Nu Skin(US:NUS)2023-08-01 16:00Revenue Performance - Revenue for Q2 2023 decreased 11% to $500.3 million, compared to $560.6 million in Q2 2022, and for the first half of 2023, revenue decreased 16% to $1.0 billion from $1.2 billion in the prior year[96]. - Revenue from the Americas segment decreased 14% to $107.6 million in Q2 2023, while the Mainland China segment reported a 2% increase to $88.4 million[101]. - The Southeast Asia/Pacific segment saw a significant decline of 32% in Q2 2023, with revenue of $63.8 million[101]. - The total revenue for the first half of 2023 was $981.7 million, down 16% from $1.165 billion in the same period last year[101]. - Revenue for the second quarter of 2023 decreased by 11% to $500.3 million, compared to $560.6 million in the prior-year period[122]. Customer Metrics - The number of Customers, Paid Affiliates, and Sales Leaders declined by 25%, 23%, and 9% year-over-year, respectively[96]. - Total customers decreased by 25% year-over-year to 1,041,118 as of June 30, 2023, down from 1,380,615 in the prior year[106]. - Paid affiliates decreased by 23% year-over-year to 187,652, down from 242,133[106]. Earnings and Profitability - Earnings per share for Q2 2023 decreased 19% to $0.54, and for the first half of 2023, it decreased 47% to $0.76, primarily due to revenue decline and $9.8 million in restructuring charges[98]. - In Q2 2023, net income was $26.9 million, down from $34.2 million in Q2 2022, and for the first six months of 2023, net income was $38.3 million compared to $73.0 million in the same period of 2022[130]. - Gross profit as a percentage of revenue was 72.9% for the second quarter of 2023, down from 73.6% in the prior-year period[123]. Expenses and Charges - General and administrative expenses decreased to $137.0 million in the second quarter of 2023, compared to $141.6 million in the prior-year period[126]. - Selling expenses as a percentage of revenue decreased to 37.0% for the second quarter of 2023, down from 39.1% in the prior-year period[124]. - The company incurred total restructuring charges of approximately $53.3 million in 2022, with cash charges of $40.8 million and non-cash charges of $12.5 million[127]. Cash Flow and Capital Expenditures - Cash from operations in the first six months of 2023 was $13.4 million, a significant decrease from $54.1 million in the prior-year period, primarily due to an $18.5 million increase in inventory[131]. - As of June 30, 2023, cash and cash equivalents were $252.3 million, down from $278.5 million as of December 31, 2022, driven by dividend payments and capital expenditures[131]. - Working capital decreased to $347.5 million as of June 30, 2023, from $400.6 million as of December 31, 2022, mainly due to acquisitions of BeautyBio and LifeDNA[132]. - Capital expenditures for the first half of 2023 were $26.2 million, with an estimated total of $55–75 million planned for the year, including a new manufacturing plant in Mainland China[133]. Foreign Currency and Market Risks - The company regularly monitors foreign currency risks and takes measures to reduce the impact of foreign exchange fluctuations on operating results[150]. - A significant portion of the company's revenue and expenses are recognized outside of the United States, impacting reported revenue and earnings based on U.S. dollar fluctuations[148]. - The company’s reported revenue and earnings will be positively impacted by a weakening of the U.S. dollar and negatively impacted by a strengthening of the U.S. dollar[148]. - The functional currency for the subsidiary in Argentina became the U.S. dollar due to highly inflationary accounting adopted as of July 1, 2018[149]. Strategic Initiatives - The launch of ageLOC TRMe generated approximately $12.7 million in revenue during Q2 2023[97]. - Anticipated sales from the upcoming ageLOC WellSpa iO are projected to be between $70 million and $90 million for the second half of 2023[97]. - The company acquired 60% of LifeDNA for $4.0 million and 100% of Beauty Biosciences for $75.0 million in cash during Q2 2023[121]. Shareholder Returns - The company has $175.4 million available for stock repurchases under its existing plan, with no shares repurchased in the first half of 2023[135]. - The company anticipates continuing quarterly cash dividends, having declared $0.39 per share in February and May 2023, totaling approximately $39 million[136].