Top Companies Report

24. Nu Skin

July 7, 2009

Provo, UT
801.345.1000
www.nuskin.com
Sales: $633 million



Sales: $633 million for personal care products. Corporate sales: $1.2 billion. Net income: $65 million.

Key Personnel: Truman Hunt, president and chief executive officer; Joseph Y. Chang, Ph.D., chief scientific officer and executive vice president, product development; Daniel R. Chard, president-global sales and operations; Scott E. Schwerdt, president, Americas, Europe and Pacific; RitchN. Wood, chief financial officer; Ashok Pahwa, chief marketing officer.

Major Products: Nu Skin 180° anti-aging skin therapy system, Galvanic Spa System II, Nu Colour, Epoch.

New Products: Galvanic Spa gels with Ageloc.

Comments: Sales of skin care products surged 27% last year and the category now accounts for more than 50% of corporate sales. Sales of Galvanic Spa surged 120% last year to propel skin care sales. Sales of Galvanic Spa System II and Galvanic Spa gels accounted for 26% of Nu Skin’s sales last year.

The company reported strong growth in Europe, the U.S., South Korea and Latin America last year. In fact, 85% of revenues came from outside the U.S. last year. Japan was Nu Skin’s largest market, accounting for 36% of sales.

At the close of fiscal 2008, the company had operations in 48 markets, with plans to enter Turkey, Ukraine and Colombia by mid-2010.

Nu Skin celebrates its 25th anniversary this year and personal care sales were something to celebrate in the first quarter.

“Our personal care business generated solid revenue growth of 19% in the quarter, driven by the continued success of the Nu Skin Galvanic Spa System,” said Truman Hunt, president and chief executive officer. “In addition, our restructuring efforts over the past three years are increasing profitability, as demonstrated by a significant improvement in first-quarter operating margin when excluding restructuring charges.”

Overall, first quarter sales fell 1% to $296.2 million, but Mr. Hunt is convinced that Nu Skin has the technology in place to drive sales forward.

“Our differentiating strategy of going beyond addressing the superficial signs of aging to addressing aging at its source, combined with our proven scientific expertise in both skin care and nutrition, gives us a powerful advantage in the anti-aging arena,” he said.

Nu Skin’s patent-pending Ageloc formula contains an ingredient that inhibits production of Arnox (age-related NADH oxidase), an internal free radical generator that increases in activity as you age, which, according to Nu Skin, makes people who have high levels of it look seven years older than those who don’t.

The Ageloc technology is the result of collaborative research from scientists at Nu Skin and Purdue University, and is designed to inhibit a newly identified age-related enzyme found on external cell membranes, including in the epidermis.

“Consumers in every economic category are spending money on anti-aging products, whether it’s for a $30 jar of cream or invasive treatments costing thousands of dollars, but no solution has yet to do what Ageloc technology offers,” said Ashok Pahwa, chief marketing officer at Nu Skin Enterprises. “We believe Ageloc technology will propel Nu Skin to the forefront of the anti-aging industry by attacking aging where it is happening, before you even see it. Our science is unlocking a secret to how you age.”

This first-to-market anti-aging technology from Nu Skin is the result of more than six years of research and development. Ageloc employs a patent-pending ingredient blend to help diminish the negative visible effects caused by a newly discovered internal source of aging and offers a scientific explanation to why some people may look younger or older than their actual age.

Last month, Nu Skin took its Ageloc message on the road as its top international sales leaders gathered in Saint Petersburg, Russia, to learn how Nu Skin plans to expand its distributor business opportunity with next-generation anti-aging products in both skin care and nutrition that target the ultimate sources of aging.

“We believe that Ageloc is unlocking the secret of youth through our unique understanding of the relationship between aging and certain genes in the human genome, the ultimate sources of aging,” said Mr. Hunt.