Top Companies Report

20. Nu Skin Enterprises, Inc.

July 11, 2011

Provo, UT

800.487.1000

www.nuskin.com

Sales: $914 million


Sales:

$914 million for personal care products. Corporate sales: $1.5 billion.


Key Personnel:

Blake M. Roney, chairman; Steven J. Lund, vice chairman; Sandie N. Tillotson, senior vice president; M. Truman Hunt, president and chief executive officer; Ritch N. Wood, chief financial officer; Daniel R. Chard, president, global sales and operations; D. Matthew Dorny, vice president, general counsel and secretary; Joseph Y. Chang, Ph.D., chief scientific officer


Major Products:

AgeLOC Edition Galvanic Spa System II with ageLOC Facial Treatment Gels; ageLOC Transformation daily skin care system, which includes ageLOC Future Serum, ageLOC, Gentle Cleanse & Tone, ageLOC Radiant Day SPF 22 and ageLOC Transforming Night; Tru Face Essence Ultra; Tru Face Line Corrector; 180° Anti-Aging Skin Therapy System; Clear Action Acne Medication System, Nutricentials; Celltrex.


New Products:

ageLOC Vitality


Comments:

It was a banner year for Nu Skin, as corporate sales for 2010 rose 15% to more than $1.5 billion—with nearly 60% of sales attributed to personal care.


“2010 was an exceptional year for Nu Skin as we generated a record level of revenue, paid out a record level of commissions to our sales leaders, and enjoyed a record level of profitability,” said Truman Hunt, Nu Skin president and chief executive officer.“While we are enjoying growth in most of our regions around the world, we are particularly pleased with robust growth rates in Mainland China, South Korea and South Asia/Pacific. Our growth is a reflection of the compelling innovation we have infused into our ageLOC product platform, as well as our sales leaders’ phenomenal ability to bring this innovation to the marketplace.


“We concluded the year with our first-ever $400 million-dollar revenue quarter, which is an exciting benchmark in our effort to become the world’s leading direct selling company. And our global management team continues to execute successfully on our growth initiatives. From virtually every metric, 2010 was a highly successful year,” he added.


During the year, the company unveiled proposed architectural renderings of an $85 million innovation center that will be an expansion to Nu Skin headquarters in Provo, UT. It also conducted a broader direct selling authorization in mainland China and received a 2010 International Business Award for Best New Product of the Year for its ageLOC Transformation daily skin care system, according to the company’s public relations department.


In October 2010, Nu Skin rolled out its first nutritional product under the ageLOC Transformation skin care system, ageLOC Vitality.


“With the blockbuster success of the ageLOC Transformation skin care system, we are continuing to build the ageLOC platform by taking the battle against aging‘inside,’” said Hunt. “It is particularly encouraging to see our sales leaders responding so positively to ageLOC Vitality and the business opportunity it represents.”

 

The company debuted the product to its “top sales leaders” at conventions in North America, Japan, Europe and the Pacific. As part of the pre-launch of the product, distributors in the US, Canada and Japan had the opportunity to purchase ageLOC Vitality in September 2010.


“The key source of youthful vitality is found in mitochondria, which are most highly concentrated in the brain, heart and muscle,” said Dr. Joseph Chang, Ph.D., Nu Skin chief scientific officer and executive vice president of product development.“As we age, the efficiency and number of our mitochondria decline. Nu Skin’s ageLOC approach targets genes related to mitochondrial function and vitality to promote a more youthful expression pattern.”


This year, Nu Skin purchased its existing corporate headquarters buildings and distribution center in Provo, UT for approximately $33 million in January 2011.


“From a financial perspective, we expect that the purchase of these buildings will have a positive impact on our earnings,” said Ritch Wood, Nu Skin chief financial officer. “We borrowed some of the funds, taking advantage of current favorable borrowing rates. We anticipate this transaction will add approximately $0.02 per share annually to our bottom line from 2011 forward.”


Nu Skin is purchasing the buildings from two partnerships that are owned primarily by some of the company’s founding stockholders, including Blake M. Roney, Steven J. Lund and Sandra N. Tillotson, who are currently serving as directors and executive or senior officers of the company.


The company then unveiled proposed architectural renderings of its new $80 million innovation center following the Provo, UT City Council’s approval of the company’s plan to purchase one block of 100 West Street—a necessary step in Nu Skin’s plans to connect the expansion project to its corporate high rise, according to the company.


Nu Skin anticipates completion by the end of 2013.


Nu Skin executives expect innovative products to boost sales 5-7% to $1.60-1.63 billion this year.


“In 2011, we will continue to fuel the ageLOC momentum by introducing our scientifically advanced nutritional products to our already successful skin care lineup,” Hunt said. “The Nu Skin ageLOC anti-aging platform represents a clear competitive advantage and provides plenty of room for sustainable growth in both the mid-to long-term.”


In late April 2011, Nu Skin received official notification from the Chinese Ministry of Commerce that it can commence direct selling activities in four additional provinces and one municipality in mainland China. The provinces include Zhejiang, Guizhou, Sichuan, Shandong and the municipality of Tianjin. This is the fourth round of licenses granted to Nu Skin in China and adds to existing approvals in Beijing, Shanghai and Guangdong.


The company also planned to commence operations in Argentina in late June.

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