About Nu Skin Enterprises

Nu Skin Enterprises, Inc. develops and distributes a comprehensive line of premium-quality beauty and wellness solutions in nearly 50 markets worldwide. The company’s three primary brands include beauty brand, Nu Skin; wellness brand, Pharmanex; and anti-aging brand, ageLOC. The company operates in the direct selling channel, primarily utilizing person-to-person marketing to promote and sell its products, including through the use of social and digital platforms. In addition to its core Nu Skin business, the company explores new areas of synergistic and adjacent growth through its business arm known as Rhyz Inc. The company’s Rhyz businesses primarily consist of consumer, technology and manufacturing companies. In 2023, the company generated approximately 26% of its revenue from the United States (consisting of Nu Skin United States and Rhyz businesses) and the remainder from its international markets. Products The company offers a branded, differentiated product portfolio. In 2022, the company began launching its first connected beauty device, ageLOC LumiSpa iO; market launches continued into 2023. In 2023, the company began launching ageLOC WellSpa iO (not sold in the United States), a connected device focused on holistic wellness and beauty, in most of its markets. The company also began launching a similar, FDA-cleared device, Nu Skin RenuSpa iO, in the United States. When connected to its mobile application, these connected devices gather data to provide insights into consumer behavior, with the goal of enabling it to provide more personalized experiences for its consumers. In 2023, the company launched its ageLOC TRMe personalized weight wellness line of products in several markets. The company plans to preview and/or launch ageLOC TRMe in additional markets in 2024. Product Categories The company has two primary product categories: beauty products and wellness products. The company develops and distributes innovative, premium-quality products in these two categories under its Nu Skin and Pharmanex brands, respectively. The company also develops and distributes products under its ageLOC brand, which features innovative, premium-quality anti-aging products in both the beauty and wellness categories and in many cases is co-branded with its Nu Skin and Pharmanex products. Most of the company’s innovative devices are ageLOC beauty products; however, ageLOC WellSpa iO spans both the beauty and wellness categories. Beauty Products: The company’s strategy for its beauty products category is to leverage its distribution channel to strengthen Nu Skin’s position as an innovative leader in the masstige and premium beauty markets. The company’s products in this category include its innovative skin care devices, cosmetics and other personal care products. In 2023, the company’s top-selling product lines by revenue in this category were its ageLOC LumiSpa devices (consisting of both ageLOC LumiSpa and ageLOC LumiSpa iO) and its Nutricentials skin care products. The company’s ageLOC beauty products accounted for 46% of its beauty product category revenue and 20% of its total revenue in 2023. Wellness Products: The company’s strategy for its wellness category is to continue to introduce innovative, substantiated nutritional supplements based on research and development and quality manufacturing. In 2023, the company’s top-selling product lines by revenue in this category were its ageLOC TR90 weight management system, its Beauty Focus products (including Beauty Focus Collagen+) and LifePak nutritional supplements. The company’s ageLOC wellness products accounted for 46% of wellness product category revenue and 21% of total revenue in 2023. Intellectual Property The company’s trademarks are registered in the United States and in markets where it operates, and it considers trademark protection to be very important to its business. The company’s major trademarks include Nu Skin, its fountain logos, Pharmanex, ageLOC, its ageLOC logos, LifePak, Galvanic Spa, TR90, Epoch, ageLOC Me, LumiSpa, Nutricentials, WellSpa iO (registered outside of the United States) and ageLOC Boost (registered outside of the United States). In addition, a number of its products, including its facial spas, ageLOC WellSpa iO, Nu Skin RenuSpa iO, ageLOC Body Spa, LumiSpa, ageLOC Boost, TR90 and Pharmanex BioPhotonic Scanner, are based on proprietary technologies and designs, some of which utilize patented technologies and/or technologies licensed from third parties. The company also relies on patent and trade secret protection to protect its proprietary technology and other proprietary information for some of its ageLOC products and other products. Distribution Channel The company’s Nu Skin business operates in the direct selling channel, primarily utilizing person-to-person marketing to promote and sell its products. The company is working through a significant digital transformation in its business to achieve widespread adoption of social commerce in all of its markets. Consumer Group and Sales Network The company’s Nu Skin business’s distribution channel consists of two primary groups: its consumer