Market Overview - The global supplement market is large and growing, estimated at $182.7 billion in 2023 and projected to reach $214 billion in 2026 [7] - Asia and Oceania represent 34% of the global supplement sales, followed by North America at 36% and Europe and the Middle East at 19% in 2023 [8] Company Performance and Strategy - Nature's Sunshine operates in 40 markets globally [6] - Asia accounts for 45% of the company's sales, North America 31%, and Europe 18% in 2023 [12] - The company's three global growth strategies are Digital First, Field Energy, and Brand Power [28] - In North America, Subscribe & Thrive represents over 25% of orders, while in Japan, it accounts for over 45% [40] - Taiwan and Japan have experienced strong revenue growth, with Taiwan showing a CAGR of 141% and Japan 23% [45] Financials - The company's revenue was $445.3 million in 2023 [69] - Adjusted EBITDA was $40.4 million in 2022 and $49.4 million in 2023 [69] - The company anticipates net sales between $443 million and $448 million, and adjusted EBITDA between $40 million and $42 million for the full year 2024 [76, 77] - $84 million in shares were repurchased at an average cost of $1656 per share in the first nine months of 2024 [67]

Company Overview - Nature's Sunshine is a global natural health and wellness company operating in 40 markets with 50+ years of experience [6] - The company has a robust product portfolio of 800+ products across six different categories [6] - The company utilizes a fully integrated model with in-house R&D, procurement, testing, and manufacturing capabilities [6] Market and Sales - The company operates in the steadily growing global supplement market, which is projected to reach $1924 billion in 2024 and $2140 billion in 2026 [7] - Asia accounts for 45% of the company's 2023 sales, followed by North America at 31% and Europe at 18% [12] - In North America, the revenue distribution is estimated as follows: Specialty Retail 30%, Health Practitioners 25%, Direct-to-Consumer 25%, and Other 20% [22] Growth Strategies - The company's three global growth strategies are Digital First, Field Energy, and Brand Power [28] - The company aims to grow North America Digital sales to be 50%+ of the business [33] - The Subscribe & Thrive program represents 25%+ of orders in North America and 45%+ of orders in Japan [40] Financial Performance - The company's revenue was $4453 million in 2023 [69] - The company's adjusted EBITDA was $494 million in 2023 [69] - The company's full year 2024 guidance projects net sales of $443 million - $448 million and adjusted EBITDA of $40 million - $42 million [76, 77]

Core Viewpoint - Nature's Sunshine Products, Inc. is conducting a secondary public offering of up to 2,854,607 shares at a price of $12.00 per share, with the offering expected to close on June 27, 2025 [1][2]. Group 1: Offering Details - The Selling Stockholder, Fosun Pharma USA, Inc., will receive all net proceeds from the offering, while Nature's Sunshine will not sell any shares or receive any proceeds [2]. - The Company has agreed to potentially purchase up to $15.0 million of its common stock from the underwriters as part of its share repurchase program, but there is no guarantee that any shares will be purchased [3]. - D.A. Davidson & Co. is acting as the sole book-running manager for the offering, which is made under a shelf registration statement filed with the SEC [4]. Group 2: Company Background - Nature's Sunshine Products is a leading manufacturer of herbal and nutritional supplements, distributing products in over 40 countries and ensuring high quality through its own manufacturing facilities [8].

Core Viewpoint - Nature's Sunshine Products, Inc. is launching a secondary public offering of up to 2,854,607 shares of its common stock, which will be sold by Fosun Pharma USA, Inc. as the selling stockholder [1][2]. Group 1: Offering Details - The selling stockholder will receive all net proceeds from the offering, while Nature's Sunshine will not sell any shares or receive any proceeds [2]. - The company has agreed to potentially purchase up to $15.0 million of its common stock from the underwriters as part of its share repurchase program, but there is no guarantee that any shares will be purchased [3]. - D.A. Davidson & Co. is acting as the sole book-running manager for the offering, which is being conducted under a shelf registration statement filed with the SEC [4]. Group 2: Company Background - Nature's Sunshine Products is a leading manufacturer of herbal and nutritional supplements, marketing products in over 40 countries and ensuring high quality through its own manufacturing facilities [8].

