UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

	OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________

	NU SKIN ENTERPRISES, INC. (Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)	011-12421 (Commission File No.)	87-0565309 (IRS Employer Identification No.)

	75 West Center Street Provo, UT 84601 (Address of principal executive offices) Registrant's telephone number, including area code: (801) 345-6100

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No

As of November 1, 2002, 35,634,967 shares of the Company's Class A common stock, $.001 par value per share, and 45,734,493 shares of the Company's Class B common stock, $.001 par value per share, were outstanding.

NU SKIN ENTERPRISES, INC.

2002 FORM 10-Q QUARTERLY REPORT – THIRD QUARTER

		PAGE
Part I.	Financial Information
	Item 1. Financial Statements:
	Consolidated Balance Sheets	1
	Consolidated Statements of Income	2
	Consolidated Statements of Cash Flows	3
	Notes to Consolidated Financial Statements	4
	Item 2. Management's Discussion and Analysis of Financial
	Condition and Results of Operations	9
	Item 3. Quantitative and Qualitative Disclosures about Market Risk	16
	Item 4. Controls and Procedures	17


Part II.	Other Information
	Item 1. Legal Proceedings	17
	Item 2. Changes in Securities	17
	Item 3. Defaults upon Senior Securities	17
	Item 4. Submission of Matters to a Vote of Security Holders	17
	Item 5. Other Information	17
	Item 6. Exhibits and Reports on Form 8-K	17
	Signatures	19
	Certifications	20

Nu Skin, Pharmanex, Big Planet, Nu Skin 180º and LifePak are trademarks of Nu Skin Enterprises, Inc. or its Subsidiaries.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NU SKIN ENTERPRISES, INC.
Consolidated Balance Sheets
(in thousands, except share amounts)

	September 30, 2002 (Unaudited)	December 31, 2001
ASSETS
Current assets
Cash and cash equivalents	$ 105,411	$ 75,923
Accounts receivable	22,454	19,318
Related parties receivable	1,154	12,961
Inventories, net	87,103	84,255
Prepaid expenses and other	29,945	45,404
	246,067	237,861

Property and equipment, net	54,075	57,355
Goodwill and other intangible assets, net (Note 7)	181,394	173,573
Other assets	113,462	113,563
Total assets	$ 594,998	$ 582,352
	––––––––––––	––––––––––––

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$ 15,104	$ 14,733
Accrued expenses	74,199	63,493
Related parties payable	144	7,122
	89,447	85,348

Long-term debt	79,731	73,718
Other liabilities	43,332	43,396
Total liabilities	212,510	202,462

Stockholders' equity
Class A common stock - 500,000,000 shares authorized,
$.001 par value, 35,698,676 and 33,615,230 shares
issued and outstanding	36	33
Class B common stock - 100,000,000 shares authorized,
$.001 par value, 45,740,952 and 48,849,040 shares
issued and outstanding	46	49
Additional paid-in capital	75,410	88,953
Accumulated other comprehensive loss	(65,492)	(49,485)
Retained earnings	372,488	340,340
	382,488	379,890
Total liabilities and stockholders' equity	$ 594,998	$ 582,352
	––––––––––––	––––––––––––

The accompanying notes are an integral part of these consolidated financial statements.

-1-

NU SKIN ENTERPRISES, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except per share amounts)

	Three Months Ended Sept. 30, 2002	Three Months Ended Sept. 30, 2001	Nine Months Ended Sept. 30, 2002	Nine Months Ended Sept. 30, 2001

Revenue	$ 252,864	$ 224,185	$ 713,867	$ 653,061
Cost of sales	49,689	45,861	142,402	131,688

Gross profit	203,175	178,324	571,465	521,373

Operating expenses
Distributor incentives	101,942	88,217	281,342	256,593
Selling, general and
administrative	75,284	70,454	213,276	211,921

Total operating expenses	177,226	158,671	494,618	468,514

Operating income	25,949	19,653	76,847	52,859
Other income (expense), net	(640)	245	(2,449)	5,399

Income before provision
for income taxes	25,309	19,898	74,398	58,258
Provision for income taxes	9,364	7,362	27,527	21,555

Net income	$ 15,945	$ 12,536	$ 46,871	$ 36,703
	–––––––––––	–––––––––––	–––––––––––	–––––––––––

Net income per share (Note 2):
Basic	$ ..20	$ ..15	$ ..57	$ ..44
Diluted	$ ..19	$ ..15	$ ..56	$ ..44

Weighted average common shares outstanding:
Basic	81,459	82,846	81,875	83,465
Diluted	83,028	83,498	83,301	84,105

The accompanying notes are an integral part of these consolidated financial statements.

