Nature's Sunshine Products Reports Fourth Quarter and Fiscal Year Financial Results

Nature's Sunshine Products Reports Fourth Quarter and Fiscal Year Financial
Results

             Increases Quarterly Cash Dividend to $0.10 per Share

                       Michael D. Dean to resign as CEO
        Gregory L. Probert, Executive Chairman, to become interim CEO

LEHI, Utah, March 6, 2013 (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 consolidated financial results for the fourth quarter and
fiscal year ended December 31, 2012, and increased its quarterly cash dividend
to $0.10 per share.

The Company also announced that Michael D. Dean has resigned as Chief
Executive Officer and as a member of the Board of Directors, effective March
31, 2013. Gregory L. Probert, Executive Chairman of the Board, has been
appointed to serve as interim Chief Executive Officer until such time as the
Board of Directors names a new CEO. Mr. Dean will enter into a one-year
consulting agreement with the Company, and work with Mr. Probert to ensure a
smooth transition. Mr. Probert has worked with the Company in a consulting and
executive capacity since September 2010. He is the former President and Chief
Operating Officer of Herbalife International of America.

Mr.Dean said: "Now that the Company has made significant progress and is well
positioned for future growth, this is an appropriate time for me to exit. I am
pleased to leave the Company stronger than ever and in capable hands with an
outstanding team and talented, loyal sales managers and independent
distributors. I will miss working with every one of them."

Mr. Probert stated: "In 2010, when Michael was a Board member, the Board asked
him to step in as CEO to stabilize the Company's business, return it to
profitability, build a world-class management team and set a strategy for
future growth. Michael has successfully accomplished all these goals. We thank
him for all of his contributions and wish him all the best in his future
endeavors. I am looking forward to working with the Company's outstanding
senior management team, talented employees and our loyal distributors to
implement an ambitious growth plan."

For the Fourth Quarter of 2012:

  oNet sales were $90.4 million, compared with $92.1 million in the same
    quarter a year ago, a decrease of 1.8 percent, and net sales decreased 1.5
    percent in local currencies.
    
  oAs of December 31, 2012, total active Managers worldwide were 16,600, a
    decrease of 1.2 percent from December 31, 2011, while total active
    Distributors and customers worldwide were 333,400, a decrease of 2.0
    percent from the end of the quarter a year ago.
    
  oOperating income was $5.8 million, compared with $9.6 million in the same
    quarter a year ago, a decrease of 39.3 percent year over year. Operating
    income decreased by $3.8 million, of which $2.6 million was due to lower
    sales and higher raw material and distribution costs, and $1.2 million was
    due to non-recurring costs and expenses ($0.8 million primarily related to
    legal and restructuring charges in certain foreign markets, and $0.4
    million of obsolete inventory and expedited freight costs).
    
  oAdjusted EBITDA, defined here as net income before taxes, depreciation and
    amortization, and other income, and adjusted to exclude share-based
    compensation expense was $7.8 million, compared with $12.3 million in the
    same quarter a year ago, a decrease of 36.7 percent.
    
  oNet income was $4.5 million, compared with $7.6 million in the same
    quarter a year ago, a decrease of 41.0 percent year over year.
    
  oBasic and diluted net income per share was $0.28, compared with basic and
    diluted net income per share of $0.49 and $0.48, respectively, for the
    same quarter a year ago.
    
  oAs of December 31, 2012, shareholders' equity was $115.6 million, compared
    to $87.4 million on December 31, 2011, an increase of 32.1 percent.

