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Segment Information | 12 Months Ended
--- | ---
Dec. 31, 2024
Segment Information [Abstract] |
Segment Information |
16. | Segment Information
The Company reports revenue from nine segments, consisting of its seven geographic Nu Skin segments—Americas, Southeast Asia/Pacific, Mainland China, Japan, Europe & Africa, South Korea, and Hong Kong/Taiwan—and two Rhyz segments—Manufacturing and Rhyz Other. The Nu Skin other category includes miscellaneous corporate revenue and related adjustments. The Rhyz Other segment includes two operating segments that are aggregated into one reporting segment and includes other investments by our Rhyz business arm. The Chief Executive Officer is the chief operating decision maker (“CODM”). These segments reflect the way the CODM 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 segment contribution. Each segment records direct expenses related to its employees and its operations. In 2023, the Company adjusted how it allocates certain corporate overhead costs to the segments. The 2022 segment information has been recast to comply with current presentation. Consolidated financial information is not affected. Effective June 2023, the Company closed its Israel market. As a result the Europe, Middle East and Africa (“EMEA”) segment has been renamed Europe & Africa. 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.
|  | Year Ended December 31, 2024 |
|  | Nu Skin |  |  | Rhyz Investments |  |  |  |
|  | Americas |  |  | Southeast Asia/ Pacific |  |  | Mainland China |  |  | Japan |  |  | Europe & Africa |  |  | South Korea |  |  | Hong Kong/ Taiwan |  |  | Manufacturing (1) |  |  | Rhyz Other |  |  | Total Segments |
Revenue |  | $ | 322,516 |  |  | $ | 244,846 |  |  | $ | 235,235 |  |  | $ | 181,557 |  |  | $ | 164,164 |  |  | $ | 163,706 |  |  | $ | 130,610 |  |  | $ | 201,430 |  |  | $ | 85,188 |  |  | $ | 1,729,252 |
Cost of sales |  |  | 83,461 |  |  |  | 64,950 |  |  |  | 44,059 |  |  |  | 36,852 |  |  |  | 42,766 |  |  |  | 33,600 |  |  |  | 24,932 |  |  |  | 164,145 |  |  |  | 14,532 |  |  |  | 509,297 |
Other segment items (2) |  |  | 171,338 |  |  |  | 134,666 |  |  |  | 145,086 |  |  |  | 93,907 |  |  |  | 100,389 |  |  |  | 79,360 |  |  |  | 70,989 |  |  |  | 35,825 |  |  |  | 116,465 |  |  |  | 948,025 |
Segment contribution |  | $ | 67,717 |  |  | $ | 45,230 |  |  | $ | 46,090 |  |  | $ | 50,798 |  |  | $ | 21,009 |  |  | $ | 50,746 |  |  | $ | 34,689 |  |  | $ | 1,460 |  |  | $ | (45,809 | ) |  | $ | 271,930 |
|  | Year Ended December 31, 2023 |
|  | Nu Skin |  |  | Rhyz Investments |  |  |  |
|  | Americas |  |  | Southeast Asia/ Pacific |  |  | Mainland China |  |  | Japan |  |  | Europe & Africa |  |  | South Korea |  |  | Hong Kong/ Taiwan |  |  | Manufacturing (1) |  |  | Rhyz Other |  |  | Total Segments |
Revenue |  | $ | 398,222 |  |  | $ | 267,206 |  |  | $ | 298,079 |  |  | $ | 207,833 |  |  | $ | 192,352 |  |  | $ | 236,099 |  |  | $ | 153,589 |  |  | $ | 181,395 |  |  | $ | 35,214 |  |  | $ | 1,969,989 |
Cost of sales |  |  | 104,162 |  |  |  | 71,364 |  |  |  | 46,915 |  |  |  | 41,191 |  |  |  | 54,095 |  |  |  | 46,326 |  |  |  | 27,488 |  |  |  | 136,875 |  |  |  | 5,274 |  |  |  | 533,690 |
