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 PROVO, Utah, Oct. 11 /PRNewswire/ -- As Provo's Nu Skin International Inc. nears its 10th anniversary, it also seems to be nearing the end of several years of probes by state and federal investigators.
 So far, the investigators have found the company "squeaky clean," according to Utah Business Magazine.
 "Our problems with a few states and the Federal Trade Commission were caused by the actions of independent distributors who violated company policies, rather than by anything the company did," said Steven J. Lund, Nu Skin's executive vice president.
 On July 29, Utah Attorney General Jan Graham announced that her office was terminating an investigation of the company. In response, Lund said that the company "has always felt strongly that our business policies and practices are sound, consumer protective, and fully in compliance with all regulations."
 According to Michael Smith, the company's general legal counsel, when state and federal officials began their investigations of the company, Nu Skin's executives offered full cooperation. "No one was more interested in finding the violations than we were. We even offered to pay the investigation costs in order to avoid delays."
 Even though Nu Skin is one of Utah Valley's largest businesses and has been in operation for nearly 10 years, it remains something of an enigma to the community.
 At the opening of the firm's state-of-the-art East Bay distribution center, Fred Ball, president of the Salt Lake Area Chamber of Commerce pointed out that Nu Skin brings more income into the state than the entire ski industry.
 In fact, Nu Skin's $500 million in wholesale sales in 1991 matched the revenues of the entire tourist industry in Utah. The firm's executives report that they expect to double that figure in 1994.
 "Becoming a billion dollar company is a remarkable achievement in the business world," Lund pointed out. "Only a handful of companies have become this big, this fast, and our growth is still escalating."
 Despite the company's remarkable sales growth and its success in defending itself against its accusers, there are still those in the community who circulate rumors that the company is a "pyramid scheme," or that it is on the verge of failure, "Neither rumor is true," said Lund.
 However you measure it, Nu Skin is a considerable presence in the valley. Lund offered the following evidence that Nu Skin is a "well- managed, financially stable business."
 -- 1,000 people are employed in its headquarters and distribution center. The annual payroll in Utah is $16.8 million.
 -- There are more than 200,000 independent Nu Skin distributors in the United States and six foreign markets. Most distributors are part- time: homemakers who want to earn extra income; men and women with full-time jobs who promote Nu Skin products to help make a car payment or pay the mortgage; or they may be loyal product users who become distributors only so they can buy the products wholesale. But there are many who count on their Nu Skin business for a living and in fact do very well.
 -- Nu Skin is an international company, one of Utah's largest exporters, distributing its products in Canada, Hong Kong, Taiwan, Japan, Australia and New Zealand. State officials believe that Nu Skin will become Utah's major exporter to Japan.
 -- Nu Skin's East Bay distribution center has been recognized as one of the most technologically advanced in the nation. It covers a massive 200,000 square feet, about the size of four football fields and can ship 50,000 orders a day.
 -- The company operates a high-tech research laboratory at East Bay to maintain quality control and test new product ideas.
 -- Nu Skin doesn't borrow money, even for large-scale enterprises like the construction of the distribution center or to finance its recent expansion overseas This debt-free policy is uncharacteristic in today's business environment, but it gives the company impressive internal strength.
 Early Problems
 "We had some communications problems in the early days of our company," said Lund. "Our distributors were printing their own brochures, making their own videotapes and producing many of their own marketing aids. We were struggling so much with our explosive growth that we weren't able to supervise our distributors as closely as we should have. Although most of them were complying with company policies and using company-produced literature, a few were saying and doing things which raised questions with state and federal officials."
 Nu Skin often did not know about these materials until a government worker brought it to their attention, "We always took immediate action, even meeting personally with government agencies," said Lund. "But by then some damage had been done."
 Lund and other company officials say that all of that has changed. Nu Skin now requires all marketing materials produced by distributors to be reviewed by the corporation. In international markets where Nu Skin does business, a committee of local employees, distributors and attorneys review the content of each new marketing brochure or videotape.
 Regulations governing multilevel marketing and direct sales vary greatly from state to state. Many Nu Skin distributors were unaware of that fact and used the same materials wherever they did business. "We spend a lot of effort trying to monitor the differences in state laws and regulations and informing our distributors how they can comply," Lund said.
 Nu Skin's experience with the regulatory process has positioned the company to be a model for other multilevel marketing companies. In speeches given at the National Regulatory Symposium of the Direct Selling Association in Washington, D.C., the company reports that government officials said that current programs of Nu Skin should become the standard for the entire industry.
