Good day, ladies and gentlemen and welcome to the Fourth Quarter 2012 Nu Skin Enterprises Earnings Conference Call. My name is Kim and I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session toward the end of the conference. If at any time during the call, you require assistance, please press star zero and an operator will be happy to assist you. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Mr. Scott Pond, Director of Investor Relations. Please, proceed, sir.

Thanks, Kim. We appreciate everyone joining us today. Today in the room are Truman Hunt, President and Chief Executive Officer; Ritch Wood, Chief Financial Officer; Dan Chard, President of Global Sales and Operations; and Joe Chang, Chief Scientific Officer. Just a reminder, during the call, comments may be made that includes forward-looking statements. These statements involve risks and uncertainties and actual results may differ materially from those discussed or anticipated. We encourage you to refer to today’s earnings release and our SEC filings for a complete discussion of these risks. Also during this call certain financial numbers may be discussed that differ from the comparable numbers obtained in our financial statements. We believe these non-GAAP financial numbers assist management and investors in evaluating and comparing period-to-period results in a more meaningful and consistent manner. And I’ll turn the time over to Truman.

Thanks, Scott. Good morning, everyone. We appreciate you joining us today. As noted in our release this morning, Nu Skin Enterprises recorded another record quarter with revenue of $588 million. We’re very pleased with our fourth quarter results given that we were going up against an aggressive comp [ph], with about $90 million in sales in connection with our 2011 fourth quarter distributor convention. And with a strong fourth we reached a new milestone with actual revenue surpassing $2 billion for the first time. Our annual revenue of $2.17 billion represents the 24% increase year-over-year and is our fifth consecutive record year of revenue. On the earnings front, we came in and have expectations with earnings per share of $0.97 which is 27% improvement over the prior year. This increase our annual EPS to $3.52 which is a 48% increase or 31% when excluding charges we took in the prior year due our [inaudible] customs case. These results speak to the strength and momentum of our business. As noted in our press release this morning, we also remained optimistic about 2013 and have raised our guidance for the full year which Chris will talk more about in a minute. Suffice it to say that 2012 was a terrific year. We ended with the strongest quarter in our 28 year history, our key metrics continued to be strong and overall, we’re very bullish about our ability to sustain growth going forward. Now as you know, there’s been a lot of noise about direct selling over the past year and some of you may have wondered if that noise has had any impact on our results. I’m pleased to say that we continue to see strong trends around the world and we have continued confidence in the model and our expectations for…

Thank you, Truman, and hello to everyone there. We’re proud to report another very strong year improving in all of our financial metrics; revenue, profit, operating margin and balance sheet strength and stability. And we really are excited about a terrific year coming in to 2013. So first of all, let me address our guidance for 2013. Today, we raised our guidance for both revenue and for earnings per share for the year. There are three primary factors impacting our guidance for which I’d like to give a little bit more detail. First of all, we see growing optimism from our region and market management teams relating to the plans of weight management launch in back half of the year. Our initial guidance for this launch was to generate somewhere around $250 million to $300 million in sales during the limited time offering of the product which would happen in September and October. Today, I’m increasing our expectation of the launch of this weight management system by $15 million, now expecting limited-time offer sales to achieve $300 million to $350 million. Second, the strength of our business in Japan, Korea, Greater China and the US during this fourth quarter, including the positive trends and the number of sales leaders in this key market has encouraged me to move to the high-end of the range of our guidance or slightly above the high-end of the range of the guidance that we provided for each of these markets and regions back in November. This change adds another $50 million revenue guidance. Together with the strength of the core business and the higher expectation of the product launch, today, we’re raising our increasing revenue or increasing revenue guidance by $100 million for an increase of 4% to our initial guidance that was provided…

Ladies and gentlemen, if you wish to ask a question, please press star followed by one, on your touch tone telephone. If your question has been answered, or you wish to withdraw your question, please press star followed by two. Your first question comes from the line of Olivia Tong with Bank of America Merrill Lynch. Please proceed. Olivia Tong – BofA Merrill Lynch: First question is around Japan and the FX impact, just broadly speaking, you gave the FX impact or the update on the top line, can you give us a sense for what impact it could have on the bottom line including any hedges you have in place, and then also the Yen-denominated debt? Thank you.