Other segment items (2) |  |  | 215,117 |  |  |  | 148,099 |  |  |  | 188,905 |  |  |  | 112,566 |  |  |  | 119,665 |  |  |  | 115,682 |  |  |  | 85,519 |  |  |  | 32,199 |  |  |  | 50,504 |  |  |  | 1,068,256 |
Segment contribution |  | $ | 78,943 |  |  | $ | 47,743 |  |  | $ | 62,259 |  |  | $ | 54,076 |  |  | $ | 18,592 |  |  | $ | 74,091 |  |  | $ | 40,582 |  |  | $ | 12,321 |  |  | $ | (20,564 | ) |  | $ | 368,043 |
|  | Year Ended December 31, 2022 |
|  | Nu Skin |  |  | Rhyz Investments |  |  |  |
|  | Americas |  |  | Southeast Asia/ Pacific |  |  | Mainland China |  |  | Japan |  |  | Europe & Africa |  |  | South Korea |  |  | Hong Kong/ Taiwan |  |  | Manufacturing (1) |  |  | Rhyz Other |  |  | Total Segments |
Revenue |  | $ | 508,537 |  |  | $ | 344,411 |  |  | $ | 360,389 |  |  | $ | 224,896 |  |  | $ | 204,275 |  |  | $ | 268,707 |  |  | $ | 157,197 |  |  | $ | 149,458 |  |  | $ | 3,830 |  |  | $ | 2,221,700 |
Cost of sales |  |  | 135,071 |  |  |  | 85,986 |  |  |  | 60,881 |  |  |  | 45,070 |  |  |  | 60,257 |  |  |  | 52,531 |  |  |  | 31,230 |  |  |  | 121,455 |  |  |  | — |  |  |  | 592,481 |
Other segment items (2) |  |  | 276,168 |  |  |  | 182,523 |  |  |  | 227,146 |  |  |  | 128,206 |  |  |  | 128,059 |  |  |  | 137,365 |  |  |  | 93,383 |  |  |  | 24,433 |  |  |  | 10,010 |  |  |  | 1,207,293 |
Segment contribution |  | $ | 97,298 |  |  | $ | 75,902 |  |  | $ | 72,362 |  |  | $ | 51,620 |  |  | $ | 15,959 |  |  | $ | 78,811 |  |  | $ | 32,584 |  |  | $ | 3,570 |  |  | $ | (6,180 | ) |  | $ | 421,926 |
(1) | The Manufacturing segment had $40.8 million, $56.5 million and $69.2 million of intersegment revenue for the years ended December 31, 2024, 2023 and 2022, respectively. Intersegment revenue is eliminated in the consolidated financial statements and in the table above.
(2) | Other segment items primarily includes selling expenses and general and administrative expenses.
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Total Segment Revenue |  | $ | 1,729,252 |  |  | $ | 1,969,989 |  |  | $ | 2,221,700 |
Core Nu Skin Adjustments |  |  | 2,832 |  |  |  | (858 | ) |  |  | 3,959 |
Total Revenue |  | $ | 1,732,084 |  |  | $ | 1,969,131 |  |  | $ | 2,225,659 |
|  | Year Ended December 31, |
|  |  | 2024 |  |  |  | 2023 |  |  |  | 2022 |
Total Segment Contribution |  | $ | 271,930 |  |  | $ | 368,043 |  |  | $ | 421,926 |
Corporate and Other |  |  | (423,515 | ) |  |  | (319,775 | ) |  |  | (311,079 | )
Operating income (loss) |  |  | (151,585 | ) |  |  | 48,268 |  |  |  | 110,847 |
Interest expense |  |  | 26,409 |  |  |  | 25,560 |  |  |  | 13,493 |
Other income (expense), net |  |  | 2,943 |  |  |  | 3,870 |  |  |  | (8,384 | )
Income (loss) before provision for income taxes |  | $ | (175,051 | ) |  | $ | 26,578 |  |  | $ | 88,970 |
Depreciation and Amortization
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Nu Skin |  |  |  |  |  |  |  |  |
Americas |  | $ | 369 |  |  | $ | 449 |  |  | $ | 591 |
Southeast Asia/Pacific |  |  | 838 |  |  |  | 1,062 |  |  |  | 1,500 |
Mainland China |  |  | 10,644 |  |  |  | 11,048 |  |  |  | 12,177 |
Japan |  |  | 278 |  |  |  | 1,327 |  |  |  | 1,011 |
Europe & Africa |  |  | 1,098 |  |  |  | 1,093 |  |  |  | 854 |
