Nature's Sunshine(US:NATR)2020-08-08 13:31Financial Data and Key Metrics Changes - Net sales in Q2 2020 were $87.3 million, a decrease from $90.7 million in the same quarter last year, reflecting a 2% decline on a local currency basis [41] - Adjusted EBITDA increased by 21% to $9.7 million compared to $8 million in Q2 2019, driven by cost savings from reduced travel and restructuring activities [46] - Net income attributable to common shareholders increased to $5.8 million or $0.29 per diluted share, compared to $2.7 million or $0.14 per diluted share in the prior year [46] Business Line Data and Key Metrics Changes - NSP U.S. revenues increased by 3% in local currency for the second consecutive quarter, while overall North America sales were flat at $34.5 million [10][43] - In Asia, net sales were $32.8 million, with China showing a significant increase of 39% in local currency, while South Korea saw a decline of nearly 20% [42][18] - Europe experienced a 3% increase in net sales year-over-year, driven by strong performance in Central and Eastern Europe, particularly in Russia and Poland [42][21] Market Data and Key Metrics Changes - Central Asia and Europe saw a 14% increase in local currency, while China experienced a 39% increase in local currency [10] - Latin America faced a 16% decline in revenue due to COVID-19 impacts, but future performance is expected to improve with new product development and online ordering capabilities [22][23] Company Strategy and Development Direction - The company is focusing on five strategic areas: brand power, field energy, digital first, manufacturing excellence, and organizational effectiveness [25] - A new Premium Membership program and a subscription model called "Subscribe and Thrive" are being introduced to enhance customer engagement and retention [29][30] - The company plans to launch a digital campaign to improve consumer awareness and drive activation, emphasizing its brand as an industry pioneer [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strategies in place and the performance in key markets, despite ongoing uncertainties due to the pandemic [54] - The company is committed to maintaining liquidity and cautious cash management in light of the uncertain environment [66][68] Other Important Information - The company reported a 45% increase in operating income to $6.6 million, reflecting effective cost management and restructuring efforts [45] - Cash and cash equivalents stood at $70.3 million with $5.4 million of debt, indicating a strong liquidity position [47][48] Q&A Session Summary Question: Expectations for the back half of the year - Management is excited about the strategies in place but acknowledges ongoing uncertainty in the markets, particularly in Asia and LATAM [54][55] Question: SG&A guidance for upcoming quarters - Management does not provide specific guidance but indicates a focus on reducing SG&A as a percentage of sales [58][59] Question: Cash management and potential shareholder returns - Management is cautious about cash usage in the current environment but acknowledges ongoing discussions at the Board level regarding potential shareholder returns [66][67]