You bet. Yes, I have not factored in gains by the way for the Yen-denominated debt. So by the way, in the first quarter, if the Yen were to remain in kind of a 93 range, we’d probably pick up about a $3 million to $4 million benefit in other income from the translation of our debt. In terms of the overall operating income impact, it will – the $72 impact has about a 10% or sorry, $0.10 negative impact to earnings per share. Olivia Tong – BofA Merrill Lynch: Got it. Thank you. And then there’s obviously been a lot of noise in the market place since the last time you guys held – since the Q3 call. Has the recent noise in the market impacted any of your distributors? What are they telling you? I mean certainly, the Q4 distributor numbers don’t look like it’s impacted them, but then again, a lot of the noise really picked up sort of late in the quarter. Thanks.

Yes, as I indicated in my remarks, Olivia, we have been very encouraged by the lack of impact on our business results as a result of the market noise. I mean I think our distributors are seeing through the intensions of short sellers, and they’re just climbing ahead, in fact as I indicated, I never sensed in 10 years that I think – as much energy and enthusiasm as there is in the field right now. And that’s not just in the US, it’s really global. And so we’re plowing through it, and have not seen business disruption. Olivia Tong – BofA Merrill Lynch: Thanks.

Your next question comes from the line of Tim Ramsey with D.A. Davidson. Please proceed. Tim Ramsey – D.A. Davidson: Hi, good morning. Thanks a lot. Ritch, you mentioned that with a greater LTO in the second half, there would be higher selling expense. I just wondered if you would kind of bracket that or give us a sense of how that tends to work out on a percentage of sale spaces?

You bet, Tim. Generally our core compensation plan pays right around let’s say 42% or so, and then we have another 1% or so that’s associated with these sort of trips and so forth. When we have LPOs, essentially, the average volume per sales liter goes up, and so the pay out on the compensation plan also goes up. Depending on the size of the LTO, and what percentage that LTO represents of our overall sales for the quarter, it will push our selling expense higher. So if I were to run some really rough numbers, let’s say, that our LTO accounts for somewhere around 30% to 40% of our fourth quarter sales, we would expect that our payout would do somewhere from 44% to 46% or 46.5% as the LTO becomes a bigger percentage of our sales, it will push the selling expense up. And generally, that’s just in the month or so that we have the LTO, and then it goes right back to kind of where the core compensation plan pays out. The other thing that has impacted us is that we are, well, two things, we have more sales leaders qualifying for trip incentives which has pushed that number up slightly. In managerial [ph] recruit call, we announced a couple of years ago, or our China management team talked about I think in a investor day that we had, a special incentive that we had in greater China, that if our greater China business achieved $1 billion, there was going to be a special payout to sales leadership qualified along the way. And we are accruing towards that as the business looks more and more likely to hit $1 billion in 2014 and possibly even sooner than that. So that is also pushing our selling expense up slightly. The idea is that we offset the vast majority of that through the efficiencies we gain in our G&A line. And so generally, our overall margin should continue to improve as we go forward. Tim Ramsey – D.A. Davidson: So just the bottom line that is, it sounds like maybe there’s 60 or 70 basis points in the second half that would be incremental to the selling expense?

I have our selling expense running at around 45.2 to 45.3 for the year, but again, that will be dependent somewhat upon the size of the LTO. Tim Ramsey – D.A. Davidson: Okay, great. And I’m surprised that given the shape of the business and the mix of the business, tax rate guidance, perhaps seems conservative, I think you shared that before, but thoughts on why tax rate wouldn’t go down?

I think there’s some upside to it as well on that number. Generally, our plans for cash this year would be payout a higher dividend which we’ve announced, buy back stock, we’ve got our buildings that we’re putting in, that we’re not planning to use our balance sheet for, we’re paying out of cash flow for those. So most of those cash ends up coming back to the US. If we determine to part cash offshore, which we could, particularly in China, with our building there, and so there is an opportunity to bring our tax rate down below the 35% rate that I put into my guidance. Tim Ramsey – D.A. Davidson: Great. Thanks so much.

You bet.

