments that Company shall deem necessary in order to apply for, obtain, maintain, reissue, defend, and enforce such rights (including, but not limited to, improvements,
renewals, extensions, continuations, divisions or continuations in part thereof) and in order to assign and convey to Company, its successors, assigns, and nominees the sole and exclusive right, title, and interest in and to such
Inventions, and any copyrights, patents, trademarks, trade secrets, mask work rights or any other intellectual property rights whatsoever relating thereto. Employee further agrees that Employee’s obligation to execute or cause to be
executed, when it is in Employee’s power to do so, any such instrument or papers shall continue after the termination of this Agreement. If Company is unable because of Employee’s mental or physical incapacity or for any other reason to
secure Employee’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to Company as above, or execute any of
the other above instruments or papers, then Employee hereby irrevocably designates and appoints Company and its duly authorized officers and agents as Employee’s agent and attorney in fact, to act for and in Employee’s behalf and stead to
execute and file any such applications and to do all other lawfully permitted acts to further the prosecution, maintenance, reissue, defense, enforcement, and issuance of letters patent or copyright registrations thereon with the same
legal force and effect as if executed by Employee.
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3. |
Non-Disclosure and Assignment:
|
3.1 |
Employee acknowledges that during the term of employment with Company, Employee will have access or be exposed to, or learn or develop, Confidential Information. Employee understands that “Confidential Information” means any Company
information, data, or physical property that relates to the actual or anticipated business or research and development of Company, Company proprietary information, technical data, trade secrets, or know-how, including, but not limited to:
research; formulas; business plans; strategic plans; product and marketing plans; sales compensation plans; sales methods; financial information; vendor information (both actual and potential), including, without limitation, vendor lists,
and vendor contact, volume, and pricing information; supplier information (both actual and potential), including, without limitation, supplier lists, and supplier contact, volume, and pricing information; distributor information (both
actual and potential), including, but not limited to; distributor lists, and distributor contact information, volume, sales, ability, performance, compensation, downline, upline, and personally identifiable information; employee
information (both actual and potential), including, but not limited to, employee lists, and employee contact information, experience, qualification, ability, performance, compensation, and personally identifiable information; markets;
market development strategies; sales strategies; strategies for the acquisition, retention, acquisition, and growth of distributors; software and computer programs; specifications; reports; designs; drawings; prototypes; procedures;
inventions; operations; procedures; manufacturing techniques, engineering processes; technology; unpublished patent applications and invention disclosures; production planning information; sales and purchasing quantities, prices, or
quotations; budget plans; contracts; risk analysis; correspondence with distributors, suppliers, and vendors; and other business information disclosed to me by Company, directly or indirectly, that is proprietary, confidential, or secret,
whether in digital, hard copy, verbal, visual, tangible, intangible, or other form.
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3.2 |
During and after Employee’s employment, Employee shall hold the Confidential Information and/or Inventions in strictest confidence and shall protect them with utmost care. Employee shall not disclose, copy, remove from Company’s
premises, or permit any person to disclose or copy any of the Confidential Information and/or Inventions, and Employee shall not use any of the Confidential Information and/or Inventions, except for the exclusive benefit of Company and
only as necessary to perform Employee’s duties as an employee of Company.
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3.3 |
During employment with Company, Employee shall not improperly use or disclose any confidential or proprietary information or trade secrets of any former or concurrent employer or previously obtained from or provided by any other person
or entity. On signing this Agreement, Employee shall disclose to Company the existence of agreements Employee has with prior employers or such other persons or entities, and shall comply with the terms of all such agreements with respect
to confidential or proprietary information or trade secrets. Employee agrees and represents that Employee’s employment with Company does not cause Employee to be in breach of any contract or agreement with any former or concurrent
employer.
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3.4 |
Employee recognizes that Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on Company’s part to maintain the confidentiality of such information and
to use it only for certain limited purposes. Employee agrees to hold all such confidential or proprietary information in the strictest confidence and to not use or disclose it except as necessary in carrying out Employee’s work for
Company consistent with Company’s agreement with such third party.
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3.5 |
This Agreement will not be interpreted to prevent the use or disclosure of information that: (a) is required by law to be disclosed, but only to the extent that such disclosure is legally required, (b) becomes a part of the public
knowledge other than by a breach of an obligation of confidentiality, or (c) is rightfully received from a third party not obligated to hold such information confidential. The Federal Defend Trade Secrets Act provides immunity to
individuals under any federal or state trade secret law for the disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney solely for
the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceedings, if such filing is made under seal. An individual who files a lawsuit for
retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document
containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. If Employee brings suit against Company in connection with Employee’s employment relationship with Company, Employee may
disclose Confidential Information to Employee’s attorney and use the Confidential Information in the court proceeding, if Employee files any document containing Confidential Information under seal and does not disclose the Confidential
Information, except pursuant to court order. Other than as described or addressed in this subparagraph, or as outlined in Paragraph 17 below, Employee must advise Company prior to disclosure of Confidential Information to be communicated
pursuant to law so that Company may obtain a protective order as necessary to protect its confidentiality interests.
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4. |
Future Inventions: Employee recognizes that inventions, original works of authorship, developments, improvements,
and trade secrets that relate to Employee’s activities while working for Company, and which are conceived, developed, reduced to practice, or created by Employee, whether alone or with others, within one year after termination of
Employee’s employment (“future inventions”), may constitute Inventions as that term is defined above. Accordingly, Employee agrees that Company’s rights and Employee’s obligations with respect to Inventions apply to future inventions,
unless and until Employee has established the contrary.
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5. |
Ethical Standards: Employee agrees to maintain the highest ethical and legal standards in Employee’s conduct, to
be scrupulously honest and straightforward in all of Employee’s dealings, and to avoid all situations which might create the appearance or perception of unethical or illegal conduct.
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6. |
Product Resale: As an employee of Company, Employee may receive Company products and materials either at no charge
or at a discount as specified from time to time by Company in its sole discretion. Employee agrees that the products and materials received shall be used strictly in accordance with the applicable policies of Company and shall not be
sold, distributed, or transferred in any manner that would violate such policies.
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7. |
Gratuities: Employee shall neither seek nor retain gifts, gratuities, entertainment, or other forms of
compensation, benefit, or persuasion from suppliers, distributors, vendors, or their representatives except in compliance with Company policy.
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8. |
Non-Solicitation: Employee shall not in any way, directly or indirectly, on Employee’s own behalf or on behalf of
others, either alone or with, assisting, or through others, at any time during employment or within one year after either a voluntary or involuntary employment termination: (a) solicit, divert, take away, or interfere with Company’s
distributors, employees, suppliers, or vendors, including, without limitation, inducing, facilitating, recruiting, or encouraging Company’s distributors, employees, suppliers, or vendors to terminate or alter their relationship with
Company or to do business with any person or entity that competes with Company, regardless of whether or not Employee initiates any such contact; or (b) attempt to do any of the foregoing.
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9. |
Non-Disparagement: Subject to Paragraph 17 below, Employee shall not in any way, directly or indirectly, at any
time during employment or after either voluntary or involuntary employment termination, disparage Company, Company products, Company employees, or Company distributors, including, without limitation, the business, reputation, practices,
or conduct of any of the foregoing.
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10. |
Non-Competition: In exchange for the benefits of continued employment by Company, Employee shall not, without the
prior written consent of Company: (i) serve in any capacity whatsoever, including, but not limited to, as a partner, joint venturer, employee, distributor, consultant, principal, officer, director, manager, member, affiliate,
representative, agent, associate, contractor, inventor, advisor, licensor, licensee, promoter, or investor for; (ii) directly or indirectly, own, purchase, organize or take preparatory steps for the organization of; or (iii) build,
design, finance, acquire, lease, operate, manage, control, invest in, participate in, work or consult for or otherwise join or participate in or affiliate with or provide service to any direct selling or multilevel marketing company or
entity, including, without limitation, any direct or indirect affiliate or subsidiary of such company or entity, that competes with the business of Company whether for market share of products or for independent distributors; provided,
however, Employee may own publicly traded securities of a company whose securities are publicly traded on a national securities exchange that is registered with the Securities and Exchange Commission if Employee’s ownership interest is
less than 1% of the total outstanding securities of such company. The foregoing covenant shall cover Employee’s activities in every part of the Territory. “Territory” shall mean: (i) all states of the United States of America; and (ii)
any other countries in which Company maintains non-trivial operations or facilities, provides goods or services, has customers or distributors, or otherwise conducts business during the time of employment. Employee shall not engage in
activities that may require or inevitably require disclosure of Confidential Information. The restrictions set forth in this paragraph shall remain in effect during Employee’s employment with Company.
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11. |
Release to Use Image, Name, Voice, and Likeness:
|
11.1 |
Employee hereby grants Company and its agents, licensees and assigns a perpetual, non-revocable, and non-exclusive right to use, distribute, and/or display, throughout the world in any form now known or later developed, Employee’s
name, image, likeness, title, picture, portrait, appearance, words, voice, biographical information, and/or actions (the “Personal Information”), by incorporating it into any form of commercial, informational, educational, advertising,
and/or promotional material (the “Works”), even if such Works are created after the termination of Employee’s employment, so long as such Personal Information was obtained during Employee’s employment with Company. Employee expressly
consents to Company’s use of the Personal Information to create Works that express or imply that Employee approves, endorses, have endorsed, or will endorse the specific subject matter of the Works. Company may use the Personal
Information for any purpose, in its sole discretion, except that Company will not use the Personal Information for any criminal or illegal purpose.
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11.2 |
Employee agrees to indemnify and defend Company, its agents, employees, licensees and assigns from any and all claims or causes of action that Employee, or any third party, may have now or in the future, arising out of the use,
distribution, or display of the Personal Information.
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11.3 |
Employee agrees that Company is and shall be the exclusive owner of all right, title, and interest, including copyright, in the Works. Employee agrees that Employee will not be entitled to compensation of any kind for the use of the
Personal Information and/or the Works unless otherwise agreed to in writing.
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12. |
Acknowledgement: Employee acknowledges that Employee’s fulfillment of the
obligations contained in this Agreement, including, but not limited to, Employee’s confidentiality, non-solicitation, non-disparagement, and non-competition covenants in Paragraphs 3 and 8-10 above, are fair and reasonable,
are necessary to protect the Company’s Confidential Information and, consequently, to preserve the value and goodwill of the Company, and should be construed to apply to the fullest extent
possible by applicable laws. Employee further acknowledges the time, geographic, and scope limitations of these obligations are reasonable, and that Employee will not be precluded from gainful
employment if obligated not to compete with Company during the period and within the Territory as described in this Agreement. Employee has carefully read this Agreement, has consulted with independent legal counsel to the
extent Employee deems appropriate, and has given careful consideration to the restraints imposed by the Agreement. Employee acknowledges that the terms of this Agreement are enforceable regardless of the manner in which Employee’s
employment is terminated, whether voluntary or involuntary. In the event that Employee is to be employed as an attorney for a competitive business, Company and Employee acknowledge that Paragraph 10 is not intended to restrict the right
of Employee to practice law in violation of any applicable rules of professional conduct.
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13. |
Separate Covenants: Employee’s confidentiality, non-solicitation, non-disparagement, and non-competition covenants
in Paragraphs 3 and 8-10 above shall be construed as a series of separate covenants, one for each city, county, and state of any geographic area in the Territory. Except for geographic coverage, each such separate covenant shall be
deemed identical in terms to the covenants contained above. If, in any judicial or arbitral proceeding, a court or arbitrator refuses to enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or
such part) shall be revised, or if revision is not permitted it shall be eliminated from this Agreement, to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the
provisions of Paragraphs 3 and 8-10 above are deemed to exceed the time, geographic, or scope limitations permitted by applicable law, then such provisions shall be reformed to the maximum time, geographic, or scope limitations, as the
case may be, then permitted by such law. In the event that the applicable court or arbitrator does not exercise the power granted to it in the prior sentence, Employee and Company agree to replace such invalid or unenforceable term or
provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business, and other purposes of such invalid or unenforceable term.
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14. |
Return of Equipment and Information upon Termination: On Company’s request at any time, and in any event on the
termination of employment for any reason, Employee shall promptly deliver to Company (and will not keep in Employee’s possession, in hard copy or digital form, or recreate, copy, or deliver to anyone else) any and all Confidential
Information and Inventions, including, but not limited to, any distributor, supplier, and vendor contact information and notes or summaries thereof. Employee will also deliver to the Company (and will not keep in Employee’s possession,
in hard copy or digital form, or recreate, copy, or deliver to anyone else) any and all devices, assets, equipment, property, passwords, documents, records, data, notes, reports, proposals, lists, correspondence, formulae,
specifications, drawings, or any other items or materials whatsoever (or any copies or reproductions of any of the aforementioned items), developed by Employee pursuant to Employee’s employment with Company or otherwise belonging to
Company. Employee understands and agrees that compliance with this paragraph may require that data be removed from Employee’s personal computer equipment and electronic storage devices of any kind, and Employee agrees to give the
qualified personnel of Company or its contractors access to such computer equipment or devices for that purpose.
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15. |
Remedies and Enforcement of Restrictive Covenants: Employee acknowledges that: (a) compliance with the provisions
of the restrictive covenants contained in this Agreement is necessary to protect the business and goodwill of Company; and (b) a breach of such provisions will result in irreparable and continuing harm to Company, for which money
damages will not provide adequate relief. Consequently, Employee agrees that, in the event Employee breaches or threatens to breach any of such provisions, Company shall be entitled to temporary, preliminary, and/or permanent injunctive
relief to prevent the threatened harm or the continuation of harm. Employee agrees that Company does not need to post a bond to obtain an injunction and waives Employee’s right to require such a bond. The seeking and/or obtaining of
such injunctive relief shall be without prejudice to, and are in addition to, Company’s right to seek any other remedies available to Company for such breach or threatened breach, including the recovery of damages from Employee, and
remedies available under federal and state laws, including, but not limited to, the Federal Defend Trade Secrets Act, and the parties agree that all remedies are cumulative. It is further recognized and agreed that the provisions of
Paragraphs 3, 8, 9, or 10 of this Agreement and [Paragraphs 3 and 5] of the Addendum are for the purpose of restricting Employee’s activities to the extent necessary for the protection of the legitimate business interests of Company and
that Employee agrees that said provisions do not and will not preclude Employee from engaging in activities sufficient for the purposes of earning a living. Unless prohibited by law, Employee also agrees that any breach by Employee of
the provisions of Paragraphs 3, 8, 9, or 10 of this Agreement and [Paragraphs 3 and 5] of the Addendum during employment by Company shall be grounds for forfeiture of any accrued bonuses or commissions as liquidated damages, which shall
be in addition to and not exclusive of any and all other rights and remedies Company may have against Employee.
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16. |
Attorney’s Fees: If any party to this Agreement breaches any of the terms of this Agreement, then that party shall
pay to the non-defaulting party all of the non-defaulting party’s costs and expenses, including reasonable attorney’s fees, incurred by that party in enforcing the terms of this Agreement.
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17. |
Protected Activity: Nothing in this Agreement is intended, or should be interpreted, to restrict,
impede, or otherwise limit the rights of all employees to report possible violations of law or regulation to any governmental agency or entity tasked with enforcing such laws and regulations, including but not limited to the United
States Department of Justice, the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Department of Labor, Congress, and any agency Inspector General, or to participate in an investigation by any such
agencies or entities; nor is this Agreement intended to limit employees’ rights to discuss among themselves or others wages, benefits, and other terms and conditions of employment or workplace matters of mutual concern, as protected by
the National Labor Relations Act or other law. Employee is not required to notify Company of his or her intention to file such a report or participate in such an investigation prior to contacting the agency or entity.
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18. |
Severability: If any provision, paragraph, or subparagraph of this Agreement is adjudged by any court or
administrative agency to be void or unenforceable in whole or in part, this adjudication shall not affect the validity of the remainder of the Agreement, including any other provision, paragraph, or subparagraph. Each provision,
paragraph, and subparagraph of this Agreement is severable from every other provision, paragraph, and subparagraph and constitutes a separate and distinct covenant.
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19. |
Governing Law and Forum: This Agreement shall be governed and enforced in accordance with the laws of the State of
Utah, excepting its choice of law rules, and any litigation between the parties relating to this Agreement shall be conducted in the state or federal courts in or for Utah County in the State of Utah.
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20. |
Employment At Will: Employee understands that employment with Company is at-will, meaning that employment with
Company is completely voluntary and for an indefinite term and that either Employee or Company is free to terminate the employment relationship at any time, with or without cause or advance notice. Employee further understands that any
representation to the contrary is unauthorized and not valid unless obtained in writing and approved by the Company’s board of directors.
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21. |
Employment Subject to Company’s Policies and Procedures: The parties acknowledge and agree that Company has
established, and may establish, various workplace policies and procedures, which Company may modify in its sole discretion from time to time. Employee acknowledges such policies and procedures, and agrees to abide by such policies and
procedures, as they may be implemented or modified from time to time.
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22. |
Entire Agreement: Company and Employee understand and agree that this Agreement shall constitute the entire
agreement between them regarding the subject matter contained herein, and that all prior understandings or agreements regarding these matters are hereby superseded and replaced, including, without limitation, any written agreements
previously signed by the parties. Any amendment or addendum to, or modification or supplementation of, this Agreement must be in writing signed by the parties hereto and stating the intent of the parties to amend or modify this
Agreement.
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23. |
Survivability of Obligations: This Agreement sets forth several obligations which continue after the termination
of Employee’s employment with Company, including, without limitation, those obligations set forth in Paragraphs 1, 2, 3, 4, 6, 8, 9, 11 and 12, and the parties specifically acknowledge and agree that such obligations shall survive the
termination of Employee’s employment for any reason.
