Nu Skin Sees Increased Revenue, Encouraging Results in China

Nu Skin Enterprises, Inc. Provo, UT, reported 8% revenue growth from $232.6 million to $250.2 million and 38% earnings per share growth in the fourth quarter of 2002 ended Dec. 31. Net income increased 32% to $18.0 million. During the quarter, the company’s executive distributor count increased 12% compared to the same prior-year period.

“Fourth quarter revenue growth was primarily the result of successful new product introductions and the prospect of our expanded China operations,” said Steven J. Lund, chief executive officer. He added that many new products are now being launched globally, such as Nu Skin Clear Action, an advanced acne treatment system that has grown to become one of Nu Skin’s top five selling products.

For the year, revenue jumped 9% to $964.1 million and earnings per share grew 30%. Revenue from North Asia increased 7% to $593.9 million. The Southeast Asia region reported revenue of $196.0 million, an increase of 30% compared to 2001 results.

On Jan. 8, 2003, the company began selling its Nu Skin brand of personal care products from more than 100 retail outlets in southern and eastern China. In January, more than 15,000 individuals signed up as “Preferred Customers,” entitling them to a discount on Nu Skin products at the time of purchase. Through the first month of operations, the company is on track to achieve its 2003 goal of breaking even on $30 million of revenue in China.

“With our new products and sales tools and our expansion into China, we believe we have the ammunition needed to achieve our 2003 and longer-term goals,” Mr. Lund said.

In North America, Big Planet revenue declined in the fourth quarter, reflecting a shift in distributor activity toward the more profitable personal care and nutrition product categories. For the year, North America revenue was down 6% to $146.0 million, although Nu Skin and Pharmanex revenue in the region was up 8%.

Revenue from the company’s other markets was up 12% to $7.7 million during the fourth quarter. Constant currency revenue in Latin America was up 36% while local currency revenue in Europe was down 3% in the fourth quarter. For the year, revenue from Europe and Latin America increased 4% to $28.3 million.