Restructuring

9 Months Ended

Sep. 30, 2024

13.	Restructuring

In the third quarter of 2022, the Company adopted a strategic plan (“2022 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 incurred total charges under the program of approximately $53.3 million, with $40.8 million in cash charges of severance and lease termination cost and approximately $12.5 million of non-cash charges of impairment of fixed assets, acceleration of depreciation and impairment of other intangibles related to the footprint optimization. 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. During the first quarter and full year of 2023, the Company incurred charges to be settled in cash of $4.0 million in severance charges, $1.9 million in lease termination cost, and $2.2 million in other associated cost, and non-cash charges of $1.7 million in accelerated depreciation. In 2023, the Company made cash payments of $19.8 million, leaving no restructuring accrual related to this plan as of December 31, 2023.

Restructuring expense by segment - 2022 Plan

(U.S. dollars in thousands)	Three Months Ended March 31, 2023			Year Ended December 31, 2022		Total
Nu Skin
Americas	$	918		$	1,687	$	2,605
Southeast Asia/Pacific		131			1,809		1,940
Mainland China		1,352			13,181		14,533
Japan		1,515			699		2,214
South Korea		422			1,533		1,955
Europe & Africa		(113	)		2,143		2,030
Hong Kong/Taiwan		(201	)		2,464		2,263
Total Nu Skin		4,024			23,516		27,540
Rhyz Investments
Manufacturing		13			401		414
Rhyz other		—			—		—
Total Rhyz Investments		13			401		414
Corporate and other		5,750			19,577		25,327
Total	$	9,787		$	43,494	$	53,281

In the fourth quarter of 2023, the Company adopted another strategic plan (“2023 Plan”) to focus resources on the Company’s global priorities and optimize future growth and profitability. The global program includes workforce reductions. The Company estimates total charges under the program will approximate $30–35 million in cash charges of severance, approximately $2.2 million in other cash charges and approximately $8.2 million in non-cash charges, including approximately $6.4 million in fixed asset impairments. The Company expects to substantially complete the program during the second half of 2024. During the fourth quarter of 2023, the Company incurred charges to be settled in cash of $10.0 million in severance charges. During the fourth quarter of 2023, the Company made cash payments of $0.3 million, leaving an ending restructuring accrual of $9.7 million. During the first quarter of 2024, the Company incurred charges to be settled in cash of $4.1 million in severance charges and $2.0 million in other associated cost, and non-cash charges of $1.0 million in write-down of assets. During the first quarter of 2024, the Company made cash payments of $7.0 million, leaving an ending restructuring accrual of $8.8 million. During the second quarter of 2024, the Company incurred charges to be settled in cash of $1.0 million in severance charges and $0.1 million in other cash charges. In the second quarter of 2024, the Company incurred non-cash charges of $7.2 million, consisting of $6.4 million in fixed asset impairments and $0.8 million in other asset write-downs. During the second quarter of 2024, the Company made cash payments of $2.8 million, leaving an ending restructuring accrual of $7.1 million. During the third quarter of 2024, the Company incurred no additional charges and made cash payments of $3.9 leaving an ending restructuring accrual of $3.2 million.

Restructuring expense by segment – 2023 Plan

	Three Months Ended
(U.S. dollars in thousands)	June 30, 2024			March 31, 2024		December 31, 2023		Total
Nu Skin
Americas	$	267		$	3,145	$	598	$	4,010
Southeast Asia/Pacific		190			307		862		1,359
Mainland China		(162	)		1,017		2,910		3,765
Japan		—			24		—		24
South Korea		(134	)		134		—		—
Europe & Africa		414			677		554		1,645
Hong Kong/Taiwan		(147	)		357		432		642
Total Nu Skin		428			5,661		5,356		11,445
Rhyz Investments
Manufacturing		—			—		—		—
Rhyz other		40			—		—		40
Total Rhyz Investments		40			—		—		40
Corporate and other		7,896			1,473		4,647		14,016
Total	$	8,364		$	7,134	$	10,003	$	25,501