 Nu Skin lawyers Mike Smith and Rich Hartvigsen have spoken at the symposiums, giving other direct selling companies advice on achieving regulatory compliance and adequate consumer protection.
 Recently, Lund was elected to the board of directors of the Direct Sales Association (DSA), a national organization of more than 100 member companies who manufacture and distribute goods and services directly to consumers, and who monitor the sales industry to make sure its members comply with all laws and ethical standards.
 Coporate Charity
 To demonstrate it support of good causes, Nu Skin is involved in a number of community activities.
 -- In 1992, the company and its employees donated about $600,000 worth of products and cash to educational institutions and charities. Nu Skin supports the United Way of Utah County and has adopted the Salt Lake City-based Children's Miracle Network as its national charity to help support 163 hospitals for children in the United States and Canada. It also made substantial donations to aid victims of Hurricane Andrew in Florida, and offered disaster aid to Somalia, the Ukraine and others.
 -- Nu Skin supports a local public service advertising campaign to encourage parents to become involved with their children's education. "Studies show that children could learn 40 percent more if parents would insist on homework being done," said Ray Beckham, director of corporate communications.
 -- During last year's Olympic games, Nu Skin used its advertising time to encourage people to get involved in community organizations like the Red Cross, Boy Scouts, United Way and children's hospitals. The company urges its own employees to do this and many company executives take leading roles in charitable causes.
 -- Nu Skin expanded its sponsorship of America's Freedom Festival at Provo this year when festival organizers asked for help to upgrade the grand parade. In previous years the company sponsored tennis and other activities as part of the Freedom Festival.
 -- Nu Skin is interested in developing historic downtown Provo. For example, Beckham, managing director of corporate communications, is chairman of the newly organized Provo Downtown Alliance board of directors which has been asked by the mayor to revitalize interest in the downtown area.
 A Fast Rising Star
 Business writer Richard Poe wrote in Success Magazine: "Nu Skin has been a fast rising star in network marketing, They've received bad press because of problems with a few distributors and misunderstandings with regulatory agencies." Poe said that his magazine's research "concluded that Nu Skin's problems were no different from those faced by the finest of the Fortune 500 companies.
 "After I interviewed Blake Roney," he wrote. "I came away with the impression that Nu Skin is the finest example of a fast-growth multilevel marketing company and that their success is helping many people be more successful in business and in life."
 Nu Skin was incorporated in October 1984 with the idea of providing personal care products containing the best of science and nature. The slogan was: "All of the good, none of the bad."
 According to Lund, Nu Skin's products are formulated under exceptionally high standards and compare with the best products on the market.
 "We live by our slogan," he said. "And use only the finest ingredients in our products."
 Today the Nu Skin personal care products line contains over 60 products still faithful to that slogan. In 1992, the company introduced a new line of nutritional products called "Interior Design Nutritionals," which also conform with the company's slogan.
 None of the Nu Skin or Interior Design products are sold in retail stores. They are only available through a network of independent distributors. Catalogs and product information are available through these distributors and, after establishing contact with the distributor, retail customers can order directly from the company or from their distributor. Either way, the distributor gets the credit and the commissions for the sale.
 The Nu Skin building in downtown Provo was completed in June 1992 and serves as Nu Skin's international and domestic headquarters. (Satellite offices are maintained in all international markets). Its 10 stories comprise 126,000-square-feet of floor space. Tours are available every work day at 10 a.m. and 2 p.m. or by appointment.
 In response to criticism that the steel and glass structure doesn't fit in with Provo's older architecture, Lund replies, "We purposely chose a reflective surface for the building to demonstrate our company's place in the future and, at the same time, reflect the beautiful architecture of the Provo Tabernacle and other downtown buildings."
 Nu Skin is a privately held company. The six stockholders are Blake M. Roney, founder, president and chief executive officer; Steven J. Lund, executive vice president; Sandie N. Tillotson, vice president; Kirk V. Roney, vice president; Brooke B. Roney, vice president; and Keith R. Halls, vice president. (Tillotson was identified in a recent article in Working Woman as the eighth most-successful business woman in America).
 Other corporate executives who oversee the day-to-day operations of the company are: Max L. Pinegar, general manager and vice president of operations; Renn Patch, vice president of international operations and assistant general manager; Michael Smith, general counsel; Scott Schwerdt, vice president of distributor support; and Max Esplin, vice president of finance.
 -0- 10/11/93
 /NOTE TO EDITORS: This Nu Skin press release was published in the Utah County Journal on Oct. 5, 1993./
 /CONTACT: John Petersen, 801-345-2114/

CO: Nu Skin International Inc. ST: Utah IN: HEA SU:

NY-EH -- LAFNS1 -- 0513 10/11/93 07:32 EDT
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Date:Oct 11, 1993

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