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TheStreet Open House

Nature's Sunshine Products Reports Third Quarter Results

Among Synergy Worldwide's markets:

  • U.S. net sales increased 92.5 percent to $4.2 million, compared to $2.2 million in the same period a year ago.  This improvement was due to strong demand for key products that fostered growth in our U.S. Distributor base.  
  • European net sales increased 52.3 percent to $3.0 million, compared to $2.0 million for the same period a year ago.  This improvement was due to network expansion into new markets.  
  • Korea net sales increased 40.9 percent to $3.1 million, compared to $2.2 million for the same period a year ago, and benefited from positive foreign currency fluctuations. Excluding the effect of foreign currency fluctuations, net sales increased 31.9 percent, compared to the same quarter a year ago due to continued growth of our Distributor base and effective leadership and development activities in the market.   
  • Japan net sales decreased 9.9 percent to $4.2 million, compared to $4.7 million in the same quarter a year ago, primarily as the result of import restrictions on several key products, strong competition, and continued economic weakness in Japan, which resulted in a decrease in the Distributor base in this market.  
  • We launched our Synergy operations in Vietnam during the second quarter and reported net sales of $0.7 million for the third quarter of 2010. 

About Nature's Sunshine Products

Nature's Sunshine Products manufactures and markets through direct sales encapsulated and tableted herbal products, high quality natural vitamins, and other complementary products. In addition to the United States, the Company has operations in Australia, Austria, Belarus, Canada, the Czech Republic, China, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Germany, Guatemala, Honduras, Hong Kong, Indonesia, Israel, Japan, Kazakhstan, Latvia, Lithuania, Malaysia, Mexico, Mongolia, the Netherlands, Nicaragua, Norway, Panama, Peru, the Philippines, Poland, Russia, Singapore, South Korea, Sweden, Thailand, Taiwan, Ukraine, the United Kingdom, the United States, Venezuela, and Vietnam. The Company also has exclusive distribution agreements with selected companies in Argentina, Australia, Chile, New Zealand, and Norway. Additional information can be obtained at the Company's website, www.natr.com.

Cautionary Statement Regarding Forward-Looking Statements

In addition to historical information, this release contains forward-looking statements. Nature's Sunshine may, from time to time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass Nature's Sunshine's beliefs, expectations, hopes, or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely," and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to the Company as of such date. Nature's Sunshine assumes no obligation to update any forward-looking statement. Actual results will vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others: further reviews of the Company's financial statements by the Company and its Audit Committee; modification of the Company's accounting practices; foreign business risks; industry cyclicality; fluctuations in customer demand and order pattern; changes in pricing and general economic conditions; as well as other risks detailed in the Company's previous filings with the SEC.

NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
     
  September 30, December 31,
  2010 2009
Assets    
Current Assets:    
Cash and cash equivalents  $ 45,657 $ 35,538
Restricted cash  249 1,495
Accounts receivable, net of allowance for doubtful accounts of $1,049 and $1,840 respectively  7,961 8,294
Investments available for sale  3,056 3,167
Inventories, net  37,682 40,623
Deferred income tax assets  5,942 6,646
Prepaid expenses and other current assets  6,070 5,629
Total current assets  106,617 101,392
     
Property, plant and equipment, net  27,841 28,757
Investment securities  1,864 1,752
Intangible assets  1,332 1,421
Deferred income tax assets  12,402 12,228
Other assets  19,036 19,306
  $ 169,092 $ 164,856
     
Liabilities and Shareholders' Equity    
Current Liabilities:    
Accounts payable  $ 4,593 $ 4,176
Accrued volume incentives  18,710 17,495
Accrued liabilities  36,736 34,143
Deferred revenue  3,227 4,513
Income taxes payable  691 7,542
Total current liabilities  63,957 67,869
Liability related to unrecognized tax benefits  33,921 35,028
Deferred compensation payable  1,864 1,752
Other liabilities  2,733 3,112
Total long-term liabilities  38,518 39,892
Shareholders' Equity:    
Common stock, no par value; 50,000 shares authorized, 15,514 and 15,510 shares issued and outstanding as of September 30, 2010 and December 31, 2009  67,538 67,183
Retained earnings  8,978 9,511
Accumulated other comprehensive loss  (9,899) (19,599)
Total shareholders' equity  66,617 57,095
  $ 169,092 $ 164,856
 
 
NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Amounts in thousands, except per share information)
(Unaudited)
     
  Three Months Ended
  September 30,
  2010 2009
     
Net sales revenue (net of the rebate portion of volume incentives of $10,726 and $11,402, respectively)  $ 86,096 $ 85,529
Cost and expenses:    
Cost of goods sold  16,632 17,222
Volume incentives  32,065 31,050
Selling, general and administrative  33,523 30,714
  82,220 78,986
Operating income  3,876 6,543
Other income, net  375 1,288
     
Income from continuing operations before provision for income taxes  4,251 7,831
Provision for income taxes  1,573 5,436
Net income from continuing operations  2,678 2,395
Loss from discontinued operations, net of tax  (8,418) (315)
Net (loss) income  $ (5,740) $ 2,080
     
Basic and diluted net (loss) income per common share    
     
Basic:    
Net income from continuing operations  $ 0.17 $ 0.15
Loss from discontinued operations, net of tax  $ (0.54) $ (0.02)
Net (loss) income  $ (0.37) $ 0.13
     
Diluted:    
Net income from continuing operations  $ 0.17 $ 0.15
Loss from discontinued operations, net of tax  $ (0.54) $ (0.02)
Net (loss) income  $ (0.37) $ 0.13
     
Weighted average basic common shares outstanding  15,514 15,510
Weighted average diluted common shares outstanding  15,612 15,510
     
 
 
NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Amounts in thousands, except per share information)
(Unaudited)
     
  Nine Months Ended
  September 30,
  2010 2009
     
Net sales revenue (net of the rebate portion of volume incentives of $32,942 and $34,779, respectively)  $ 260,029 $ 252,465
Cost and expenses:    
Cost of goods sold  51,308 50,439
Volume incentives  97,162 93,233
Selling, general and administrative  103,840 102,291
  252,310 245,963
Operating income  7,719 6,502
Other income, net  2,374 1,926
     
Income from continuing operations before provision for income taxes  10,093 8,428
Provision for income taxes  1,238 6,472
Net income from continuing operations  8,855 1,956
(Loss) income from discontinued operations, net of tax  (9,388) 196
Net (loss) income  $ (533) $ 2,152
     
Basic and diluted net (loss) income per common share    
     
Basic:    
Net income from continuing operations  $ 0.57 $ 0.13
(Loss) income from discontinued operations, net of tax  $ (0.60) $ 0.01
Net (loss) income  $ (0.03) $ 0.14
     
Diluted:    
Net income from continuing operations  $ 0.57 $ 0.13
(Loss) income from discontinued operations, net of tax  $ (0.60) $ 0.01
Net (loss) income  $ (0.03) $ 0.14
     
Weighted average basic common shares outstanding  15,512 15,510
Weighted average diluted common shares outstanding  15,606 15,510
CONTACT:  Nature's Sunshine Products, Inc.
          Stephen M. Bunker, Chief Financial Officer
          (801) 342-4370
          Provo, Utah 84605-9005

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