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Nature’s Sunshine Products Reports Second Quarter 2016 Financial Results

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LEHI, Utah, Aug. 08, 2016 (GLOBE NEWSWIRE) — Nature’s Sunshine Products, Inc. (NASDAQ:NATR), a leading natural health and wellness company engaged in the manufacture and direct selling of nutritional and personal care products, today reported its financial results for the second quarter ended June 30, 2016.

Second Quarter 2016 Financial Highlights

  • Net sales revenue of $89.4 million increased 10.0%, compared to $81.2 million in the second quarter of 2015. On a local currency basis, net sales revenue increased 11.5% compared to the second quarter of 2015. In addition to sustained local currency net sales revenue growth in NSP United States and NSP Canada, Synergy Asia delivered 28.5% local currency growth as compared to the second quarter of 2015.  The quarter included incremental net sales revenue of $4.4 million related to pre-opening product sales through Hong Kong. Net sales revenue was negatively impacted by $1.2 million of unfavorable foreign currency exchange rate fluctuations, as well as a $0.5 million decline in net sales in the NSP Russia, Central and Eastern Europe segment.
  • Net income from continuing operations was $2.4 million, or $0.14 per diluted common share, compared to $2.4 million, or $0.12 per diluted common share, in the second quarter of 2015.
  • Adjusted EBITDA was $6.2 million, compared to $5.1 million in the second quarter of 2015. Adjusted EBITDA, which is a non-GAAP financial measure, is defined here as net income from continuing operations before taxes, depreciation, amortization and other income adjusted to exclude share-based compensation expense.

First Half of 2016 Financial Highlights

  • Net sales revenue of $171.8 million increased 4.0%, compared to $165.1 million in the first six months of 2015. On a local currency basis, net sales revenue increased 6.3% compared to the first six months of 2015. Net sales revenue growth adjusted for foreign currency fluctuations was largely driven by an $8.9 million, or 23.7% increase in Synergy Asia and an incremental net sales revenue increase of $4.4 million related to sales through Hong Kong, when compared to the first six months of 2015. Net sales revenue was negatively impacted by $3.8 million of unfavorable foreign currency exchange rate fluctuations, as well as a $1.5 million decline in net sales in the NSP Russia, Central and Eastern Europe segment.
  • Net income from continuing operations was $4.2 million, or $0.24 per diluted common share, compared to $6.6 million, or $0.34 per diluted common share, in the first six months of 2015. Earnings per diluted common share for the first six months of 2016, were impacted by several factors including: the Company’s investment in China of approximately $0.12 per share and unfavorable changes in the effective tax rate of $0.02 per share.
  • Adjusted EBITDA was $10.4 million compared to $12.8 million in the first six months of 2015.

Management Commentary

“We are very pleased to report accelerated revenue growth during the second quarter with strength across several regions,” commented Gregory L. Probert
, Chairman and Chief Executive Officer. “Sustained local currency growth in both NSP United States and NSP Canada continues to reflect the strong foundation within our most mature markets and is a reflection of our high quality products and effective business model. The improvements we have put in place at Synergy WorldWide are delivering strong results across all geographical regions, led by 28.5% local currency growth in Synergy Asia.”

Mr. Probert continued, “We are optimistic about our new market opportunity in China and believe we have the management team, the business model and product offering in place to achieve success. We also remain encouraged by the success of our patent-pending IN.FORM weight loss and daily habit of health program and continue to target geographical expansion of this promising new program offering.”