For the Full Year of 2012:

  oNet sales were $367.5 million, compared with $367.8 million in the same
    period a year ago, a decrease of 0.1 percent; however, net sales increased
    1.0 percent in local currencies.
    
  oOperating income was $34.0 million, compared with $20.2 million, or an
    increase of 6.9 percent, compared with non-GAAP operating income of $34.9
    million (excluding contract termination costs of $14.7 million) in the
    same period a year ago, a decrease of 2.6 percent year over year.
    
  oAdjusted EBITDA, defined here as net income before taxes, depreciation and
    amortization, and other income, and adjusted to exclude share-based
    compensation expense and contract termination costs, was $41.0 million,
    compared with $42.8 million in the same period a year ago, a decrease of
    4.2 percent.
    
  oNet income was $25.4 million, compared with net income of $17.6 million,
    or an increase of 44.2 percent, and compared with Non-GAAP net income of
    $27.6 million (excluding contract termination costs of $14.7 million) in
    the same period a year ago, a decrease of 8.0 percent year over year.
    
  oBasic and diluted net income per share was $1.62 and $1.59, respectively,
    compared with basic and diluted net income per share of $1.13 and $1.12,
    respectively, for the same period a year ago.

Declaration of Quarterly Cash Dividend

The Company's Board of Directors declared a regular quarterly cash dividend of
$0.10 per share payable on March 28, 2013 to shareholders of record as of the
close of business on March 18, 2013. The quarterly dividend was doubled from
$0.05 to $0.10 per share due to the Company's strong cash flow, its record
high year-end cash balance of $79.2 million and the Board's commitment to
return excess capital to shareholders.

NSP Americas, Asia Pacific and Europe Segment Results for the Fourth Quarter:

  oNet sales were $49.7 million, compared with $51.6 million in the same
    quarter a year ago, a decrease of 3.7 percent. In local currencies, net
    sales decreased by 4.2 percent compared to the same quarter a year ago.
    The decrease in local currency net sales was due to lower sales to
    Managers and lower recruiting in the United States. We are continuing our
    efforts to return to growth through training, new products and incentive
    programs, while at the same time ensuring stability in sales to existing
    Distributors and customers. In addition, sales were lower in Peru due to a
    change in local regulations that has restricted our ability to sell our
    key products in this market through a direct selling business model. We
    are currently selling our products through a wholesale channel and
    continue to evaluate our product mix for Peru.
    
  oActive Managers within NSP Americas, Asia Pacific and Europe totaled
    approximately 8,100 and 8,700 at December 31, 2012 and 2011, respectively.
    Active Distributors and customers within NSP Americas, Asia Pacific and
    Europe totaled approximately 153,000 and 165,600 at December 31, 2012 and
    2011, respectively. The number of total Managers, Distributors and
    customers decreased due to lower recruiting in the NSP United States and
    Mexico markets and a change in the operating model in the NSP Peru market.
    
  oContribution margin, defined as net sales less cost of sales and volume
    incentive expense, was $19.1 million, compared with $21.3 million in the
    same quarter a year ago, a decrease of 10.6 percent. The decrease was
    primarily the result of increased product material and related
    distribution costs, as well as the lower sales described above.

NSP Russia, Central and Eastern Europe Segment Results for the Fourth Quarter:

  oNet sales were $15.9 million, compared with $14.6 million in the same
    quarter a year ago, an increase of 8.9 percent. The impact of foreign
    currency fluctuations on net sales was negligible. The Russian markets
    continue to build on the momentum as a result of improved Manager and
    Distributor recruiting efforts and Distributor engagement.
    
  oActive Managers within NSP Russia, Central and Eastern Europe totaled
    approximately 5,600 and 5,400 at December 31, 2012 and 2011, respectively.
    Active Distributors and customers within NSP Russia, Central and Eastern
    Europe totaled approximately 125,800 and 122,800 at December 31, 2012 and
    2011, respectively. Managers and Distributors within NSP Russia, Central
    and Eastern Europe are network marketing oriented.
    
  oContribution margin was $5.9 million, compared with $5.4 million in the
    same quarter a year ago, an increase of 8.1 percent. The increase was
    primarily the result of higher net sales in our Russian markets.