Core Viewpoint - Nature's Sunshine Products, Inc. has renewed its scholarship program in partnership with the David Eccles School of Business to support economically disadvantaged students, pledging $200,000 over four years for full-ride scholarships [1][2][3] Group 1: Scholarship Details - The scholarship will provide full-ride support for deserving students, particularly those who are first-generation college students [2][6] - Nature's Sunshine will collaborate with the Opportunity Scholars program, which offers mentorship, tutoring, academic advising, and networking opportunities for scholarship recipients [5][6] - The Nature's Sunshine Scholarship was first awarded in the 2021-2022 academic year and will continue through the 2027-2028 academic year [9] Group 2: Company Commitment and Impact - Nature's Sunshine emphasizes its commitment to health and wellness by supporting education in disadvantaged communities, aiming to empower individuals to improve their lives [3][8] - The scholarship initiative is part of the Impact Foundation, which arose from the company's desire to address the needs of diverse individuals following significant social events in 2020 [8] - The partnership with the Eccles School aims to create transformative educational opportunities that benefit not only the students but also their families and communities [6][8] Group 3: Institutional Background - The David Eccles School of Business provides a world-class business education with a focus on real-world applications, educating over 6,000 students annually [11] - The school manages the scholarship application and award process, ensuring that students have access to various support resources [5][11]

Core Viewpoint - Nature's Sunshine Products, Inc. is undergoing a leadership transition as Terrence Moorehead steps down as President and CEO, with a search for his successor already initiated [3][4][5]. Group 1: Leadership Transition - Terrence Moorehead has notified the Board of Directors of his decision to resign as President and CEO, effective upon the appointment of a successor [3]. - The Board has engaged a nationally recognized executive search firm to assist in identifying the next President and CEO [4]. - Moorehead expressed pride in the company's accomplishments during his nearly seven-year tenure, highlighting improvements in competitiveness and a strong foundation for future growth [5]. Group 2: Company Outlook - Nature's Sunshine reaffirmed its previously announced outlook for full year 2025 net sales and adjusted EBITDA, indicating confidence in its financial performance despite the leadership change [5]. - The company is well-positioned to capitalize on growth opportunities in the market, supported by a robust product portfolio and upgraded digital capabilities [5]. Group 3: Company Background - Nature's Sunshine Products is a leading manufacturer of herbal and nutritional supplements, operating in over 40 countries and ensuring high quality through its state-of-the-art manufacturing facilities [6].

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was reported at $113 million, a 5% increase compared to the prior year, or $115 million on a constant currency basis [9][17] - Adjusted EBITDA increased by 20% to $11 million compared to $9.2 million in the previous year [9][24] - Gross margin improved by 90 basis points to 72.1% year-over-year, reflecting effective cost management and gross margin initiatives [21][24] - GAAP net income attributable to common shareholders was $4.7 million, or $0.25 per diluted share, compared to $2.3 million, or $0.12 per diluted share in the prior year [24] Business Line Data and Key Metrics Changes - In Asia Pacific, revenue grew by 10% on a local currency basis, with standout performances in Japan (24% growth) and Taiwan (18% growth) [10][18] - Europe saw a 9% increase in sales on a constant currency basis, driven by strong performance in Central Europe, which grew by 16% [11][19] - North America experienced a 4% decline in sales, although there were signs of sequential order growth for three consecutive quarters [11][20] Market Data and Key Metrics Changes - Digital sales in Q1 increased by 19%, significantly outpacing the supplement industry's digital growth rate [12][20] - The Subscribe and Thrive Autoship program accounted for approximately 26% of total sales and about 45% of direct-to-consumer sales [12] Company Strategy and Development Direction - The company is focusing on minimizing tariff exposure by increasing raw ingredient inventory and enforcing pricing contracts with suppliers [6][9] - A commitment to sustainability was highlighted, with goals to reduce carbon emissions by 50% and achieve zero waste certification at U.S. distribution centers [13][14] - The company is optimistic about growth opportunities in North America, despite current challenges, and plans to leverage digital transformation initiatives [15][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand for products and a positive outlook for 2025, despite macroeconomic uncertainties [6][9] - The company is taking a conservative stance in its guidance, anticipating potential headwinds from tariffs and economic instability [27] Other Important Information - The company repurchased 38,000 shares for approximately $500,000 during the quarter, with an increased share repurchase authority of $25 million [25][26] - Inventory levels increased to $64.9 million, reflecting a strategic decision to prepare for potential tariff-related costs and delays [24] Q&A Session Summary Question: How did Q1 come in versus internal expectations? - Management indicated that Q1 performance was slightly ahead of internal expectations [32][36] Question: Can you clarify guidance in light of macroeconomic conditions? - Management noted that the midpoint of guidance assumes continued macroeconomic instability, while the lower end reflects a potential recession [37][40] Question: What are the expectations for the new digital toolkit launch? - Management confirmed that the digital toolkit is on track for launch in the second half of 2025, with no anticipated order disruptions [45][46] Question: What are the drivers for continued growth in Europe and Asia? - Management expressed confidence in market opportunities and strong fundamentals driving growth in these regions [54][56] Question: How is the company addressing challenges in North America? - Management highlighted a focus on building fundamentals, new leadership, and the introduction of a new toolkit to support practitioners and retailers [59][60]

