Nature's Sunshine(NATR) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $118 million, or$ 120 million on a constant currency basis, reflecting a 10% increase year-over-year [8] - Adjusted EBITDA for the quarter was $10 million, up 6% year-over-year [8][31] - Full year consolidated net sales were$ 454.4 million, representing a 2% growth or 4% growth excluding foreign exchange impacts [22] Business Line Data and Key Metrics Changes - Asia-Pacific sales grew 18% to $56.3 million in Q4, or 21% excluding foreign exchange impacts, driven by strong growth in Taiwan, Japan, and Korea [24] - North America sales declined by 2% in Q4, with a full year decline of 1%, although digital sales increased by 17% year-over-year [26][14] - Europe saw Q4 sales increase of 8%, with full year sales up 5% [25] Market Data and Key Metrics Changes - In Asia-Pacific, Taiwan, Japan, and Korea saw sales growth of 29%, 27%, and 21% respectively in Q4 [24][88] - Europe experienced robust growth in Central Europe, with sales increasing 17% [25] - North America faced challenges with customer activation, impacting overall sales performance [26] Company Strategy and Development Direction - The company is focusing on enhancing digital capabilities in North America and plans to introduce a new digital toolkit for distributors in late 2025 [15][16] - Strategies implemented in Asia-Pacific have led to increased customer order growth and market share [11][12] - The company is taking steps to mitigate external headwinds, including extending supplier contracts and building inventory [18] Management's Comments on Operating Environment and Future Outlook - Management expressed a guarded outlook for 2025 due to geopolitical and macroeconomic uncertainties [20] - The company anticipates a more measured pace of sales growth in 2025, estimating net sales between$ 445 million and $470 million [34] - Management remains optimistic about the business's long-term growth potential despite current challenges [36] Other Important Information - The company has a clean balance sheet with cash and cash equivalents of$ 84.7 million and zero debt [32] - Inventory at the end of Q4 was $59.4 million, which is$ 7.5 million less than the previous year [32] - The company repurchased 540,000 shares for approximately $9 million during the year [33] Q&A Session Summary Question: Growth in Asia - Management noted strong momentum in Asia-Pacific, attributing growth to effective strategies and field incentives [39][40] Question: Digital Business Upgrade - The digital platform in North America is largely set, with a new toolkit for distributors expected to launch in late 2025 [46][49] Question: Tariff Impact - The estimated impact of proposed tariffs on gross margin could be$ 2 million to $3 million, including retaliatory tariffs [55][59] Question: Sales Performance in Asia - Management confirmed that Taiwan, Japan, and Korea drove significant growth in Q4, with expectations for continued positive momentum [88][95] Question: Future of Russian Business - The company retains infrastructure in Russia but has not built any business plans around potential recovery [97]