Synergy WorldWide Segment Results for the Fourth Quarter:

  oNet sales were $24.8 million, compared with $25.9 million in the same
    quarter a year ago, a decrease of 4.1 percent. In local currencies, net
    sales decreased 4.0 percent compared to the same quarter a year ago. The
    decrease in local currency net sales was driven by lower sales in Japan
    due to a non-recurring promotion in the prior year, declines in North
    America as a result of a lower level of recruiting, retention and training
    efforts, and lower net sales in Norway as a result of temporary shipping
    restrictions to Norwegian Distributors imposed by the Norwegian Food
    Authority in late November 2012. All issues were resolved with the
    Norwegian Food Authority in late December 2012. Shipments to Norwegian
    Distributors recommenced at the beginning of January 2013. These decreases
    were offset by improvements in Korea due to continued collaboration
    between the Company and key Distributor leadership in developing groups
    with strong selling systems and a broad product line.
    
  oActive Managers within Synergy Worldwide totaled approximately 2,900 and
    2,700 at December 31, 2012 and 2011, respectively. Active Distributors and
    customers within Synergy Worldwide totaled approximately 54,600 and 51,700
    at December 31, 2012 and 2011, respectively. Synergy Worldwide is a
    traditional network-marketing business model.
    
  oContribution margin was $8.6 million, compared to $9.9 million in the same
    quarter a year ago, a decrease of 13.2 percent. The decrease was primarily
    the result of increased product material and related distribution costs,
    as well as the lower sales described above.

Selling, General and Administrative Expenses for the Fourth Quarter:

  oSelling, general and administrative expenses were $27.7 million, compared
    with $27.1 million in the same quarter a year ago, an increase of 2.1
    percent. The impact of foreign currency changes on net sales was
    negligible. The increase in selling general and administrative expenses
    were primarily related to one-time charges incurred in resolving the
    interruption in our Norway business as described above, restructuring our
    operations in some of our foreign markets, and other non-recurring
    charges, collectively totaling approximately $0.8 million.

Effective Income Tax Rate

The effective income tax rate was 39.8 percent, compared with 26.7 percent in
the same quarter a year ago.The current quarter's effective income tax rate
was above the U.S. federal statutory tax rate of 35.0 percent, which was
primarily attributed to a decrease in blended state income tax rate, which
causes a permanent difference relating to state deferred tax assets and an
increase in liabilities associated with uncertain tax positions. The effective
income tax rate of 26.7 percent for the same quarter a year ago was below the
U.S. federal statutory tax rate of 35.0 percent, which was primarily
attributed to increased foreign tax credit utilization, foreign deductible
items, lower tax rates in foreign jurisdictions than the rates in the U.S.,
and a decrease in the recognition of previous expense related to unremitted
earnings.

Non-GAAP Financial Measures

The Company has included information concerning adjusted EBITDA, non-GAAP
operating income and non-GAAP net income because management utilizes this
information in the evaluation of its operations and believes that these
measures are a useful indicator of the Company's ability to fund its business.
Adjusted EBITDA has not been prepared in accordance with generally accepted
accounting principles (GAAP). These non-GAAP financial measure should not be
considered as an alternative to, or more meaningful than, U.S. GAAP net income
as an indicator of the Company's operating performance.Moreover, this
non-GAAP financial measure, as presented by the Company, may not be comparable
to similarly titled measures reported by other companies. Other companies may
use the same or similarly named measures, but exclude different items, which
may not provide investors with a comparable view of our performance in
relation to other companies. The Company has included a reconciliation of
these non-GAAP measures to reported earnings under GAAP in the attached
financial tables.

About Nature's Sunshine Products

Nature's Sunshine Products (Nasdaq:NATR), a leading natural health and
wellness company, markets and distributes nutritional and personal care
products through a global direct sales force of over 340,000 active
independent Managers, Distributors and customers in more than 40 countries.
Nature's Sunshine manufactures most of its products through its own
state-of-the-art facilities to ensure its products continue to set the
standard for the highest quality, safety and efficacy on the market today. The
Company has three reportable business segments that are divided based on the
characteristics of their Distributor base, similarities in compensation plans,
as well as the internal organization of NSP's officers and their
responsibilities (NSP Americas, Asia Pacific and Europe; NSP Russia, Central
and Eastern Europe; and Synergy WorldWide). The Company also supports health
and wellness for children around the world through its partnership with the
Little Heroes Foundation.Additional information about the Company can be
obtained at its website, www.natr.com.

