Nature's Sunshine Products Reports First Quarter Financial Results and Declares Quarterly Cash Dividend

Nature's Sunshine Products Reports First Quarter Financial Results and
Declares Quarterly Cash Dividend

LEHI, Utah, May 8, 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 first quarter, and
declared a quarterly cash dividend of $0.10 per share.

For the First Quarter of 2013:

  *Net sales were $96.5 million, compared with $92.9 million in the same
    quarter a year ago, an increase of 3.9 percent, and net sales increased
    4.2 percent in local currencies.
    
  *As of March 31, 2013 and 2012, total active Managers worldwide were 18,200
    and 19,000, respectively, while total active Distributors and customers
    worldwide were 341,200 and 349,100, respectively.
    
  *Operating income was $6.9 million, compared with $9.2 million in the same
    quarter a year ago, a decrease of 24.3 percent. Operating income decreased
    by $2.2 million due to a $3.7 million increase in selling, general and
    administrative expenses (of which $1.4 million was due to one-time
    severance costs and the acceleration of stock option expense incurred
    related to the resignation of our former Chief Executive Officer, and $1.5
    million consisted of increased compensation and benefits related to the
    Company's investment in sales, marketing and product development personnel
    designed to enhance net sales growth and profitability). These increased
    expenses were partially offset by increased net sales and improvement in
    cost of sales as a percentage of net sales.
    
  *Adjusted EBITDA, defined here as net income before taxes, depreciation and
    amortization, and other income, and adjusted to exclude share-based
    compensation expense was $9.2 million, compared with $10.9 million in the
    same quarter a year ago, a decrease of 15.8 percent.
    
  *Net income was $4.9 million, compared with $7.2 million in the same
    quarter a year ago, a decrease of 32.7 percent.
    
  *Basic and diluted net income per share were $0.31 and $0.30, respectively,
    compared to $0.46 for basic and diluted for the same quarter a year ago.
    
  *As of March 31, 2013, shareholders' equity was $118.8 million, compared to
    $115.6 million as of December 31, 2012, an increase of 2.8 percent.

Declaration of Quarterly Cash Dividend:

The Company's Board of Directors declared a regular quarterly cash dividend of
$0.10 per share payable on May 30, 2013 to shareholders of record as of the
close of business on May 20, 2013.

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

  *Net sales were $53.1 million, compared with $53.9 million in the same
    quarter a year ago, a decrease of 1.5 percent. In local currencies, net
    sales decreased by 1.0 percent compared to the same quarter a year ago.
    Segment net sales revenue and the number of Distributors and customers
    decreased primarily due to lower recruiting in the NSP Canada, Japan and
    Mexico markets and were partially offset by increased activity in the NSP
    Venezuela market. We are continuing our efforts to return to growth
    through investment in sales and marketing personnel, training, new
    products, sales programs and incentive programs.
    
  *Active Managers within NSP Americas, Asia Pacific and Europe totaled
    approximately 9,100 and 10,200 at March 31, 2013 and 2012, respectively.
    Active Distributors and customers within NSP Americas, Asia Pacific and
    Europe totaled approximately 157,300 and 169,200 at March 31, 2013 and
    2012, respectively. The number of total Distributors and customers
    decreased due to lower recruiting in several key markets.
    
  *Contribution margin, defined as net sales less cost of sales and volume
    incentive expense, was $22.0 million, compared with $21.3 million in the
    same quarter a year ago, an increase of 2.9 percent. The increase was
    primarily a result of increased allocation of manufacturing costs to other
    operating segments as well as sales mix.

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

  *Net sales were $16.1 million, compared with $15.6 million in the same
    quarter a year ago, an increase of 3.5 percent. Our Russia market
    continues its momentum with a second consecutive quarter of year-over-year
    growth, the result of improved Manager and Distributor recruiting efforts
    and Distributor engagement.
    
  *Active Managers within NSP Russia, Central and Eastern Europe totaled
    approximately 6,000 and 5,900 at March 31, 2013 and 2012, respectively.
    Active Distributors and customers within NSP Russia, Central and Eastern
    Europe totaled approximately 130,000 and 127,000 at March 31, 2013 and
    2012, respectively. Managers and Distributors within NSP Russia, Central
    and Eastern Europe are more network marketing oriented when compared to
    those of NSP Americas, Asia Pacific and Europe.
    
  *Contribution margin was $6.0 million, or flat compared to the same quarter
    a year ago.

Synergy WorldWide Results for the First Quarter:

  *Net sales were $27.2 million, compared with $23.3 million in the same
    quarter a year ago, an increase of 16.5 percent. The increase in net sales
    was driven by improvements in Korea due to strong Manager leadership and a
    well-defined selling system supported by a structured training program, as
    well as by our European markets in which strong Manager leadership in
    recruiting and training efforts continues to effectively build our
    Distributor base. Following the successful resolution of temporary
    shipping restrictions to Norwegian Distributors by the Norwegian Food
    Authority in late December 2012, sales returned to prior levels in the
    first quarter of 2013.
    
