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Segment Information | 9 Months Ended
--- | ---
Sep. 30, 2024
Segment Information [Abstract] |
Segment Information |
10. | Segment Information
The Company reports revenue from nine segments, consisting of its seven geographic Nu Skin segments—Americas, Mainland China, Southeast Asia/Pacific, South Korea, Japan, Europe & Africa, and Hong Kong/Taiwan—and two Rhyz Investments segments—Manufacturing and Rhyz other. The Nu Skin other category includes miscellaneous corporate revenue and related adjustments. The Rhyz other segment includes other investments by our Rhyz business arm. 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. Profitability by segment as determined under US 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
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(U.S. dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Nu Skin |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 77,194 |  |  | $ | 91,671 |  |  | $ | 237,160 |  |  | $ | 300,469 |
Southeast Asia/Pacific |  |  | 59,515 |  |  |  | 68,743 |  |  |  | 179,921 |  |  |  | 200,317 |
Mainland China |  |  | 53,020 |  |  |  | 70,225 |  |  |  | 178,797 |  |  |  | 226,563 |
Japan |  |  | 47,222 |  |  |  | 53,399 |  |  |  | 134,045 |  |  |  | 156,867 |
South Korea |  |  | 45,201 |  |  |  | 63,709 |  |  |  | 130,283 |  |  |  | 187,719 |
Europe & Africa |  |  | 38,577 |  |  |  | 50,048 |  |  |  | 121,564 |  |  |  | 144,460 |
Hong Kong/Taiwan |  |  | 33,749 |  |  |  | 40,724 |  |  |  | 98,061 |  |  |  | 112,380 |
Nu Skin other |  |  | 2,518 |  |  |  | (274 | ) |  |  | 3,186 |  |  |  | 208 |
Total Nu Skin |  |  | 356,996 |  |  |  | 438,245 |  |  |  | 1,083,017 |  |  |  | 1,328,983 |
Rhyz Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing (1) |  |  | 51,773 |  |  |  | 49,714 |  |  |  | 153,548 |  |  |  | 131,032 |
Rhyz other |  |  | 21,376 |  |  |  | 10,813 |  |  |  | 49,967 |  |  |  | 20,476 |
Total Rhyz Investments |  |  | 73,149 |  |  |  | 60,527 |  |  |  | 203,515 |  |  |  | 151,508 |
Total |  | $ | 430,145 |  |  | $ | 498,772 |  |  | $ | 1,286,532 |  |  | $ | 1,480,491 |
(1) | The Manufacturing segment had $10.9 million and $16.2 million of intersegment revenue for the three months ended September 30, 2024 and 2023, respectively, and $28.5 million and $44.3 million for the nine months ended September 30, 2024 and 2023, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above.
Segment Contribution
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(U.S. dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Nu Skin |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 15,881 |  |  | $ | 16,627 |  |  | $ | 48,236 |  |  | $ | 61,730 |
Southeast Asia/Pacific |  |  | 9,997 |  |  |  | 13,190 |  |  |  | 31,787 |  |  |  | 37,057 |
Mainland China |  |  | 7,277 |  |  |  | 15,223 |  |  |  | 32,903 |  |  |  | 48,192 |
Japan |  |  | 13,491 |  |  |  | 14,617 |  |  |  | 37,201 |  |  |  | 40,033 |
South Korea |  |  | 14,283 |  |  |  | 19,433 |  |  |  | 39,789 |  |  |  | 60,399 |
Europe & Africa |  |  | 5,193 |  |  |  | 6,562 |  |  |  | 13,874 |  |  |  | 15,145 |
Hong Kong/Taiwan |  |  | 9,225 |  |  |  | 10,146 |  |  |  | 25,006 |  |  |  | 28,128 |
Nu Skin contribution |  |  | 75,347 |  |  |  | 95,798 |  |  |  | 228,796 |  |  |  | 290,684 |
Rhyz Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  | 542 |  |  |  | 4,838 |  |  |  | 4,266 |  |  |  | 7,683 |
