Nu Skin(US:NUS)2022-11-02 16:00Revenue Performance - Revenue for Q3 2022 decreased 16% to $537.8 million, compared to $641.2 million in Q3 2021, and for the nine-month period, it decreased 16% to $1.7 billion from $2.0 billion[98]. - Revenue from the Mainland China segment decreased 44% in Q3 2022 compared to Q3 2021, and 35% for the nine-month period[102]. - The Americas segment reported a slight revenue increase of 3% in Q3 2022, while the total revenue for Nu Skin decreased by 17% in the same quarter[102]. - The EMEA segment experienced a 19% revenue decline in Q3 2022 compared to the previous year, reflecting broader economic pressures[102]. - The Rhyz Investments segment reported a 330% increase in revenue for Q3 2022, driven by strategic investments made in the previous quarters[102]. - Total revenue for Q3 2022 decreased 16% to $537.8 million, compared to $641.2 million in Q3 2021[122]. - Revenue for the first nine months of 2022 decreased 16% to $1.7 billion, down from $2.0 billion in the same period of 2021[122]. - The Americas segment revenue decreased 20% year-over-year, while the U.S. market revenue increased 7% in Q3 2022[110][111]. - Mainland China revenue decreased 39% year-over-year due to COVID-related challenges[110][113]. - Southeast Asia/Pacific segment revenue increased 6% in Q3 2022, driven by strong product launches, despite a 6% negative impact from foreign-currency fluctuations[116]. - South Korea segment revenue declined 27% in Q3 2022, impacted by inflationary pressures and COVID-related disruptions[117]. - EMEA segment revenue was negatively affected by geopolitical tensions, leading to a decline in Customers and Sales Leaders[119]. Customer Metrics - The number of Customers declined by 11% year-over-year to 1,239,384, with significant drops in Mainland China (28%) and South Korea (14%)[108]. - Paid Affiliates decreased by 11% year-over-year to 243,276, with notable declines in Mainland China (28%) and the Americas (12%)[109]. Earnings and Profitability - Earnings per share for Q3 2022 decreased 153% to $(0.51), compared to $0.97 in Q3 2021, primarily due to restructuring costs and decreased revenue[99]. - Net income for Q3 2022 was $(25.4) million, compared to $49.7 million in Q3 2021[129]. - Gross profit margin for Q3 2022 was 67.7%, down from 75.2% in Q3 2021, and 71.6% for the first nine months of 2022, compared to 75.2% in the prior-year period[123]. Cash Flow and Capital Management - Cash generated from operations in the first nine months of 2022 was $82.5 million, up from $32.1 million in the prior-year period[131]. - As of September 30, 2022, working capital increased to $412.3 million from $343.3 million as of December 31, 2021, driven by a $60.0 million net increase in borrowings and a $17.5 million rise in prepaid expenses[132]. - Capital expenditures for the nine months ended September 30, 2022, were $45.3 million, with an estimated total of $75–95 million expected for the year, primarily for computer systems, facility upgrades, and a new manufacturing plant in Mainland China[133]. - The new manufacturing plant in Mainland China is expected to be completed in the first half of 2023, with approximately $43.1 million spent on the project as of September 30, 2022[133]. - As of September 30, 2022, the company had $30.0 million in outstanding borrowings under its revolving credit facility and $397.5 million on its term loan facility, with compliance to all debt covenants maintained[134]. - The company repurchased approximately 1.0 million shares of Class A common stock for $40.0 million during Q3 2022, with $185.4 million remaining available for repurchases[137]. - Quarterly cash dividends of $0.385 per share were declared in February, May, and August 2022, totaling $58.0 million for the three payments, with an additional dividend declared for December 2022[138]. - Cash and cash equivalents held as of September 30, 2022, amounted to $308.0 million, including $221.9 million held outside the U.S.[139]. - The company plans to repatriate undistributed earnings from non-U.S. operations as necessary, considering cash needs for dividends, stock repurchases, and capital investments[140]. - The company has entered into interest rate swaps totaling $200 million to hedge variable cash flows associated with its variable-rate debt[135]. Economic and Market Conditions - The overall global economic downturn and COVID-related factors in key markets were cited as primary reasons for the revenue decline[98]. - The subsidiary in Argentina accounted for less than 2% of consolidated net sales for the three- and nine-month periods ended September 30, 2022, with a small net peso monetary position[151].