group—individuals who buy its products primarily for personal or family consumption and share products with friends and family; and its sales network—individuals who personally buy, use and resell products, and who also attract new consumers, and recruit, train and develop new sellers. To monitor the growth in its sales network, the company tracks the number of Paid Affiliates and Sales Leaders, which are defined as follows: Paid Affiliates are any Brand Affiliates, as well as members of the company’s sales force in Mainland China, who earned sales compensation during the previous three months. Sales Leaders are the three-month average of the company’s monthly Brand Affiliates, as well as sales employees and independent marketers in Mainland China, who achieved certain qualification requirements as of the end of each month of the quarter. Global Direct Selling Channel Outside of Mainland China, individuals can elect to participate in the company’s business as follows: Brand Affiliate-Direct Consumers—Individuals who purchase products directly from a Brand Affiliate at a price established by the Brand Affiliate. Company-Direct Consumers—Individuals who purchase products directly from the company. Basic Brand Affiliates—Brand Affiliates who purchase products for personal or family use or for resale to other consumers. Sales Leaders and Qualifiers—Brand Affiliates who have qualified or are trying to qualify as a Sales Leader. Mainland China Business Model Because of restrictions on direct selling and multi-level commissions in Mainland China, the company has implemented a business model for that market that is different from the business model it uses in its other markets. The company has structured its business model in Mainland China based on several factors: the guidance it has received from government officials, its interpretation of applicable regulations, its understanding of the practices of other international direct selling companies operating in Mainland China, and its understanding as to how regulators are interpreting and enforcing the regulations. In Mainland China, the company utilizes sales employees to sell products through its retail stores, website and digital platforms; independent direct sellers, who can sell away from its stores where it has a direct selling license and a service center and can also sell through its website and digital platforms; and independent marketers, who are licensed business owners authorized to sell its products at their own approved premises or through its stores, website and digital platforms. Sales Incentives, Meetings, Recognition and Training An important part of its distribution channel is motivating the company’s Sales Leaders and recognizing their achievements. The company holds regular meetings and events globally to recognize Sales Leaders who have achieved various levels of success in its business. The company utilizes a variety of sales incentives such as incentive trips to motivate Sales Leaders. In addition to rewarding performance, incentive trips provide Sales Leaders and the company opportunities to share best practices, set goals, generate alignment of Sales Leaders around key initiatives, and provide a high level of motivation and team building. Geographic Regions The company sells and distributes its Nu Skin business’s products in nearly 50 markets. The company has divided its markets into seven segments: Mainland China; South Korea; Southeast Asia/Pacific, which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Australia, New Zealand and other markets; Americas, which includes Canada, Latin America and the United States; Japan; Hong Kong/Taiwan, which also includes Macau; and Europe & Africa, which includes markets in Europe as well as South Africa. The company’s Rhyz business arm also includes two additional segments: Manufacturing and Rhyz other. Regulation The company’s beauty and wellness products and related promotional and marketing activities are subject to extensive government regulation by numerous federal, state, and local government agencies and authorities, including the United States Food and Drug Administration (the FDA), the Federal Trade Commission (the FTC), the Consumer Product Safety Commission, the Department of Agriculture, United States and State Attorneys General, and state regulatory agencies in the United States, as well as the State Administration for Market Regulation in Mainland China, the Food and Drug Administration in Taiwan, the Ministry of Food and Drug Safety in South Korea, the Ministry of Health, Labour and Welfare in Japan, and similar government agencies in all other markets in which it operates. In the United States, the FDA, in particular, regulates the formulation, manufacture and labeling of over-the-counter (OTC) drugs, cosmetics, dietary supplements, foods and medical devices such as those that the company distributes. The company’s beauty products are subject to various laws and regulations that regulate cosmetic and personal care products and set forth regulations that, among other things, determine whether a product can be marketed as a cosmetic or requires further submissions as an