SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 4, 1999
(Date of earliest event reported)
NU SKIN ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-12421 87-0565309
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
75 West Center Street, Provo, Utah 84601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 345-6100
(Former name or former address, if changed since last report.)
The Index to Exhibits appears on page 4.
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Item 5. Other Events
On February 4, 1999, the Registrant announced its intent to acquire Big
Planet, Inc., an Internet-based technology company that offers e-commerce and
other technology services to consumers in the United States. In addition, the
Registrant announced plans to acquire the assets of Nu Skin USA, Inc. (including
approximately 600,000 shares of Nu Skin Enterprises stock) and the Registrant's
remaining affiliates in Canada, Mexico and Guatemala. Reference is made to the
press release issued to the public by the Registrant on February 4, 1999, the
text of which is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Press Release of Nu Skin Enterprises, Inc. dated February 4, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the date indicated.
NU SKIN ENTERPRISES, INC.
By: /s/ M. Truman Hunt
Name: M. Truman Hunt
Title: Vice President and General Counsel
Dated: February 5, 1999
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INDEX TO EXHIBITS
Exhibit Description
99.1 Press Release of Nu Skin Enterprises dated February 4, 1999.
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FOR IMMEDIATE RELEASE
CONTACTS:
Nu Skin Enterprises Charles Allen (investors)
(801) 345-6110 Larry Macfarlane (media)
(801) 345-2112
NU SKIN ENTERPRISES ANNOUNCES INTENT TO ACQUIRE
INTERNET COMPANY BIG PLANET(TM) AND NORTH AMERICAN AFFILIATES
PROVO, Utah -- Feb. 4, 1999 -- Nu Skin Enterprises, Inc. (NYSE: NUS) today
announced its intent to acquire Big Planet, an Internet-based technology company
that offers e-commerce and other technology services to consumers in the United
States. In addition, the company announced plans to acquire the assets of Nu
Skin USA, Inc. (including approximately 600,000 shares of Nu Skin Enterprises
stock) and the company's remaining affiliates in Canada, Mexico and Guatemala.
Upon completion of the acquisitions, all of Nu Skin's worldwide assets
and operations will be held and managed by the public company. Under the
proposed terms of these acquisitions, Nu Skin Enterprises will purchase these
affiliates for approximately $40 million in cash, $14 million in a three-year
note and the assumption of certain liabilities.
The addition of the North American operations comes at a time when
Pharmanex(R) products have recently become available exclusively through Nu Skin
channels. Beginning Feb. 1, these premiere natural health supplements will be
sold to consumers via the company's distributors, independent pharmacies, and
direct orders placed over the telephone, by mail, or online through
Pharmanex.com.
"Nu Skin's operations in North America will add diversity to the public
company's potential and revenue," said Steven J. Lund, president and chief
executive officer. "The U.S. market is in the process of establishing important
Nu Skin initiatives -- including Pharmanex and Big Planet -- and we look forward
to future innovations from our founding market."
The addition of Big Planet adds a new category of services to Nu Skin
Enterprises and represents an exciting opportunity for Nu Skin distributors.
"Big Planet is the culmination of three years of planning and research
to create a strategic high-tech partner for Nu Skin distributors," Mr. Lund
said. "This acquisition is consistent with our goal to offer a broad array of
branded opportunities for our distributors."
"Nu Skin has always believed that many technology products are ideally
suited for the direct selling
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Nu Skin Enterprises
Feb. 4, 1999
Page 2
channel," added Mr. Lund. "Our distributors will be able to assist the large
number of people who want to take advantage of technology's latest offerings,
but don't know how."
Big Planet(TM), the "InterNetworking(TM) Company," is an innovative
provider of communications and technology products and services for individuals
and small businesses. Currently only available in the United States through
independent representatives, Big Planet offers five strategic product lines,
consisting of Internet services, e-commerce, telecommunications, unified
messaging and education products. As its business matures in the United States,
Big Planet intends to expand into international markets. "Our network of more
than 500,000 globally-minded distributors has demonstrated its ability to
quickly access international markets," Mr. Lund said. "With our unique approach
to selling technology and our powerful global distribution channel, we believe
Big Planet has the potential to become a pioneer in taking Internet and
communications products and services around the globe."
Big Planet is led by Richard King, a veteran of the high-technology
industry. Before joining Big Planet, Mr. King served as executive vice president
for Novell, Inc. At Novell he supervised the Netware Systems Group and was
responsible for the development and marketing of NetWare, the company's flagship
product. He spent more than 11 years at Novell in development and management
positions and has worked in the information technology industry for more than 18
years. At Big Planet Mr. King has assembled a world-class management team and
has established an organization of more than 300 technical and customer service
professionals to deliver on the company's vision of providing high quality
products to the consumer and small business market place.
"InterNetworking is the next revolution in direct marketing, combining
the power of one-to-one relationships with the emerging global Internet
opportunity to improve the way we learn, communicate, work, shop and play," said
Mr. King, president of Big Planet. "We have leveraged Nu Skin's distributor
leadership since our launch in the United States in April 1998 to attract
thousands of new technology-savvy representatives to Big Planet. We are excited
to be part of Nu Skin Enterprises, and we believe its management clearly shares
our vision of the future."
