EX-99.2 4 ef20041017_ex99-2.htm UNAUDITED PRO FORMA FINANCIAL INFORMATION
Exhibit 99.2
SELECTED UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 
On January 2, 2025, Nu Skin Enterprises, Inc. (“Nu Skin” “we” or the “Company”), through our consolidated subsidiary Mavely Seller LLC (“Seller”), entered into a Unit Purchase Agreement, dated as of January 2, 2025 (the “Purchase Agreement”), by and among Seller, Mavely LLC (“Mavely”), Clout.io Holdings, Inc. (“Purchaser”) and Mavrck LLC, and disposed of all of our equity interests in Mavely. As a result of the disposal, as of January 2, 2025, Mavely and its subsidiaries will no longer be included in our consolidated financial statements.
 
The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2024 assumes that the sale occurred on September 30, 2024. The following unaudited pro forma condensed consolidated statements of operations of the Company for the nine month period ended September 30, 2024 and for the year ended December 31, 2023 are presented as if the disposal had occurred as of January 1, 2023.
 
The unaudited pro forma condensed consolidated financial statements are presented based on information currently available, are intended for informational purposes only, and do not purport to represent what the Company’s financial position and results of operations actually would have been had the sale occurred on the dates indicated, or to project the Company’s financial performance for any future period.
 
The unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Form 10-Q for the quarterly period ended September 30, 2024. The unaudited pro forma condensed consolidated financial statements and the accompanying notes should also be read in conjunction with the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Form 10-K for the fiscal year ended December 31, 2023.
 
The Historical columns in the Unaudited Pro Forma Condensed Consolidated Balance Sheet and the Unaudited Pro Forma Condensed Consolidated Statements of Operations reflect the Company’s historical financial statements for the periods presented and do not reflect any adjustments related to the disposal.
 
The information in the Transactions Accounting Adjustments column in the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024 was derived from the unaudited information supporting the unaudited financial statements included in the Company’s Form 10-Q for the quarterly period ended September 30, 2024. The information in the Transactions Accounting Adjustments column in the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2023 was derived from the information supporting the audited financial statement included in the Company’s Form 10-K for the fiscal year ended December 31, 2023.
 
2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 2024

(In thousands)
  
Historical
(as reported)
    
Transaction
Accounting Adjustments
      
Pro Forma
  
ASSETS
                    
Current assets:
                    
Cash and cash equivalents
  
$
227,751
    
$
197,800
  
(b)
  
$
425,551
  
Current investments
    
10,077
      
—
        
10,077
  
Accounts receivable, net
    
68,812
      
(14,834
)
(a)
    
53,978
  
Inventories, net
    
247,789
      
—
        
247,789
  
Prepaid expenses and other
    
98,942
      
(296
)
(a)
    
98,646
  
Total current assets
    
653,371
      
182,670
        
836,041
  
                           
Property and equipment, net
    
410,673
      
(1,185
)
(a)
    
409,488
  
Operating lease right-of-use assets
    
85,550
      
—
        
85,550
  
Goodwill
    
99,885
      
(12,602
)
(a)
    
87,283
  
Other intangible assets, net
    
85,266
      
(8,431
)
(a)
    
76,835
  
Other assets
    
248,150
      
10,000
  
(c)
    
258,150
  
Total assets
  
$
1,582,895
    
$
170,452
      
$
1,753,347
  
                           
LIABILITIES AND STOCKHOLDERS’ EQUITY
                          
Current liabilities:
                          
Accounts payable
  
$
32,736
    
$
(230
)
(a)
  
$
32,506
  
Accrued expenses
    
246,615
      
(11,903
)
(a)
    
234,712
  
Current portion of long-term debt
    
60,000
      
—
        
60,000
  
Total current liabilities
    
339,351
      
(12,133
)
      
327,218
  
                           
Operating lease liabilities
    
68,351
      
—
        
68,351
  
Long-term debt
    
373,470
      
—
        
373,470
  
Other liabilities
    
94,848
      
—
        
94,848
  
Total liabilities
    
876,020
      
(12,133
)
      
863,887
  
                           
Stockholders’ equity:
                          
Class A common stock
    
91
      
—
        
91
  
Additional paid-in capital
    
624,665
      
—
        
624,665
  
Treasury stock, at cost
    
(1,563,878
)
    
—
        
(1,563,878
)
Accumulated other comprehensive loss
    
(105,040
)
    
—
        
(105,040
)
Retained earnings
    
1,751,037
      
182,585
  
(d)
    
