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Segment Information | 12 Months Ended
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Dec. 31, 2020
Segment Information [Abstract] |
Segment Information |
15. | Segment Information
The Company reports revenue from 9 segments, consisting of its seven geographic Nu Skin segments—Mainland China, Americas/Pacific, South Korea, Southeast Asia, Japan, EMEA, and Hong Kong/Taiwan—and its Manufacturing and Grow Tech segments. The Other category includes miscellaneous corporate revenue and related adjustments. These segments reflect the way the chief operating decision maker evaluates the Company’s business performance and allocates resources. Reported revenue includes only the revenue generated by sales to external customers. The seven geographic Nu Skin segments generate revenue from the sale of personal care products and wellness products under the Nu Skin, Pharmanex and ageLOC brands, all of which have similar business characteristics and align with how the CODM function assesses performance and allocates resources. Profitability by segment as determined under U.S. GAAP is driven primarily by the Company’s transfer pricing policies. Segment contribution, which is the Company’s segment profitability metric presented in the table below, excludes certain intercompany charges, specifically royalties, license fees, transfer pricing, discrete charges and other miscellaneous items. These charges have been included in Corporate and other expenses. Corporate and other expenses also include costs related to the Company’s executive and administrative offices, information technology, research and development, and marketing and supply chain functions not recorded at the segment level. The accounting policies of the segments are the same as those described in Note 2, “Summary of Significant Accounting Policies.” The Company evaluates the performance of its segments based on revenue and segment contribution. Each segment records direct expenses related to its employees and its operations. Summarized financial information for the Company’s reportable segments is shown in the following tables. Asset information is not reviewed or included with the Company’s internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment. Revenue by Segment
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Nu Skin |  |  |  |  |  |  |  |  |
Mainland China |  | $ | 625,538 |  |  | $ | 722,526 |  |  | $ | 886,472 |
Americas/Pacific |  |  | 511,941 |  |  |  | 349,078 |  |  |  | 385,034 |
South Korea |  |  | 326,478 |  |  |  | 329,978 |  |  |  | 373,357 |
Southeast Asia |  |  | 302,708 |  |  |  | 301,620 |  |  |  | 316,890 |
Japan |  |  | 273,681 |  |  |  | 260,039 |  |  |  | 254,939 |
EMEA |  |  | 230,246 |  |  |  | 167,165 |  |  |  | 182,394 |
Hong Kong/Taiwan |  |  | 161,117 |  |  |  | 166,335 |  |  |  | 185,893 |
Other |  |  | (17 | ) |  |  | 1,621 |  |  |  | 3,423 |
Total Nu Skin |  |  | 2,431,692 |  |  |  | 2,298,362 |  |  |  | 2,588,402 |
Manufacturing (1) |  |  | 149,339 |  |  |  | 121,917 |  |  |  | 90,606 |
Grow Tech |  |  | 903 |  |  |  | 137 |  |  |  | — |
Total |  | $ | 2,581,934 |  |  | $ | 2,420,416 |  |  | $ | 2,679,008 |
(1) | The Manufacturing segment had $39.4 million, $25.7 million and $23.5 million of intersegment revenue for the years ended December 31, 2020, 2019 and 2018, respectively. Intersegment revenue is eliminated in the consolidated financial statements and in the table above.
Segment Contribution
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Nu Skin |  |  |  |  |  |  |  |  |
Mainland China |  | $ | 181,024 |  |  | $ | 191,570 |  |  | $ | 253,598 |
Americas/Pacific |  |  | 91,627 |  |  |  | 57,090 |  |  |  | 52,433 |
South Korea |  |  | 100,933 |  |  |  | 99,892 |  |  |  | 107,215 |
Southeast Asia |  |  | 75,538 |  |  |  | 82,455 |  |  |  | 78,598 |
Japan |  |  | 68,027 |  |  |  | 61,081 |  |  |  | 56,676 |
EMEA |  |  | 24,078 |  |  |  | 10,195 |  |  |  | 14,773 |
Hong Kong/Taiwan |  |  | 33,466 |  |  |  | 33,569 |  |  |  | 33,392 |
Nu Skin contribution |  |  | 574,693 |  |  |  | 535,852 |  |  |  | 596,685 |
Manufacturing |  |  | 21,168 |  |  |  | 15,693 |  |  |  | 7,754 |
Grow Tech |  |  | (22,430 | ) |  |  | (19,509 | ) |  |  | (9,228 | )
Total segment contribution |  |  | 573,431 |  |  |  | 532,036 |  |  |  | 595,211 |
Corporate and other |  |  | (315,867 | ) |  |  | (264,610 | ) |  |  | (354,351 | )
Operating income |  |  | 257,564 |  |  |  | 267,426 |  |  |  | 240,860 |