Our next question comes from the line of Faiza Alwy of Deutsche Bank. Please proceed. Faiza Alwy – Deutsche Bank: Yes, hi. How are you?

Hi, Faiza. Good, thanks. Faiza Alwy – Deutsche Bank: Hi. So I guess I wanted to one, just get a little bit more detail on the weight management LTO, and how it’s going to be broken down between the quarters and the regions. So is it going to be a global roll out all at the same time, or should we model it, should it be staggered across the two quarters?

It will be staggered across the two quarters and we’re still waiting for final product registration confirmation and so forth. The way it looks today is that greater China will launch in September, possibly south east Asia, a couple of markets in September, some in October, but the whole world will LTO the product between September and October. And right now, I would kind of forecast greater China in Q3, and the rest of the markets in Q4, that may adjust slightly, but that’s generally the way we’re looking at it. Faiza Alwy – Deutsche Bank: Okay, great. And then just if you have any updates on capital allocation plan. I know we’ve talked about potentially doing an accelerated share repurchase or levering up the balance sheet a little bit, so if you have any updated thoughts on that, that would be great.

These are always questions that we work through our board of directors with, and continue to monitor and analyze. Right now, we’re generating strong cash flow, so we’re using cash flow obviously to buy back shares. We bought back $200 million of stock last year, that was 7% of our outstanding shares. We think that’s a great use of our cash. We haven’t to-date, used our balance sheet, it’s always an option that we continue to consider with our board, but we’ll evaluate that as we go forward. Faiza Alwy – Deutsche Bank: All right. Thank you.

You bet.

Our next question comes from the line of Scott Van Winkle of Canaccord Genuity. Please proceed. Scott Van Winkle – Canaccord Genuity: Thanks. Congrats, guys. Ritch, what was the actual interest expense in that fourth quarter?

Let me look real quick. About 1.5 million, I believe. 1.4 million. Scott Van Winkle – Canaccord Genuity: 1.4 million. And so the remainder of the other income, was the end going your way towards the end of the quarter?

Yes. By the end of December, it had moved, certainly not to where it’s at today, and in fact I can pull that end rate, but there’s about a $3.7 million gain in FX for the quarter. Scott Van Winkle – Canaccord Genuity: And as you go into the LTO for weight management, when do the numbers kind of come to you? You’re going to know how big this is, either from the standpoint of executive distributors of indications, when does visibility really become clear on how big it gets?

You know, Scott, visibility really clarifies on a daily and a weekly basis. And as our management teams around the world, sales leaders, and as they work with their groups, the feedback we get really just kind of clarifies visibility on the launch going forward. And we continue to believe that the $300 million to $350 million projection we noted this morning, is still conservative.

Okay. I’d just highlight too that we’re having to build inventory starting today, Scott. So we continue to get those forecast in, and updated regularly, and we’re building inventory for a launch that’s half a billion dollars to support that sort of level if it goes to that high. And by the way, the Yen ended at 87 in December. Scott Van Winkle – Canaccord Genuity: Okay. And then last on Japan, you talked about it, obviously, been a big, strong fourth quarter, if you kind of exclude and LTO in Q4 and what’s coming with the big product launch later this year, what do you kind of see underlying kind of the day to day business in that market?

Yes. The market is still – we wouldn’t characterize the market as being extremely healthy, but we are encouraged with underlying trends in our active numbers and in our sales leader numbers. And we are starting to see the fundamentals of the business turn positive there which is why we’re speaking optimistically about continued growth in Japan here in 2013. Scott Van Winkle – Canaccord Genuity: Great. Thank you, much.

Our next question comes from the line of Frank Kema [ph], of Sidoti. Please proceed. Frank Kema – Sidoti: Good morning. Most of my questions have been answered, but I was wondering if you just could give us a little more detail on, in particular, it was obviously a very strong quarter there, and in light of the macro environment, how did you achieve that?

The macro environment where? Frank Kema – Sidoti: In Europe being kind of weak from economic standpoint.

