Nature's Sunshine(NATR)2023-11-07 22:11Sales Performance - Consolidated net sales for Q3 2023 were $111.2 million, a 6.4% increase from $104.5 million in Q3 2022, while net sales for the nine months ended September 30, 2023, were $336.4 million, up 5.4% from $319.2 million in the same period last year [103]. - Net sales in Asia for Q3 2023 reached $52.2 million, a 9.1% increase from $47.9 million in Q3 2022, and for the nine months, sales were $153.4 million, up 8.5% from $141.4 million [104]. - In North America, net sales for Q3 2023 were $34.8 million, a 10.4% increase from $31.5 million in Q3 2022, and for the nine months, sales were $104.1 million, up 2.5% from $101.6 million [110]. - In the Taiwan market, net sales increased by $2.1 million (15.8%) for Q3 2023 compared to Q3 2022, attributed to effective sales force execution [106]. - The China market saw a significant increase in net sales of $2.5 million (30.7%) for Q3 2023, driven by the expiration of COVID-19 restrictions and product promotions [108]. - Europe experienced a slight decrease in net sales for Q3 2023, totaling $18.8 million, down 2.9% from $19.3 million in Q3 2022, primarily due to reduced average order sizes [109]. - Latin America and Other markets reported net sales of $5.4 million for Q3 2023, a decrease of 6.4% from $5.8 million in Q3 2022, reflecting customer sensitivity to economic conditions [112]. - The company anticipates continued growth in net sales driven by product sales improvements in Asia and North America, despite challenges from foreign currency fluctuations and inflation [102]. Cost and Expenses - Cost of sales as a percentage of net sales decreased to 26.9% for Q3 2023 from 28.4% in Q3 2022, indicating improved contribution margin initiatives despite inflationary pressures [114]. - Volume incentives as a percentage of net sales were 30.7% for Q3 2023, down from 31.6% in Q3 2022, reflecting changes in promotional activity and sales mix [115]. - Selling, general and administrative expenses increased by $4.5 million to $41.3 million for the three months ended September 30, 2023, and by $12.9 million to $127.2 million for the nine months ended September 30, 2023, compared to the same periods in 2022 [117]. - Selling, general and administrative expenses represented 37.1% and 37.8% of net sales for the three and nine months ended September 30, 2023, respectively, compared to 35.2% and 35.8% for the same periods in 2022 [117]. Cash Flow and Financial Position - Operating activities provided cash of $31.6 million for the nine months ended September 30, 2023, compared to using cash of $2.9 million in the same period in 2022 [132]. - Investing activities used $9.2 million for the nine months ended September 30, 2023, compared to $4.7 million for the same period in 2022 [133]. - Financing activities used $3.4 million for the nine months ended September 30, 2023, compared to $15.3 million in cash for the same period in 2022 [134]. - The company had $76.0 million in cash as of September 30, 2023, with $66.7 million held in foreign markets [130]. Tax and Other Charges - The provision for income taxes was 35.9% for the three months ended September 30, 2023, compared to 92.7% for the same period in 2022 [119]. - A one-time pre-tax charge of $5.8 million was recorded for the nine months ended September 30, 2023, related to a criminal scheme directed at a wholly owned subsidiary [117]. - Other loss, net, for the three months ended September 30, 2023, was $0.9 million, an improvement from a loss of $2.3 million in the same period in 2022 [118]. Share Repurchase - The company repurchased 180,000 shares of common stock for $2.2 million during the nine months ended September 30, 2023 [134].