Cautionary Statement Regarding Forward-Looking Statements

In addition to historical information, this release contains certain
forward-looking statements, including statements regarding Distributors and
Managers and payment of dividends. 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 include, but
are not limited to, 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: furtherreviewsof
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)

                                                    December 31, December 31,
                                                     2012         2011
Assets                                                           
Current Assets:                                                  
Cash and cash equivalents                            $ 79,241     $ 58,969
Accounts receivable, net of allowance for doubtful   9,614        9,868
accounts of $631 and $647, respectively
Investments available for sale                       2,071        5,677
Inventories                                          43,280       41,611
Deferred income tax assets                           5,307        4,395
Prepaid expenses and other                           5,820        4,583
Total current assets                                 145,333      125,103
                                                                
Property, plant and equipment, net                   27,950       25,137
Investment securities                                1,276        1,429
Intangible assets                                    1,002        1,151
Deferred income tax assets                           11,516       16,576
Other assets                                         6,842        6,415
                                                    $ 193,919    $ 175,811
                                                                
Liabilities and Shareholders' Equity                             
Current Liabilities:                                             
Accounts payable                                     $ 6,226      $ 5,980
Accrued volume incentives                            18,130       19,326
Accrued liabilities                                  27,302       27,938
Deferred revenue                                     4,311        2,603
Current installments of long-term debt               3,350        3,296
Income taxes payable                                 2,071        8,655
Total current liabilities                            61,390       67,798
                                                                
Liability related to unrecognized tax benefits       10,571       10,426
Long-term debt                                       2,270        5,894
Deferred compensation payable                        1,276        1,429
Other liabilities                                    2,776        2,826
Total long-term liabilities                          16,893       20,575
Shareholders' Equity:                                            
Common stock, no par value; 50,000 shares
authorized, 15,810 and 15,569 issuedand outstanding 77,292       71,628
as of December 31, 2012 and December 31, 2011
Retained earnings                                    48,910       25,879
Accumulated other comprehensive loss                 (10,566)     (10,069)
Total shareholders' equity                           115,636      87,438
                                                    $ 193,919    $ 175,811





NATURE'S SUNSHINE PRODUCTS,INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share information)
(Unaudited)

                                                           ThreeMonthsEnded
                                                            December 31,
                                                           2012      2011
                                                                    
Net sales revenue (net of the rebate portion of volume      $ 90,377  $ 92,056
incentives of $10,375 and $10,813,respectively)
Cost of sales                                               (23,841)  (21,911)
Gross profit                                                66,536    70,145
                                                                    
Operating expenses:                                                  
Volume incentives                                           32,991    33,462
Selling, general and administrative                         27,719    27,086
                                                           61,204    60,548
Operating income                                            5,826     9,597
Other income, net                                           1,639     798
                                                                    
Income before provision for income taxes                    7,465     10,395
Provision for income taxes                                  2,969     2,774
Net income                                                  $ 4,496   $ 7,621
                                                                    
Basic and diluted net income per common share                        
                                                                    
Basic:                                                               
Net income per common share                                 $ 0.28    $ 0.49
                                                                    
Diluted:                                                             
Net income per common share                                 $ 0.28    $ 0.48
                                                                    
                                                                    
Weighted average basic common shares outstanding            15,781    15,567
                                                           16,064    15,568
Weighted average diluted common shares outstanding

                                                           $ 0.05    $ —
Dividends declared per common share



NATURE'S SUNSHINE PRODUCTS,INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share information)

                                                          YearEnded
                                                           December 31,
                                                          2012      2011
                                                                   