Europe? You know, we turned the corner on Europe a few years ago where we finally, after many years of hard work, frankly, reached critical mass with sales leadership in that market, it is now really established and effective. And I really think it’s been that, along with implementation of the product launch process that we’ve talked about this morning that have enabled that market to continue to growth with strong rates despite economic turbulence in the market. And frankly, we’re still small too, I mean we have a lot of room to run before we really reach anywhere near our potential in the market. So we’re still small, happy with our progress, sales leaders maturing, and aligning behind the product launch process, all of those things add up to 20% plus growth in a market that is otherwise difficult for many consumer product companies. Frank Kema – Sidoti: Right. Can you remind us what countries you’re most exposed to in Europe?

In order of size, France, in Germany, are our largest markets. In eastern Europe, Hungary is a significant market, we’re growing nicely, and Russia which is becoming more and more meaningful, and then in Scandinavia, Demark and Norway, they’re both very good markets for us. Frank Kema – Sidoti: Great. Okay, that’s all I had. Thanks.

Our next question comes from the line of John Faucher of JP Morgan. Please proceed. John Faucher – JP Morgan: Thanks. Two questions. First off, Ritch, can you talk about, you talked about sort of staying a little uncommitted in terms of the balance sheet opportunity, can you talk about what you have built into the model from a share repurchase standpoint already? And then secondly, if you look at the rollout of the weight loss product particularly in Asia, what’s the competitive advantage that you guys have there, and how well is the market developed from a competitive standpoint? Thanks.

Yes, on the balance sheet, use of balance sheet, I have our share count for the year at 61 million which is reflective of where we’re at, at the end of the fourth quarter. So I don’t have any net benefit showing up for the year in use of our balance sheet, which is always a possibility, but again, something we’re working with the board on.

With respect to competitive profile in Asia, I mean Asia is obviously a bit place and competitive profile really varies from market to market, some markets single levels are excelling models, do better, and in other markets, multi level models do better. Generally, we compete there on the same factors we compete everywhere else. There’s a healthy appetite for high quality, western branded consumer products. Frankly, the push back that we give from our management teams in many of the Asian environment is that our products aren’t priced high enough in line with other premium skin care products in particular. I think one of the things that sets us apart, really, throughout the whole Asia region is that we have very mature and very experienced management teams who have been with us for a long time, they are locally, they’re natives to the markets that they manage, certainly the case in greater China, in north Asia and south east Asia. They have been with us for a long time, they know who are, they know what we’re trying to do, they’re aligned behind everything that we’ve talked about this morning. And we enjoy very strong field leadership, great sales leaders who run our businesses very effectively, and it’s just enabling us to really hit stride in a region that still has a tremendous potential and lots of room for us to continue to grow. When we look at our competitors’ success, in the markets such as mainland China, and look at companies who are doing in the range of $4 billion to $5 billion a year in sales, and we compete head to head with them in other Asian environments such as Taiwan and Hong Kong, Singapore, other Chinese markets. It’s hard for us to not be enthusiastic about our potential in mainland China, and in other Asian environments. We’ve been far more successful in Korea, than many direct sellers have been. Japan is clearly a multi level market. Single level companies have not done well there, whereas multi level marketing companies have done well. And all of those things add up to really give us tremendous confidence in the fact that these Asian markets are going to continue to grow. John Faucher – JP Morgan: Okay. And specifically on the weight loss product, what’s the competitive environment there and what gives you guys the right to succeed in that category?

Well, as you know, John, we’re already succeeding in the category in south east Asia, and in Taiwan and in Hong Kong too where we have very successful weight management offerings. The thing that’s going to distinguish us from everything else in the market place, is the fact that we’re applying these science to category. So for the first time, the science of GN [ph] Expression will be built into a product formulation that we think will yield good results for consumers. And ultimately, when someone looses weight on a product and manages their weight effectively on a product, they become a walking sales ad. And they’re the best brochure. And that’s what we’re seeing right now with the success of our TRA [ph] weight management system in south east Asia and in Hong Kong and Taiwan. So the addition of a new ageLOC system is just going to add fuel to that fire. John Faucher – JP Morgan: Thanks.

Our final question comes from the line of Mark Astrachan of Stifel. Please proceed. Mark Astrachan – Stifel Nicolaus: Yes, thanks, guys. Just following up on the last question. How do you think about the weight management product cannibalization broadly, in terms of just the overall products more on the nutrition side, and then on personal care side, and then specifically within the 300 million to 350 million that you talked about in terms of contribution in September and October.