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Dated:
|
Employee
|
Title |
Date |
Identifying Number or Brief Description |
Signature of Employee:
|
Print Name of Employee:
|
Date:
|
1. |
Terms of Employee Covenants Agreement: Company and Employee agree that the defined terms in the Employee Covenants
Agreement shall have the same meaning in this Addendum. Company and Employee further agree that all terms of the Employee Covenants Agreement remain in full force and effect, except as modified herein. To the extent of a conflict
between terms of the Employee Covenants Agreement and this Addendum, the applicable portion or portions of this Addendum shall control.
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2. |
Conflict of Interest: All references in Paragraph 1 and subparagraphs 1.1 through 1.3 of the Employee Covenants
Agreement to Employee’s “director,” “supervisor,” and “HR” shall be replaced with Company’s General Counsel. For example, and without limiting the provisions of that Paragraph and subparagraphs, Employee shall direct questions
concerning conflicts of interest to, report actual or potential conflicts of interest to, seek an appropriate waiver or resolution of such conflict of interest from, and provide any required notifications or disclosures to, Company’s
General Counsel. The General Counsel shall direct questions concerning conflicts of interest to, report actual or potential conflicts of interest to, seek an appropriate waiver or resolution of such
conflict of interest from, and provide any required notifications or disclosures to, the Chair of the Compensation and Human Capital Committee.
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3. |
Non-Competition: Employee agrees that the restrictions in Paragraph 10 of the Employee Covenants Agreement shall
remain in effect during a period of one year following termination of Employee’s employment for any reason. In the event of any breach or violation of
these restrictions prior to or during this one-year period, or a good faith allegation by Company of Employee’s breach or violation of these restrictions, this one-year period shall be extended until such breach or violation of these
restrictions, or dispute related to an allegation by Company that Employee has breached or violated these restrictions, has been duly cured or resolved, as applicable.
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4. |
Other Employment: Subject to the limitations in the Employee Covenants Agreement and this Addendum, should
Employee obtain other employment or service as a director during Employee’s employment with Company, or within one year immediately following Employee’s termination for any reason, Employee shall provide written notice to the Company’s
General Counsel of the name and address of the new employer, the position Employee expects to hold, and a general description of Employee’s expected duties and responsibilities, at least three days prior to starting such employment or
service. Employee shall also provide a copy of the Employee Covenants Agreement and this Addendum to the new employer.
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5. |
[Non-Endorsement: Employee shall not in any way, directly or indirectly, at any time during employment or within one year after either a voluntary or involuntary employment termination,
endorse any sales compensation plan of another person or entity that competes with Company or any products of Company, promote or speak on behalf of any person or entity whose products compete with those of Company, or allow Employee’s
name or likeness to be used in any way to promote any person, entity, or product that competes with Company or any products of Company.][Paragraph to be included for employees as deemed appropriate by the
Company]
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6. |
Acknowledgment: In addition to the acknowledgment of Paragraph 12 of the Agreement, Employee further acknowledges
that Employee’s position and work activities with the Company are “key” and vital to the on-going success of Company’s operation in each product category and in the Territory. In addition, Employee acknowledges that Employee’s
employment or involvement with any other direct selling or multilevel marketing company in particular would create the impression that Employee has left Company for a “better opportunity,” which could damage Company by this perception
in the minds of Company’s employees, distributors, or other persons. Therefore, Employee acknowledges that Employee’s non-competition covenant in this Addendum is fair and reasonable, is necessary to
protect the Company’s Confidential Information and, consequently, to preserve the value and goodwill of the Company, and should be construed to apply to the fullest extent possible by applicable laws. Employee further acknowledges the time, geographic, and scope limitations of this obligation are reasonable, and that Employee will not be precluded from gainful employment if obligated not to compete with Company
during the period and within the Territory as described in the Agreement and this Addendum. Employee has carefully read this Addendum, has consulted with independent legal counsel to the extent Employee deems appropriate, and
has given careful consideration to the restraints imposed by this Addendum. Employee acknowledges that the terms of this Addendum are enforceable regardless of the manner in which Employee’s employment is terminated, whether voluntary
or involuntary. In the event that Employee is to be employed as an attorney for a competitive business, Company and Employee acknowledge that this Addendum is not intended to restrict the right of Employee to practice law in violation
of any applicable rules of professional conduct.
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Dated:
|
Employee
|
1. |
I have reviewed this annual report on Form 10-K of Nu Skin Enterprises, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.
|
Date: February 15, 2023
|
/s/ Ryan. S. Napierski
|
||
Ryan. S. Napierski
|
|||
Chief Executive Officer
|
1. |
I have reviewed this annual report on Form 10-K of Nu Skin Enterprises, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.
|
Date: February 15, 2023
|
/s/ Mark H. Lawrence
|
||
Mark H. Lawrence
|
|||
Chief Financial Officer
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 15, 2023
|
/s/ Ryan. S. Napierski
|
||
Ryan. S. Napierski
|
|||
Chief Executive Officer
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 15, 2023
|
/s/ Mark H. Lawrence
|
||
Mark H. Lawrence
|
|||
Chief Financial Officer
|
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Stockholders' equity: | ||
Common stock, shares authorized (in shares) | 500.0 | 500.0 |
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) | 41.1 | 40.7 |
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Consolidated Statements of Income [Abstract] | |||
Revenue | $ 2,225,659 | $ 2,695,669 | $ 2,581,934 |
Cost of sales | 630,915 | 675,223 | 658,028 |
Gross profit | 1,594,744 | 2,020,446 | 1,923,906 |
Operating expenses: | |||
Selling expenses | 879,634 | 1,080,153 | 1,029,869 |
General and administrative expenses | 555,769 | 654,431 | 636,473 |
Restructuring and impairment expenses | 48,494 | 51,870 | 0 |
Total operating expenses | 1,483,897 | 1,786,454 | 1,666,342 |
Operating income | 110,847 | 233,992 | 257,564 |
Other income (expense), net (Note 17) | (21,877) | (1,533) | (1,332) |
Income before provision for income taxes | 88,970 | 232,459 | 256,232 |
Provision (benefit) for income taxes | (15,808) | 85,193 | 64,877 |
Net income | $ 104,778 | $ 147,266 | $ 191,355 |
Net income per share: | |||
Basic (in dollars per share) | $ 2.1 | $ 2.93 | $ 3.66 |
Diluted (in dollars per share) | $ 2.07 | $ 2.86 | $ 3.63 |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 50,002 | 50,193 | 52,296 |
Diluted (in shares) | 50,525 | 51,427 | 52,765 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 104,778 | $ 147,266 | $ 191,355 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment, net of taxes of $536, $429, and $(299), respectively | (22,918) | (13,476) | 19,708 |
Net unrealized gains/(losses) on cash flow hedges, net of taxes of $(3,519), $(1,166) and $(220), respectively | 12,748 | 4,225 | 797 |
Less: Reclassification adjustment for realized losses/(gains) in current earnings on cash flow hedges, net of taxes of $674, $(34), and $(5), respectively | (2,443) | 123 | 19 |
Other comprehensive (loss) income, net of tax | (12,613) | (9,128) | 20,524 |
Comprehensive income | $ 92,165 | $ 138,138 | $ 211,879 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Other comprehensive income (loss): | |||
Foreign currency translation adjustment, tax | $ 536 | $ 429 | $ (299) |
Net unrealized gains/(losses) on foreign currency cash flow hedges, tax | (3,519) | (1,166) | (220) |
Reclassification adjustment for realized losses/(gains) in current earnings on cash flow hedges, tax | $ 674 | $ (34) | $ (5) |
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands |
Common Stock [Member]
Class A [Member]
|
Additional Paid-in Capital [Member] |
Treasury Stock, at Cost [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 | 191,355 | 191,355 |
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | 20,524 | 0 | 20,524 |
Repurchase of Class A common stock (Note 8) | 0 | 0 | (144,334) | 0 | 0 | (144,334) |
Exercise of employee stock options/vesting of stock awards | 0 | (1,803) | 7,567 | 0 | 0 | 5,764 |
Stock-based compensation | 0 | 24,060 | 0 | 0 | 0 | 24,060 |
Cash dividends | 0 | 0 | 0 | 0 | (78,387) | (78,387) |
Balance at end 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 | 147,266 | 147,266 |
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | (9,128) | 0 | (9,128) |
Repurchase of Class A common stock (Note 8) | 0 | 0 | (80,420) | 0 | 0 | (80,420) |
Exercise of employee stock options/vesting of stock awards | 0 | (1,292) | 15,153 | 0 | 0 | 13,861 |
Stock-based compensation | 0 | 23,194 | 0 | 0 | 0 | 23,194 |
Cash dividends | 0 | 0 | 0 | 0 | (76,272) | (76,272) |
Balance at end of period at Dec. 31, 2021 | 91 | 601,703 | (1,526,860) | (73,896) | 1,911,734 | 912,772 |
Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 0 | 0 | 104,778 | 104,778 |
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | (12,613) | 0 | (12,613) |
Repurchase of Class A common stock (Note 8) | 0 | 0 | (70,045) | 0 | 0 | (70,045) |
Exercise of employee stock options/vesting of stock awards | 0 | (792) | 27,844 | 0 | 0 | 27,052 |
Stock-based compensation | 0 | 12,367 | 0 | 0 | 0 | 12,367 |
Cash dividends | 0 | 0 | 0 | 0 | (77,015) | (77,015) |
Balance at end of period at Dec. 31, 2022 | $ 91 | $ 613,278 | $ (1,569,061) | $ (86,509) | $ 1,939,497 | $ 897,296 |
Consolidated Statements of Stockholder's Equity (Parenthetical) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Stockholders' Equity [Roll Forward] | |||
Exercise of employee stock options (in shares) | 1.2 | 0.7 | 0.4 |
The Company |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 | |||
The Company [Abstract] | |||
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 nine segments, consisting of its seven geographic Nu Skin segments—Americas, which includes Canada, Latin America and the United States; Mainland
China; Southeast Asia/Pacific, which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Australia, New Zealand, and other markets; South Korea; Japan; Europe, Middle East and Africa (“EMEA”), which includes markets in
Europe as well as Israel and South Africa; and Hong Kong/Taiwan, which also includes Macau—and two Rhyz Investments
segments—Manufacturing, which includes manufacturing and packaging subsidiaries it has acquired; 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 Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
Consolidation
The consolidated financial statements include the accounts of the Company and the Subsidiaries. All significant intercompany accounts and transactions are eliminated in
consolidation.
Use of estimates
The preparation of these financial statements, in conformity with accounting principles generally accepted
in the United States of America (“U.S. GAAP”), required management to make estimates and assumptions that affected the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the
financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates.
Reclassifications
Certain prior period
amounts have been reclassified to conform to the current presentation. The Company reclassified $12.0 million and $10.4 million of events and other miscellaneous selling costs from the general and administration expenses line to the
line on the
consolidated statement of income for the years ended December 31, 2021 and 2020, respectively. The Company believes these costs are better reflected in selling expenses. The reclassification had no impact on operating income for the years ended
December 31, 2021 and 2020.Cash and cash equivalents
Cash equivalents are short-term, highly liquid instruments with original maturities of 90 days or less.
Accounts receivable
Accounts receivable
represents amounts owed to us through our operating activities and are presented net of allowance for doubtful accounts. Accounts receivable for core Nu Skin consists primarily of credit card receivables, while accounts receivable for our Rhyz
investments consists primarily of trade receivables from customer sales. For the Company’s trade receivables from its Rhyz investment customers, the Company performs ongoing credit evaluations of its customers and maintains an allowance for
expected credit losses. The allowance for expected credit losses represents the Company’s best estimate based on current and historical information, and reasonable and supportable forecasts of future events and circumstances.
Inventories
Inventories consist primarily of merchandise purchased for resale and are stated at the lower of standard cost or net realizable value, using a standard cost method
which approximates the first-in, first-out method. The Company had reserves of its inventory carrying value totaling $37.3 million and $18.6 million as of December 31, 2022 and 2021, respectively.
Inventories consist of the following (U.S. dollars in thousands):
Reserves of inventories consist of the following (U.S. dollars in thousands):
Prepaid expense and other
Prepaid expenses and other consist of the following (U.S. dollars in thousands):
Property and equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the following estimated useful
lives:
Expenditures for maintenance and repairs are charged to expense as incurred. When an asset is sold or otherwise disposed of, the cost and associated accumulated
depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of income. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of
such assets may not be recoverable. An impairment loss is recognized if the carrying amount of the asset exceeds its fair value.
Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued expenses and
operating lease liabilities on the consolidated balance sheets. Finance leases are included in other assets, accrued expenses and other liabilities on the consolidated balance sheets.
Operating lease ROU assets represent the Company’s right to
use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the
estimated present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating
lease ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will
exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with a term of 12 months or less are not recorded on the balance sheet. The Company’s lease agreements do not contain
any residual value guarantees.
The Company has lease agreements with lease and non-lease components. The Company accounts for the lease and non-lease components as a single lease component.
Goodwill and other intangible assets
Goodwill is recorded
when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill and intangible assets with indefinite useful lives are not amortized, but are assessed for impairment annually on October 1. In addition,
impairment testing is conducted when events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill and intangible assets with indefinite useful lives would be
written down to fair value if considered impaired. Guidance under Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other (“ASC 350”), requires an entity to test goodwill for impairment on at least an annual basis. The Company had the option
to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the
qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If under the quantitative
assessment the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured. In fiscal years 2022 and 2020, a quantitative assessment was performed. The Company elected to perform
the qualitative assessment during fiscal year 2021, and determined that it is not more likely than not the carrying value exceeds the fair value of the reporting units. Intangible assets with finite useful lives are amortized to their estimated
residual values over such finite lives using the straight-line method and reviewed for impairment whenever events or circumstances warrant such a review.
The
Company has historically evaluated its goodwill for impairment annually as of June 30 or more frequently if impairment indicators arose in accordance with ASC 350, “Intangibles - Goodwill and Other.” In the fourth quarter of 2021, the Company
changed the date of its annual assessment of goodwill to October 1 for all reporting units. The change in testing date for goodwill is a change in accounting principle, which management believes is preferable as the new date of the assessment
better aligns with the Company’s budgeting process and will create a more efficient and timely process surrounding the impairment tests. The change in the assessment date does not delay, accelerate or avoid a potential impairment charge. The
Company has determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been used as of each October 1 of prior reporting periods without the use of hindsight. As such, the
Company prospectively applied the change in annual goodwill impairment testing date from October 1, 2021. No impairment was
recognized during the years ended December 31, 2022 and 2020.
As
discussed further in Note 20 of the Notes to Consolidated Financial Statements, during the fourth quarter of fiscal year 2021, the Company recognized an $18.2
million goodwill and intangibles impairment charge related to the Grow Tech segment, which was included in
in the consolidated statement of income. During fiscal year 2022, the Company recorded a $1.7 million impairment of other intangibles. The Company completed the annual goodwill and indefinite-lived intangible asset impairment testing as of October 1, 2022, and concluded that the
fair value of the reporting units were determined to be in excess of its carrying amounts and no goodwill impairment charge was
required. As of the October 1, 2022 testing date, the fair value of the Manufacturing reporting unit was estimated to be approximately 8%
in excess of its carrying amount, and therefore the reporting unit is considered to be at risk of future impairment. The Manufacturing reporting unit’s fair value remains sensitive to significant unfavorable changes in revenue, gross margin
and discount rates that could negatively impact future analyses.
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there
can be no assurance that the estimates and assumptions made for purposes of the goodwill impairment tests will prove to be an accurate prediction of the future. Although the Manufacturing reporting unit showed strong revenue growth in fiscal
year 2020 and 2021, the fair value of the reporting unit in the current year was negatively impacted by an increase in the discount rate due to the current interest rate
environment, and lower near-term revenue projections. Current projections used for the Manufacturing reporting unit reflect revenue growth attributable to the continued expansion of capacity, continued intercompany sales to Nu Skin,
and the recent acquisition of new customers. While historical performance and current expectations have resulted in fair values of the Manufacturing reporting unit in excess of carrying values, if the assumptions are not realized an
impairment charge may be recorded in the future.
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 (“ASC 321”) for equity investments that do not have readily determinable fair values. These investments are measured at cost, less impairment, if any, plus or minus changes resulting
from observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company does not exercise significant influence over these companies. These investments are carried on the consolidated balance
sheets within Other Assets. Changes in fair value based on impairments or resulting from observable price changes are recorded in Other Income (expense), net on the consolidated statements of income. See Note 10 – Fair Value and Equity
Investments, for further details around the Company’s equity investments.
Other assets
Other assets consist of the following (U.S. dollars in thousands):
Accrued expenses
Accrued expenses consist of the following (U.S. dollars in thousands):
Other liabilities
Other liabilities consist of the following (U.S. dollars in thousands):
Revenue recognition
Net sales include products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Revenue is measured as the amount of
consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The Company recognizes revenue by transferring the promised products to the customer,
with revenue recognized at shipping point, the point in time the customer obtains control of the products. The Company recognizes revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. A
reserve for product returns is accrued based on historical experience totaling $3.4 million and $3.5 million as of December 31, 2022 and 2021, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company recorded sales returns of $31.6 million, $52.1 million and $49.5 million, respectively. The majority of the Company’s contracts have a single performance obligation and are short term in nature. Sales taxes and
value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales.
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 was $18.7 million and $22.0 million as of December 31, 2022, and 2021, respectively.
The contract liabilities impact to revenue for the years ended December 31, 2022, 2021 and 2020 was an increase of $3.3 million, decrease
of $3.8 million and a decrease of $5.7
million, respectively.
Disaggregation of Revenue
Please refer to Note 15 - Segment Information for revenue by segment and product line.
Arrangements with Multiple Performance Obligations
The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenues to each performance obligation
based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers for individual products sales to customers.
Shipping and handling costs
Shipping and handling costs are recorded as cost of sales and are expensed as incurred.
Advertising expenses
Advertising costs are
expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of income. Advertising expense incurred for the years ended December 31, 2022, 2021 and 2020 totaled $14.5 million, $15.5 million and $14.7 million, respectively.