South Korea |  |  | 1,022 |  |  |  | 1,399 |  |  |  | 1,616 |
Hong Kong/Taiwan |  |  | 1,775 |  |  |  | 2,614 |  |  |  | 3,743 |
Total Nu Skin |  |  | 16,024 |  |  |  | 18,992 |  |  |  | 21,492 |
Rhyz |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  | 13,729 |  |  |  | 13,293 |  |  |  | 13,838 |
Rhyz Other |  |  | 7,253 |  |  |  | 5,836 |  |  |  | 2,368 |
Total Rhyz |  |  | 20,982 |  |  |  | 19,129 |  |  |  | 16,206 |
Total segment depreciation and amortization |  |  | 37,006 |  |  |  | 38,121 |  |  |  | 37,698 |
Corporate and other |  |  | 32,804 |  |  |  | 32,802 |  |  |  | 34,808 |
Total |  | $ | 69,810 |  |  | $ | 70,923 |  |  | $ | 72,506 |
Capital Expenditures
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Nu Skin |  |  |  |  |  |  |  |  |
Americas |  | $ | 102 |  |  | $ | 236 |  |  | $ | 204 |
Southeast Asia/Pacific |  |  | 115 |  |  |  | 645 |  |  |  | 263 |
Mainland China |  |  | 5,701 |  |  |  | 20,052 |  |  |  | 10,692 |
Japan |  |  | 402 |  |  |  | 104 |  |  |  | 225 |
Europe & Africa |  |  | 412 |  |  |  | 411 |  |  |  | 1,612 |
South Korea |  |  | 36 |  |  |  | 585 |  |  |  | 727 |
Hong Kong/Taiwan |  |  | 610 |  |  |  | 1,212 |  |  |  | 3,338 |
Total Nu Skin |  |  | 7,378 |  |  |  | 23,245 |  |  |  | 17,061 |
Rhyz |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  | 10,164 |  |  |  | 11,162 |  |  |  | 7,301 |
Rhyz Other |  |  | 2,137 |  |  |  | 34 |  |  |  | — |
Total Rhyz |  |  | 12,301 |  |  |  | 11,196 |  |  |  | 7,301 |
Total segment capital expenditures |  |  | 19,679 |  |  |  | 34,441 |  |  |  | 24,362 |
Corporate and other |  |  | 21,904 |  |  |  | 24,049 |  |  |  | 34,694 |
Total |  | $ | 41,583 |  |  | $ | 58,490 |  |  | $ | 59,056 |
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) |  | 2024 |  |  | 2023 |  |  | 2022 |
United States |  | $ | 526,059 |  |  | $ | 514,947 |  |  | $ | 537,081 |
Mainland China |  |  | 235,235 |  |  |  | 298,079 |  |  |  | 360,389 |
Japan |  |  | 181,557 |  |  |  | 207,833 |  |  |  | 224,896 |
South Korea |  |  | 163,706 |  |  |  | 236,099 |  |  |  | 268,707 |
All others |  |  | 625,527 |  |  |  | 712,173 |  |  |  | 834,586 |
Total |  | $ | 1,732,084 |  |  | $ | 1,969,131 |  |  | $ | 2,225,659 |
Revenue by Product Line
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
Beauty |  | $ | 681,765 |  |  | $ | 858,625 |  |  | $ | 1,069,714 |
Wellness |  |  | 757,217 |  |  |  | 886,093 |  |  |  | 992,338 |
Other |  |  | 293,102 |  |  |  | 224,413 |  |  |  | 163,607 |
Total |  | $ | 1,732,084 |  |  | $ | 1,969,131 |  |  | $ | 2,225,659 |
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. Long-lived assets by major market are set forth below for the periods ended December 31, 2024, 2023 and 2022:
|  | Year Ended December 31, |
(U.S. dollars in thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |
United States |  | $ | 294,513 |  |  | $ | 339,163 |  |  | $ | 343,482 |
Mainland China |  |  | 107,260 |  |  |  | 122,728 |  |  |  | 132,148 |
South Korea |  |  | 18,435 |  |  |  | 23,578 |  |  |  | 30,867 |
Japan |  |  | 10,329 |  |  |  | 13,322 |  |  |  | 18,011 |
All others |  |  | 31,204 |  |  |  | 35,451 |  |  |  | 33,291 |
Total |  | $ | 461,741 |  |  | $ | 534,242 |  |  | $ | 557,799 |

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