Sales Performance - Consolidated net sales for Q1 2025 were $113.2 million, an increase of 2.0% compared to $111.0 million in Q1 2024, with a 4.5% increase when excluding foreign currency fluctuations[94] - Net sales in Asia for Q1 2025 were $48.7 million, up 5.3% from $46.2 million in Q1 2024, with local currency sales increasing by 10.1%[95] - In Europe, net sales for Q1 2025 reached $24.1 million, an 8.2% increase from $22.3 million in Q1 2024, with local currency sales up 8.6%[99] - North America saw a decline in net sales to $35.0 million, down 4.1% from $36.5 million in Q1 2024, with local currency sales decreasing by 3.7%[100] - Latin America and Other markets reported net sales of $5.5 million, an 8.2% decrease from $6.0 million in Q1 2024, with local currency sales down 3.7%[102] Cost and Expenses - Cost of sales as a percentage of net sales improved to 27.9% in Q1 2025 from 28.8% in Q1 2024, attributed to price increases and cost-saving initiatives[104] - Volume incentives expense as a percentage of net sales increased to 30.8% in Q1 2025 from 30.2% in Q1 2024, due to promotional incentives timing and market mix changes[105] - Selling, general and administrative expenses decreased to $40.6 million in Q1 2025 from $40.8 million in Q1 2024, representing 35.8% of net sales compared to 36.7%[107] Other Income and Tax - Other income for Q1 2025 was $0.9 million, significantly up from $31,000 in Q1 2024, primarily due to foreign exchange gains[108] - The effective tax rate for Q1 2025 was 31.3%, down from 46.5% in Q1 2024, influenced by foreign operations and adjustments to foreign tax credits[109] Cash and Working Capital - As of March 31, 2025, working capital was $100.0 million, an increase from $94.9 million as of December 31, 2024[120] - Cash balance at March 31, 2025, was $86.5 million, with $8.0 million in the U.S. and $78.5 million in foreign markets[120] - Operating activities generated cash inflows of $2.6 million for the three months ended March 31, 2025, compared to $2.2 million in the same period in 2024[121][122] - Investing activities used $1.1 million for the three months ended March 31, 2025, down from $3.7 million in the same period in 2024[121][123] - Financing activities used $0.7 million for the three months ended March 31, 2025, compared to cash inflow of $0.1 million in the same period in 2024[121][124] - The company repurchased 38,000 shares of common stock for $0.5 million during the three months ended March 31, 2025[124] - The remaining balance available for share repurchases under the program was $8.3 million as of March 31, 2025[124] - The company maintains a revolving credit agreement with no outstanding balances as of March 31, 2025[125] - Cash generated from operations is expected to be sufficient to fund normal operating needs, including capital expenditures[126] Taxation - The company is subject to income taxes in both the United States and numerous foreign jurisdictions, requiring significant judgments and estimates[133]

