Nature’s Sunshine Products, Inc. (NASDAQ:NATR), a leading manufacturer and marketer of nutritional supplements and complementary products, today reported an increase in net sales of 4.7 percent to $87.0 million for the 2010 first quarter, compared with $83.2 million for the same period in 2009. Operating income improved by approximately $2.8 million, to break-even, compared to an operating loss of $2.8 million in the first quarter of 2009. Net income totaled $4.2 million, compared with a net loss of $1.5 million in the first quarter of last year. Basic and diluted net income per share was $0.27, compared to a net loss per share of $0.09 for the same period last year. The increase in operating income was primarily the result of increased sales and reduced cost of goods sold and selling, general, and administrative expenses as a percent of sales. During the quarter, the Company generated cash flow from operations of approximately $3.5 million.
The Company’s balance sheet remains strong with cash and cash equivalents of $38.8 million, and shareholders’ equity of $62.6 million as of March 31, 2010. The Company has no long-term debt.
During the first quarter of 2010, the Company recorded a $3.7 million, or $0.24 per diluted share, foreign exchange gain in other income related to the implementation of highly-inflationary accounting for Venezuela and devaluation of the Venezuelan bolivar. This change also reduced reported net sales for the Company by approximately 1.7 percent and reduced operating income by approximately $0.4 million, or $0.02 per diluted share, for the first quarter of 2010.
An income tax benefit added approximately $0.08 per diluted share to net income, as compared with $0.01 per diluted share for the same period a year ago. The benefit in 2010 was primarily due to a reduction of our liability for unrecognized tax benefits.
“We are pleased with the continued progress by Nature’s Sunshine Products and the improved start for 2010,” said Douglas Faggioli, President and CEO. “With improving economies worldwide, most of our markets – notably the U.S., Europe, the Ukraine, Canada, and Mexico – demonstrated encouraging growth, aided by selective price increases and more favorable exchange rates. We continue to see increases in sales managers, a key positive indicator, and strengthening cash flow. We remain focused on reducing expenses and improving operating income at Nature’s Sunshine.”