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]

Core Insights - Nature's Sunshine Products, Inc. reported a strong start to 2025 with first quarter revenue of $113 million, reflecting a 5% increase on a constant currency basis and a 20% rise in adjusted EBITDA to $11 million compared to the previous year [3][8][6] Financial Performance - Net sales increased by 2% to $113.2 million from $111.0 million in the same quarter last year, with a 5% increase when excluding foreign exchange impacts [6][8] - Gross profit margin improved to 72.1% from 71.2% year-over-year, driven by price increases and effective cost-saving initiatives [6] - GAAP net income attributable to common shareholders rose 104% to $4.7 million, or $0.25 per diluted share, compared to $2.3 million, or $0.12 per diluted share, in the prior year [8][12] Segment Performance - Sales by region showed varied performance: - Asia: $48.7 million, up 5.3% (10.1% excluding currency impact) - Europe: $24.1 million, up 8.2% (8.6% excluding currency impact) - North America: $35.0 million, down 4.1% (3.7% excluding currency impact) - Latin America and Other: $5.5 million, down 8.2% (3.7% excluding currency impact) [4][30] Cost Management - Selling, general and administrative expenses (SG&A) decreased slightly to $40.6 million from $40.8 million, representing 35.8% of net sales compared to 36.7% in the prior year [9] - Operating income increased to $6.2 million, or 5.4% of net sales, compared to $4.6 million, or 4.2% of net sales, in the previous year [10] Capital Allocation - The board of directors authorized a share repurchase program of up to $25 million, supplementing the remaining $8.3 million from a previous authorization [2][4] Outlook - The company expects full-year 2025 net sales to range between $445 million and $470 million, with adjusted EBITDA projected between $38 million and $44 million [15]

Group 1 - Nature's Sunshine Products (NASDAQ: NATR) is expected to benefit from its Asia segment, indicating potential growth opportunities in that region [1] - Weak demand in the North America segment is anticipated to negatively impact the company's top-line performance in the near term [1] - The focus is primarily on GARP (Growth at Reasonable Price) opportunities within the industrial, consumer, and technology sectors [1]

Ms. Wissmiller has served on the Board of Nature's Sunshine since 2020. Over the course of her tenure, she has chaired the Governance and Risk Management Committees. As Chief Growth Officer at Rodan + Fields ("R+F"), the leading skincare brand in North America, Ms. Wissmiller led the company to more than $1 billion in incremental revenue growth, expanding its powerful community of female entrepreneurs to over 300,000 and customer base to 1.8 million. She also led the creation and launch of R+F Virtual, for ...

Company Achievements - Nature's Sunshine Products, Inc. has been awarded two Stevie® Awards at the 23rd Annual American Business Awards, including a Gold Stevie® Award for its 2023 Impact Report and a Silver Stevie® Award for Achievement in Product Innovation for its Chlorophyll Detoxifying Stick Packs [1][2][3] - The Gold Stevie® Award recognizes the company's achievements in responsible business practices and sustainability, while the Silver Stevie® Award highlights the innovative powdered form of chlorophyll that is more convenient than traditional liquid formats [2][3] Leadership and Commitment - The company's President and CEO, Terrence Moorehead, emphasized that these awards validate Nature's Sunshine's commitment to transparency and sustainability, reflecting the hard work of the entire team [3] - Tracee Comstock, Senior Vice President of Global Human Resources, noted that Nature's Sunshine demonstrates leadership in the natural products industry through high-quality supplements and responsible business practices [4] Industry Context - The American Business Awards is a premier business awards program in the U.S., with over 3,600 nominations submitted this year across various categories [5] - The awards ceremony will take place on June 10, 2025, at the Marriott Marquis Hotel in New York [5]