OTC drug. In the United States, the regulation of cosmetic content and labeling is under the primary jurisdiction of the FDA. In the company’s foreign markets, nutritional supplements are generally regulated by similar government agencies, such as the Mainland China State Administration for Market Regulation, the South Korea Ministry of Food and Drug Safety; the Japan Ministry of Health, Labour and Welfare and the Taiwan Department of Health. The company is aware of media reports regarding dietary supplements, which call for the repeal or amendment of DSHEA. In 2014, the company’s Nu Skin Facial Spa device was cleared for marketing through the 510(k) process with the FDA as a medical device with cosmetic benefit. More recently, the company’s RenuSpa iO device was cleared for marketing through the FDA’s 510(k) process. Competition Direct Selling The company competes with other direct selling companies, some of which have a longer operating history, and greater visibility, name recognition and financial resources than it does. Leading global direct selling companies include Amway, Natura & Co and Herbalife. Rhyz Companies In addition to its core Nu Skin business, the company explores new areas of synergistic and adjacent growth through its business arm known as Rhyz Inc. The company’s Rhyz businesses, which are reported in two segments, primarily consist of the following consumer, technology and manufacturing companies: Rhyz Manufacturing Elevate Nutraceuticals LLC, doing business as Elevate Health Sciences—a manufacturer of private-label dietary supplements. Ingredient Innovations International Company, doing business as 3i Solutions—a manufacturer of dietary supplements. L&W Holdings, Inc., doing business as CasePak—a packaging company that consults with product developers to design and develop custom packaging. Wasatch Product Development, LLC—a developer and manufacturer of personal care products, dietary supplements and functional foods. Rhyz Other Beauty Biosciences LLC—a beauty company that sells its products through digital and retail channels. LifeDNA, Inc.—a DNA assessment and recommendation technology company that holds potential for the company’s broader personalization strategy. MyFavoriteThings, Inc., dba Mavely—a social commerce platform that offers creators a suite of social selling tools to help them promote products from Mavely partner brands and retailers and earn a commission for their converted sales. Rhyz is a key component of the company’s business. History Nu Skin Enterprises, Inc. was founded in 1984. The company was incorporated in 1996. Nu Skin Enterprises, Inc. develops and distributes a comprehensive line of premium-quality beauty and wellness solutions in nearly 50 markets worldwide. The company’s three primary brands include beauty brand, Nu Skin; wellness brand, Pharmanex; and anti-aging brand, ageLOC. The company operates in the direct selling channel, primarily utilizing person-to-person marketing to promote and sell its products, including through the use of social and digital platforms. In addition to its core Nu Skin business, the company explores new areas of synergistic and adjacent growth through its business arm known as Rhyz Inc. The company’s Rhyz businesses primarily consist of consumer, technology and manufacturing companies. In 2023, the company generated approximately 26% of its revenue from the United States (consisting of Nu Skin United States and Rhyz businesses) and the remainder from its international markets. Products The company offers a branded, differentiated product portfolio. In 2022, the company began launching its first connected beauty device, ageLOC LumiSpa iO; market launches continued into 2023. In 2023, the company began launching ageLOC WellSpa iO (not sold in the United States), a connected device focused on holistic wellness and beauty, in most of its markets. The company also began launching a similar, FDA-cleared device, Nu Skin RenuSpa iO, in the United States. When connected to its mobile application, these connected devices gather data to provide insights into consumer behavior, with the goal of enabling it to provide more personalized experiences for its consumers. In 2023, the company launched its ageLOC TRMe personalized weight wellness line of products in several markets. The company plans to preview and/or launch ageLOC TRMe in additional markets in 2024. Product Categories The company has two primary product categories: beauty products and wellness products. The company develops and distributes innovative, premium-quality products in these two categories under its Nu Skin and Pharmanex brands, respectively. The company also develops and distributes products under its ageLOC brand, which features innovative, premium-quality anti-aging products in both the beauty and wellness categories and in many cases is co-branded with its Nu Skin and Pharmanex products. Most of the company’s innovative devices are ageLOC beauty products; however, ageLOC WellSpa iO spans both the beauty and wellness categories. Beauty Products: The company’s strategy for its beauty products category is to leverage its distribution channel to