Selling expenses
Selling expenses are the Company’s most significant expense and are classified as
operating expenses. Selling expenses include commissions the Company pays to its Brand Affiliates, as well as salaries, service fees, benefits, bonuses and other labor and unemployment expenses the Company pays to its sales force in Mainland
China. Selling expenses do not include amounts the Company pays to its sales force based on their personal purchases; rather, such amounts are reflected as reductions to revenue. The term “Brand Affiliates” refers to members of the Company’s independent sales force in all of the Company’s markets besides Mainland China. In each of the Company’s markets, except Mainland China, Sales Leaders can
earn “multi-level” compensation under the Company’s global sales compensation plan, including commissions for product sales to their consumer groups as well as the product sales made through the sales network they have developed and trained.
The Company does not pay commissions on sales materials.
Outside of Mainland China, the Company’s Brand Affiliates may
make profits by purchasing the products from the Company at a discount and selling them to consumers with a mark-up. The Company does not account for nor pay additional commissions on these mark-ups received by Brand Affiliates. In many markets,
the Company also allows individuals who are not members of its sales force, referred to as “preferred customers,” to buy products directly from the Company at a discount. The Company pays commissions on preferred customer purchases to the referring
member of its sales force.
Research and development
Research and
development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of income and totaled $23.3 million, $27.2 million and $23.3 million in 2022, 2021 and 2020, respectively.
Deferred tax assets and liabilities
The Company accounts for income taxes in accordance with the
Income Taxes Topic of the Financial Accounting Standards Codification. 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. These deferred tax assets assume sufficient future earnings will exist for their realization, and are calculated using anticipated tax rates. Valuation allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be ultimately realized.
Uncertain tax positions
The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. In 2009, we entered
into a voluntary program with the IRS called Compliance Assurance Process (“CAP”). Under the CAP program, the IRS audits the tax position of the Company to identify and resolve any tax issues that may arise throughout the tax year. As of
December 31, 2022, tax years through 2020 have been audited and are effectively closed to further examination. For tax years 2021 and 2022, the Company is in the Bridge phase of the CAP program, pursuant to which the IRS will not accept
disclosures, will not conduct reviews and will not provide letters of assurance for the year. There are limited circumstances that tax years in the Bridge phase will be opened for examination. The company has applied for the CAP program for
tax year 2023 and is currently waiting on approval from the IRS. With a few exceptions, we are no longer subject to state and local income tax examination by tax authorities for the years before 2019. Foreign jurisdictions have varying lengths
of statutes of limitations for income tax examinations. Some statutes are as short as three years and in certain markets may be as
long as ten years. The Company is currently under examination in certain foreign jurisdictions; however, the outcomes of those
reviews are not yet determinable.
A reconciliation of the beginning and ending amount of
unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands):
At December 31, 2022, the Company had $23.1 million in
unrecognized tax benefits of which $23.1 million, if recognized, would affect the effective tax rate. In comparison, at December 31, 2021,
the Company had $15.1 million in unrecognized tax benefits of which $15.1 million, if recognized, would affect the effective tax rate. The Company’s unrecognized tax benefits relate to multiple foreign and domestic jurisdictions. Due to potential changes in
unrecognized tax benefits from the multiple jurisdictions in which the Company operates, as well as the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross unrecognized tax benefits, net of foreign
currency adjustments, may increase within the next 12 months by a range of approximately $2.0 to $3.0 million.
During the years ended
December 31, 2022, 2021 and 2020 the Company recognized $5.7 million, $1.6 million and $1.5 million, respectively in interest and penalties expenses
related to uncertain tax positions. The Company had $12.4 million, $6.7 million and $5.1 million of accrued interest and penalties related to
uncertain tax positions at December 31, 2022, 2021 and 2020, respectively. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense.
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 (Note 8).
Foreign currency translation
A significant portion
of the Company’s business operations occurs outside of the United States. The local currency of each of the Company’s Subsidiaries is considered its functional currency, except for the Company’s subsidiaries in Singapore and countries deemed highly
inflationary where the U.S. dollar is used. All assets and liabilities are translated into U.S. dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’
equity is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ equity in the consolidated balance sheets and transaction gains and losses are included in
other income (expense) in the consolidated statements of income. Net of tax, the accumulated other comprehensive loss related to the foreign currency translation adjustments are $102.0 million (net of tax of $8.1 million), $79.1 million (net of tax of $7.5
million), and $65.6 million (net of tax of $7.1
million), at December 31, 2022, 2021 and 2020, respectively.
Classification of a highly inflationary economy
A market is considered to have a highly inflationary economy if it has a cumulative inflation rate of approximately 100% or more
over a three-year period as well as other qualitative factors including historic inflation rate trends (increasing and decreasing), the capital intensiveness of the operation and other pertinent economic factors. The functional currency in highly
inflationary economies is required to be the functional currency of the entity’s parent company, and transactions denominated in the local currency are remeasured to the functional currency. The remeasurement of local currency into U.S. dollars
creates foreign currency transaction gains or losses, which the Company includes in its consolidated statements of income.
In the second quarter of 2018, published inflation indices indicated that the three-year cumulative inflation in Argentina exceeded 100 percent, and as of July 1, 2018,
we elected to adopt highly inflationary accounting for our subsidiary in Argentina. Under highly inflationary accounting, Argentina’s functional currency became the U.S. dollar, and its income statement and balance sheet have been measured in U.S.
dollars using both current and historical rates of exchange. The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in Other income (expense), net and was not material. As of December 31, 2022, and 2021, Argentina had a small net peso monetary position. Net sales of Argentina were less than 2 percent of our consolidated net sales for the years ended December 31, 2022, 2021 and 2020.
Fair value of financial instruments
The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term
nature of these instruments. The Company’s current investments as of December 31, 2022 include certificates of deposits and pre-refunded municipal bonds that are classified by management as held-to-maturity as the Company had the positive intent and
ability to hold to maturity. The carrying value of these current investments approximate fair values due to the short-term nature of these instruments. As of December 31, 2022 and 2021, the fair value of debt was $405.0 million and $377.5 million,
respectively. The estimated fair value of the Company’s debt is based on interest rates available for debt with similar terms and remaining maturities.
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:
Accounting standards permit companies, at their option, to measure many financial instruments and certain other items at fair value. The Company has elected not to
apply the fair value option to existing eligible items.
Stock-based compensation
All share-based
payments, including grants of stock options and restricted stock units, are required to be recognized in the Company’s financial statements based upon their respective grant date fair values. The Black-Scholes option-pricing model is used to
estimate the fair value of stock options. The determination of the fair value of stock options is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected
dividends. The Company uses historical volatility as the expected volatility assumption required in the Black-Scholes model. The expected life of the stock options is based on historical data trended into the future. The risk-free interest rate
assumption is based on observed interest rates appropriate for the expected terms of the Company’s stock options. The fair value of the Company’s restricted stock units is based on the closing market price of its stock on the date of grant less the
Company’s expected dividend yield. The Company recognizes stock-based compensation net of actual forfeitures over the requisite service period of the award.
The total compensation expense related to equity compensation plans was $12.4
million, $23.2 million and $24.1
million for the years ended December 31,
2022, 2021 and 2020, respectively. In 2022, 2021 and 2020, these amounts reflect the reversal of $1.3, none, and none, respectively, for
certain performance-based awards that were no longer expected to vest. For the years ended December 31, 2022, 2021 and 2020, all stock-based compensation expense was recorded within general and administrative expenses.
Reporting comprehensive income
Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events and circumstances from non-owner sources, and it includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.
Derivative instruments and hedging activities
FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a)
how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial
performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative
instruments, and disclosures about credit-risk-related contingent features in derivative instruments.
As required by ASC 815,
the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a
hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an
asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or
other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching
of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the
hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge
accounting.
In accordance with the
FASB’s fair value measurement guidance in ASU 2011-04, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty
portfolio.
Recent accounting pronouncements
In March 2020, the FASB issued ASU 2020-04, 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 2020-04 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 31, 2024. The
amendments in ASU 2020-04 are elective and are effective upon issuance for all entities. The Company had previously 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. In the second quarter of 2022, the Company elected the hedge accounting expedient that
allows an update to the hedged risk in active hedging relationships without de-designation as the Company’s debt transitioned to SOFR. In the fourth quarter of 2022, the Company elected the hedge accounting expedient that allows an amendment to
existing hedges without de-designation as the Company’s hedges transitioned to SOFR. 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.
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Property and Equipment |
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Property and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment |
Property and equipment are comprised of the following (U.S. dollars in thousands):
Depreciation of property and equipment totaled $61.0
million, $62.9 million and $62.5
million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company recorded impairments of $8.2 million and $13.7 million for the years ended December 31, 2022 and 2021, respectively, in connection with our fiscal year 2022 and 2021 restructuring plans, see Note
20 – Restructuring and Severance Charges.
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Goodwill |
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Goodwill [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill |
The following table
presents goodwill allocated to the Company’s reportable segments for the periods ended December 31, 2022 and 2021 (U.S. dollars in thousands):
All of the Company’s
goodwill is recorded in U.S. dollar functional currency and allocated to the respective segments. Goodwill is not amortized; rather, it is subject to annual impairment tests. In connection with the Company’s decision to exit the Grow Tech segment, a
$9.2 million impairment charge was recorded in the year ended December 31, 2021, see Note 20 for further discussion regarding the
restructuring and impairment of the Grow Tech segment.
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Other Intangible Assets |
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Other Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets |
Other intangible assets consist of the following (U.S. dollars in thousands):
Amortization of finite-life intangible assets totaled $9.7
million, $11.7 million and $9.8
million for the years ended December 31, 2022, 2021 and 2020, respectively.
The estimated annual amortization expense for each of the five succeeding fiscal years are as follows (U.S. dollars in thousands):
Indefinite life intangible assets are not amortized, rather they are
subject to annual impairment tests. Finite life intangibles are amortized over their useful lives unless circumstances occur that cause the Company to revise such lives or review
such assets for impairment. In connection with the Company’s decision to exit the Grow Tech segment, a $3.8 million impairment
charge related to other indefinite lived intangibles and a $5.2 million
impairment charge related to other finite lived intangibles was recorded in the year ended December 31, 2021, see Note 20 for further discussion restructuring and impairment of the Grow Tech segment. During 2022, the Company recorded a
$1.7 million impairment charge for other intangibles associated with our 2022 restructuring, see Note 20 for further discussion.
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Long-Term Debt |
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Long-Term Debt |
2018 Credit Agreement
On April 18, 2018, the Company entered into a Credit Agreement (the “2018 Credit
Agreement”) with several financial institutions as lenders and Bank of America, N.A., as administrative agent. The 2018 Credit Agreement provided for a $400 million term loan facility and a $350 million revolving credit facility, each
with a term of five years. Both facilities bore interest at the LIBOR,
plus a margin based on the consolidated leverage ratio. The term loan facility amortized 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 2018 Credit Agreement, with the remainder payable at final maturity.
The 2018 Credit Agreement required 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.
Credit Agreement
On June 14, 2022, the
Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with several financial institutions as lenders and Bank of America, N.A., as administrative agent, which amended and restated the 2018 Credit Agreement. The
Credit Agreement provides for a $400 million term loan facility and a $500 million revolving credit facility, each with a term of five years.
Both facilities bear interest at the SOFR, plus a margin based on the Company’s consolidated leverage ratio. Commitment fees payable under the Credit Agreement are also based on the consolidated leverage ratio as defined in the Credit Agreement and
range from 0.175% to 0.30%
on the unused portion of the total lender commitments then in effect. The term loan facility amortizes in quarterly installments in amounts resulting in an annual amortization of 2.5% during the first year and 5.0% during the second,
third, fourth and fifth years after the closing date of the Credit Agreement, with the remainder payable at final maturity. The Credit Agreement is guaranteed by certain of the Company’s domestic subsidiaries and collateralized by assets of such
subsidiaries, including a pledge of 65% of the capital stock of certain foreign subsidiaries. The Credit Agreement requires the Company
to maintain a consolidated leverage ratio not exceeding 2.75 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00. As of December 31, 2022, the Company was in compliance with all covenants under the Credit Agreement.
The following table summarizes the Company’s debt facilities as of December 31, 2022 and 2021:
Maturities of all long-term debt at December 31, 2022, are as follows (U.S. dollars in thousands):
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Leases |
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Leases |
The Company has operating and finance leases for regional offices, manufacturing facilities, retail
centers, distribution centers and certain equipment. The Company’s leases have remaining lease terms of 1 year to 22 years, some of
which include options to extend the leases for up to 20 years, and
some of which include options to terminate the leases within 1
year.
As of December 31, 2022, the weighted average remaining lease term was 8.8
and 4.6 years for operating and finance leases, respectively. As of December 31, 2022, the weighted average discount rate was 3.3% and 3.5% for operating and finance
leases, respectively.
The components of lease expense were as follows (U.S. dollars in thousands):
Supplemental cash flow information related to leases was as follows (U.S. dollars in thousands):
Maturities of lease liabilities were as follows (U.S. dollars in thousands):
The Company has additional lease liabilities of $5.5
million which have not yet commenced as of December 31, 2022, and as such, have not been recognized on the consolidated balance sheets.
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Capital Stock |
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Capital Stock [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock |
The Company’s authorized capital stock consists of 25
million shares of preferred stock, par value $0.001 per share, 500 million shares of Class A common stock, par value $0.001 per
share, and 100 million shares of Class B common stock, par value $0.001 per share. As of December 31, 2022 and 2021, there were no preferred or Class B common shares outstanding. Each share of Class A common stock entitles the holder to one vote on matters submitted to a vote of the Company’s stockholders. Stock dividends of Class A common stock may be paid
only to holders of Class A common stock. Class A common stock has no conversion rights.
Weighted-average common shares outstanding
The following is a
reconciliation of the weighted-average common shares outstanding for purposes of computing basic and diluted net income per share (in thousands):
For the years ended December 31, 2022, 2021 and 2020, other stock options totaling 0.1 million, 0.1 million and 0.4 million, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive.
Dividends
Quarterly cash dividends for the years ended December 31, 2022 and 2021 totaled $77.0 million and $76.3 million or $0.385 per share in all quarters of 2022 and $0.38 for
all quarters of 2021. The board of directors has declared a quarterly cash dividend of $0.39 per share of Class A common stock to be
paid on March 8, 2023 to stockholders of record on February 27, 2023.
Repurchases of common stock
In July 2018, the Company’s board of directors approved a stock repurchase plan with an authorization amount of $500 million. The repurchases are used primarily for strategic initiatives and to offset dilution from the Company’s equity incentive plans. During the years ended December 31, 2022, 2021 and 2020, the Company
purchased 1.7 million, 1.6
million and 5.1 million shares under the 2018 plan for $70.0 million, $80.4 million and $144.3 million, respectively. At December 31, 2022, $175.4 million
was available for repurchases under the 2018 stock repurchase plan.
|
Stock-Based Compensation |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
At December 31, 2022, the Company had the following stock-based employee compensation plans:
Equity Incentive Plans
In April 2010, the Company’s board of directors approved the Nu Skin Enterprises, Inc. 2010 Omnibus Incentive Plan (the “2010 Omnibus Incentive Plan”). This plan was
approved by the Company’s stockholders at the Company’s 2010 Annual Meeting of Stockholders held in May 2010. The 2010 Omnibus Incentive Plan provides for granting of a variety of equity-based awards including stock options, stock appreciation
rights, restricted stock, restricted stock units, other share-based awards, performance cash, performance shares and performance units to executives, other employees, independent consultants and directors of the Company and its subsidiaries. Options
granted under the 2010 Omnibus Incentive Plan are generally non-qualified stock options, but the 2010 Omnibus Incentive Plan permits some stock options granted to qualify as “incentive stock options” under the U.S. Internal Revenue Code. The exercise
price of a stock option generally is equal to the fair market value of the Company’s common stock on the stock option grant date. The contractual term of a stock option granted under the 2010 Omnibus Incentive Plan is seven years. Currently, all shares issued upon the exercise of stock options are from the Company’s treasury shares. Subject to certain adjustments, 7.0 million shares were authorized for issuance under the 2010 Omnibus Incentive Plan. On June 3, 2013, the Company’s stockholders approved an Amended and
Restated 2010 Omnibus Incentive Plan, which among other things increased the number of shares available for awards by 3.2 million shares.
On May 24, 2016, the Company’s stockholders approved a Second Amended and Restated 2010 Omnibus Incentive Plan, which among other things increased the number of shares available for awards by 3.8 million shares. On June 3, 2020, the Company’s stockholders approved a Third Amended and Restated 2010 Omnibus Incentive Plan, which among other things increased the number of shares available for awards by 5.9 million shares.
The fair value of stock option awards was estimated using the Black-Scholes option-pricing model with the following assumptions and weighted-average fair values as
follows:
Options under the plans as of December 31, 2022 and changes during the year ended December 31, 2022 were as follows:
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last
trading day of the respective years and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2022. This amount varies
based on the fair market value of the Company’s stock.
Cash proceeds, tax benefits and intrinsic value related to total stock options exercised during 2022, 2021 and 2020, were as follows (U.S. dollars in thousands):
Nonvested restricted stock awards as of December 31, 2022 and changes during the year ended December 31, 2022 were as follows:
Nonvested performance share units as of December 31, 2022 and changes during the year ended December 31, 2022 were as follows:
Stock-based compensation expense is recognized on a straight-line basis, except for performance-based awards for which expense is recognized using a graded-attribution
method if the results are materially different than the straight-line method. The Company recognized none, none and $0.3 million of expense related to
service condition stock options in 2022, 2021 and 2020, respectively; and recognized $14.3 million, $15.4 million and $13.9 million of expense
related to service condition restricted stock units in 2022, 2021 and 2020, respectively. For performance stock options and performance stock units, an expense is recorded each period for the estimated expense associated with the projected
achievement of the performance-based targets. The Company recognized $2.0 million of income, $7.8 million of expense and $9.9 million of expense related to
performance stock options in 2022, 2021 and 2020, respectively; and no expense related to performance stock units in 2022, 2021 and
2020. The amount in 2022 reflects the reversal of stock compensation for awards no longer expected to vest.
As of December 31, 2022, there was $0.1 million of
unrecognized stock-based compensation expense related to nonvested stock option awards. That cost is expected to be recognized over a weighted-average period of 0.1 years. As of December 31, 2022, there was $29.6 million of unrecognized
stock-based compensation expense related to nonvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 2.6
years.