Net sales revenue (net of the rebate portion of volume     $ 367,468 $ 367,813
incentives of $43,121 and $44,628,respectively)
Cost of sales                                              (93,324)  (89,409)
Gross profit                                               274,144   278,404
                                                                   
Cost and expenses:                                                  
Volume incentives                                          133,267   133,883
Selling, general and administrative                        106,861   109,606
Contract termination costs                                 —         14,750
                                                          240,128   258,239
Operating income                                           34,016    20,165
Other income, net                                          1,480     1,847
                                                                   
Income before provision for income taxes                   35,496    22,012
Provision for income taxes                                 10,116    4,411
Net income                                                 $ 25,380  $ 17,601
                                                                   
Basic and diluted net income per common share                       
                                                                   
Basic:                                                              
Net income per common share                                $ 1.62    $ 1.13
                                                                   
Diluted:                                                            
Net income per common share                                $ 1.59    $ 1.12
                                                                   
                                                                   
Weighted average basic common shares outstanding           15,648    15,550
                                                          15,987    15,695
Weighted average diluted common shares outstanding

                                                          $ 0.15    $ —
Dividends declared per common share



NATURE'S SUNSHINE PRODUCTS,INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

YearEndedDecember31,                                       2012    2011
CASH FLOWS FROM OPERATING ACTIVITIES:                                
Net income                                                    $25,380 $17,601
Adjustments to reconcile net income to net cash provided by          
operating activities:
Provision for doubtful accounts                               45      (133)
Depreciation and amortization                                 4,078   4,362
Tax benefit from stock option exercise                        (378)   —
Share-based compensation expense                              2,878   3,478
Loss on sale of property and equipment                        85      224
Deferred income taxes                                         4,270   (5,073)
Amortization of bond discount                                 9       9
Purchase of trading investment securities                     (92)    (102)
Proceeds from sale of trading investment securities           354     438
Realized and unrealized gains                                 (90)    (44)
Foreign exchange gains                                        (290)   (466)
Changes in assets and liabilities:                                   
Accounts receivable                                           266     (3,742)
Inventories                                                   (1,466) (5,566)
Prepaid expenses and other                                    (1,155) 1,032
Other assets                                                  (193)   2,986
Accounts payable                                              77      1,316
Accrued volume incentives                                     (1,279) 805
Accrued current and other long-term liabilities               (1,289) (6,152)
Deferred revenue                                              1,708   (782)
Income taxes payable                                          (6,259) 5,009
Liability related to unrecognized tax positions               145     (10,943)
Deferred compensation payable                                 (153)   (349)
Net cash provided by operating activities                     26,651  3,908
CASH FLOWS FROM INVESTING ACTIVITIES:                                
Purchases of property, plant and equipment                    (6,629) (2,419)
Purchases of investments available for sale                   (174)   (6,968)
Proceeds from sale/maturities of investments available for    3,789   7,697
sale
Proceeds from sale of property, plant and equipment           25      11
Net cash used in investing activities                         (2,989) (1,679)
CASH FLOWS FROM FINANCING ACTIVITIES:                                
Payments of cash dividends                                    (2,349) —
Proceeds from issuance of long-term debt                      —       10,000
Principal payments of long-term debt                          (3,570) (810)
Tax benefit from stock option exercise                        378     —
Proceeds from exercise of stock options                       2,408   398
Net cash provided by (used in) financing activities           (3,133) 9,588
Effect of exchange rates on cash and cash equivalents         (257)   (452)
Net increase in cash and cash equivalents                     20,272  11,365
Cash and cash equivalents at beginning of the year            58,969  47,604
Cash and cash equivalents at end of the year                  $79,241 $58,969



NATURE'S SUNSHINE PRODUCTS,INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(Amounts in thousands)
(Unaudited)

                                Three Months Ended
                                 December 31,
                                2012      2011
                                         