strengthen Nu Skin’s position as an innovative leader in the masstige and premium beauty markets. The company’s products in this category include its innovative skin care devices, cosmetics and other personal care products. In 2023, the company’s top-selling product lines by revenue in this category were its ageLOC LumiSpa devices (consisting of both ageLOC LumiSpa and ageLOC LumiSpa iO) and its Nutricentials skin care products. The company’s ageLOC beauty products accounted for 46% of its beauty product category revenue and 20% of its total revenue in 2023. Wellness Products: The company’s strategy for its wellness category is to continue to introduce innovative, substantiated nutritional supplements based on research and development and quality manufacturing. In 2023, the company’s top-selling product lines by revenue in this category were its ageLOC TR90 weight management system, its Beauty Focus products (including Beauty Focus Collagen+) and LifePak nutritional supplements. The company’s ageLOC wellness products accounted for 46% of wellness product category revenue and 21% of total revenue in 2023. Intellectual Property The company’s trademarks are registered in the United States and in markets where it operates, and it considers trademark protection to be very important to its business. The company’s major trademarks include Nu Skin, its fountain logos, Pharmanex, ageLOC, its ageLOC logos, LifePak, Galvanic Spa, TR90, Epoch, ageLOC Me, LumiSpa, Nutricentials, WellSpa iO (registered outside of the United States) and ageLOC Boost (registered outside of the United States). In addition, a number of its products, including its facial spas, ageLOC WellSpa iO, Nu Skin RenuSpa iO, ageLOC Body Spa, LumiSpa, ageLOC Boost, TR90 and Pharmanex BioPhotonic Scanner, are based on proprietary technologies and designs, some of which utilize patented technologies and/or technologies licensed from third parties. The company also relies on patent and trade secret protection to protect its proprietary technology and other proprietary information for some of its ageLOC products and other products. Distribution Channel The company’s Nu Skin business operates in the direct selling channel, primarily utilizing person-to-person marketing to promote and sell its products. The company is working through a significant digital transformation in its business to achieve widespread adoption of social commerce in all of its markets. Consumer Group and Sales Network The company’s Nu Skin business’s distribution channel consists of two primary groups: its consumer group—individuals who buy its products primarily for personal or family consumption and share products with friends and family; and its sales network—individuals who personally buy, use and resell products, and who also attract new consumers, and recruit, train and develop new sellers. To monitor the growth in its sales network, the company tracks the number of Paid Affiliates and Sales Leaders, which are defined as follows: Paid Affiliates are any Brand Affiliates, as well as members of the company’s sales force in Mainland China, who earned sales compensation during the previous three months. Sales Leaders are the three-month average of the company’s monthly Brand Affiliates, as well as sales employees and independent marketers in Mainland China, who achieved certain qualification requirements as of the end of each month of the quarter. Global Direct Selling Channel Outside of Mainland China, individuals can elect to participate in the company’s business as follows: Brand Affiliate-Direct Consumers—Individuals who purchase products directly from a Brand Affiliate at a price established by the Brand Affiliate. Company-Direct Consumers—Individuals who purchase products directly from the company. Basic Brand Affiliates—Brand Affiliates who purchase products for personal or family use or for resale to other consumers. Sales Leaders and Qualifiers—Brand Affiliates who have qualified or are trying to qualify as a Sales Leader. Mainland China Business Model Because of restrictions on direct selling and multi-level commissions in Mainland China, the company has implemented a business model for that market that is different from the business model it uses in its other markets. The company has structured its business model in Mainland China based on several factors: the guidance it has received from government officials, its interpretation of applicable regulations, its understanding of the practices of other international direct selling companies operating in Mainland China, and its understanding as to how regulators are interpreting and enforcing the regulations. In Mainland China, the company utilizes sales employees to sell products through its retail stores, website and digital platforms; independent direct sellers, who can sell away from its stores where it has a direct selling license and a service center and can also sell through its website and digital platforms; and independent marketers, who are licensed business owners authorized to sell its products at their own approved premises or through its stores, website and digital platforms. Sales Incentives, Meetings, Recognition