Nu Skin Enterprises, Inc. (NYSE:NUS) Q1 2022 Earnings Conference Call May 4, 2022 4:30 PM ET Company Participants Scott Pond – Vice President-Investor Relations Ryan Napierski – President and Chief Executive Officer Connie Tang – Chief Global Growth Officer Mark Lawrence – Chief Financial Officer Conference Call Participants Steph Wissink – Jefferies Doug Lane – Lane Research Mark Astrachan – Stifel Linda Bolton Weiser – D.A. Davidson Operator Good day, and welcome to the First Quarter 2022 Nu Skin Enterpri ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 001-12421 NU SKIN ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Delaware 87-0565309 (State or other ju ...

Nu Skin Enterprises, Inc. (NYSE:NUS) Q3 2021 Earnings Conference Call November 3, 2021 5:00 PM ET Company Participants Scott Pond - VP, IR Ryan Napierski - President and CEO Connie Tang - Chief Global Growth and Customer Experience Officer Mark Lawrence - EVP and CFO Conference Call Participants Steph Wissink - Jefferies Doug Lane - Lane Research Chris Armes - Stifel Operator Good day and thank you for standing by. Welcome to the Third Quarter 2021 Nu Skin Enterprises Earnings Conference Call. At this time, ...

Financial Data and Key Metrics Changes - Revenue increased by 15% to $704.1 million, positively impacted by 6% due to favorable foreign currency [22][24] - Earnings per share improved by 42% to $1.15, benefiting from improved gross margin and overall cost containment [22][24] - Gross margin improved by 80 basis points to 75.6%, driven by product mix, product cost focus, and supply chain efficiencies [23][24] Business Line Data and Key Metrics Changes - Beauty device systems now account for approximately 30% of total revenue, with the launch of ageLOC Boost contributing to this growth [13][14] - Nutricentials Bioadaptives performed well, targeting millennial and Gen Z consumers [13] - The company plans to introduce Beauty Focus Collagen+ and ageLOC Meta in the second half of the year, expanding its product offerings [14][50] Market Data and Key Metrics Changes - The Western segments accounted for approximately 40% of total revenue, with strong growth in the Americas-Pacific region [9][18] - EMEA market showed excitement for ageLOC Boost, with social commerce driving business growth [19] - Southeast Asia faced challenges due to COVID-19, but revenue and sales leader growth were observed in Indonesia [21] Company Strategy and Development Direction - The company aims to become a leading innovative beauty and wellness company through a dynamic affiliate opportunity platform [12][22] - Focus on social commerce and leveraging micro-influencers to build brand awareness and acquire customers [15][16] - Investment in digital tools and connected devices to enhance customer engagement and personalization [10][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the transition to a more customer-obsessed enterprise [6][9] - The company is well-positioned to leverage macro trends and shifts in consumer behavior [6][11] - Management acknowledged challenges in certain markets but remains confident in growth potential [19][21] Other Important Information - The company established aggressive sustainability goals focusing on people, product, and planet [8] - Cash from operations was $20 million, with strategic investments in inventory to meet customer demand [24] - Annual revenue guidance was raised to $2.81 billion to $2.87 billion, with EPS guidance increased by $0.20 to a range of $4.30 to $4.50 [25] Q&A Session Summary Question: What is driving the geographic mix shift out of Asia into Western markets? - Management indicated that social commerce is propelling growth in the West, while adaptation in the East is taking longer [28][29] Question: How should we think about customer numbers and retention? - Management noted that customer numbers were impacted by tough comparisons year-over-year, particularly in Southeast Asia and Argentina [34][36] Question: Can you provide insights on the data captured through the affiliate model? - Management emphasized the importance of data collection for future growth, focusing on personalization and connected devices [37][39] Question: What is driving the improvement in gross margin? - Management attributed gross margin improvements to better product costs, product mix, and supply chain efficiencies [44][46] Question: What are the expectations for ageLOC Meta's launch? - Management expects similar performance to previous product launches, estimating around $70 million in revenue between the two new products [50]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited consolidated financial statements as of June 30, 2021, showing growth in revenue, net income, and changes in financial position [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $2.05 billion, driven by inventories, while liabilities and equity also grew Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2,049,980** | **$1,957,076** | | Cash and cash equivalents | $354,759 | $402,683 | | Inventories, net | $390,977 | $314,366 | | **Total Liabilities** | **$1,132,154** | **$1,062,805** | | Current portion of long-term debt | $152,500 | $30,000 | | **Total Stockholders' Equity** | **$917,826** | **$894,271** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2021 revenue increased 15% to $704.1 million, with net income up 41.8% to $59.3 million Q2 & H1 2021 vs 2020 Performance (in thousands, except per share) | Metric | Q2 2021 | Q2 2020 | % Change | H1 2021 | H1 2020 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$704,055** | **$612,366** | **+15.0%** | **$1,381,081** | **$1,130,394** | **+22.2%** | | **Operating Income** | $85,376 | $58,074 | +47.0% | $148,289 | $94,639 | +56.7% | | **Net Income** | $59,338 | $41,851 | +41.8% | $106,768 | $61,581 | +73.4% | | **Diluted EPS** | $1.15 | $0.81 | +42.0% | $2.06 | $1.15 | +79.1% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow sharply decreased to $1.9 million due to increased inventories and decreased accrued expenses Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,859 | $166,081 | | Net cash used in investing activities | ($55,235) | ($28,489) | | Net cash provided by/(used in) financing activities | $11,233 | ($92,533) | | **Net (decrease) increase in cash** | **($47,924)** | **$39,882** | - The significant decrease in operating cash flow was largely driven by an **$80.2 million** increase in inventories and a **$55.4 million** decrease in accrued expenses[29](index=29&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Details accounting policies, segment performance, debt, capital stock, and the MyFavoriteThings acquisition - The company reports revenue across ten segments: seven geographic Nu Skin segments and three Rhyz Investments segments (Manufacturing, Grow Tech, Rhyz other)[31](index=31&type=chunk)[76](index=76&type=chunk) - As of June 30, 2021, the company had **$322.5 million** outstanding on its term loan and **$120.0 million** on its revolving credit facility[43](index=43&type=chunk) - During the first six months of 2021, the company repurchased **1.2 million shares** for **$60.4 million** $265.4 million remained available for repurchases as of June 30, 2021[52](index=52&type=chunk) - In April 2021, the company acquired MyFavoriteThings, Inc. for **$16.8 million** in cash, with potential for an additional **$24.0 million** in contingent consideration This resulted in **$12.6 million** of goodwill[89](index=89&type=chunk) [Management's Discussion and Analysis (MD&A)](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 revenue grew 15% due to digital-first strategy, with EPS up 42%, despite decreased operating cash flow - Q2 2021 revenue increased **15%** to **$704.1 million**, benefiting from a **6%** positive impact from foreign currency fluctuations Sales Leaders grew **15%** while Customers decreased **2%** year-over-year[93](index=93&type=chunk) - The business continues to benefit from a strategic shift to digital and social commerce, which has been more broadly adopted in the Americas/Pacific and EMEA segments, driving their growth[94](index=94&type=chunk) - The company is continuing the launch of ageLOC Boost and is preparing for the launch of Beauty Focus Collagen+ and ageLOC Meta in the second half of 2021 and into 2022[94](index=94&type=chunk) - Cash from operations for H1 2021 was only **$1.9 million**, down from **$166.1 million** in H1 2020, primarily due to an **$80.2 million** increase in inventory and higher commission/incentive payouts[123](index=123&type=chunk) [Segment Results](index=21&type=section&id=Segment%20Results) EMEA led Q2 revenue growth at 64%, with Americas/Pacific also strong, while other regions varied Q2 2021 Revenue Growth by Segment (vs Q2 2020) | Segment | Revenue (USD M) | % Change | Constant Currency % Change | | :--- | :--- | :--- | :--- | | EMEA | $83.1 | +64% | +49% | | Americas/Pacific | $151.7 | +19% | +14% | | South Korea | $88.6 | +15% | +6% | | Southeast Asia | $70.8 | +6% | +2% | | Mainland China | $154.2 | +5% | -4% | | Hong Kong/Taiwan | $38.5 | +4% | 0% | | Japan | $68.0 | 0% | +1% | - The EMEA segment's growth was boosted by the ageLOC Boost launch, which generated **$11.1 million** in sales during the