-2-

NU SKIN ENTERPRISES, INC.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)

	Nine Months Ended September 30, 2002	Nine Months Ended September 30, 2001
Cash flows from operating activities:
Net income	$ 46,871	$ 36,703
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization	16,314	23,609
Amortization of deferred compensation	—	725
Gain on sale	(1,328)	(2,328)
Changes in operating assets and liabilities:
Accounts receivable	(3,136)	(4,235)
Related parties receivable	5,379	409
Inventories, net	(2,848)	(1,062)
Prepaid expenses and other	4,859	(1,602)
Other assets	(2,414)	3,344
Accounts payable	371	1,848
Accrued expenses	10,706	(7,297)
Related parties payable	(6,978)	(2,022)
Other liabilities	(64)	1,453

Net cash provided by operating activities	67,732	49,545

Cash flows from investing activities:
Purchase of property and equipment	(13,295)	(11,612)
Purchase of long-term asset (Note 10)	(6,473)	—

Net cash used in investing activities	(19,768)	(11,612)

Cash flows from financing activities:
Exercise of distributor and employee stock options	658	35
Payments of cash dividends	(14,723)	(12,304)
Repurchase of shares of common stock (Note 5)	(8,709)	(14,259)

Net cash used in financing activities	(22,774)	(26,528)

Effect of exchange rate changes on cash	4,298	(9,530)

Net increase in cash and cash equivalents	29,488	1,875

Cash and cash equivalents, beginning of period	75,923	63,996

Cash and cash equivalents, end of period	$ 105,411	$ 65,871
	––––––––––––	––––––––––––

The accompanying notes are an integral part of these consolidated financial statements.

-3-

NU SKIN ENTERPRISES, INC.
Notes to Consolidated Financial Statements

1. THE COMPANY

Nu Skin Enterprises, Inc. (the “Company”) is a leading, global direct selling company that develops and distributes premium-quality, innovative personal care products and nutritional supplements through a large network of independent distributors. The Company also distributes technology and telecommunications products and services through its distributors. The Company reports revenue from four geographic regions: North Asia, which consists of Japan and South Korea; Southeast Asia, which consists of Australia, Hong Kong (including Macau), Malaysia, New Zealand, China, the Philippines, Singapore, Taiwan and Thailand; North America, which consists of the United States and Canada; and Other Markets, which consists of the Company’s markets in Brazil, Europe, Guatemala and Mexico (the Company’s subsidiaries operating in these countries are collectively referred to as the “Subsidiaries”).

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited consolidated financial statements include the accounts of the Company and the Subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Company’s financial information as of September 30, 2002, and for the three and nine-month periods ended September 30, 2002 and 2001. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the fiscal year. For further information, refer to the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.

2. NET INCOME PER SHARE

Net income per share is computed based on the weighted average number of common shares outstanding during the periods presented. Additionally, diluted earnings per share data give effect to all potentially dilutive common shares that were outstanding during the periods presented.

3. DIVIDENDS PER SHARE

In July 2002, the board of directors declared a quarterly cash dividend of $0.06 per share for all classes of common stock. This quarterly cash dividend of approximately $4.9 million was paid on September 25, 2002, to stockholders of record on September 6, 2002.

4. DERIVATIVE FINANCIAL INSTRUMENTS

The Company recognizes all derivatives as either assets or liabilities, with the instruments measured at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on the intended use of the derivative and its resulting designation.

The Company’s Subsidiaries enter into significant transactions with each other and with third parties which may not be denominated in the respective Subsidiary’s functional currency. The Company seeks to reduce its exposure to fluctuations in foreign exchange rates through the use of foreign currency exchange contracts and through certain intercompany loans of foreign currency. The Company does not use such derivative financial instruments for trading or

-4-

NU SKIN ENTERPRISES, INC.
Notes to Consolidated Financial Statements

speculative purposes. The Company regularly monitors its foreign currency risks and periodically takes measures to reduce the impact of foreign exchange fluctuations on the Company’s operating results. Gains and losses on certain intercompany loans of foreign currency are recorded as other income or expense in the consolidated statements of income.

