Nu Skin Enterprises, Inc. (NUS) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting of Stockholders of Nu Skin Enterprises. I'm Steve Lund, the Chairman of Nu Skin's Board of Directors. We're excited to host today's meeting through this virtual online platform, which allows us to open access and participation in the meeting to all shareholders around the world while adhering to the advice of government and public health authorities regarding gatherings and social distancing. I'd also like to introduce the other directors of our company, some of whom are participating this morning in this meeting. They are Dan Campbell, Andy Lipman, Laura Nathanson, Tom Pisano, Simon Shen, Ritch Wood and Edwina Woodbury. I'd also like to introduce our executive officers who are participating today. They are Ritch Wood, the CEO; Ryan Napierski, President; Mark Lawrence, Executive Vice President and Chief Financial Officer; Joe Chang, Executive Vice President of Product and Chief -- Product Development and Chief Scientific Officer; Matt Dorny, Executive Vice President and General Counsel. We also welcome our auditors from PricewaterhouseCoopers, who are available to respond to appropriate questions. The online portal for this meeting includes an agenda as well as instructions for voting, submitting questions and viewing a stockholder list. Feel free to vote at any time during the meeting prior to the closing of the polls. Instructions for voting are on the portal, but keep in mind that if you have previously voted, you do not need to vote again unless you wish to change your vote. We also invite you to submit questions at any time during the meeting by typing your questions in the designated part of the meeting portal. We will address questions about the 4 items of business for the meeting when we deal with respective item of business. Other questions will be addressed during the question-and-answer session later on. Please keep your questions and comments within reasonable limits on length, language and of course relevance. Greg Belliston, an Assistant Corporate Secretary of the company has informed me that this meeting has been duly called and that there is a quorum present for purposes of conducting the business of the meeting. He will file the proof of notice of this meeting with our corporate records. Mr. Belliston will serve as the secretary for this meeting. The Board of Directors has appointed Mr. Belliston and Matt Dorny as inspectors of election for this meeting. They are present and have taken the oath of office. So we'll turn to the business of the meeting. We're ready to proceed to the 4 items that you'll be voting on this morning. We'll introduce each of them one at a time, address any stockholder questions dealing with at that time and then proceed to the next item. We will then be ready for the balloting. For the first item of business, we have the election of 8 directors. The nominees are set forth in the proxy statement that was distributed to shareholders. Seeing no questions about the nominees, we will move to the second item of business. The second item of business is an advisory vote to approve the company's executive compensation. Seeing no questions about our executive compensation, we'll move to the third item of business, which is the approval of our Third Amended and Restated 2010 Omnibus Incentive Plan. Seeing no questions about the incentive plan, we'll move to the fourth item of business, which is the ratification of the selection of PricewaterhouseCoopers as the company's independent registered public accounting firm for 2020. Seeing no questions about our auditors, we will move to the balloting. The polls for each matter to be voted on at this meeting are open. We will allow about another 0.5 minute for you to place your votes. We'll pause now while you do that. [Voting]

Thank you. All stockholders have had an opportunity now to vote and the polls are now declared closed. I'd like to invite Greg Belliston to announce the preliminary results of the voting.

More than 50% of the shares of common stock outstanding on the record date of this meeting are represented at this meeting in person or by proxy. I also report that based on the votes that were cast before the meeting, more than 50% of the votes eligible to be counted at this meeting have elected the company's 8 Director nominees; approved the company's executive compensation, approved the Third Amended and Restated 2010 Omnibus Incentive Plan, and ratified the selection of PwC as the company's independent registered public accounting firm for 2020. We expect to report the final voting results, which will include any votes cast during the meeting today in a Form 8-K that will be filed with the SEC within 4 business days.

Thank you. Our CEO, Ritch Wood, will now provide a brief update on our business, and we will address questions and comments from stockholders in accordance with the rules of conduct you received as you entered the meeting room. Ritch?

Well, we thank all of you for joining us today. And with everything that's happened early in this year, it feels like 2019 is a long way away. But it's good to look back and see what we accomplished last year, which is actually playing a really important role in what we're doing this year. I'd just highlight a couple of things that were really critical for us last year. We had -- as you know, as we started January 2018, the Chinese government initiated a 100-day review on the direct selling in nutrition industries. And while that was difficult last year, we leaned into a number of initiatives that are really paying dividends for us this year. For example, learning and leaning into online training courses and the ability to leverage our digital network has been a great, great help to us as COVID-19 has slipped in this year. We saw things, particularly with our customer count hold steady during the year, and that has also formed a good basis for us growing into this year. We look forward to 2020. We've got a number of key initiatives that we believe will help our business be strong throughout the year and particularly as we get to the end of the year, which is discussions we've had in our previous releases. I would also highlight that we generated strong cash flow last year. We had good growth out of our manufacturing partners and continue to see really positive trends in a number of areas of the business. We've completed our rollout of our Velocity compensation program enhancement. And again, those are in place for a good strong year this year. So we started this year. We increased our dividend. We've been in the market buying stock as we announced at the end of first quarter, where we bought $60 million of our stock, and we look forward to a really strong product launch later this year. We call that product, the ageLOC boost product, which will be launched in the majority of our markets in the fourth quarter and the rest next year. And we expect that to be a good initiative that will continue to drive growth in our business. So with all that going on, I think we can open it up for any questions, and welcome anyone who may want to get further information on any of the items I've talked about or others. It looks as though there are no questions right now. So Steve, I'll turn it back to you.

Well, thank you, Ritch. We will declare the question-and-answer period now closed. The -- and we'll conclude the meeting, the 2020 Annual Meeting of Stockholders of Nu Skin Enterprises is now concluded. Thank you for your attendance and for your continued support.