quarter[109](index=109&type=chunk) - The Americas/Pacific segment's performance was negatively impacted by economic instability in Argentina, which saw a **73%** revenue decline in Q2[105](index=105&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and working capital decreased, with significant cash use for operations, capex, and repurchases - Projected capital expenditures for 2021 are estimated at **$80-95 million**, including **$25-30 million** for a new manufacturing plant in Mainland China[124](index=124&type=chunk) - The company plans to refinance its Credit Agreement, which includes a term loan and revolving credit facility, within the next twelve months[124](index=124&type=chunk) - As of June 30, 2021, the company held **$321.2 million** of its cash outside the U.S The company plans to repatriate most non-U.S. earnings, except for **$60.0 million** designated as indefinitely reinvested in Mainland China[128](index=128&type=chunk)[129](index=129&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Primary market risk is foreign currency fluctuations, managed with swaps, impacting revenue and earnings - A majority of revenue is generated outside the U.S., making reported results sensitive to U.S. dollar exchange rate fluctuations[140](index=140&type=chunk) - The company uses interest rate swaps to hedge against interest rate movements on its variable-rate debt and may use foreign currency exchange contracts to reduce exposure to currency fluctuations[71](index=71&type=chunk)[142](index=142&type=chunk) - Highly inflationary accounting is used for the Argentina subsidiary, with the U.S. dollar as the functional currency[141](index=141&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes to internal controls - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2021[143](index=143&type=chunk) - No material changes were made to the internal control over financial reporting during the second quarter of 2021[144](index=144&type=chunk) [Part II. Other Information](index=29&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) No material developments in legal proceedings, with no expected adverse financial impact - No material developments have occurred concerning legal proceedings discussed in the 2020 Annual Report on Form 10-K[146](index=146&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) Supplements risk factors including direct selling regulations, COVID-19, economic conditions, and ESG matters - The U.S. Federal Trade Commission (FTC) is reviewing its Business Opportunity Rule If the exemption for multi-level marketing companies is removed, it could negatively impact the business[149](index=149&type=chunk) - The COVID-19 pandemic and its variants continue to pose risks by interrupting supply chains, impacting sales force activities, and potentially affecting the company's ability to comply with debt covenants[151](index=151&type=chunk)[152](index=152&type=chunk) - Difficult economic conditions, including potential inflation, could reduce consumer demand for the company's products[154](index=154&type=chunk) - Increased stakeholder focus on corporate citizenship and sustainability (ESG) matters presents a risk if the company fails to meet expectations or achieve its stated goals[155](index=155&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Repurchased 184,723 shares at $54.16 average price in Q2 2021, with $265.4 million remaining Issuer Purchases of Equity Securities (Q2 2021) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining (in millions) | | :--- | :--- | :--- | :--- | | April 1 - 30, 2021 | 115,209 | $52.44 | $269.4 | | May 1 - 31, 2021 | 66,299 | $56.83 | $265.6 | | June 1 - 30, 2021 | 3,215 | $60.45 | $265.4 | | **Total** | **184,723** | **$54.16** | **$265.4** | [Other Information](index=31&type=section&id=Item%205.%20Other%20Information) CFO Mark H. Lawrence's compensation adjusted, with salary increased to $575,000 and higher equity award - CFO Mark H. Lawrence's salary was increased to **$575,000**, and his 2022 annual equity award is anticipated to be approximately **$1,300,000**[160](index=160&type=chunk)

Nu Skin Enterprises, Inc. (NYSE:NUS) Q1 2021 Earnings Conference Call May 5, 2021 5:00 PM ET Company Participants Scott Pond - Vice President, Investor Relations Ritch Wood - Chief Executive Officer Ryan Napierski - President and CEO-elect Mark Lawrence - Chief Financial Officer Conference Call Participants Faiza Alwy - Deutsche Bank Doug Lane - Lane Research Steph Wissink - Jefferies Mark Astrachan - Stifel Operator Good day and thank you for standing by. Welcome to the Q1 2021 Nu Skin Enterprises Earnings ...