"Because the Internet is radically altering the way information is
delivered and products are purchased, we believe there is a huge opportunity for
Big Planet representatives to develop their own independent businesses with this
new technology," continued Mr. King. "While many people are intimidated by
technology's constant innovations, Big Planet representatives are specialists
who know the technology and can provide the education and training necessary to
help customers understand and take advantage of the latest products and
services."
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Nu Skin Enterprises
Feb. 4, 1999
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Big Planet(TM) is a nationwide provider of Internet services with more
than 25,000 current subscribers and is adding thousands of new subscribers each
quarter. The company delivers Internet service from 1,600 local dial-up access
phone numbers (Points of Presence), more than other major Internet Service
Providers. Big Planet currently receives nearly 1.5 million hits to its web site
and exchanges 70,000 e-mail messages each day. Big Planet's e-commerce site has
been in operation for less than four months and has already received orders from
more than 17,000 registered shoppers and sold over $4 million in merchandise. In
its first partial year of operations, the company generated approximately $16
million in revenue through the sale of Internet service, e-commerce,
telecommunication products and services, unified messaging and education
products.
"We are excited to bring Big Planet into Nu Skin Enterprises because it
provides a center for technology development that can be adapted and used across
all the company's divisions," Mr. Lund said.
The acquisition of Big Planet and the private Nu Skin affiliates in
North America unifies all Nu Skin markets and opportunities together under the
public company -- Nu Skin Enterprises. "We believe this transaction will enable
us to begin a transition from a geographic management focus to a strategic,
product-based business model," Mr. Lund said. "Nu Skin Personal Care,
Pharmanex(R) and Big Planet and other future additions can now be managed as
complete, distinct business opportunities. Distributors will be able to
concentrate on a specific business opportunity while sponsoring and selling
across all product divisions."
"Nu Skin has always been able to attract the highest-caliber
distributors by being on the leading edge of the direct selling opportunity,"
Mr. Lund said. "We were the first direct selling company to give distributors
access to seamless global commissions on product sales. Now we intend to take
multi-level marketing compensation to the next level by being the first major
direct sales company to allow distributors to generate commissions across
multiple divisions of opportunity throughout the world."
Big Planet, Pharmanex and Nu Skin Personal Care presidents will report
directly to Nu Skin Enterprises' chief executive officer, Steven J. Lund. Each
division president will have global responsibility for profits and losses in
their respective businesses.
A special committee comprised of the independent members of Nu Skin
Enterprises' Board of Directors was formed to evaluate the transaction for Nu
Skin Enterprises. The proposed acquisitions are subject to, among other things,
completion of definitive documentation, obtaining necessary regulatory and
third-party consents and approvals, approval of the shareholders of Big Planet
and the North American affiliates and final approval by the independent
committee.
The North American market and Big Planet acquisitions are expected to
close in 30 and 90 days, respectively. Commenting on how these recent
transactions will affect Nu Skin's financial outlook,
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Nu Skin Enterprises
Feb. 4, 1999
Page 4
Corey B. Lindley, chief financial officer, said, "While Big Planet(TM) is in
start-up mode and is, currently generating losses like most Internet
initiatives, earnings from North American sales of Nu Skin Personal Care and
Pharmanex(R) products will help to partially offset these losses. This results
in a transaction that is marginally dilutive to our short-term earnings outlook.
However, we are committed to investing in our future and building a foundation
for growth over the long term." Mr. Lindley continued, "Our revenue and earnings
outlook for the year 2000 and beyond is amplified as we realize the positive
impact of Big Planet and our new divisional approach to direct selling."
The company plans to release fourth-quarter and 1998 year-end results
on February 17, 1999. Mr. Lindley indicated that the company anticipates
earnings, excluding charges related to the recent Pharmanex acquisition, to be
in line with analysts' current fourth-quarter estimates.
The Company Nu Skin Enterprises, Inc. is one of the largest direct
selling companies in the world. Nu Skin products are sold in 27 countries
throughout Asia, Europe, North America, South America and the Pacific. Nu Skin
Enterprises is traded on the New York Stock Exchange under the symbol "NUS."
Nu Skin Enterprises news releases are available online at
www.nuskin.com or through the Company News On-Call fax service. For a menu of Nu
Skin Enterprises news or to retrieve a specific release, call 800-758-5804,
extension 119638.
Please note: This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 which represent
the company's expectations or beliefs concerning future events including,
without limitation, the company's plan to acquire and integrate Big Planet and
other Nu Skin Affiliates in North America including Canada, Mexico, and
Guatemala, Big Planet's plan to market Internet, telecommunications and other
technology products globally through direct marketing, fourth-quarter financial
results and revenue and earnings outlook . The company wishes to caution and
advise readers that these statements involve risks and uncertainties that could
cause actual results and outcomes for future periods to differ materially from
any forward-looking statements or views expressed herein. These risks and
uncertainties relate to, but are not limited to: the company's ability to
complete the planned acquisition and successfully integrate the acquired
businesses into the company's operations, Big Planet's ability to successfully
market technology products on a global basis through direct marketing,
regulatory changes affecting technology or the marketing of technology products,
changes in technology and market acceptance of certain technologies, currency
exchange rates related to the U.S. dollar, global economic and political
conditions, competitive conditions in the Internet market, and unanticipated
adjustments that could adversely affect anticipated fourth-quarter financial
results. The forward-looking statements contained herein are further qualified
by a detailed discussion of associated risks set forth in the documents filed by
the company with the Securities and Exchange Commission, including the company's
most recent Form 10-K and Form 10-Q.
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