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Fair Value and Equity Investments |
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Fair Value and Equity Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value and Equity Investments |
Fair Value
The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term
nature of these instruments. Fair value estimates are made at a specific point in time, based on relevant market information.
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):
The following methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair value in the consolidated balance
sheets:
Cash equivalents and current investments: Cash equivalents and current
investments primarily consist of highly rated money market funds with maturities of three months or less, and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, the Company
considers all cash equivalents and current investments as Level 1. Current investments include $4.9 million and $5.2 million as of December 31, 2022 and 2021, respectively, that is restricted for the Company’s voluntary participation in a consumer protection
cooperative in South Korea, along with investments in corporate securities.
Life insurance contracts: ASC 820 preserves practicability exceptions to fair
value measurements provided by other applicable provisions of U.S. GAAP. The guidance in ASC 715-30-35-60 allows a reporting entity, as a practical expedient, to use cash
surrender value or conversion value as an expedient for fair value when it is present. Accordingly, the Company determines the fair value of its life insurance contracts as the cash-surrender value of life insurance policies held in its Rabbi Trust
as disclosed in Note 13, “Deferred Compensation Plan.”
Derivative financial instruments asset and liability: Derivative financial instruments are measured at fair value based on observable market information and appropriate valuation methods. See Note 14, “Derivative Financial Instruments” for more information on derivative financial instruments.
Contingent consideration: Contingent consideration represents the obligations
incurred in connection with acquisitions. The estimate of fair value of the contingent consideration obligations requires subjective assumptions to be made regarding the future business results, discount rates, discount periods and probabilities
assigned to various potential business result scenarios and was determined using probability assessments with respect to the likelihood of reaching various targets or of achieving certain milestones. The fair value measurement is based on
significant inputs unobservable in the market and thus represents a level 3 measurement. Changes in current expectations of progress could change the probability of achieving the targets within the measurement periods and result in an increase or
decrease in the fair value of the contingent consideration obligation.
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):
The following table
provides a summary of changes in fair value of the Company’s Level 3 contingent consideration (U.S. dollars in thousands):
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 December 31, 2022 and 2021. During the year ended December 31, 2021, the Company made an additional investment of $5.0 million. During the year ended December 31, 2021, the Company recognized $18.1 million of upward fair value adjustments, based on the third quarter of 2021 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 income. The upward fair value adjustment represents a nonrecurring fair value measurement based on
observable price changes and is classified as a level 2 fair value measurement.
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Income Taxes |
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Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
Consolidated income before provision for income taxes consists of the following for the years ended December 31, 2022, 2021 and 2020 (U.S. dollars in thousands):
The provision for current and deferred taxes for the years ended December 31, 2022, 2021 and 2020 consists of the following (U.S. dollars in thousands):
The principal components of deferred taxes are as follows (U.S. dollars in thousands):
At December 31, 2022, the Company had foreign operating loss carryforwards of $35.4 million for tax purposes, which will be available to offset future taxable income. If not used, $18.6 million of carryforwards will expire between
and , while $16.8 million do not expire. A
valuation allowance has been placed on foreign operating loss carryforwards of $34.8 million, tax effected the valuation on the net
operating loss is $12.7 million. In addition, a valuation allowance of $19.1 million has been recorded on a portion of the foreign tax credit carryforwards which will expire between and , and all of the R&D credit carryforward of $1.8 million which will expire between
and .The Company uses the tax law ordering approach when determining when excess tax benefits have been realized.
Valuation allowances have been recognized for a portion of the foreign tax credit, the foreign net operating loss carryforwards, and the R&D
credit carryforward. During 2022, the Company made an election to change its capitalization policy for tax purposes related to certain direct and indirect costs for inventory and
self-constructed assets under Internal Revenue Code (“IRC”) Section 263A. This method change allows the Company to utilize a portion of its tax attributes related to foreign tax credits in the United States that were previously fully reserved.
The impact of the method change is approximately $51.3 million from the utilization of foreign tax credits and the release of
valuation allowances. This change only impacts a portion of the Company’s foreign tax credit carryforwards and the Company will maintain a valuation allowance against the remaining balance of foreign tax credit carryforwards. The remaining valuation allowances were recognized for assets which it is more likely than not some portion or all of the deferred tax asset will not be realized. In making
such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary difference, projected future taxable income, tax planning strategies and recent financial operations.
When the Company determines that there is sufficient positive evidence to utilize the remaining foreign tax credits, the foreign net operating losses, or the R&D credit carryforward, the valuation allowance will be released which would reduce
the provision for income taxes.
The deferred tax asset valuation adjustments for the years ended December 31, 2022, 2021 and 2020 are as follows (U.S. dollars in thousands):
The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands):
The Company is subject to regular audits by federal, state and foreign tax authorities. These audits may result in proposed assessments that may result in additional tax
liabilities.
The actual tax rate for the years ended December 31, 2022, 2021 and 2020 compared to the statutory U.S. Federal tax rate is as follows:
The decrease in effective tax rate for the 2022 was primarily due to the Company
making an election to change its capitalization policy for tax purposes related to certain direct and indirect costs for inventory and self-constructed assets under Internal Revenue Code (“IRC”) Section 263A. This method change allows the
Company to utilize a portion of its tax attributes related to foreign tax credits in the United States that were previously fully reserved. The increase in the effective tax rate for 2021 was primarily caused by the disposal of the
Company’s Grow Tech segment which reduced the utilization of foreign tax credits and increased the Company’s valuation allowance.
The cumulative amount of undistributed earnings of the Company’s non-U.S. Subsidiaries held for indefinite reinvestment is approximately $60.0 million, at December 31, 2022. If this amount were repatriated to the United States, the amount of incremental taxes would be approximately $6.0 million.
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Employee Benefit Plan |
12 Months Ended | ||
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Dec. 31, 2022 | |||
Employee Benefit Plan [Abstract] | |||
Employee Benefit Plan |
The Company has a 401(k) defined-contribution plan which permits participating employees to defer up to a maximum of 100% of their compensation, subject to limitations established by the IRS. Employees age 18 and older are eligible to contribute to the plan starting the first day of employment. After completing at least one day of service, employees are eligible to receive matching contributions from the Company. In 2022, 2021, and 2020 the Company provided matching contributions of up to 4% of employees’ compensation each year. The Company’s matching contributions cliff vest after two years of service. The Company recorded compensation expense of $3.8 million, $4.8 million and $4.4 million for the years
ended December 31, 2022, 2021 and 2020, respectively, related to its contributions to the plan. The Company may make additional discretionary contributions to the plan of up to 10% of employees’ base pay. The Company’s discretionary contributions vest 20%
per year for an employee’s first five years of service. For the years ended December 31, 2022, 2021 and 2020, the Company did not make any
additional discretionary contributions.
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Deferred Compensation Plan |
12 Months Ended | ||
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Dec. 31, 2022 | |||
Deferred Compensation Plan [Abstract] | |||
Deferred Compensation Plan |
The Company has a deferred compensation plan for select management personnel, highly compensated employees, and members of the Company’s board of directors. Under this
plan, the Company may make discretionary contributions to participants’ deferred compensation accounts; prior to 2021, the Company historically contributed 10% of base salary for
participants above a specified job level. In addition, each participant has the option to defer a portion of their compensation up to a maximum of 80%
of their base salary and 100% of their bonuses or director fees. Participant contributions are immediately vested. Company contributions
made on or prior to December 31, 2020 will vest 50% after ten years of service and 5% each year of
service thereafter. In addition, any unvested company contributions will fully vest on the earlier of: (a) the participant attaining 60 years
of age; and (b) death or disability.
Effective January 1, 2021, the Company amended its deferred compensation plan. Under the revision, the Company shall make matching contributions up to 5% of base salary for participants above a specified job level. The revision continues to authorize the Company to make discretionary contributions to participants’ deferred compensation accounts. In view of the opportunity to receive a 5% match, the Company reduced its discretionary contributions to 5% of base salary each year, though the Company is not obligated to make these contributions. Under the revision, the amounts contributed by
the Company, adjusted for earnings and losses thereon, will vest 20% per year over five years, subject to acceleration upon the occurrence of certain events, including the completion of at least ten years of employment above a specified job level. All amounts a participant elects to defer, adjusted for earnings and losses thereon, are 100% vested at all times.
The Company recorded compensation expense of $2.3 million,
$4.0 million and $2.3
million for the years ended December 31, 2022, 2021 and 2020, respectively, related to its contributions to the plan. The total long-term deferred compensation liability under the deferred compensation plan was $44.4 million and $54.2 million for the
years ended December 31, 2022 and 2021, respectively, related to its contributions to the plan and is included in other long-term liabilities.
All benefits under the deferred compensation plan are unsecured obligations of the Company. The Company has contributed assets to a “rabbi trust” for the payment of
benefits under the deferred compensation plan. As the assets of the trust are available to satisfy the claims of general creditors if the Company becomes insolvent, the amounts held in the trust are accounted for as an investment on the Company’s
consolidated balance sheets of $40.1 million and $49.9 million for the years ended December 31, 2022 and 2021, respectively.
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Derivative Financial Instruments |
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Derivative Financial Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments |
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 2022, 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 $9.2 million will be reclassified as a reduction to interest expense.
As of December 31, 2022, 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:
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.
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Segment Information |
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Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 fourth quarter of 2021 exit of the Grow Tech segment, which has been recast to Corporate and other
expense. Prior year segment information has been recast to reflect the move of the Pacific components from the “America/Pacific” operating segments to the “Southeast Asia/Pacific” operating segment to comply with current segment presentation. Prior
year segment information has been recast for a first quarter of 2021 change in the Company’s transfer pricing policies in the Americas segment, the 2020 Americas and Corporate and other segment contribution has been recast to conform with the new
policy. 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
Segment Contribution
Depreciation and Amortization
Capital Expenditures
Revenue by Major Market
A major market is defined as one with total revenue greater than 10% of consolidated total revenue. Based on this criteria, the Company has identified four major markets: Mainland China, South Korea, United States, and Japan. There are approximately 45 other markets, each of which individually is less than 10%. No single customer accounted for 10% or more of net sales
for the periods presented. Sales are recorded in the jurisdiction in which the transactions occurred:
Revenue by Product Line
Long-Lived Assets by Major Market
A major market is defined as a market with long-lived assets greater than 10% of consolidated long-lived assets and also includes the Company’s country of domicile (the
United States). Long-lived assets in Mainland China consist primarily of property, plant and equipment related to manufacturing, distribution facilities and the Mainland China headquarters. Long-lived assets in the United States consist primarily of
property, plant and equipment, including the Company’s corporate offices and distribution facilities. Long-lived assets by major market are set forth below for the periods ended December 31, 2022, 2021 and 2020:
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Commitments and Contingencies |
12 Months Ended | ||
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Dec. 31, 2022 | |||
Commitments and Contingencies [Abstract] | |||
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. The Company is subject to loss contingencies, including various legal and regulatory proceedings, asserted and potential claims that arise in the ordinary course of business. An estimated loss from such contingencies is recognized as
a charge to income if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
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.
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Other Income (Expense), Net |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 | |||
Other Income (Expense), Net [Abstract] | |||
Other Income (Expense), Net |
Other income (expense), net was $21.9 million, $1.5 million and $1.3 million of expense in 2022, 2021 and 2020, respectively. Other income (expense), net
includes $13.5 million, $11.0
million and $13.1 million in interest expense during 2022, 2021 and 2020,
respectively.
|
Supplemental Cash Flow Information |
12 Months Ended | ||
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Dec. 31, 2022 | |||
Supplemental Cash Flow Information [Abstract] | |||
Supplemental Cash Flow Information |
Cash paid for interest totaled $14.5 million, $8.6 million and $11.2 million for the
years ended December 31, 2022, 2021 and 2020, respectively. Cash paid for income taxes totaled $42.1 million, $96.0 million and $56.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
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Acquisitions |
12 Months Ended | ||
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Dec. 31, 2022 | |||
Acquisitions [Abstract] | |||
Acquisitions |
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 trademarks, 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.
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Restructuring and Severance Charges |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Severance Charges [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Severance Charges |
In 2021, the Company determined to exit the Grow Tech segment, to better align its resources on key strategic initiatives to achieve the future
growth objectives and priorities of the core Nu Skin business. The Grow Tech segment was pursuing the commercialization of controlled-environment agriculture for use in the agriculture feed industry. This segment has been operating as part of
the Company’s Rhyz strategic investment arm. As a result of the restructuring program, the Company recorded a non-cash charge of $38.5
million in 2021, including $9.2 million for impairment of
goodwill, $9.0 million for impairment of intangibles, $13.7 million of fixed asset impairments and $6.6 million for inventory write-off, and $20.0 million of cash charges, including $6.5
million for employee severance and $13.5 million for other related cash charges with our restructuring. The restructuring charges
were recorded in the Grow Tech segment. As of December 31, 2021, the $20.0 million liability related to cash charges was recorded
within Accrued expenses. During 2022, the Company incurred $5.0 million in incremental cash charges associated with the exit
activities and legal settlements. During 2022, the Company made cash payments of $20.0 million, leaving a restructuring accrual of
$5.0 million as of December 31, 2022.
In the third quarter of 2022, the Company adopted a strategic plan to focus resources
on the Company’s strategic priorities and optimize future growth and profitability. The global program includes workforce reductions and footprint optimization. The Company estimates total charges under the program will approximate $50–$55 million, with $40–$45 million in cash charges of severance and lease termination cost and approximately
$10 million of non-cash charges of
impairment of fixed assets, acceleration of depreciation and impairment of other intangibles related to the footprint optimization. The Company expects to substantially complete the program during the first half of 2023. During 2022, the Company incurred charges to be settled in cash of $20.1
million in severance charges, $7.4
million in lease termination cost, and $5.2
million in other associated cost, and non-cash charges of $8.2 million in fixed asset impairments, $0.9 million in accelerated depreciation and $1.7 million in impairment of other intangibles.
During 2022, the Company made cash payments of $21.0 million related to this global program, leaving an ending restructuring accrual of $11.7 million.
Restructuring expense by segment
|
Summary of Significant Accounting Policies (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation |
Consolidation
The consolidated financial statements include the accounts of the Company and the Subsidiaries. All significant intercompany accounts and transactions are eliminated in
consolidation.
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Use of Estimates |
Use of estimates
The preparation of these financial statements, in conformity with accounting principles generally accepted
in the United States of America (“U.S. GAAP”), required management to make estimates and assumptions that affected the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the
financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates.
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Reclassifications |
Reclassifications
Certain prior period
amounts have been reclassified to conform to the current presentation. The Company reclassified $12.0 million and $10.4 million of events and other miscellaneous selling costs from the general and administration expenses line to the
line on the
consolidated statement of income for the years ended December 31, 2021 and 2020, respectively. The Company believes these costs are better reflected in selling expenses. The reclassification had no impact on operating income for the years ended
December 31, 2021 and 2020. |
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Cash and Cash Equivalents |
Cash and cash equivalents
Cash equivalents are short-term, highly liquid instruments with original maturities of 90 days or less.
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Accounts Receivable |
Accounts receivable
Accounts receivable
represents amounts owed to us through our operating activities and are presented net of allowance for doubtful accounts. Accounts receivable for core Nu Skin consists primarily of credit card receivables, while accounts receivable for our Rhyz
investments consists primarily of trade receivables from customer sales. For the Company’s trade receivables from its Rhyz investment customers, the Company performs ongoing credit evaluations of its customers and maintains an allowance for
expected credit losses. The allowance for expected credit losses represents the Company’s best estimate based on current and historical information, and reasonable and supportable forecasts of future events and circumstances.
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Inventories |
Inventories
Inventories consist primarily of merchandise purchased for resale and are stated at the lower of standard cost or net realizable value, using a standard cost method
which approximates the first-in, first-out method. The Company had reserves of its inventory carrying value totaling $37.3 million and $18.6 million as of December 31, 2022 and 2021, respectively.
Inventories consist of the following (U.S. dollars in thousands):
Reserves of inventories consist of the following (U.S. dollars in thousands):
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Property and Equipment |
Property and equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the following estimated useful
lives:
Expenditures for maintenance and repairs are charged to expense as incurred. When an asset is sold or otherwise disposed of, the cost and associated accumulated
depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of income. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of
such assets may not be recoverable. An impairment loss is recognized if the carrying amount of the asset exceeds its fair value.
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Leases |
Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued expenses and
operating lease liabilities on the consolidated balance sheets. Finance leases are included in other assets, accrued expenses and other liabilities on the consolidated balance sheets.
Operating lease ROU assets represent the Company’s right to
use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the
estimated present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating
lease ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will
exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with a term of 12 months or less are not recorded on the balance sheet. The Company’s lease agreements do not contain
any residual value guarantees.
The Company has lease agreements with lease and non-lease components. The Company accounts for the lease and non-lease components as a single lease component.
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Goodwill and Other Intangible Assets |
Goodwill and other intangible assets
Goodwill is recorded
when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill and intangible assets with indefinite useful lives are not amortized, but are assessed for impairment annually on October 1. In addition,
impairment testing is conducted when events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill and intangible assets with indefinite useful lives would be
written down to fair value if considered impaired. Guidance under Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other (“ASC 350”), requires an entity to test goodwill for impairment on at least an annual basis. The Company had the option
to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the
qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If under the quantitative
assessment the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured. In fiscal years 2022 and 2020, a quantitative assessment was performed. The Company elected to perform
the qualitative assessment during fiscal year 2021, and determined that it is not more likely than not the carrying value exceeds the fair value of the reporting units. Intangible assets with finite useful lives are amortized to their estimated
residual values over such finite lives using the straight-line method and reviewed for impairment whenever events or circumstances warrant such a review.