Yes, I mean as we shine the light on a particular new product, we’re always going to see the attention shift that direction a little bit which is not at all surprising. And so we would expect to see some modest cannibalization of other products as we launch the new weight management system, but one of the benefits of our new approach to product launches is the fact that the LTO volume is far more incremental in nature than a normal product launch has been in the past. And so where as in the past, say 100 million product launch might have been 70% cannibalistic, the new approach has cut that in half, so maybe it’s only 30% cannibalizing of other sales. And so that’s part of the beauty of the LTO approach market that it’s been far more incremental than just a standard, here’s a product on the market forever type of launch model. Mark Astrachan – Stifel Nicolaus: Okay. And then looking at over the next two or three years, maybe this is a question for Ritch. Where do you think selling expenses as a percentage of sales end up? And maybe broader, from an operating margin standpoint, how do you think about that as well over the next two to three years?

Yes, great questions, Mark. I think selling expense again, will be somewhat dependent upon the percentage of our sales each year coming from the LTO sales. I would generally forecast it out to hold in the 45% range. And that would really forecast out very strong growth into our future model. If our top line growth rate comes down a little bit, then selling expense is going to come down as well. So the nice thing about top line continuing to be strong even with selling expense being higher at 455 or so, we should make that up on our G&A line. Our commitment has been to really get to this level, and then we shifted our focus a little bit to invest back in the business in a lot of these top line growth areas that we believe will sustain a high level of growth for extended periods of time in China, investing in Latin America, some of these other concepts we’re looking at. So I think our commitment going forward is to maintain our operating margin where it’s at, and trying to increase it by approximately 20 to 30 basis points a year, but we’ll make those evaluations each year as we look at the opportunities to expand the top line and continue to drive more earnings. I mean the bottom line is, what we’re really shooting for, is to increase our overall earnings and cash flow into the company, and we try and evaluate and balance that between investing in the business and just improving operating margin. So I hope that answers your question, but that’s the way we think about the business. Mark Astrachan – Stifel Nicolaus: Yes, that’s helpful. And then just lastly, the weight management gross margins, how are they on a relative basis?

Yes, mostly similar to our other nutritional supplements. It should not be a drain or a drag to our overall. The only pressure we’ll get from our gross margin as we look at it today, is the currency impact. We have a negative impact from currency, it may impact our gross margin slightly. Mark Astrachan – Stifel Nicolaus: Thanks.

You bet.

Thank you for joining us this morning, everyone. And we appreciate your attention on what we consider to be one of the world’s great businesses. I wanted to conclude with just one thought that has been in my mind over the course of the last nine months that the spotlight has been shined on the direct selling channels. There are skeptics out there who want to argue that direct selling companies, the directional model is less sustainable than other types of business models. I would invite those skeptics to take a look at our November investor day presentation where we reviewed with the investment community our revenue history over the past 20 years, or 28 years since we started. I would invite those skeptics to show me where it becomes apparent that our model isn’t sustainable. The reality is, the direct selling is still a drop in the bucket of total consumers spending. And to me, as I have dived into this channel and into this model, I would argue that direct selling is as sustainable as any other business model and even more so. I look at even here at our home town where Nu Skin started to do business in the mid 80s. We worked alongside high flying companies like Work [ph] Perfect or like Novel [ph], and then along came Geneva’s Feel [ph] which was a local still new, but enjoyed the moment in the sun. And these companies enjoyed at those moments in time with tremendous profile and tremendous credibility. And yet I ask myself where are they now? Well, two of them are out of business completely, and one of them is essentially irrelevant, while Nu Skin continues to put up record year after record year. So in reality, it’s really difficult for any business to really project a future out beyond five years because the world changes a lot in 10 or 20 year period of time. So I don’t know where Nu Skin Enterprises will be 20 years from now because it will be a different world. But I do have a high level of confidence that five years from now, we’re going to continue to celebrate record years as we work to achieve our vision of becoming a $5 billion company in that period of time. So thank you for joining us. And we look forward to answering any other questions you may have off line.

Ladies and gentlemen, this concludes the presentation. And you may now disconnect. Have a great day.