Rhyz other |  |  | (2,923 | ) |  |  | (5,966 | ) |  |  | (14,338 | ) |  |  | (11,318 | )
Rhyz Investments contribution |  |  | (2,381 | ) |  |  | (1,128 | ) |  |  | (10,072 | ) |  |  | (3,635 | )
Total segment contribution |  |  | 72,966 |  |  |  | 94,670 |  |  |  | 218,724 |  |  |  | 287,049 |
Corporate and other |  |  | (54,735 | ) |  |  | (121,035 | ) |  |  | (317,228 | ) |  |  | (254,844 | )
Operating income |  |  | 18,231 |  |  |  | (26,365 | ) |  |  | (98,504 | ) |  |  | 32,205 |
Interest expense |  |  | 6,500 |  |  |  | 7,535 |  |  |  | 20,545 |  |  |  | 18,192 |
Other income, net |  |  | 1,567 |  |  |  | (551 | ) |  |  | 1,800 |  |  |  | 3,237 |
Income (loss) before provision for income taxes |  | $ | 13,298 |  |  | $ | (34,451 | ) |  | $ | (117,249 | ) |  | $ | 17,250 |
Depreciation and Amortization
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(U.S. dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Nu Skin |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 85 |  |  | $ | 115 |  |  | $ | 283 |  |  | $ | 307 |
Southeast Asia/Pacific |  |  | 227 |  |  |  | 257 |  |  |  | 650 |  |  |  | 813 |
Mainland China |  |  | 2,697 |  |  |  | 2,742 |  |  |  | 8,197 |  |  |  | 8,127 |
Japan |  |  | 65 |  |  |  | 93 |  |  |  | 217 |  |  |  | 1,241 |
South Korea |  |  | 256 |  |  |  | 310 |  |  |  | 762 |  |  |  | 1,062 |
Europe & Africa |  |  | 283 |  |  |  | 271 |  |  |  | 830 |  |  |  | 810 |
Hong Kong/Taiwan |  |  | 451 |  |  |  | 715 |  |  |  | 1,348 |  |  |  | 1,990 |
Total Nu Skin |  |  | 4,064 |  |  |  | 4,503 |  |  |  | 12,287 |  |  |  | 14,350 |
Rhyz Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  | 3,460 |  |  |  | 3,297 |  |  |  | 10,227 |  |  |  | 10,050 |
Rhyz other |  |  | 1,679 |  |  |  | 2,048 |  |  |  | 5,531 |  |  |  | 3,816 |
Total Rhyz Investments |  |  | 5,139 |  |  |  | 5,345 |  |  |  | 15,758 |  |  |  | 13,866 |
Corporate and other |  |  | 8,118 |  |  |  | 8,344 |  |  |  | 25,316 |  |  |  | 24,123 |
Total |  | $ | 17,321 |  |  | $ | 18,192 |  |  | $ | 53,361 |  |  | $ | 52,339 |
Capital Expenditures
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(U.S. dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Nu Skin |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 38 |  |  | $ | 18 |  |  | $ | 71 |  |  | $ | 209 |
Southeast Asia/Pacific |  |  | 7 |  |  |  | 130 |  |  |  | 25 |  |  |  | 321 |
Mainland China |  |  | 690 |  |  |  | 3,496 |  |  |  | 4,957 |  |  |  | 12,265 |
Japan |  |  | 101 |  |  |  | 81 |  |  |  | 122 |  |  |  | 84 |
South Korea |  |  | 7 |  |  |  | 361 |  |  |  | 29 |  |  |  | 522 |
Europe & Africa |  |  | 97 |  |  |  | 46 |  |  |  | 386 |  |  |  | 322 |
Hong Kong/Taiwan |  |  | 174 |  |  |  | 90 |  |  |  | 410 |  |  |  | 698 |
Total Nu Skin |  |  | 1,114 |  |  |  | 4,222 |  |  |  | 6,000 |  |  |  | 14,421 |
Rhyz Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  | 1,209 |  |  |  | 2,621 |  |  |  | 3,673 |  |  |  | 8,318 |
Rhyz other |  |  | 490 |  |  |  | 20 |  |  |  | 1,559 |  |  |  | 20 |
Total Rhyz Investments |  |  | 1,699 |  |  |  | 2,641 |  |  |  | 5,232 |  |  |  | 8,338 |
Corporate and other |  |  | 5,783 |  |  |  | 5,043 |  |  |  | 17,768 |  |  |  | 15,346 |
Total |  | $ | 8,596 |  |  | $ | 11,906 |  |  | $ | 29,000 |  |  | $ | 38,105 |

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