  *Active Managers within Synergy WorldWide totaled approximately 3,100 and
    2,900 at March 31, 2013 and 2012, respectively. Active Distributors and
    customers within Synergy WorldWide totaled approximately 53,900 and 52,900
    at March 31, 2013 and 2012, respectively. Synergy WorldWide is a
    traditional network-marketing business model.
    
  *Contribution margin was $9.1 million, compared to $8.2 million in the same
    quarter a year ago, an increase of 11.1 percent. The increase was
    primarily the result of the higher net sales described above, partially
    offset by increased cost allocations from manufacturing activities.

Selling, General and Administrative Expenses for the First Quarter:

  *Selling, general and administrative expenses were $30.1 million, compared
    with $26.4 million in the same quarter a year ago, an increase of 14.1
    percent. The $3.7 million increase was primarily related to (i) increased
    U.S. compensation costs related to increased sales, marketing and product
    development personnel that will further encourage growth of net sales and
    profitability, (ii) severance costs and the acceleration of stock option
    expense associated with the resignation of our previous Chief Executive
    Officer, (iii) expenses for Synergy Global Summit which occurs every other
    year and (iv) stock-based compensation expenses, excluding the additional
    stock option expense incurred with the resignation of our previous Chief
    Executive Officer.

Effective Income-tax Rate

The effective income tax rate for the quarter was 33.1 percent compared with
20.3 percent in the same quarter a year ago.The current quarter's effective
tax rate was below the U.S. federal statutory tax rate of 35.0 percent, and
was primarily attributed to net favorable foreign items related to foreign tax
rate differences, the impact of unremitted earnings, and adjustments to
foreign valuation allowances, offset, in part, by an increase in tax
liabilities associated with uncertain tax positions. The effective income tax
rate of 20.3 percent for the same quarter a year ago was attributed to foreign
deductible items, including a favorable inflation adjustment, and a decrease
in tax liabilities associated with uncertain tax positions due to the
expiration of the statute of limitations on certain liabilities in various
foreign jurisdictions, in addition to a valuation allowance release related to
the utilization of foreign tax credits.

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
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

                                                      March 31, December 31,
                                                      2013       2012
Assets                                                           
Current assets:                                                  
Cash and cash equivalents                             $83,036  $79,241
Accounts receivable, net of allowance for doubtful     10,014    9,614
accounts of $636 and $631, respectively
Investments available for sale                        2,110     2,071
Inventories                                           41,342    43,280
Deferred income tax assets                            5,090     5,307
Prepaid expenses and other                            6,470     5,820
Total current assets                                  148,062   145,333
                                                                
Property, plant and equipment, net                    27,891    27,950
Investment securities                                 1,235     1,276
Intangible assets, net                                965       1,002
Deferred income tax assets                            11,542    11,516
Other assets                                          6,496     6,842
                                                      $196,191 $193,919
                                                                
Liabilities and Shareholders' Equity                             
Current liabilities:                                             
Accounts payable                                      $5,144   $6,226
Accrued volume incentives                             20,216    18,130
Accrued liabilities                                   27,287    27,302
Deferred revenue                                      3,571     4,311
Current installments of long-term debt                3,362     3,350
Income taxes payable                                  1,451     2,071
Total current liabilities                             61,031    61,390
                                                                
Liability related to unrecognized tax benefits        10,609    10,571
Long-term debt                                        1,424     2,270
Deferred compensation payable                         1,235     1,276
Other liabilities                                     3,057     2,776
Total long-term liabilities                           16,325    16,893
                                                                
Shareholders' equity:                                            
Common stock, no par value; 50,000 shares authorized,
15,874 and 15,810 shares issued and outstanding as of  79,072    77,292
March31, 2013 and December 31, 2012, respectively
Retained earnings                                     52,191    48,910
Accumulated other comprehensive loss                  (12,428)  (10,069)
Total shareholders' equity                            118,835   115,636
                                                      $196,191 $193,919
                                                                

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

                                                   ThreeMonthsEnded
                                                   March 31,
                                                   2013      2012
                                                            
Net sales revenue                                  $96,479 $92,868
Cost of sales                                      (24,445) (23,729)
Gross profit                                        72,034   69,139
                                                            
Volume incentives                                  34,975   33,581
Selling, general and administrative                30,117   26,384
Operating income                                   6,942    9,174
Other income (loss), net                           330      (110)
Income before provision for income taxes           7,272    9,064
Provision for income taxes                         2,408    1,836
Net income                                         $4,864  $7,228
                                                            
Basic and diluted net income per common share                
                                                            
Basic:                                                       
Net income per common share                        $0.31   $0.46
                                                            
Diluted:                                                     
Net income per common share                        $0.30   $0.46
                                                            