Financial Data and Key Metrics Changes - Revenue for the first quarter was reported at $113 million, reflecting a 5% increase compared to the prior year, or a 2% increase when excluding foreign exchange impacts [8][15] - Adjusted EBITDA increased by 20% to $11 million compared to $9.2 million in the previous year [22] - GAAP net income attributable to common shareholders was $4.7 million, or $0.25 per diluted share, compared to $2.3 million, or $0.12 per diluted share in the prior year [21] Business Line Data and Key Metrics Changes - In Asia Pacific, revenue grew by 10% on a local currency basis, with standout performances in Japan and Taiwan, where sales increased by 24% and 18% respectively [9][16] - European sales increased by 9% on a constant currency basis, driven by strong growth in Central Europe, which was up 16% [10][17] - North American sales declined by 4%, but there was a positive trend with the third consecutive quarter of sequential order growth [10][18] Market Data and Key Metrics Changes - Digital sales in North America increased by 19%, significantly outpacing the supplement industry's digital growth rate [11][18] - The Subscribe and Thrive Autoship program accounted for approximately 26% of total sales and about 45% of direct-to-consumer sales [11] Company Strategy and Development Direction - The company is focusing on minimizing exposure to tariffs by increasing raw ingredient inventory and enforcing pricing contracts with suppliers [6][7] - A strong emphasis on sustainability initiatives was highlighted, with goals to reduce carbon emissions by 50% and achieve zero waste certification [12][13] - The company is optimistic about growth opportunities in North America, despite current challenges, and plans to leverage digital transformation and strategic initiatives [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand for products and a positive outlook for 2025, despite macroeconomic uncertainties [6][14] - The company is taking a conservative stance in its guidance, anticipating potential headwinds from tariffs and economic instability [24][35] Other Important Information - The company repurchased 38,000 shares for approximately $500,000 during the quarter, with an increased share repurchase authority of $25 million [23] - Inventory levels increased to $64.9 million, reflecting a strategic decision to prepare for potential tariff-related costs and delays [22] Q&A Session Summary Question: How did Q1 come in relative to internal expectations? - The company was slightly ahead of internal expectations for the quarter [30] Question: Can you clarify guidance for the balance of the year? - The midpoint of guidance assumes continued macroeconomic instability and potential tariff impacts [35] Question: What are the expectations for the new digital toolkit launch? - The toolkit is on track for launch in the second half of 2025, with no anticipated order disruptions [40][41] Question: What are the drivers for continued growth in Europe and Asia? - Strong fundamentals in sales and marketing are expected to drive growth, with significant market opportunities remaining [48] Question: How is the company addressing the North American market challenges? - Focus on building fundamentals, new leadership, and the introduction of a new toolkit are key strategies [55]

Financial Performance - Net sales for Q1 2025 were $113.2 million, a 2.0% increase compared to $111.0 million in Q1 2024[6] - Operating income increased by 33.5% from $4.6 million in Q1 2024 to $6.2 million in Q1 2025[6] - Net income attributable to common shareholders increased by 104.5% from $2.3 million in Q1 2024 to $4.7 million in Q1 2025[6] - Adjusted EBITDA increased by 20.0% from $9.2 million in Q1 2024 to $11.0 million in Q1 2025[6] - Diluted EPS increased by 108.6% from $0.12 in Q1 2024 to $0.25 in Q1 2025[6] Balance Sheet and Cash Flow - Cash and cash equivalents totaled $86.5 million as of March 31, 2025[9, 10] - The company has zero debt as of March 31, 2025[9, 10] - Cash from operations totaled $2.6 million for Q1 2025[9, 10] - Free cash flow totaled $1.5 million for Q1 2025[9, 10] Sales by Operating Segment - Asia net sales increased by 5.3% from $46.22 million in Q1 2024 to $48.653 million in Q1 2025[11] - Europe net sales increased by 8.2% from $22.296 million in Q1 2024 to $24.114 million in Q1 2025[11] - North America net sales decreased by 4.1% from $36.525 million in Q1 2024 to $35.018 million in Q1 2025[11]