The
Company has historically evaluated its goodwill for impairment annually as of June 30 or more frequently if impairment indicators arose in accordance with ASC 350, “Intangibles - Goodwill and Other.” In the fourth quarter of 2021, the Company
changed the date of its annual assessment of goodwill to October 1 for all reporting units. The change in testing date for goodwill is a change in accounting principle, which management believes is preferable as the new date of the assessment
better aligns with the Company’s budgeting process and will create a more efficient and timely process surrounding the impairment tests. The change in the assessment date does not delay, accelerate or avoid a potential impairment charge. The
Company has determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been used as of each October 1 of prior reporting periods without the use of hindsight. As such, the
Company prospectively applied the change in annual goodwill impairment testing date from October 1, 2021. No impairment was
recognized during the years ended December 31, 2022 and 2020.
As
discussed further in Note 20 of the Notes to Consolidated Financial Statements, during the fourth quarter of fiscal year 2021, the Company recognized an $18.2
million goodwill and intangibles impairment charge related to the Grow Tech segment, which was included in
in the consolidated statement of income. During fiscal year 2022, the Company recorded a $1.7 million impairment of other intangibles. The Company completed the annual goodwill and indefinite-lived intangible asset impairment testing as of October 1, 2022, and concluded that the
fair value of the reporting units were determined to be in excess of its carrying amounts and no goodwill impairment charge was
required. As of the October 1, 2022 testing date, the fair value of the Manufacturing reporting unit was estimated to be approximately 8%
in excess of its carrying amount, and therefore the reporting unit is considered to be at risk of future impairment. The Manufacturing reporting unit’s fair value remains sensitive to significant unfavorable changes in revenue, gross margin
and discount rates that could negatively impact future analyses.
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there
can be no assurance that the estimates and assumptions made for purposes of the goodwill impairment tests will prove to be an accurate prediction of the future. Although the Manufacturing reporting unit showed strong revenue growth in fiscal
year 2020 and 2021, the fair value of the reporting unit in the current year was negatively impacted by an increase in the discount rate due to the current interest rate
environment, and lower near-term revenue projections. Current projections used for the Manufacturing reporting unit reflect revenue growth attributable to the continued expansion of capacity, continued intercompany sales to Nu Skin,
and the recent acquisition of new customers. While historical performance and current expectations have resulted in fair values of the Manufacturing reporting unit in excess of carrying values, if the assumptions are not realized an
impairment charge may be recorded in the future.
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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 (“ASC 321”) for equity investments that do not have readily determinable fair values. These investments are measured at cost, less impairment, if any, plus or minus changes resulting
from observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company does not exercise significant influence over these companies. These investments are carried on the consolidated balance
sheets within Other Assets. Changes in fair value based on impairments or resulting from observable price changes are recorded in Other Income (expense), net on the consolidated statements of income. See Note 10 – Fair Value and Equity
Investments, for further details around the Company’s equity investments.
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Revenue Recognition |
Revenue recognition
Net sales include products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Revenue is measured as the amount of
consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. The Company recognizes revenue by transferring the promised products to the customer,
with revenue recognized at shipping point, the point in time the customer obtains control of the products. The Company recognizes revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. A
reserve for product returns is accrued based on historical experience totaling $3.4 million and $3.5 million as of December 31, 2022 and 2021, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company recorded sales returns of $31.6 million, $52.1 million and $49.5 million, respectively. The majority of the Company’s contracts have a single performance obligation and are short term in nature. Sales taxes and
value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales.
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 was $18.7 million and $22.0 million as of December 31, 2022, and 2021, respectively.
The contract liabilities impact to revenue for the years ended December 31, 2022, 2021 and 2020 was an increase of $3.3 million, decrease
of $3.8 million and a decrease of $5.7
million, respectively.
Disaggregation of Revenue
Please refer to Note 15 - Segment Information for revenue by segment and product line.
Arrangements with Multiple Performance Obligations
The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenues to each performance obligation
based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers for individual products sales to customers.
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Shipping and Handling Costs |
Shipping and handling costs
Shipping and handling costs are recorded as cost of sales and are expensed as incurred.
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Advertising Expenses |
Advertising expenses
Advertising costs are
expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of income. Advertising expense incurred for the years ended December 31, 2022, 2021 and 2020 totaled $14.5 million, $15.5 million and $14.7 million, respectively.
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Selling Expenses |
Selling expenses
Selling expenses are the Company’s most significant expense and are classified as
operating expenses. Selling expenses include commissions the Company pays to its Brand Affiliates, as well as salaries, service fees, benefits, bonuses and other labor and unemployment expenses the Company pays to its sales force in Mainland
China. Selling expenses do not include amounts the Company pays to its sales force based on their personal purchases; rather, such amounts are reflected as reductions to revenue. The term “Brand Affiliates” refers to members of the Company’s independent sales force in all of the Company’s markets besides Mainland China. In each of the Company’s markets, except Mainland China, Sales Leaders can
earn “multi-level” compensation under the Company’s global sales compensation plan, including commissions for product sales to their consumer groups as well as the product sales made through the sales network they have developed and trained.
The Company does not pay commissions on sales materials.
Outside of Mainland China, the Company’s Brand Affiliates may
make profits by purchasing the products from the Company at a discount and selling them to consumers with a mark-up. The Company does not account for nor pay additional commissions on these mark-ups received by Brand Affiliates. In many markets,
the Company also allows individuals who are not members of its sales force, referred to as “preferred customers,” to buy products directly from the Company at a discount. The Company pays commissions on preferred customer purchases to the referring
member of its sales force.
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Research and Development |
Research and development
Research and
development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of income and totaled $23.3 million, $27.2 million and $23.3 million in 2022, 2021 and 2020, respectively.
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Deferred Tax Assets and Liabilities |
Deferred tax assets and liabilities
The Company accounts for income taxes in accordance with the
Income Taxes Topic of the Financial Accounting Standards Codification. 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. These deferred tax assets assume sufficient future earnings will exist for their realization, and are calculated using anticipated tax rates. Valuation allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be ultimately realized.
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Uncertain Tax Positions |
Uncertain tax positions
The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. In 2009, we entered
into a voluntary program with the IRS called Compliance Assurance Process (“CAP”). Under the CAP program, the IRS audits the tax position of the Company to identify and resolve any tax issues that may arise throughout the tax year. As of
December 31, 2022, tax years through 2020 have been audited and are effectively closed to further examination. For tax years 2021 and 2022, the Company is in the Bridge phase of the CAP program, pursuant to which the IRS will not accept
disclosures, will not conduct reviews and will not provide letters of assurance for the year. There are limited circumstances that tax years in the Bridge phase will be opened for examination. The company has applied for the CAP program for
tax year 2023 and is currently waiting on approval from the IRS. With a few exceptions, we are no longer subject to state and local income tax examination by tax authorities for the years before 2019. Foreign jurisdictions have varying lengths
of statutes of limitations for income tax examinations. Some statutes are as short as three years and in certain markets may be as
long as ten years. The Company is currently under examination in certain foreign jurisdictions; however, the outcomes of those
reviews are not yet determinable.
A reconciliation of the beginning and ending amount of
unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands):
At December 31, 2022, the Company had $23.1 million in
unrecognized tax benefits of which $23.1 million, if recognized, would affect the effective tax rate. In comparison, at December 31, 2021,
the Company had $15.1 million in unrecognized tax benefits of which $15.1 million, if recognized, would affect the effective tax rate. The Company’s unrecognized tax benefits relate to multiple foreign and domestic jurisdictions. Due to potential changes in
unrecognized tax benefits from the multiple jurisdictions in which the Company operates, as well as the expiration of various statutes of limitation, it is reasonably possible that the Company’s gross unrecognized tax benefits, net of foreign
currency adjustments, may increase within the next 12 months by a range of approximately $2.0 to $3.0 million.
During the years ended
December 31, 2022, 2021 and 2020 the Company recognized $5.7 million, $1.6 million and $1.5 million, respectively in interest and penalties expenses
related to uncertain tax positions. The Company had $12.4 million, $6.7 million and $5.1 million of accrued interest and penalties related to
uncertain tax positions at December 31, 2022, 2021 and 2020, respectively. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense.
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Net Income per Share |
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 (Note 8).
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Foreign Currency Translation and Classification of a Highly Inflationary Economy |
Foreign currency translation
A significant portion
of the Company’s business operations occurs outside of the United States. The local currency of each of the Company’s Subsidiaries is considered its functional currency, except for the Company’s subsidiaries in Singapore and countries deemed highly
inflationary where the U.S. dollar is used. All assets and liabilities are translated into U.S. dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders’
equity is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ equity in the consolidated balance sheets and transaction gains and losses are included in
other income (expense) in the consolidated statements of income. Net of tax, the accumulated other comprehensive loss related to the foreign currency translation adjustments are $102.0 million (net of tax of $8.1 million), $79.1 million (net of tax of $7.5
million), and $65.6 million (net of tax of $7.1
million), at December 31, 2022, 2021 and 2020, respectively.
Classification of a highly inflationary economy
A market is considered to have a highly inflationary economy if it has a cumulative inflation rate of approximately 100% or more
over a three-year period as well as other qualitative factors including historic inflation rate trends (increasing and decreasing), the capital intensiveness of the operation and other pertinent economic factors. The functional currency in highly
inflationary economies is required to be the functional currency of the entity’s parent company, and transactions denominated in the local currency are remeasured to the functional currency. The remeasurement of local currency into U.S. dollars
creates foreign currency transaction gains or losses, which the Company includes in its consolidated statements of income.
In the second quarter of 2018, published inflation indices indicated that the three-year cumulative inflation in Argentina exceeded 100 percent, and as of July 1, 2018,
we elected to adopt highly inflationary accounting for our subsidiary in Argentina. Under highly inflationary accounting, Argentina’s functional currency became the U.S. dollar, and its income statement and balance sheet have been measured in U.S.
dollars using both current and historical rates of exchange. The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in Other income (expense), net and was not material. As of December 31, 2022, and 2021, Argentina had a small net peso monetary position. Net sales of Argentina were less than 2 percent of our consolidated net sales for the years ended December 31, 2022, 2021 and 2020.
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Fair Value of Financial Instruments |
Fair value of financial instruments
The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term
nature of these instruments. The Company’s current investments as of December 31, 2022 include certificates of deposits and pre-refunded municipal bonds that are classified by management as held-to-maturity as the Company had the positive intent and
ability to hold to maturity. The carrying value of these current investments approximate fair values due to the short-term nature of these instruments. As of December 31, 2022 and 2021, the fair value of debt was $405.0 million and $377.5 million,
respectively. The estimated fair value of the Company’s debt is based on interest rates available for debt with similar terms and remaining maturities.
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:
Accounting standards permit companies, at their option, to measure many financial instruments and certain other items at fair value. The Company has elected not to
apply the fair value option to existing eligible items.
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Stock-based Compensation |
Stock-based compensation
All share-based
payments, including grants of stock options and restricted stock units, are required to be recognized in the Company’s financial statements based upon their respective grant date fair values. The Black-Scholes option-pricing model is used to
estimate the fair value of stock options. The determination of the fair value of stock options is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected
dividends. The Company uses historical volatility as the expected volatility assumption required in the Black-Scholes model. The expected life of the stock options is based on historical data trended into the future. The risk-free interest rate
assumption is based on observed interest rates appropriate for the expected terms of the Company’s stock options. The fair value of the Company’s restricted stock units is based on the closing market price of its stock on the date of grant less the
Company’s expected dividend yield. The Company recognizes stock-based compensation net of actual forfeitures over the requisite service period of the award.
The total compensation expense related to equity compensation plans was $12.4
million, $23.2 million and $24.1
million for the years ended December 31,
2022, 2021 and 2020, respectively. In 2022, 2021 and 2020, these amounts reflect the reversal of $1.3, none, and none, respectively, for
certain performance-based awards that were no longer expected to vest. For the years ended December 31, 2022, 2021 and 2020, all stock-based compensation expense was recorded within general and administrative expenses.
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Reporting Comprehensive Income |
Reporting comprehensive income
Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events and circumstances from non-owner sources, and it includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.
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Derivative Instruments and Hedging Activities |
Derivative instruments and hedging activities
FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a)
how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial
performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative
instruments, and disclosures about credit-risk-related contingent features in derivative instruments.
As required by ASC 815,
the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a
hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an
asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or
other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching
of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the
hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge
accounting.
In accordance with the
FASB’s fair value measurement guidance in ASU 2011-04, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty
portfolio.
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Recent Accounting Pronouncements |
Recent accounting pronouncements
In March 2020, the FASB issued ASU 2020-04, 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 2020-04 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 31, 2024. The
amendments in ASU 2020-04 are elective and are effective upon issuance for all entities. The Company had previously 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. In the second quarter of 2022, the Company elected the hedge accounting expedient that
allows an update to the hedged risk in active hedging relationships without de-designation as the Company’s debt transitioned to SOFR. In the fourth quarter of 2022, the Company elected the hedge accounting expedient that allows an amendment to
existing hedges without de-designation as the Company’s hedges transitioned to SOFR. 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.
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Summary of Significant Accounting Policies (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Inventories |
Inventories consist of the following (U.S. dollars in thousands):
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Inventory Reserves |
Reserves of inventories consist of the following (U.S. dollars in thousands):
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Prepaid Expenses and Other |
Prepaid expenses and other consist of the following (U.S. dollars in thousands):
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Estimated Useful Lives |
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the following estimated useful
lives:
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Other Assets |
Other assets consist of the following (U.S. dollars in thousands):
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Accrued Expenses |
Accrued expenses consist of the following (U.S. dollars in thousands):
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Other Liabilities |
Other liabilities consist of the following (U.S. dollars in thousands):
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|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrecognized Tax Benefits |
A reconciliation of the beginning and ending amount of
unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands):
|
Property and Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment |
Property and equipment are comprised of the following (U.S. dollars in thousands):
|
Goodwill (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill |
The following table
presents goodwill allocated to the Company’s reportable segments for the periods ended December 31, 2022 and 2021 (U.S. dollars in thousands):
|
Other Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indefinite Life Intangible Assets |
Other intangible assets consist of the following (U.S. dollars in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite Life Intangible Assets |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Amortization Expense |
The estimated annual amortization expense for each of the five succeeding fiscal years are as follows (U.S. dollars in thousands):
|
Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Facilities |
The following table summarizes the Company’s debt facilities as of December 31, 2022 and 2021:
|
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Maturities of Long-Term Debt |
Maturities of all long-term debt at December 31, 2022, are as follows (U.S. dollars in thousands):
|
Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense |
The components of lease expense were as follows (U.S. dollars in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information Related to Leases |
Supplemental cash flow information related to leases was as follows (U.S. dollars in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Lease Liabilities |
Maturities of lease liabilities were as follows (U.S. dollars in thousands):
|
Capital Stock (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Common Shares Outstanding |
The following is a
reconciliation of the weighted-average common shares outstanding for purposes of computing basic and diluted net income per share (in thousands):
|
Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Valuation Assumptions |
The fair value of stock option awards was estimated using the Black-Scholes option-pricing model with the following assumptions and weighted-average fair values as
follows:
|
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Stock Options |
Options under the plans as of December 31, 2022 and changes during the year ended December 31, 2022 were as follows:
|
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Stock Options Exercised |
Cash proceeds, tax benefits and intrinsic value related to total stock options exercised during 2022, 2021 and 2020, were as follows (U.S. dollars in thousands):
|
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Nonvested Restricted Stock Awards |
Nonvested restricted stock awards as of December 31, 2022 and changes during the year ended December 31, 2022 were as follows:
|
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Nonvested Performance Share Units |
Nonvested performance share units as of December 31, 2022 and changes during the year ended December 31, 2022 were as follows:
|
Fair Value and Equity Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
|
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Changes in Fair Value of Level 3 Life Insurance Contracts |
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):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
|
Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Income Before Provision for Income Taxes |
Consolidated income before provision for income taxes consists of the following for the years ended December 31, 2022, 2021 and 2020 (U.S. dollars in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current and Deferred Taxes |
The provision for current and deferred taxes for the years ended December 31, 2022, 2021 and 2020 consists of the following (U.S. dollars in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Tax Assets and Liabilities |
The principal components of deferred taxes are as follows (U.S. dollars in thousands):
|
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Deferred Tax Asset Valuation Adjustments |
The deferred tax asset valuation adjustments for the years ended December 31, 2022, 2021 and 2020 are as follows (U.S. dollars in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Taxes, Net on a Jurisdiction Basis |
The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Statutory to Effective Tax Rate |
The actual tax rate for the years ended December 31, 2022, 2021 and 2020 compared to the statutory U.S. Federal tax rate is as follows:
|
Derivative Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value 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:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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.