Second Quarter 2016 Regional Sales by Operating Segment

Net Sales Revenue by Operating Segment
Three Months

Ended

June 30, 2016

Three Months

Ended

June 30, 2015

Percent

Change

Impact of

Currency

Exchange

Percent

Change

Excluding

Impact of

Currency

NSP Americas:
NSP North America $ 37,439 $ 36,816 1.7 % $ (122 ) 2.0 %
NSP Latin America 7,286 8,234 (11.5 ) (511 ) (5.3 )
44,725 45,050 (0.7 ) (633 ) 0.7
NSP Russia, Central and Eastern Europe 6,269 6,815 (8.0 ) (40 ) (7.4 )
Synergy WorldWide:
Synergy Asia Pacific 23,397 18,765 24.7 (711 ) 28.5
Synergy Europe 6,738 6,669 1.0 138 (1.0 )
Synergy North America 2,878 3,046 (5.5 ) (5.5 )
33,013 28,480 15.9 (573 ) 17.9
China and New Markets 5,359 902 494.1 494.1
$ 89,366 $ 81,247 10.0 % $ (1,246 ) 11.5 %

Six Months Ended June 30, 2016 Regional Sales by Operating Segment

Net Sales Revenue by Operating Segment
Six Months

Ended

June 30, 2016

Six Months

Ended

June 30, 2015

Percent

Change

Impact of

Currency

Exchange

Percent

Change

Excluding

Impact of

Currency

NSP Americas:
NSP North America $ 75,745 $ 74,990 1.0 % $ (423 ) 1.6 %
NSP Latin America 14,163 16,570 (14.5 ) (1,111 ) (7.8 )
89,908 91,560 (1.8 ) (1,534 ) (0.1 )
NSP Russia, Central and Eastern Europe 12,621 14,258 (11.5 ) (93 ) (10.8 )
Synergy WorldWide:
Synergy Asia Pacific 44,213 37,463 18.0 (2,137 ) 23.7
Synergy Europe 12,994 13,398 (3.0 ) (7 ) (3.0 )
Synergy North America 5,654 6,387 (11.5 ) (11.5 )
62,861 57,248 9.8 (2,144 ) 13.5
China and New Markets 6,378 2,059 209.8 209.8
$ 171,768 $ 165,125 4.0 % $ (3,771 ) 6.3 %

Active Distributors and Customers by Segment (1)

As of June 30, 2016 As of December 31, 2015
Distributors

& Customers

Managers Distributors

& Customers

Managers
NSP Americas 129,700 7,000 131,600 6,500
NSP Russia, Central and Eastern Europe 62,600 2,400 72,000 2,800
Synergy WorldWide 56,600 3,800 60,800 3,400
China and New Markets
248,900 13,200 264,400 12,700

(1) Active Distributors and customers include Nature’s Sunshine Products’ independent Distributors and customers who have purchased products directly from the Company for resale and/or personal consumption during the previous three months ended as of the date indicated.  Total Manager, Distributors and Customers, which includes those who have made a purchase in the last twelve months, was 554,500 as of June 30, 2016.

Cash Flow and Balance Sheet Highlights

  • Net cash provided by operating activities was $6.5 million for the six months ended June 30, 2016, as compared to $3.1 million of net cash provided by operating activities for the six months ended June 30, 2015.
  • Total assets on June 30, 2016 were $211.0 million, compared to $200.5 million on December 31, 2015.
  • The Company’s Board of Directors approved a quarterly cash dividend of $0.10 per share, payable on September 2, 2016, to shareholders of record as of the close of business on August 23, 2016.  Dividend payments were $3.8 million during the first six months of 2016.

Conference Call

Nature’s Sunshine Products will host a conference call to discuss its second quarter 2016 results on August 8, 2016 at 4:30 PM Eastern Time.  The toll-free dial-in number for callers in the U.S. and Canada is 1-877-407-0789, conference ID: 13642367.  International callers can dial 1-201-689-8562, conference ID: 13642367.  A replay will be available from August 8, 2016 at 7:30 PM Eastern Time through August 22, 2016 at 11:59 PM Eastern Time by dialing 1-877-870-5176 (U.S. and Canada) or 1-858-384-5517 (International), replay PIN: 13642367.  The call will also be webcast live and will be available on the Investors section of Nature’s Sunshine Products’ website at www.naturessunshine.com for 90 days.

08/10/2016 |

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