At September 30, 2002 and December 31, 2001, the Company held forward contracts designated as foreign currency cash flow hedges with notional amounts totaling approximately $92.0 million and $55.0 million, respectively, to hedge foreign currency intercompany transactions. All such contracts were denominated in Japanese yen. The net gains on foreign currency cash flow hedges recorded in current earnings were $0.8 million and $4.6 million for the three and nine-month periods ended September 30, 2002, respectively, and were $1.1 million and $4.7 million for the three and nine-month periods ended September 30, 2001, respectively. Those contracts held at September 30, 2002 have maturities through June 2003 and, accordingly, all unrealized gains on foreign currency cash flow hedges included in other comprehensive income at September 30, 2002 will be recognized in current earnings over the next twelve-month period.

5. REPURCHASE OF COMMON STOCK

During the three-month periods ended September 30, 2002 and 2001, the Company repurchased approximately 150,000 and 480,000 shares of Class A common stock, respectively, for approximately $1.7 million and $3.5 million, respectively. During the nine-month periods ended September 30, 2002 and 2001, the Company repurchased approximately 752,000 and 1,977,000 shares of Class A common stock, respectively, for approximately $8.7 million and $14.2 million, respectively.

6. COMPREHENSIVE INCOME

The components of comprehensive income, net of related tax, for the three and nine-month periods ended September 30, 2002 and 2001, were as follows (in thousands):

	Three Months Ended Sept. 30, 2002		Three Months Ended Sept. 30, 2001		Nine Months Ended Sept. 30, 2002		Nine Months Ended Sept. 30, 2001
Net income	$ 15,945		$ 12,536		$ 46,871		$ 36,703

Other comprehensive income, net of tax:
Foreign currency translation adjustments	(1,225	)	(5,307	)	(8,799	)	(14,111	)
Net unrealized gains (losses)
on foreign currency cash flow hedges	1,586		(418	)	(4,347	)	3,116
Net gain reclassified into current earnings	(506	)	(712	)	(2,861	)	(3,001	)
Comprehensive income	$ 15,800		$ 6,099		$ 30,864		$ 22,707
	–––––––––––		–––––––––––		–––––––––––		–––––––––––

-5-

NU SKIN ENTERPRISES, INC.
Notes to Consolidated Financial Statements

7. GOODWILL AND OTHER INTANGIBLE ASSETS

The Company adopted Statement of Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets (“SFAS 142”) effective January 1, 2002. Under the new standard, goodwill and indefinite life intangible assets are no longer amortized but are subject to annual impairment tests. Other intangible assets with finite lives, such as developed technology, will continue to be amortized over their useful lives. The transitional impairment tests were completed and did not result in an impairment charge.

In accordance with SFAS 142, prior period amounts were not restated. A reconciliation of the previously reported net income and earnings per share for the three and nine-month periods ended September 30, 2001, to the amounts adjusted for the reduction of amortization expense, net of the related income tax effect, is as follows:

	Three Months Ended September 30, 2001
	Net Income (in thousands)	Basic EPS	Diluted EPS

Reported	$ 12,536	$ ..15	$ ..15
Add: amortization adjustment	1,660	..02	..02
Adjusted	$ 14,196	$ ..17	$ ..17
	–––––––––––––	–––––––––––––	–––––––––––––

	Nine Months Ended September 30, 2001
	Net Income (in thousands)	Basic EPS	Diluted EPS

Reported	$ 36,703	$ ..44	$ ..44
Add: amortization adjustment	5,162	..06	..06
Adjusted	$ 41,865	$ ..50	$ ..50
	–––––––––––––	–––––––––––––	–––––––––––––

Goodwill and other intangible assets as of September 30, 2002 consists of the following (in thousands):

	Goodwill and other indefinite life intangible assets:				Carrying Amount
	Goodwill				$ 117,736
	Trademarks and tradenames				22,391
	Marketing rights				12,266
	Other				4,081
					$ 156,474
					–––––––––––––

FORM 10-Q

NU SKIN ENTERPRISES, INC.

2002 FORM 10-Q QUARTERLY REPORT – THIRD QUARTER

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