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Segment Information (Tables) |
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Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Segment |
Revenue by Segment
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Segment Contribution |
Segment Contribution
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Depreciation and Amortization and Capital Expenditures |
Depreciation and Amortization
Capital Expenditures
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Revenue by Major Market |
A major market is defined as one with total revenue greater than 10% of consolidated total revenue. Based on this criteria, the Company has identified four major markets: Mainland China, South Korea, United States, and Japan. There are approximately 45 other markets, each of which individually is less than 10%. No single customer accounted for 10% or more of net sales
for the periods presented. Sales are recorded in the jurisdiction in which the transactions occurred:
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Revenue by Product Line |
Revenue by Product Line
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Long-Lived Assets by Major Market |
A major market is defined as a market with long-lived assets greater than 10% of consolidated long-lived assets and also includes the Company’s country of domicile (the
United States). Long-lived assets in Mainland China consist primarily of property, plant and equipment related to manufacturing, distribution facilities and the Mainland China headquarters. Long-lived assets in the United States consist primarily of
property, plant and equipment, including the Company’s corporate offices and distribution facilities. Long-lived assets by major market are set forth below for the periods ended December 31, 2022, 2021 and 2020:
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Restructuring and Severance Charges (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Severance Charges [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Expense by Segment |
Restructuring expense by segment
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The Company (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022
Segment
| |
The Company [Abstract] | |
Number of reportable segments | 9 |
Number of geographic segments | 7 |
Number of Rhyz Investments segments | 2 |
Summary of Significant Accounting Policies, Reclassifications (Details) - Reclassification Adjustment [Member] - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
General and Administrative Expenses [Member] | ||
Reclassifications [Abstract] | ||
Events and other miscellaneous selling costs | $ (12.0) | $ (10.4) |
Selling Expenses [Member] | ||
Reclassifications [Abstract] | ||
Events and other miscellaneous selling costs | $ 12.0 | $ 10.4 |
Summary of Significant Accounting Policies, Inventories (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Inventories [Abstract] | |||
Raw materials | $ 163,797 | $ 179,891 | |
Finished goods | 182,386 | 220,040 | |
Total Inventory, net | 346,183 | 399,931 | |
Inventory Valuation Reserve [Member] | |||
Valuation Allowance [Roll Forward] | |||
Beginning balance | 18,643 | 14,249 | $ 12,295 |
Additions | 43,286 | 31,300 | 15,952 |
Write-offs | (24,662) | (26,906) | (13,998) |
Ending balance | $ 37,267 | $ 18,643 | $ 14,249 |
Summary of Significant Accounting Policies, Prepaid Expenses and Other (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Prepaid Expenses and Other [Abstract] | ||
Deferred charges | $ 11,748 | $ 14,266 |
Prepaid income tax | 9,333 | 2,784 |
Prepaid inventory and import costs | 3,540 | 6,087 |
Prepaid rent, insurance and other occupancy costs | 5,830 | 3,690 |
Prepaid promotion and event cost | 2,395 | 4,382 |
Prepaid other taxes | 8,768 | 9,333 |
Derivative financial instruments | 9,156 | 557 |
Prepaid software license | 17,463 | 17,041 |
Deposits | 1,153 | 1,158 |
Other | 18,430 | 17,608 |
Total prepaid expense and other | $ 87,816 | $ 76,906 |
Summary of Significant Accounting Policies, Property and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Buildings [Member] | |
Property and Equipment [Abstract] | |
Useful life | 39 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 7 years |
Computers and Equipment [Member] | Minimum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 3 years |
Computers and Equipment [Member] | Maximum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 5 years |
Leasehold Improvements [Member] | |
Property and Equipment [Abstract] | |
Useful life | Shorter of estimated useful life or lease term |
Scanners [Member] | |
Property and Equipment [Abstract] | |
Useful life | 3 years |
Vehicles [Member] | Minimum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 3 years |
Vehicles [Member] | Maximum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 5 years |
Summary of Significant Accounting Policies, Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2022 |
|
Goodwill and Other Intangible Assets [Abstract] | |||||
Impairment of goodwill | $ 0.0 | $ 0.0 | |||
Impairment of other intangible assets | $ 1.7 | ||||
Manufacturing Reporting Unit [Member] | |||||
Goodwill and Other Intangible Assets [Abstract] | |||||
Percentage of fair value in excess of carrying amount | 8.00% | ||||
Grow Tech Segment [Member] | |||||
Goodwill and Other Intangible Assets [Abstract] | |||||
Impairment of goodwill | $ 9.2 | ||||
Grow Tech Segment [Member] | Restructuring and Impairment Expenses [Member] | |||||
Goodwill and Other Intangible Assets [Abstract] | |||||
Impairment of goodwill and intangibles | $ 18.2 |
Summary of Significant Accounting Policies, Other Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Assets [Abstract] | ||
Deferred taxes | $ 89,770 | $ 26,483 |
Deposits for noncancelable operating leases | 13,872 | 17,121 |
Cash surrender value for life insurance policies | 40,055 | 49,851 |
Right-of-use assets, Financing, net | 14,259 | 6,477 |
Derivative financial instruments | 10,582 | 6,033 |
Long-term Investments | 39,493 | 35,868 |
Other | 36,398 | 33,627 |
Total other assets | $ 244,429 | $ 175,460 |
Right-of-use assets, Financing, net Statement of Financial Position [Extensible Enumeration] | Total other assets | Total other assets |
Summary of Significant Accounting Policies, Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accrued Expenses [Abstract] | ||
Accrued sales force commissions and other payments | $ 95,686 | $ 139,793 |
Accrued other taxes | 21,822 | 31,135 |
Accrued payroll and other employee expenses | 37,650 | 53,641 |
Accrued payable to vendors | 29,569 | 45,347 |
Short-term operating lease liability | 29,376 | 33,427 |
Accrued royalties | 845 | 1,095 |
Sales return reserve | 3,359 | 3,513 |
Deferred revenue | 27,053 | 33,139 |
Other | 34,920 | 31,111 |
Total accrued expenses | $ 280,280 | $ 372,201 |
Short-term operating lease liability, Statement of Financial Position [Extensible List] | Total accrued expenses | Total accrued expenses |
Summary of Significant Accounting Policies, Other Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Liabilities [Abstract] | ||
Deferred tax liabilities | $ 439 | $ 2,385 |
Reserve for other tax liabilities | 35,532 | 21,774 |
Liability for deferred compensation plan | 44,427 | 54,213 |
Contingent consideration | 6,364 | 10,341 |
Finance lease liabilities | 12,140 | 5,318 |
Asset retirement obligation | 5,978 | 5,408 |
Other | 5,545 | 7,035 |
Total other liabilities | $ 110,425 | $ 106,474 |
Finance lease liabilities, Statement of Financial Position [Extensible Enumeration] | Total other liabilities | Total other liabilities |
Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue Recognition [Abstract] | |||
Sales returns | $ 31.6 | $ 52.1 | $ 49.5 |
Allowance for Product Returns [Member] | |||
Revenue Recognition [Abstract] | |||
Accrued reserve | $ 3.4 | $ 3.5 |
Summary of Significant Accounting Policies, Contract Liabilities - Customer Loyalty Programs (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Contract Liabilities - Customer Loyalty Programs [Abstract] | |||
Contract liabilities for customer loyalty programs | $ 18.7 | $ 22.0 | |
Contract liabilities, increase (decrease) to revenue | $ 3.3 | $ (3.8) | $ (5.7) |
Summary of Significant Accounting Policies, Advertising Expenses (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
General and Administrative Expenses [Member] | |||
Advertising Expenses [Abstract] | |||
Advertising costs incurred | $ 14.5 | $ 15.5 | $ 14.7 |
Summary of Significant Accounting Policies, Research and Development (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Research and Development [Abstract] | |||
Research and development expense | $ 23.3 | $ 27.2 | $ 23.3 |
Summary of Significant Accounting Policies, Foreign Currency Translation (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Foreign Currency Translation [Abstract] | |||
Cumulative translation adjustment related to foreign currency adjustment | $ (102.0) | $ (79.1) | $ (65.6) |
Cumulative translation adjustment related to foreign currency adjustment, tax | $ 8.1 | $ 7.5 | $ 7.1 |
Summary of Significant Accounting Policies, Classification of a Highly Inflationary Economy (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Argentina [Member] | Net Sales [Member] | Geographic Concentration Risk [Member] | Maximum [Member] | |||
Operations in Argentina [Abstract] | |||
Concentration percentage | 2.00% | 2.00% | 2.00% |
Summary of Significant Accounting Policies, Fair Value of Financial Instruments (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value of Financial Instruments [Abstract] | ||
Fair value of debt | $ 405.0 | $ 377.5 |
Summary of Significant Accounting Policies, Stock-Based Compensation (Details) - General and Administrative Expenses [Member] - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Stock-Based Compensation [Abstract] | |||
Compensation expense related to equity compensation plans | $ 12.4 | $ 23.2 | $ 24.1 |
Reversal of compensation expense for certain performance based awards no longer expected to vest | $ 1.3 | $ 0.0 | $ 0.0 |
Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill [Abstract] | |||
Goodwill | $ 206,432 | $ 206,432 | |
Impairment charges | 0 | $ 0 | |
Americas [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 9,449 | 9,449 | |
Mainland China [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 32,179 | 32,179 | |
Southeast Asia/Pacific [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 18,537 | 18,537 | |
South Korea [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 29,261 | 29,261 | |
Japan [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 16,019 | 16,019 | |
EMEA [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 2,875 | 2,875 | |
Hong Kong/Taiwan [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 6,634 | 6,634 | |
Manufacturing [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 78,875 | 78,875 | |
Rhyz Other [Member] | |||
Goodwill [Abstract] | |||
Goodwill | $ 12,603 | 12,603 | |
Grow Tech [Member] | |||
Goodwill [Abstract] | |||
Impairment charges | $ 9,200 |
Other Intangible Assets, Indefinite Life Intangible Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Trademarks and Trade Names [Member] | ||
Indefinite Life Intangible Assets [Abstract] | ||
Indefinite life intangible assets | $ 24,599 | $ 24,599 |
Other Intangible Assets, Finite Life Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 152,300 | $ 156,320 | |
Accumulated amortization | $ 110,198 | 103,928 | |
Weighted-average amortization period | 13 years | ||
Amortization expense | $ 9,700 | 11,700 | $ 9,800 |
Scanner Technology [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 40,716 | 40,716 | |
Accumulated amortization | $ 40,716 | 40,716 | |
Weighted-average amortization period | 18 years | ||
Developed Technology [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 43,841 | 43,841 | |
Accumulated amortization | $ 27,365 | 24,697 | |
Weighted-average amortization period | 14 years | ||
Sales Force Network [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 11,598 | 11,598 | |
Accumulated amortization | $ 11,598 | 11,598 | |
Weighted-average amortization period | 15 years | ||
Trademarks [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 7,860 | 8,989 | |
Accumulated amortization | $ 4,200 | 3,827 | |
Weighted-average amortization period | 9 years | ||
Other [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 48,285 | 51,176 | |
Accumulated amortization | $ 26,319 | $ 23,090 | |
Weighted-average amortization period | 8 years |
Other Intangible Assets, Annual Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Annual Estimated Future Amortization Expense [Abstract] | ||
2023 | $ 9,595 | |
2024 | 9,108 | |
2025 | 7,826 | |
2026 | 6,222 | |
2027 | 4,373 | |
Impairment Charges [Abstract] | ||
Impairment of other intangible assets | 1,700 | |
Exit Grow Tech Segment [Member] | ||
Impairment Charges [Abstract] | ||
Impairment charge related to indefinite lived intangible assets | $ 3,800 | |
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income [Extensible Enumeration] | Restructuring and impairment expenses | |
Impairment of other intangible assets | $ 5,200 | |
Impairment, Intangible Asset, Finite-Lived, Statement of Income [Extensible Enumeration] | Restructuring and impairment expenses | |
2022 Strategic Restructuring Plan [Member] | ||
Impairment Charges [Abstract] | ||
Impairment of other intangible assets | $ 1,700 | |
Impairment, Intangible Asset, Finite-Lived, Statement of Income [Extensible Enumeration] | Restructuring and impairment expenses |
Long-Term Debt, 2018 Credit Agreement (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Apr. 18, 2018 |
|
2018 Credit Agreement [Member] | Maximum [Member] | ||
Long-Term Debt [Abstract] | ||
Consolidated leverage ratio | 2.25 | |
2018 Credit Agreement [Member] | Minimum [Member] | ||
Long-Term Debt [Abstract] | ||
Consolidated interest coverage ratio | 3 | |
2018 Term Loan Facility [Member] | ||
Long-Term Debt [Abstract] | ||
Original principal amount | $ 400.0 | $ 400.0 |
Term of loan | 5 years | |
2018 Term Loan Facility [Member] | First Year [Member] | ||
Long-Term Debt [Abstract] | ||
Annual amortization percentage | 5.00% | |
2018 Term Loan Facility [Member] | Second Year [Member] | ||
Long-Term Debt [Abstract] | ||
Annual amortization percentage | 5.00% | |
2018 Term Loan Facility [Member] | Third Year [Member] | ||
Long-Term Debt [Abstract] | ||
Annual amortization percentage | 7.50% | |
2018 Term Loan Facility [Member] | Fourth Year [Member] | ||
Long-Term Debt [Abstract] | ||
Annual amortization percentage | 7.50% | |
2018 Term Loan Facility [Member] | Fifth Year [Member] | ||
Long-Term Debt [Abstract] | ||
Annual amortization percentage | 10.00% | |
2018 Revolving Credit Facility [Member] | ||
Long-Term Debt [Abstract] | ||
Borrowing capacity | $ 350.0 | |
Term of loan | 5 years |
Long- Term Debt, Credit Agreement (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Jun. 14, 2022 |
|
Credit Agreement [Member] | ||
Debt [Abstract] | ||
Percentage of capital stock of certain foreign subsidiaries pledged as collateral | 65.00% | |
Credit Agreement [Member] | Minimum [Member] | ||
Debt [Abstract] | ||
Commitment fee percentage payable on unused portion | 0.175% | |
Consolidated interest coverage ratio | 3 | |
Credit Agreement [Member] | Maximum [Member] | ||
Debt [Abstract] | ||
Commitment fee percentage payable on unused portion | 0.30% | |
Consolidated leverage ratio | 2.75 | |
Term Loan Facility [Member] | ||
Debt [Abstract] | ||
Original principal amount | $ 400.0 | $ 400.0 |
Term of loan | 5 years | |
Term Loan Facility [Member] | First Year [Member] | ||
Debt [Abstract] | ||
Annual amortization percentage | 2.50% | |
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 | 5.00% | |
Term Loan Facility [Member] | Fourth Year [Member] | ||
Debt [Abstract] | ||
Annual amortization percentage | 5.00% | |
Term Loan Facility [Member] | Fifth Year [Member] | ||
Debt [Abstract] | ||
Annual amortization percentage | 5.00% | |
Revolving Credit Facility [Member] | ||
Debt [Abstract] | ||
Borrowing capacity | $ 500.0 | |
Term of loan | 5 years |
Long-Term Debt, Debt Facilities (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Jun. 14, 2022 |
Dec. 31, 2021 |
Apr. 18, 2018 |
|||||||
Long-term Debt [Abstract] | ||||||||||
Balance | [1] | $ 395,000 | ||||||||
Current portion of long-term debt | 25,000 | $ 107,500 | ||||||||
Unamortized debt issuance costs | 2,500 | |||||||||
2018 Credit Agreement [Member] | ||||||||||
Long-term Debt [Abstract] | ||||||||||
Unamortized debt issuance costs | 1,200 | |||||||||
2018 Credit Agreement Term Loan Facility [Member] | ||||||||||
Long-term Debt [Abstract] | ||||||||||
Original principal amount | 400,000 | $ 400,000 | ||||||||
Balance | [2],[3] | $ 0 | 307,500 | |||||||
Repayment terms | Principal amount was paid in full during June 2022. | |||||||||
Term of loan | 5 years | |||||||||
Current portion of long-term debt | 37,500 | |||||||||
2018 Credit Agreement Revolving Credit Facility [Member] | ||||||||||
Long-term Debt [Abstract] | ||||||||||
Balance | [2],[3] | $ 0 | 70,000 | |||||||
Repayment terms | Principal amount was paid in full during June 2022 and credit line was closed. | |||||||||
Term of loan | 5 years | |||||||||
Credit Agreement [Member] | ||||||||||
Long-term Debt [Abstract] | ||||||||||
Unamortized debt issuance costs | $ 2,500 | |||||||||
Credit Agreement Term Loan Facility [Member] | ||||||||||
Long-term Debt [Abstract] | ||||||||||
Original principal amount | 400,000 | $ 400,000 | ||||||||
Balance | [2],[3] | $ 395,000 | 0 | |||||||
Interest rate | Variable 30 day: 6.17% | |||||||||
Interest rate | 6.17% | |||||||||
Term of variable rate | 30 days | |||||||||
Repayment terms | 21% of the principal amount is payable in increasing quarterly installments over a five-year period that began on September 30, 2022, with the remainder payable at the end | |||||||||
Percentage of principal payable in installments | 21.00% | |||||||||
Term of loan | 5 years | |||||||||
Current portion of long-term debt | $ 15,000 | |||||||||
Credit Agreement Revolving Credit Facility [Member] | ||||||||||
Long-term Debt [Abstract] | ||||||||||
Balance | [2],[3] | $ 10,000 | $ 0 | |||||||
Interest rate | Variable 30 day: 6.17% | |||||||||
Interest rate | 6.17% | |||||||||
Term of variable rate | 30 days | |||||||||
Repayment terms | Revolving line of credit expires June 14, 2027. | |||||||||
Term of loan | 5 years | |||||||||
|
Long-Term Debt, Maturities of Long-Term Debt (Details) $ in Thousands |
Dec. 31, 2022
USD ($)
|
|||
---|---|---|---|---|
Maturities of Long-term Debt [Abstract] | ||||
2023 | $ 15,000 | |||
2024 | 20,000 | |||
2025 | 20,000 | |||
2026 | 20,000 | |||
2027 | 320,000 | |||
Thereafter | 0 | |||
Total | 395,000 | [1] | ||
Unamortized debt issuance costs | $ 2,500 | |||
|
Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Leases [Abstract] | |||
Weighted average remaining lease term for operating leases | 8 years 9 months 18 days | ||
Weighted average remaining lease term for finance lease | 4 years 7 months 6 days | ||
