Nu Skin Counters Sales Stumble With Layoffs

Nu Skin Counters Sales Stumble With Layoffs

PROVO, UtahNu SkinEnterprises Inc. (NYSE:NUS), a direct-sales company for personal care productsand supplements, reported Oct. 23 that for its third quarter (3Q03), ended Sept.30, sales were down but measures had already been takenincluding layoffstohelp increase the companys future profitability.

Sales came in at $250.2 million, a slight decrease incomparison to 3Q02s $252.9 million, due to depressed revenues in the NorthAmerican and South Asian/Pacific territories. Gross margin improved to 82.5percent of sales, and operating costs rose to $182.0 million from $177.2million. Net income stayed relatively steady, logging in at $15.1 million, or$.19 earned per share, in 3Q03 compared to 3Q02s $15.9 million, or $.20earned per share.

During the quarter, the company eliminated or modifiedunprofitable services offered by its Big Planet division, which explained thesales decrease ($12.8 million in 3Q02 to $7.5 million in 3Q03) for this businessunit. The sales at NuSkin, the companys personal care business, were levelwith the same period last year, coming in at $120.8 million. The divisionsTru Face Essence, first introduced in Japan in March 2003, is one of the topfive revenue-generating products for the business unit. Pharmanex, the companysnutrition division, had a 3-percent sales increase, landing at $121.8 million.

Nu Skin Inc. also agreed to repurchase approximately 10.8million shares of common stock from certain members of the companys originalshareholder group at a price of $12.95 per share. The company reported thiswould take the companys outstanding diluted shares from 82 million to 71million. Also, Nu Skin Inc. announced a $.07 per share dividend to be paid onDec. 18 to shareholders of record as of Dec. 1.

In addition, the company concluded a headcount reduction atour corporate headquarters to reinvest the savings on initiatives designed todrive revenue growth, said Truman Hunt, president and chief executiveofficer.