1,933,622
  
Total stockholders’ equity
    
706,875
      
182,585
        
889,460
  
Total liabilities and stockholders’ equity
  
$
1,582,895
    
$
170,452
      
$
1,753,347
  

3
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
For the Nine Months Ended September 30, 2024

(In thousands, except for per share data)
  
Historical
(as reported)
    
Transaction
Accounting
Adjustments
          
Pro Forma
  
Revenue
  
$
1,286,532
    
$
(37,368
)
  
(e)
    
$
1,249,164
  
Cost of sales
    
383,828
      
(583
)
  
(e)
      
383,245
  
Gross profit
    
902,704
      
(36,785
)
          
865,919
  
                               
Operating expenses:
                              
Selling expenses
    
486,617
      
(26,676
)
  
(e)
      
459,941
  
General and administrative expenses
    
358,107
      
(9,112
)
  
(e)
      
348,995
  
Restructuring and impairment expenses
    
156,484
      
—
            
156,484
  
Total operating expenses
    
1,001,208
      
(35,788
)
          
965,420
  
                               
Operating income (loss)
    
(98,504
)
    
(997
)
          
(99,501
)
Interest expense
    
20,545
      
—
            
20,545
  
Other income, net
    
1,800
      
22
    
(e)
      
1,822
  
                               
Income (loss) before provision for income taxes
    
(117,249
)
    
(975
)
          
(118,224
)
Provision (benefit) for income taxes
    
(6,760
)
    
(244
)
  
(e)
      
(7,004
)
                               
Net income (loss)
  
$
(110,489
)
  
$
(731
)
        
$
(111,220
)
                               
Net income (loss) per share:
                              
Basic
  
$
(2.23
)
          
     
$
(2.24
)
Diluted
  
$
(2.23
)
          
     
$
(2.24
)
                                 
Weighted-average common shares outstanding:
                                
Basic
    
49,645
                      
49,645
  
Diluted
    
49,645
                      
49,645
  

4
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
For the Year Ended December 31, 2023

(In thousands, except for per share data)
  
Historical
(as reported)
    
Transaction
Accounting
Adjustments
          
Pro Forma
  
Revenue
  
$
1,969,131
    
$
(24,654
)
  
(e)
    
$
1,944,477
  
Cost of sales
    
611,850
      
—
            
611,850
  
Gross profit
    
1,357,281
      
(24,654
)
          
1,332,627
  
                               
Operating expenses:
                              
Selling expenses
    
742,365
      
(22,088
)
  
(e)
      
720,277
  
General and administrative expenses
    
546,858
      
(10,302
)
  
(e)
      
536,556
  
Restructuring and impairment expenses
    
19,790
      
—
            
19,790
  
Total operating expenses
    
1,309,013
      
(32,390
)
          
1,276,623
  
                               
Operating income
    
48,268
      
7,736
            
56,004
  
Interest Expense
    
25,560
      
—
            
25,560
  
Other expense, net
    
3,870
      
182,583
      
(e,g
)
    
186,453
  
                                 
Income before provision for income taxes
    
26,578
      
190,319
              
216,897
  
Provision (benefit) for income taxes
    
17,983
      
47,580
    
(f)
      
65,563
  
                                 
Net income
  
$
8,595
    
$
142,739
            
$
151,334
  
                                 
Net income per share:
                                
Basic
  
$
0.17
            
     
$
3.04
  
Diluted
  
$
0.17
            
     
$
3.04
  
                                 
Weighted-average common shares outstanding:
                                
Basic
    
49,711
                      
49,711
  
Diluted
    
49,860
                      
49,860
  

Pro Forma Adjustments and Assumptions
 
Separation transaction accounting adjustments:
 
(a)
Reflects the adjustments to eliminate the assets and liabilities attributable to the Mavely business.
 
(b)
Reflects net cash proceeds from the transaction, less certain purchase price adjustments and estimated transaction costs.
 
(c)
Reflects approximately one million shares of ownership interest in Purchaser.

(d)
Reflects the effect on total stockholders’ equity of the adjustments described in notes (a) - (c) above.

(e)
Reflects the adjustments to eliminate the historical operating results of Mavely.

(f)
Reflects the provision (benefit) for income taxes for the adjustments made to income before provision for income taxes at a statutory tax rate of 25%.

(g)
Reflects the estimated $182.6 million gain arising from the transaction. No adjustments have been made to the sale proceeds to give effect to any potential post-closing adjustments under the terms of the Purchase Agreement.