Weighted average discount rate for operating leases | 3.30% | ||
Weighted average discount rate for finance lease | 3.50% | ||
Operating Lease Expense [Abstract] | |||
Operating lease cost | $ 39,682 | $ 48,447 | $ 51,828 |
Variable lease cost | 6,061 | 5,734 | 4,366 |
Short-term lease cost | 210 | 592 | 1,056 |
Sublease income | 0 | (5,663) | (5,052) |
Finance Lease Expense [Abstract] | |||
Amortization of right-of-use assets | 2,371 | 2,398 | 1,023 |
Interest on lease liabilities | 268 | 319 | 154 |
Total lease expense | 48,592 | 51,827 | 53,375 |
Supplemental Cash Flow Information Related to Leases [Abstract] | |||
Operating cash outflow from operating leases | 37,174 | 51,570 | 56,395 |
Operating cash outflow from finance leases | 243 | 322 | 138 |
Financing cash outflow from finance leases | 1,919 | 1,871 | 709 |
Right-of-use assets obtained in exchange for operating lease obligations | 34,026 | 25,427 | 82,662 |
Right-of-use assets obtained in exchange for finance lease obligations | 9,797 | $ 74 | $ 9,206 |
Maturities of Operating Lease Liabilities [Abstract] | |||
2023 | 26,086 | ||
2024 | 18,808 | ||
2025 | 13,338 | ||
2026 | 8,692 | ||
2027 | 7,690 | ||
Thereafter | 42,385 | ||
Total | 116,999 | ||
Less: Finance charges | 15,542 | ||
Total principal liability | 101,457 | ||
Maturities of Finance Lease Liabilities [Abstract] | |||
2023 | 3,836 | ||
2024 | 3,428 | ||
2025 | 3,371 | ||
2026 | 3,277 | ||
2027 | 2,933 | ||
Thereafter | 0 | ||
Total | 16,845 | ||
Less: Finance charges | 1,362 | ||
Total principal liability | 15,483 | ||
Additional lease liabilities not yet commenced | $ 5,500 | ||
Minimum [Member] | |||
Leases [Abstract] | |||
Remaining lease terms | 1 year | ||
Maximum [Member] | |||
Leases [Abstract] | |||
Remaining lease terms | 22 years | ||
Extension period for leases | 20 years | ||
Termination period for leases | 1 year |
Capital Stock, Authorized Capital Stock (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022
Vote
$ / shares
shares
|
Dec. 31, 2021
$ / shares
shares
|
|
Capital Stock [Abstract] | ||
Preferred stock, authorized (in shares) | 25,000,000 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Class A [Member] | ||
Capital Stock [Abstract] | ||
Common stock, shares authorized (in shares) | 500,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
Number of votes per share | Vote | 1 | |
Common Class B [Member] | ||
Capital Stock [Abstract] | ||
Common stock, shares authorized (in shares) | 100,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
Common stock, shares outstanding (in shares) | 0 | 0 |
Capital Stock, Weighted Average Shares Outstanding (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Weighted Average Shares Outstanding [Abstract] | |||
Basic weighted-average common shares outstanding (in shares) | 50,002 | 50,193 | 52,296 |
Effect of Dilutive Securities [Abstract] | |||
Stock awards and options (in shares) | 523 | 1,234 | 469 |
Diluted weighted-average common shares outstanding (in shares) | 50,525 | 51,427 | 52,765 |
Stock Options [Member] | |||
Weighted Average Shares Outstanding [Abstract] | |||
Anti-dilutive shares excluded from calculation of diluted earnings per share (in shares) | 100 | 100 | 400 |
Capital Stock, Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
2 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 15, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Dividends [Abstract] | ||||||||||||
Payment of cash dividends | $ 77,015 | $ 76,272 | $ 78,387 | |||||||||
Dividend Declared 2022-Q1 [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividend paid (in dollars per share) | $ 0.385 | |||||||||||
Dividend Declared 2022-Q2 [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividend paid (in dollars per share) | $ 0.385 | |||||||||||
Dividend Declared 2022-Q3 [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividend paid (in dollars per share) | $ 0.385 | |||||||||||
Dividend Declared 2022-Q4 [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividend paid (in dollars per share) | $ 0.385 | |||||||||||
Dividend Declared 2021-Q1 [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividend paid (in dollars per share) | $ 0.38 | |||||||||||
Dividend Declared 2021-Q2 [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividend paid (in dollars per share) | $ 0.38 | |||||||||||
Dividend Declared 2021-Q3 [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividend paid (in dollars per share) | $ 0.38 | |||||||||||
Dividend Declared 2021-Q4 [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividend paid (in dollars per share) | $ 0.38 | |||||||||||
Dividend Declared 2023-Q1 [Member] | Subsequent Event [Member] | ||||||||||||
Dividends [Abstract] | ||||||||||||
Dividend payable per share (in dollars per share) | $ 0.39 | |||||||||||
Dividend payable, date to be paid | Mar. 08, 2023 | |||||||||||
Dividend payable, date of record | Feb. 27, 2023 |
Capital Stock, Repurchases of Common Stock (Details) - USD ($) $ in Thousands, shares in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Jul. 31, 2018 |
|
Repurchases of Common Stock [Abstract] | ||||
Class A common stock repurchased | $ 70,045 | $ 80,420 | $ 144,334 | |
2018 Stock Repurchase Plan [Member] | ||||
Repurchases of Common Stock [Abstract] | ||||
Authorized amount | $ 500,000 | |||
Amount available for repurchases | 175,400 | |||
Treasury Stock [Member] | ||||
Repurchases of Common Stock [Abstract] | ||||
Class A common stock repurchased | $ 70,045 | $ 80,420 | $ 144,334 | |
Treasury Stock [Member] | 2018 Stock Repurchase Plan [Member] | ||||
Repurchases of Common Stock [Abstract] | ||||
Class A common stock repurchased (in shares) | 1.7 | 1.6 | 5.1 | |
Class A common stock repurchased | $ 70,000 | $ 80,400 | $ 144,300 |
Stock-Based Compensation, Equity Incentive Plans (Details) - 2010 Omnibus Incentive Plan [Member] - shares shares in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jun. 03, 2020 |
May 24, 2016 |
Jun. 03, 2013 |
Dec. 31, 2022 |
Apr. 30, 2010 |
|
Stock-Based Compensation [Abstract] | |||||
Number of shares authorized for issuance (in shares) | 7.0 | ||||
Number of additional shares authorized for issuance (in shares) | 5.9 | 3.8 | 3.2 | ||
Stock Options [Member] | |||||
Stock-Based Compensation [Abstract] | |||||
Contractual term | 7 years |
Stock-Based Compensation, Stock Option Valuation Assumptions (Details) - Stock Options [Member] - $ / shares |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|||||||||
Fair Value Assumptions [Abstract] | ||||||||||
Weighted-average grant date fair value of grants (in dollars per share) | $ 16.1 | $ 8.59 | ||||||||
Risk-free interest rate | [1] | 0.50% | 1.40% | |||||||
Dividend yield | [2] | 2.90% | 2.90% | |||||||
Expected volatility | [3] | 49.50% | 40.70% | |||||||
Expected life in months | [4] | 56 months | 59 months | |||||||
Minimum [Member] | ||||||||||
Fair Value Assumptions [Abstract] | ||||||||||
Contractual life | 7 years | |||||||||
Maximum [Member] | ||||||||||
Fair Value Assumptions [Abstract] | ||||||||||
Contractual life | 10 years | |||||||||
|
Stock-Based Compensation, Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Number of Shares [Roll Forward] | |||
Exercised (in shares) | (1,200,000) | (700,000) | (400,000) |
Stock Options [Member] | |||
Number of Shares [Roll Forward] | |||
Outstanding at beginning of year (in shares) | 2,758,300 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | (680,500) | ||
Forfeited/cancelled/expired (in shares) | (452,300) | ||
Outstanding at end of year (in shares) | 1,625,500 | 2,758,300 | |
Exercisable at end of year (in shares) | 1,122,500 | ||
Weighted-Average Exercise Price [Roll Forward] | |||
Outstanding at beginning of year (in dollars per share) | $ 39.9 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 31.65 | ||
Forfeited/cancelled/expired (in dollars per share) | 50.95 | ||
Outstanding at end of year (in dollars per share) | 40.04 | $ 39.9 | |
Exercisable at end of year (in dollars per share) | $ 39.2 | ||
Remaining Contractual Term and Aggregate Intrinsic Value [Abstract] | |||
Outstanding options, weighted-average remaining contractual term | 3 years 6 months 10 days | ||
Outstanding options, aggregate intrinsic value | $ 10,349 | ||
Exercisable options, weighted-average remaining contractual term | 2 years 11 months 15 days | ||
Exercisable options, aggregate intrinsic value | $ 8,027 | ||
Service-Based Options [Member] | |||
Number of Shares [Roll Forward] | |||
Outstanding at beginning of year (in shares) | 538,200 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | (340,000) | ||
Forfeited/cancelled/expired (in shares) | (34,300) | ||
Outstanding at end of year (in shares) | 163,900 | 538,200 | |
Exercisable at end of year (in shares) | 163,900 | ||
Weighted-Average Exercise Price [Roll Forward] | |||
Outstanding at beginning of year (in dollars per share) | $ 35.89 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 33.15 | ||
Forfeited/cancelled/expired (in dollars per share) | 54.45 | ||
Outstanding at end of year (in dollars per share) | 37.69 | $ 35.89 | |
Exercisable at end of year (in dollars per share) | $ 37.69 | ||
Remaining Contractual Term and Aggregate Intrinsic Value [Abstract] | |||
Outstanding options, weighted-average remaining contractual term | 4 months 6 days | ||
Outstanding options, aggregate intrinsic value | $ 834 | ||
Exercisable options, weighted-average remaining contractual term | 4 months 6 days | ||
Exercisable options, aggregate intrinsic value | $ 834 | ||
Performance-Based Options [Member] | |||
Number of Shares [Roll Forward] | |||
Outstanding at beginning of year (in shares) | 2,220,100 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | (340,500) | ||
Forfeited/cancelled/expired (in shares) | (418,000) | ||
Outstanding at end of year (in shares) | 1,461,600 | 2,220,100 | |
Exercisable at end of year (in shares) | 958,600 | ||
Weighted-Average Exercise Price [Roll Forward] | |||
Outstanding at beginning of year (in dollars per share) | $ 40.87 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 31.14 | ||
Forfeited/cancelled/expired (in dollars per share) | 50.66 | ||
Outstanding at end of year (in dollars per share) | 40.3 | $ 40.87 | |
Exercisable at end of year (in dollars per share) | $ 39.46 | ||
Remaining Contractual Term and Aggregate Intrinsic Value [Abstract] | |||
Outstanding options, weighted-average remaining contractual term | 3 years 10 months 20 days | ||
Outstanding options, aggregate intrinsic value | $ 9,515 | ||
Exercisable options, weighted-average remaining contractual term | 3 years 4 months 28 days | ||
Exercisable options, aggregate intrinsic value | $ 7,193 |
Stock-Based Compensation, Stock Options Exercised (Details) - Stock Options [Member] - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Stock-Based Compensation [Abstract] | |||
Cash proceeds from stock options exercised | $ 31,600 | $ 14,435 | $ 7,419 |
Tax benefit realized for stock options exercised | 229 | 807 | |
Tax expense realized for stock options exercised | (459) | ||
Intrinsic value of stock options exercised | $ 15,505 | $ 8,402 | $ 5,232 |
Stock-Based Compensation, Nonvested Restricted and Performance Stock Awards (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022
$ / shares
shares
| |
Restricted Stock Awards [Member] | |
Number of Shares [Roll Forward] | |
Nonvested at beginning of year (in shares) | shares | 884,900 |
Granted (in shares) | shares | 587,100 |
Vested (in shares) | shares | (326,600) |
Forfeited (in shares) | shares | (192,400) |
Nonvested at end of year (in shares) | shares | 953,000 |
Weighted-Average Grant Date Fair Value [Abstract] | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 44.11 |
Granted (in dollars per share) | $ / shares | 46.04 |
Vested (in dollars per share) | $ / shares | 47.03 |
Forfeited (in dollars per share) | $ / shares | 44.01 |
Nonvested, Ending Balance (in dollars per share) | $ / shares | $ 44.28 |
Performance Share Units [Member] | |
Number of Shares [Roll Forward] | |
Nonvested at beginning of year (in shares) | shares | 0 |
Granted (in shares) | shares | 192,700 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (12,500) |
Nonvested at end of year (in shares) | shares | 180,200 |
Weighted-Average Grant Date Fair Value [Abstract] | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 44.39 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 44.39 |
Nonvested, Ending Balance (in dollars per share) | $ / shares | $ 44.39 |
Stock-Based Compensation, Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | $ 12,367 | $ 23,194 | $ 24,060 |
Stock Options [Member] | |||
Unrecognized Stock-Based Compensation Expense [Abstract] | |||
Unrecognized stock-based compensation expense | $ 100 | ||
Unrecognized stock-based compensation expense, period for recognition | 1 month 6 days | ||
Restricted Stock Awards [Member] | |||
Unrecognized Stock-Based Compensation Expense [Abstract] | |||
Unrecognized stock-based compensation expense | $ 29,600 | ||
Unrecognized stock-based compensation expense, period for recognition | 2 years 7 months 6 days | ||
Service-Based Options [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | $ 0 | 0 | 300 |
Service-Based Restricted Stock Units [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | 14,300 | 15,400 | 13,900 |
Performance-Based Options [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | (2,000) | 7,800 | 9,900 |
Performance Stock Units [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | $ 0 | $ 0 | $ 0 |
Fair Value and Equity Investments, Fair Value (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Contingent Consideration [Member] | ||
Changes in Fair Value of Level 3 Contingent Consideration [Roll Forward] | ||
Beginning balance | $ (10,341) | $ (3,125) |
Additions from acquisitions | 0 | (8,702) |
Changes in fair value of contingent consideration | 3,977 | 1,486 |
Ending balance | (6,364) | (10,341) |
Fair Value on a Recurring Basis [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 55,356 | 66,477 |
Derivative financial instruments asset | 19,738 | 6,590 |
Life insurance contracts | 40,055 | 49,851 |
Contingent consideration | (6,364) | (10,341) |
Financial assets (liabilities) | 108,785 | 112,577 |
Restricted current investments | 4,900 | 5,200 |
Fair Value on a Recurring Basis [Member] | Level 1 [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 55,356 | 66,477 |
Derivative financial instruments asset | 0 | 0 |
Life insurance contracts | 0 | 0 |
Contingent consideration | 0 | 0 |
Financial assets (liabilities) | 55,356 | 66,477 |
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 | 19,738 | 6,590 |
Life insurance contracts | 0 | 0 |
Contingent consideration | 0 | 0 |
Financial assets (liabilities) | 19,738 | 6,590 |
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 | 40,055 | 49,851 |
Contingent consideration | (6,364) | (10,341) |
Financial assets (liabilities) | 33,691 | 39,510 |
Life Insurance Contracts [Member] | ||
Changes in Fair Value of Level 3 Marketable Securities [Roll Forward] | ||
Beginning balance | 49,851 | 45,453 |
Actual return on plan assets | (9,180) | 5,153 |
Purchases and issuances | 0 | 6,261 |
Sales and settlements | (616) | (7,016) |
Ending balance | $ 40,055 | $ 49,851 |
Fair Value and Equity Investments, Equity Investments (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Equity Investments [Abstract] | |||
Upward fair value adjustments on equity securities | $ 0 | $ 18,077 | $ 0 |
Equity Securities [Member] | |||
Equity Investments [Abstract] | |||
Carrying amount of equity securities without readily determinable fair values | $ 28,100 | 28,100 | |
Additional investment made | 5,000 | ||
Equity Securities [Member] | Other Income (Expense), Net [Member] | |||
Equity Investments [Abstract] | |||
Upward fair value adjustments on equity securities | $ 18,100 |
Income Taxes, Consolidated Income Before Provision for Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Consolidated Income Before Provision for Income Taxes [Abstract] | |||
U.S. | $ 24,411 | $ 45,371 | $ 71,138 |
Foreign | 64,559 | 187,088 | 185,094 |
Income before provision for income taxes | $ 88,970 | $ 232,459 | $ 256,232 |
Income Taxes, Current and Deferred Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current [Abstract] | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 1,515 | 1,458 | 1,629 |
Foreign | 34,117 | 77,393 | 77,079 |
Current income tax expense (benefit) | 35,632 | 78,851 | 78,708 |
Deferred [Abstract] | |||
Federal | (65,733) | 3,705 | (14,430) |
State | (1,239) | (38) | (563) |
Foreign | 15,532 | 2,675 | 1,162 |
Deferred income tax expense (benefit) | (51,440) | 6,342 | (13,831) |
Provision for income taxes | $ (15,808) | $ 85,193 | $ 64,877 |
Income Taxes, Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Deferred Tax Assets [Abstract] | ||
Inventory differences | $ 41,127 | $ 5,859 |
Foreign tax credit and other foreign benefits | 51,273 | 69,401 |
Stock-based compensation | 5,981 | 9,392 |
Accrued expenses not deductible until paid | 37,181 | 36,401 |
Foreign currency exchange | 0 | 605 |
Net operating losses | 12,773 | 9,479 |
Capitalized research and development | 26,406 | 22,962 |
R&D credit carryforward | 1,795 | 1,451 |
Other | 242 | 34 |
Gross deferred tax assets | 176,778 | 155,584 |
Deferred Tax Liabilities [Abstract] | ||
Foreign currency exchange | 3,225 | 0 |
Foreign withholding taxes | 15,375 | 15,412 |
Intangibles step-up | 4,446 | 4,446 |
Overhead allocation to inventory | 3,504 | 3,373 |
Amortization of intangibles | 21,211 | 21,936 |
Other | 6,129 | 6,133 |
Gross deferred tax liabilities | 53,890 | 51,300 |
Valuation allowance | (33,557) | (80,186) |
Deferred taxes, net | 89,331 | $ 24,098 |
R&D Credit Carryforward [Member] | ||
Tax Credit Carryforwards [Abstract] | ||
Valuation allowance on tax credit carryforward | $ 1,800 | |
R&D Credit Carryforward [Member] | Minimum [Member] | ||
Tax Credit Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2036 | |
R&D Credit Carryforward [Member] | Maximum [Member] | ||
Tax Credit Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2041 | |
Foreign Tax Credit [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Operating loss carryforwards | $ 35,400 | |
Operating loss carryforwards subject to expiration | 18,600 | |
Operating loss carryforwards not subject to expiration | 16,800 | |
Operating loss carryforwards on which valuation allowance has been placed | 34,800 | |
Valuation allowance on operating loss carryforwards | 12,700 | |
Tax Credit Carryforwards [Abstract] | ||
Valuation allowance on tax credit carryforward | $ 19,100 | |
Foreign Tax Credit [Member] | Minimum [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2023 | |
Tax Credit Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2028 | |
Foreign Tax Credit [Member] | Maximum [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2042 | |
Tax Credit Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2031 |
Income Taxes, Deferred Tax Asset Valuation Adjustments (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
||||||||||||||||
Valuation Allowance [Roll Forward] | ||||||||||||||||||
