Nature's Sunshine(NATR)2024-11-07 22:15Financial Performance - Net sales for the three months ended September 30, 2024, were $114,615, an increase from $111,202 in the same period of 2023, representing a growth of 2.2%[7] - Gross profit for the three months ended September 30, 2024, was $81,759, slightly up from $81,238 in the prior year, indicating a stable gross margin[7] - Operating income for the three months ended September 30, 2024, was $5,284, compared to $5,832 in the same period of 2023, reflecting a decrease of 9.4%[7] - Net income attributable to common shareholders for the three months ended September 30, 2024, was $4,347, up from $2,832 in the same period of 2023, marking a significant increase of 53.4%[7] - For the nine months ended September 30, 2024, net sales were $336,159, slightly down from $336,384 in the same period of 2023, indicating a marginal decline of 0.1%[9] - Operating income for the nine months ended September 30, 2024, increased to $15,545 from $13,041 in the same period of 2023, representing a growth of 19.2%[9] - Basic earnings per share attributable to common shareholders for the three months ended September 30, 2024, were $0.23, compared to $0.15 in the same period of 2023, an increase of 53.3%[7] - The net income for the nine months ended September 30, 2024, was $8,624,000, compared to $7,072,000 for the same period in 2023, representing a year-over-year increase of approximately 22%[18] - Net income for the three months ended September 30, 2024, was $4.6 million, a 47.9% increase from $3.1 million in the same period in 2023[92] Assets and Liabilities - Total assets as of September 30, 2024, were $245,333, a decrease from $249,773 as of December 31, 2023[6] - Total liabilities decreased to $82,716 as of September 30, 2024, from $90,233 as of December 31, 2023, reflecting a reduction of 8.3%[6] - Total shareholders' equity increased to $162,617 as of September 30, 2024, from $159,540 as of December 31, 2023, indicating a growth of 1.3%[6] - The company reported cash and cash equivalents of $78,704,000 at the end of the period, down from $82,373,000 at the beginning of the period[18] - The total stock amount decreased from $119,694,000 at December 31, 2023, to $113,946,000 at September 30, 2024[14] - Working capital increased to $96.4 million as of September 30, 2024, compared to $89.1 million at the end of 2023[124] Share Repurchase and Compensation - The company repurchased common stock totaling $8,436,000 during the nine months ended September 30, 2024[18] - The company repurchased 509,000 shares of common stock for $8.4 million during the nine months ended September 30, 2024, compared to 180,000 shares for $2.2 million in the same period of 2023[36] - Share-based compensation expense for the nine months ended September 30, 2024, was $3,580,000, slightly down from $3,790,000 in the same period of the previous year[18] - Share-based compensation expense related to time-based RSUs for the three-month period ended September 30, 2024, was approximately $0.7 million, a decrease from $1.0 million in the same period of 2023[45] Sales by Region - Net sales in Asia for the three months ended September 30, 2024, were $55.3 million, up from $52.2 million in the same period of 2023[51] - The United States, Taiwan, and South Korea each contributed over 10% of consolidated net sales for the three months ended September 30, 2024[53] - North America net sales for Q3 2024 were $33.6 million, a decrease of 3.3% compared to $34.8 million in Q3 2023[102] - Latin America net sales for Q3 2024 increased to $6.1 million, reflecting a 12.0% growth from $5.4 million in Q3 2023[105] - In Europe, net sales for the three months ended September 30, 2024, were $19.6 million, a 4.5% increase from $18.8 million in the same period of 2023[101] Expenses and Taxation - Cost of sales increased by $2.9 million to $32.9 million, with the cost as a percentage of net sales rising to 28.7% from 26.9%[92] - Selling, general and administrative (SG&A) expenses decreased by $0.3 million to $40.9 million, representing 35.7% of net sales, down from 37.1%[90] - The provision for income taxes for the three months ended September 30, 2024, was 41.2%, compared to 35.9% for the same period in 2023[59] - The effective tax rate for the nine months ended September 30, 2024, was 49.2%, up from 43.6% for the same period in 2023[59] Cash Flow and Financing - The company reported a net cash provided by operating activities of $13,114,000 for the nine months ended September 30, 2024, compared to $31,628,000 in the same period of 2023[18] - Financing activities used $9.3 million in cash for the nine months ended September 30, 2024, compared to $3.4 million in the same period of 2023, including $8.4 million for share repurchases[128] - The company had no outstanding balance under the revolving credit agreement as of September 30, 2024, with a borrowing limit of $25 million[30] Market Conditions and Outlook - The company anticipates continued impacts from inflation, particularly from higher costs of raw materials and labor[87] - The company expects foreign currency fluctuations to continue to impact net sales and operating expenses significantly[91] - The company expects to recognize an additional $2.7 million of potential share-based compensation expense related to performance-based RSUs[46] Company Overview - The company’s product line includes over 800 products across various health categories, manufactured primarily in Spanish Fork, Utah[117] - The company markets its products through a network of independent consultants, providing them with incentives and support[119]