Other income (expense) |  |  | (1,332 | ) |  |  | (12,254 | ) |  |  | (21,194 | )
Income before provision for income taxes |  | $ | 256,232 |  |  | $ | 255,172 |  |  | $ | 219,666 |
Depreciation and Amortization
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Nu Skin |  |  |  |  |  |  |  |  |
Mainland China |  | $ | 11,056 |  |  | $ | 10,496 |  |  | $ | 13,036 |
Americas/Pacific |  |  | 1,054 |  |  |  | 864 |  |  |  | 988 |
South Korea |  |  | 3,620 |  |  |  | 5,093 |  |  |  | 6,266 |
Southeast Asia |  |  | 1,600 |  |  |  | 1,915 |  |  |  | 2,123 |
Japan |  |  | 1,876 |  |  |  | 3,866 |  |  |  | 3,604 |
EMEA |  |  | 1,017 |  |  |  | 1,260 |  |  |  | 847 |
Hong Kong/Taiwan |  |  | 2,912 |  |  |  | 2,310 |  |  |  | 1,316 |
Total Nu Skin |  |  | 23,135 |  |  |  | 25,804 |  |  |  | 28,180 |
Manufacturing |  |  | 8,081 |  |  |  | 6,689 |  |  |  | 11,281 |
Grow Tech |  |  | 5,092 |  |  |  | 4,008 |  |  |  | 1,885 |
Corporate and other |  |  | 37,683 |  |  |  | 40,149 |  |  |  | 41,657 |
Total |  | $ | 73,991 |  |  | $ | 76,650 |  |  | $ | 83,003 |
Capital Expenditures
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Nu Skin |  |  |  |  |  |  |  |  |
Mainland China |  | $ | 19,363 |  |  | $ | 14,814 |  |  | $ | 11,658 |
Americas/Pacific |  |  | 1,090 |  |  |  | 1,340 |  |  |  | 974 |
South Korea |  |  | 1,420 |  |  |  | 1,223 |  |  |  | 285 |
Southeast Asia |  |  | 2,168 |  |  |  | 759 |  |  |  | 1,120 |
Japan |  |  | 3,128 |  |  |  | 1,528 |  |  |  | 788 |
EMEA |  |  | 1,875 |  |  |  | 364 |  |  |  | 734 |
Hong Kong/Taiwan |  |  | 708 |  |  |  | 3,203 |  |  |  | 4,113 |
Total Nu Skin |  |  | 29,752 |  |  |  | 23,231 |  |  |  | 19,672 |
Manufacturing |  |  | 14,366 |  |  |  | 6,595 |  |  |  | 5,486 |
Grow Tech |  |  | 2,499 |  |  |  | 6,938 |  |  |  | 14,591 |
Corporate and other |  |  | 17,206 |  |  |  | 29,303 |  |  |  | 30,622 |
Total |  | $ | 63,823 |  |  | $ | 66,067 |  |  | $ | 70,371 |
Revenue by Major Market A major market is defined as one with total revenue greater than 10% of consolidated total revenue. Based on this criteria, the Company has identified four major markets: Mainland China, South Korea, United States, and Japan. There are approximately 45 other markets, each of which individually is less than 10%. No single customer accounted for 10% or more of net sales for the periods presented. Sales are recorded in the jurisdiction in which the transactions occurred:
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Mainland China |  | $ | 625,538 |  |  | $ | 722,526 |  |  | $ | 886,472 |
South Korea |  |  | 326,478 |  |  |  | 329,978 |  |  |  | 373,357 |
Japan |  |  | 273,681 |  |  |  | 260,039 |  |  |  | 254,939 |
United States |  |  | 425,155 |  |  |  | 324,727 |  |  |  | 311,436 |
All others |  |  | 931,082 |  |  |  | 783,146 |  |  |  | 852,804 |
Total |  | $ | 2,581,934 |  |  | $ | 2,420,416 |  |  | $ | 2,679,008 |
Revenue by Product Line
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Personal Care |  | $ | 1,491,803 |  |  | $ | 1,423,485 |  |  | $ | 1,659,737 |
Wellness |  |  | 922,553 |  |  |  | 863,125 |  |  |  | 921,328 |
Other |  |  | 167,578 |  |  |  | 133,806 |  |  |  | 97,943 |
Total |  | $ | 2,581,934 |  |  | $ | 2,420,416 |  |  | $ | 2,679,008 |
Long-Lived Assets by Major Market A major market is defined as a market with long-lived assets greater than 10% of consolidated long-lived assets and also includes the Company’s country of domicile (the United States). Long-lived assets in Mainland China consist primarily of property, plant and equipment related to manufacturing, distribution facilities and the Mainland China headquarters. Long-lived assets in the United States consist primarily of property, plant and equipment, including the Company’s corporate offices and distribution facilities. As a result of adoption of ASC 842, long-lived assets for 2020 and 2019 include our ROU assets. Long-lived assets by major market are set forth below for the periods ended December 31, 2020, 2019 and 2018:
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
United States |  | $ | 348,028 |  |  | $ | 354,410 |  |  | $ | 317,516 |
Mainland China |  |  | 152,312 |  |  |  | 136,845 |  |  |  | 89,447 |
South Korea |  |  | 39,104 |  |  |  | 35,286 |  |  |  | 36,325 |
Japan |  |  | 31,085 |  |  |  | 12,015 |  |  |  | 6,864 |
All others |  |  | 62,141 |  |  |  | 59,374 |  |  |  | 14,383 |
Total |  | $ | 632,670 |  |  | $ | 597,930 |  |  | $ | 464,535 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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