Impact of change in capitalization policy for tax purposes under IRC Section 263A | $ (51,300) | |||||||||||||||||
Utilization of foreign tax credits | (18,100) | |||||||||||||||||
Valuation allowance release of foreign tax credits | (32,200) | |||||||||||||||||
Foreign tax credit carryforward due to disposal of Grow Tech segment | $ 11,900 | |||||||||||||||||
Deferred Tax Asset Valuation Allowance [Member] | ||||||||||||||||||
Valuation Allowance [Roll Forward] | ||||||||||||||||||
Beginning balance | 80,186 | 67,340 | $ 77,042 | |||||||||||||||
Additions charged to cost and expenses | 3,231 | [1] | 12,674 | [2] | 2,154 | [1] | ||||||||||||
Decreases | (50,315) | [3] | 0 | [4] | (12,100) | [5] | ||||||||||||
Adjustments | [6] | 455 | 172 | 244 | ||||||||||||||
Ending balance | $ 33,557 | $ 80,186 | $ 67,340 | |||||||||||||||
|
Income Taxes, Deferred Taxes, Net of a Jurisdiction Basis (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Income Taxes [Abstract] | ||
Net noncurrent deferred tax assets | $ 89,770 | $ 26,483 |
Net noncurrent deferred tax liabilities | 439 | 2,385 |
Deferred taxes, net | $ 89,331 | $ 24,098 |
Income Taxes, Reconciliation of Statutory to Effective Tax Rate (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Effective Income Tax Rate Reconciliation [Abstract] | |||
Income taxes at statutory rate | 21.00% | 21.00% | 21.00% |
Excess tax benefit from equity award | (0.12%) | (0.19%) | 0.70% |
Deferred compensation | 2.18% | (0.46%) | (0.30%) |
Executive salary limitation | 2.06% | 0.47% | 0.04% |
Non-U.S. income taxed at different rates | 4.78% | 6.06% | 3.37% |
Foreign withholding taxes | (0.73%) | 4.71% | 5.21% |
Change in reserve for uncertain tax positions | 17.69% | (0.06%) | 1.98% |
Valuation allowance recognized foreign tax credit & others | (56.17%) | 5.12% | (4.59%) |
Foreign-Derived Intangible Income (FDII) | (8.14%) | (0.87%) | (2.78%) |
Other | (0.32%) | 0.87% | 0.69% |
Effective income tax rate, continuing operations | (17.77%) | 36.65% | 25.32% |
Cumulative amount of undistributed earnings of non-U.S. subsidiaries | $ 60.0 | ||
Incremental taxes if undistributed earnings on non-U.S. subsidiaries were repatriated | $ 6.0 |
Employee Benefit Plan (Details) - 401(k) Defined Contribution Plan [Member] - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
401(k) Defined Contribution Plan [Abstract] | |||
Maximum percentage of compensation that can be deferred | 100.00% | ||
Minimum age to make contributions | 18 years | ||
Requisite service period | 1 day | ||
Percentage of employees' base pay matched by employer | 4.00% | 4.00% | 4.00% |
Vesting period for Company's matching contributions | 2 years | ||
Compensation expense | $ 3.8 | $ 4.8 | $ 4.4 |
Additional discretionary contribution by employer, maximum percentage of employees' base pay | 10.00% | ||
Additional discretionary contribution by employer, annual vesting percentage | 20.00% | ||
Vesting period for Company's additional discretionary contributions | 5 years |
Deferred Compensation Plan (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Deferred Compensation Plan [Abstract] | |||
Percentage of participant's base salary contributed | 5.00% | 10.00% | |
Percentage of Company contributions that vest after ten years of service | 50.00% | ||
Number of years of service to qualify for 50% vesting in Company contributions | 10 years | ||
Percentage of Company contributions that vest annually thereafter | 5.00% | ||
Minimum age for participant's unvested company contributions to fully vest | 60 years | ||
Percentage of Company contributions that vest after five years of service | 20.00% | ||
Vesting period | 5 years | ||
Participant's vesting percentage | 100.00% | ||
Compensation expense | $ 2,300 | $ 4,000 | $ 2,300 |
Long-term deferred compensation liability | 44,427 | 54,213 | |
Investment in Rabbi Trust | $ 40,100 | $ 49,900 | |
Maximum [Member] | |||
Deferred Compensation Plan [Abstract] | |||
Percentage of participant's salary that can be deferred | 80.00% | ||
Percentage of participant's bonus or director fees that can be deferred | 100.00% | ||
Minimum [Member] | |||
Deferred Compensation Plan [Abstract] | |||
Number of years of service required for accelerated vesting above specified compensation level | 10 years |
Derivative Financial Instruments, Fair Value of Derivative Instruments on the Balance Sheet (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022
USD ($)
Derivatives
|
Dec. 31, 2021
USD ($)
|
|
Derivatives and Hedging Activities [Abstract] | ||
Loss to be reclassified to interest expense during next twelve months | $ (9,200) | |
Number of outstanding derivatives held | Derivatives | 4 | |
Notional amount | $ 200,000 | |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Prepaid Expenses and Other [Member] | ||
Derivatives and Hedging Activities [Abstract] | ||
Fair value, asset | 9,156 | $ 557 |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | ||
Derivatives and Hedging Activities [Abstract] | ||
Fair value, asset | $ 10,582 | $ 6,033 |
Derivative Financial Instruments, 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 |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Other Income (Expense), Net [Member] | |||
Derivatives and Hedging Activities [Abstract] | |||
Gain (loss) reclassified from accumulated other comprehensive loss into income | $ 3,117 | $ (157) | $ (24) |
Other Comprehensive Income [Member] | |||
Derivatives and Hedging Activities [Abstract] | |||
Gain (loss) recognized in OCI | $ 16,267 | $ 5,391 | $ 1,017 |
Segment Information, Revenue by Segment (Details) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2022
USD ($)
Segment
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|||
Segment Information [Abstract] | |||||
Number of reportable segments | Segment | 9 | ||||
Number of geographic segments | Segment | 7 | ||||
Number of Rhyz Investments segments | Segment | 2 | ||||
Revenue by Segment [Abstract] | |||||
Revenue | $ 2,225,659 | $ 2,695,669 | $ 2,581,934 | ||
Other [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 3,959 | 3,653 | 886 | ||
Operating Segment [Member] | Nu Skin [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 2,072,371 | 2,523,112 | 2,432,595 | ||
Operating Segment [Member] | Americas [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 508,537 | 547,755 | 453,022 | ||
Operating Segment [Member] | Mainland China [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 360,389 | 568,774 | 625,538 | ||
Operating Segment [Member] | Southeast Asia/Pacific [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 344,411 | 336,651 | 361,627 | ||
Operating Segment [Member] | South Korea [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 268,707 | 354,252 | 326,478 | ||
Operating Segment [Member] | Japan [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 224,896 | 266,216 | 273,681 | ||
Operating Segment [Member] | EMEA [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 204,275 | 283,200 | 230,246 | ||
Operating Segment [Member] | Hong Kong/Taiwan [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 157,197 | 162,611 | 161,117 | ||
Operating Segment [Member] | Rhyz Investments [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 153,288 | 172,557 | 149,339 | ||
Operating Segment [Member] | Manufacturing [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | [1] | 149,458 | 172,120 | 149,339 | |
Operating Segment [Member] | Rhyz Other [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | 3,830 | 437 | 0 | ||
Intersegment [Member] | Manufacturing [Member] | |||||
Revenue by Segment [Abstract] | |||||
Revenue | $ 69,200 | $ 84,500 | $ 39,400 | ||
|
Segment Information, Segment Contribution (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Segment Contribution [Abstract] | |||
Operating income | $ 110,847 | $ 233,992 | $ 257,564 |
Other income (expense) | (21,877) | (1,533) | (1,332) |
Income before provision for income taxes | 88,970 | 232,459 | 256,232 |
Operating Segment [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 459,580 | 627,085 | 602,835 |
Operating Segment [Member] | Nu Skin [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 462,190 | 610,552 | 581,667 |
Operating Segment [Member] | Americas [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 110,522 | 116,265 | 86,386 |
Operating Segment [Member] | Mainland China [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 72,362 | 151,645 | 181,024 |
Operating Segment [Member] | Southeast Asia/Pacific [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 85,827 | 81,779 | 87,753 |
Operating Segment [Member] | South Korea [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 81,804 | 114,034 | 100,933 |
Operating Segment [Member] | Japan [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 54,976 | 67,511 | 68,027 |
Operating Segment [Member] | EMEA [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 21,446 | 41,988 | 24,078 |
Operating Segment [Member] | Hong Kong/Taiwan [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 35,253 | 37,330 | 33,466 |
Operating Segment [Member] | Rhyz Investments [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | (2,610) | 16,533 | 21,168 |
Operating Segment [Member] | Manufacturing [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 3,570 | 18,346 | 21,168 |
Operating Segment [Member] | Rhyz Other [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | (6,180) | (1,813) | 0 |
Corporate and Other [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | $ (348,733) | $ (393,093) | $ (345,271) |
Segment Information, Depreciation and Amortization and Capital Expenditures (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | $ 72,506 | $ 76,320 | $ 73,991 |
Capital expenditures | 59,056 | 68,615 | 63,823 |
Operating Segments [Member] | Nu Skin [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 21,492 | 24,594 | 23,135 |
Capital expenditures | 17,061 | 29,452 | 29,752 |
Operating Segments [Member] | Americas [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 591 | 871 | 984 |
Capital expenditures | 204 | 714 | 1,061 |
Operating Segments [Member] | Mainland China [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 12,177 | 13,345 | 11,056 |
Capital expenditures | 10,692 | 24,382 | 19,363 |
Operating Segments [Member] | Southeast Asia/Pacific [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 1,500 | 1,450 | 1,670 |
Capital expenditures | 263 | 1,330 | 2,197 |
Operating Segments [Member] | South Korea [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 1,616 | 3,279 | 3,620 |
Capital expenditures | 727 | 854 | 1,420 |
Operating Segments [Member] | Japan [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 1,011 | 906 | 1,876 |
Capital expenditures | 225 | 194 | 3,128 |
Operating Segments [Member] | EMEA [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 854 | 1,106 | 1,017 |
Capital expenditures | 1,612 | 1,242 | 1,875 |
Operating Segments [Member] | Hong Kong/Taiwan [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 3,743 | 3,637 | 2,912 |
Capital expenditures | 3,338 | 736 | 708 |
Operating Segments [Member] | Rhyz Investments [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 16,206 | 13,344 | 8,081 |
Capital expenditures | 7,301 | 14,022 | 14,366 |
Operating Segments [Member] | Manufacturing [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 13,838 | 11,765 | 8,081 |
Capital expenditures | 7,301 | 14,022 | 14,366 |
Operating Segments [Member] | Rhyz Other [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 2,368 | 1,579 | 0 |
Capital expenditures | 0 | 0 | 0 |
Corporate and Other [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 34,808 | 38,382 | 42,775 |
Capital expenditures | $ 34,694 | $ 25,141 | $ 19,705 |
Segment Information, Revenue by Major Market (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022
USD ($)
Market
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
Segment Information [Abstract] | |||
Number of major markets | Market | 4 | ||
Number of markets | Market | 45 | ||
Segment Contribution [Abstract] | |||
Revenue | $ 2,225,659 | $ 2,695,669 | $ 2,581,934 |
Major Market [Member] | United States [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | 537,081 | 540,253 | 425,155 |
Major Market [Member] | Mainland China [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | 360,389 | 568,774 | 625,538 |
Major Market [Member] | South Korea [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | 268,707 | 354,252 | 326,478 |
Major Market [Member] | Japan [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | 224,896 | 266,216 | 273,681 |
Major Market [Member] | All Others [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | $ 834,586 | $ 966,174 | $ 931,082 |
Segment Information, Revenue by Product Line (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue by Product Line [Abstract] | |||
Revenue | $ 2,225,659 | $ 2,695,669 | $ 2,581,934 |
Beauty [Member] | |||
Revenue by Product Line [Abstract] | |||
Revenue | 1,069,714 | 1,442,659 | 1,491,803 |
Wellness [Member] | |||
Revenue by Product Line [Abstract] | |||
Revenue | 992,338 | 1,062,549 | 922,553 |
Other [Member] | |||
Revenue by Product Line [Abstract] | |||
Revenue | $ 163,607 | $ 190,461 | $ 167,578 |
Segment Information, Long-Lived Assets by Major Market (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | $ 557,799 | $ 581,124 | $ 632,670 |
Major Market [Member] | United States [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | 343,482 | 335,020 | 348,028 |
Major Market [Member] | Mainland China [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | 132,148 | 149,124 | 152,312 |
Major Market [Member] | South Korea [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | 30,867 | 25,364 | 39,104 |
Major Market [Member] | Japan [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | 18,011 | 23,929 | 31,085 |
Major Market [Member] | All Others [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | $ 33,291 | $ 47,687 | $ 62,141 |
Other Income (Expense), Net (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Other Income (Expense), Net [Abstract] | |||
Other income (expense), net | $ (21,877) | $ (1,533) | $ (1,332) |
Interest expense | $ 13,500 | $ 11,000 | $ 13,100 |
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | $ 14.5 | $ 8.6 | $ 11.2 |
Cash paid for income taxes | $ 42.1 | $ 96.0 | $ 56.2 |
Acquisitions (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Acquisitions [Abstract] | ||||
Purchase price, net of cash acquired | $ 0 | $ 18,963 | $ 14,949 | |
Accrued liability | 34,920 | 31,111 | ||
Fair Value of Assets Acquired [Abstract] | ||||
Goodwill | $ 206,432 | $ 206,432 | ||
Useful life | 13 years | |||
Trademarks [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Useful life | 9 years | |||
Mavely [Member] | ||||
Acquisitions [Abstract] | ||||
Percentage interest 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 | |||
Useful life | 8 years | |||
Mavely [Member] | Other Intangibles [Member] | ||||
Fair Value of Assets Acquired [Abstract] | ||||
Intangible assets | $ 300 | |||
Useful life | 3 years |
Restructuring and Severance Charges, Exit Grow Tech Segment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring [Abstract] | |||
Non-cash impairment charges | $ 48,494 | $ 51,870 | $ 0 |
Impairment of goodwill | 0 | $ 0 | |
Impairment of fixed assets | 8,200 | 13,700 | |
Accrued Expenses [Member] | |||
Restructuring [Abstract] | |||
Liability related to cash charges | 20,000 | ||
Exit Grow Tech Segment [Member] | |||
Restructuring [Abstract] | |||
Non-cash impairment charges | 38,500 | ||
Impairment of goodwill | 9,200 | ||
Impairment of intangible assets | 9,000 | ||
Impairment of fixed assets | 13,700 | ||
Inventory write-off | 6,600 | ||
Cash charges associated with restructuring | 20,000 | ||
Employee severance | 6,500 | ||
Other related restructuring charges | 5,000 | $ 13,500 | |
Cash payments | 20,000 | ||
Ending restructuring accrual | $ 5,000 |
Restructuring and Severance Charges, Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring [Abstract] | |||
Impairment of fixed assets | $ 8,200 | $ 13,700 | |
Impairment of other intangible assets | 1,700 | ||
Restructuring expenses | 48,494 | $ 51,870 | $ 0 |
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | |||
Restructuring [Abstract] | |||
Severance charges | 20,100 | ||
Lease termination cost | 7,400 | ||
Other associated restructuring costs | 5,200 | ||
Impairment of fixed assets | 8,200 | ||
Accelerated depreciation | 900 | ||
Impairment of other intangible assets | 1,700 | ||
Cash payments | 21,000 | ||
Ending restructuring accrual | 11,700 | ||
Restructuring expenses | 43,494 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Minimum [Member] | |||
Restructuring [Abstract] | |||
Estimated restructuring costs | 50,000 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Maximum [Member] | |||
Restructuring [Abstract] | |||
Estimated restructuring costs | 55,000 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Nu Skin [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 23,516 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Americas [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 1,687 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Mainland China [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 13,181 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Southeast Asia/Pacific [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 1,809 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | South Korea [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 1,533 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Japan [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 699 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | EMEA [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 2,143 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Hong Kong/Taiwan [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 2,464 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Rhyz Investments [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 401 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Manufacturing [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 401 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Operating Segment [Member] | Rhyz Other [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 0 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Corporate and Other [Member] | |||
Restructuring [Abstract] | |||
Restructuring expenses | 19,577 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Severance and Lease Termination [Member] | Minimum [Member] | |||
Restructuring [Abstract] | |||
Estimated restructuring costs | 40,000 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Severance and Lease Termination [Member] | Maximum [Member] | |||
Restructuring [Abstract] | |||
Estimated restructuring costs | 45,000 | ||
Focus Resources on Strategic Priorities and Optimize Future Growth and Profitability [Member] | Impairment of Fixed Assets, Acceleration of Depreciation and Other Intangibles Related to Footprint Optimization [Member] | |||
Restructuring [Abstract] | |||
Estimated restructuring costs | $ 10,000 |
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