                                                            
Weighted average basic common shares outstanding   15,822   15,578
                                                            
Weighted average diluted common shares outstanding 15,956   15,846
                                                            
Dividends declared per common share                $0.10   $—
                                                            

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

                                                          ThreeMonthsEnded
                                                          March31,
                                                          2013      2012
CASH FLOWS FROM OPERATING ACTIVITIES:                               
Net income                                                $4,864  $7,228
Adjustments to reconcile net income to net cash provided            
by operating activities:
Provision for doubtful accounts                           (25)     5
Depreciation and amortization                             1,088    1,084
Share-based compensation expense                          1,148    636
Loss on sale of property and equipment                    11       13
Deferred income taxes                                     235      449
Amortization of bond discount                             1        3
Purchase of trading investment securities                 (19)     (19)
Proceeds from sale of trading investment securities       105      92
Realized and unrealized gains on investments              (21)     (42)
Foreign exchange losses                                   (416)    553
Changes in assets and liabilities:                                  
Accounts receivable                                       (555)    (3,279)
Inventories                                               1,716    281
Prepaid expenses and other current assets                 (658)    (884)
Other assets                                              83       578
Accounts payable                                          (943)    (1,250)
Accrued volume incentives                                 2,206    2,038
Accrued liabilities                                       262      (3,597)
Deferred revenue                                          (740)    933
Income taxes payable                                      (516)    (2,988)
Liability related to unrecognized tax benefits            38       (1,261)
Deferred compensation payable                             (41)     15
Net cash provided by operating activities                 7,823    588
CASH FLOWS FROM INVESTING ACTIVITIES:                               
Purchases of property, plant and equipment                (1,165)  (917)
Proceeds from sale of property, plant and equipment       8        15
Proceeds from sale of investments available for sale      —       3,499
Purchase of investments available for sale                (83)     (217)
Net cash provided by investing activities                 (1,240)  2,380
CASH FLOWS FROM FINANCING ACTIVITIES:                               
Payments of cash dividends                                (1,583)  —
Principal payments of long-term debt                      (834)    (816)
Proceeds from the exercise of stock options               633      337
Net cash used in financing activities                     (1,784)  (479)
Effect of exchange rates on cash and cash equivalents     (1,004)  (116)
Net increase in cash and cash equivalents                 3,795    2,373
Cash and cash equivalents at the beginning of the period  79,241   58,969
Cash and cash equivalents at end of the period            $83,036 $61,342
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                   
Cash paid for income taxes                                $3,282  $6,327
Cash paid for interest                                    20       33
                                                                   

NATURE'S SUNSHINE PRODUCTS,INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(Amounts in thousands)
(Unaudited)
                                                           
                                                           
                                          Three Months Ended
                                          March 31,
                                          2013              2012
                                                           
Net income                                $4,864          $7,228
Adjustments:                                                
Depreciation and amortization             1,088            1,084
Share-based compensation expense          1,148            636
Other (income) loss, net*                 (330)            110
Taxes                                     2,408            1,836
Adjusted EBITDA                           $9,178          $10,894
                                                           
                                                           
* 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 March 31,

                                 2013                  2012
                                 Distributors         Distributors 
                                  &                    &            
                                  Customers    Managers Customers    Managers
                                                               
NSP Americas, Asia Pacific &       338,500     9,100   380,700     10,200
Europe
NSP Russia, Central and Eastern    253,400     6,000   264,100     5,900
Europe
Synergy WorldWide                  118,300     3,100   113,700     2,900
Total                              710,200     18,200  758,500     19,000

"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 product sales 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 March 31,

                                     2013         2012
                                     Distributors Distributors
                                       & Customers  & Customers
                                                 
NSP Americas, Asia Pacific & Europe   157,300     169,200
NSP Russia, Central and Eastern Europe 130,000     127,000
Synergy WorldWide                      53,900      52,900
                                      341,200     349,100

"Active 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 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 Quarter Ended
March 31,

                                 2013                  2012
                                 Distributors         Distributors 
                                  &                    &            
                                  Customers    Managers Customers    Managers
                                                               
NSP Americas, Asia Pacific &       37,700      1,000   46,200      1,300
Europe
NSP Russia, Central and Eastern    23,000      400     20,900      400
Europe
Synergy WorldWide                  18,500      500     17,900      400
                                  79,200      1,900   85,000      2,100

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

New Managers, Distributors and Customers by Segment for the Twelve Months
Ended March 31,

                                 2013                  2012
                                 Distributors         Distributors 
                                  &                    &            
                                  Customers    Managers Customers    Managers
                                                               
NSP Americas, Asia Pacific &       157,800     4,000   182,200     4,700
Europe
NSP Russia, Central and Eastern    80,000      1,500   75,600      1,600
Europe
Synergy WorldWide                  74,300      1,800   72,700      1,600
                                  312,100     7,300   330,500     7,900

"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: Steve M. Bunker
         Chief Financial Officer
         Nature's Sunshine Products, Inc.
         Lehi, Utah 84043
         (801) 341-7303
 
Press spacebar to pause and continue. Press esc to stop.