and Training An important part of its distribution channel is motivating the company’s Sales Leaders and recognizing their achievements. The company holds regular meetings and events globally to recognize Sales Leaders who have achieved various levels of success in its business. The company utilizes a variety of sales incentives such as incentive trips to motivate Sales Leaders. In addition to rewarding performance, incentive trips provide Sales Leaders and the company opportunities to share best practices, set goals, generate alignment of Sales Leaders around key initiatives, and provide a high level of motivation and team building. Geographic Regions The company sells and distributes its Nu Skin business’s products in nearly 50 markets. The company has divided its markets into seven segments: Mainland China; South Korea; Southeast Asia/Pacific, which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Australia, New Zealand and other markets; Americas, which includes Canada, Latin America and the United States; Japan; Hong Kong/Taiwan, which also includes Macau; and Europe & Africa, which includes markets in Europe as well as South Africa. The company’s Rhyz business arm also includes two additional segments: Manufacturing and Rhyz other. Regulation The company’s beauty and wellness products and related promotional and marketing activities are subject to extensive government regulation by numerous federal, state, and local government agencies and authorities, including the United States Food and Drug Administration (the FDA), the Federal Trade Commission (the FTC), the Consumer Product Safety Commission, the Department of Agriculture, United States and State Attorneys General, and state regulatory agencies in the United States, as well as the State Administration for Market Regulation in Mainland China, the Food and Drug Administration in Taiwan, the Ministry of Food and Drug Safety in South Korea, the Ministry of Health, Labour and Welfare in Japan, and similar government agencies in all other markets in which it operates. In the United States, the FDA, in particular, regulates the formulation, manufacture and labeling of over-the-counter (OTC) drugs, cosmetics, dietary supplements, foods and medical devices such as those that the company distributes. The company’s beauty products are subject to various laws and regulations that regulate cosmetic and personal care products and set forth regulations that, among other things, determine whether a product can be marketed as a cosmetic or requires further submissions as an OTC drug. In the United States, the regulation of cosmetic content and labeling is under the primary jurisdiction of the FDA. In the company’s foreign markets, nutritional supplements are generally regulated by similar government agencies, such as the Mainland China State Administration for Market Regulation, the South Korea Ministry of Food and Drug Safety; the Japan Ministry of Health, Labour and Welfare and the Taiwan Department of Health. The company is aware of media reports regarding dietary supplements, which call for the repeal or amendment of DSHEA. In 2014, the company’s Nu Skin Facial Spa device was cleared for marketing through the 510(k) process with the FDA as a medical device with cosmetic benefit. More recently, the company’s RenuSpa iO device was cleared for marketing through the FDA’s 510(k) process. Competition Direct Selling The company competes with other direct selling companies, some of which have a longer operating history, and greater visibility, name recognition and financial resources than it does. Leading global direct selling companies include Amway, Natura & Co and Herbalife. Rhyz Companies In addition to its core Nu Skin business, the company explores new areas of synergistic and adjacent growth through its business arm known as Rhyz Inc. The company’s Rhyz businesses, which are reported in two segments, primarily consist of the following consumer, technology and manufacturing companies: Rhyz Manufacturing Elevate Nutraceuticals LLC, doing business as Elevate Health Sciences—a manufacturer of private-label dietary supplements. Ingredient Innovations International Company, doing business as 3i Solutions—a manufacturer of dietary supplements. L&W Holdings, Inc., doing business as CasePak—a packaging company that consults with product developers to design and develop custom packaging. Wasatch Product Development, LLC—a developer and manufacturer of personal care products, dietary supplements and functional foods. Rhyz Other Beauty Biosciences LLC—a beauty company that sells its products through digital and retail channels. LifeDNA, Inc.—a DNA assessment and recommendation technology company that holds potential for the company’s broader personalization strategy. MyFavoriteThings, Inc., dba Mavely—a social commerce platform that offers creators a suite of social selling tools to help them promote products from Mavely partner brands and retailers and earn a commission for their converted sales. Rhyz is a key component of the company’s business. History Nu Skin Enterprises, Inc. was founded in 1984. The company was incorporated in 1996.