Net income                       $4,496    $7,621
Adjustments:                              
Depreciation and amortization    1,050     1,158
Share-based compensation expense 877       1,561
Other (income) expense, net*     (1,639)   (798)
Taxes                            2,969     2,774
Adjusted EBITDA                  $7,753    $12,316
                                         
                                Year Ended
                                 December 31,
                                2012      2011
                                         
Net income                       $25,380   $17,601
Adjustments:                              
Depreciation and amortization    4,078     4,362
Share-based compensation expense 2,878     3,478
Contract termination costs       —         14,750
Other (income) expense, net*     (1,480)   (1,847)
Taxes                            10,116    4,411
Adjusted EBITDA                  $40,972   $42,755

* Other income (expense), net is primarily comprised of foreign exchange gains
(losses), interest income, and interest expense.

Distributor Information

Our revenue is highly dependent upon the number and productivity of our
Managers, Distributors and customers. Growth in sales volume requires an
increase in the productivity and/or growth in the total number of Managers,
Distributors and customers.

The following table provides information concerning the number of total
Managers, Distributors and customers by segment, as of the dates indicated.

Total Managers, Distributors and Customers by Segment as of December 31,
            2012                  2011                  2010
             Distributors          Distributors          Distributors
            &            Managers &            Managers &            Managers
             Customers             Customers             Customers
                                                                
NSP
Americas,    350,400      8,100    388,400      8,700    431,300      9,300
Asia Pacific
& Europe
NSP Russia,
Central and  252,700      5,600    266,200      5,400    236,600     5,400
Eastern
Europe
Synergy      118,200      2,900    112,300      2,700   95,600       2,300
WorldWide
Total       721,300      16,600   766,900      16,800  763,500     17,000

"Total Managers" includes independent Managers under our various compensation
plans that have achieved and maintained specified and personal groups sale
volumes as of the date indicated. To maintain Manager status, an individual
must continue to meet certain purchase volume levels. As such, all Managers
are considered to be active Managers.

"Total Distributors and customers" includes our independent Distributors and
customers who have purchased products directly from the Company for resale
and/or personal consumption during the previous twelve months ended as of the
date indicated. This includes Manager, Distributor and customer accounts that
may have become inactive since such respective dates.

The following table provides information concerning the number of active
Distributors and customers by segment, as of the dates indicated.

Active Distributors and Customers by Segment as of December 31,
                                      2012         2011         2010
                                      Distributors Distributors Distributors
                                       & Customers  & Customers  & Customers
                                                              
NSP Americas, Asia Pacific & Europe   153,000      165,600      181,600
NSP Russia, Central and Eastern Europe 125,800      122,800      123,400
Synergy WorldWide                      54,600       51,700       45,100
Total                                 333,400      340,100      350,100

"Active Customers and Distributors" includes our 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. All of our Managers are active.

The following tables provide information concerning the number of new
Managers, Distributors and customers by segment, as of the dates indicated.

New Managers, Distributors and Customers by Segment for the Year Ended
December 31,
            2012                   2011                2010
             Distributors          Distributors          Distributors
            &            Managers &            Managers &            Managers
             Customers             Customers             Customers
                                                                
NSP
Americas,    166,400      4,200    185,600      4,800    218,100      6,900
Asia Pacific
& Europe
NSP Russia,
Central and  78,000       1,500    74,700       1,700    74,800      2,000
Eastern
Europe
Synergy      73,700       1,700    72,000       1,600   n/a          n/a
WorldWide
Total        318,100      7,400    322,300      8,100   292,900     8,900

"New Managers" includes independent Managers under our various compensation
plans that first achieved the rank of Manager during the previous twelve
months ended as of the date indicated.

"New Distributors and customers" include our independent distributors and
customers who have made their initial product purchase directly from us for
resale and/or personal consumption during the previous twelve months ended as
of the date indicated.

CONTACT: Stephen M. Bunker
         Chief Financial Officer
         Nature's Sunshine Products, Inc.
         Lehi, Utah 84043
         (801) 341-7303
 
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