Nature's Sunshine Products Reports Third Quarter 2013 Financial Results

Nature's Sunshine Products Reports Third Quarter 2013 Financial Results

  *Third quarter net sales revenue growth of 1.3 percent (2.4 percent in
    local currency)
  *Significant investment spending, resulting in lower operating income
    margin
  *Board of Directors approved a $0.10 per share regular quarterly dividend
  *Repurchased 107,722 shares of common stock

LEHI, Utah, Nov. 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 third quarter ended
September 30, 2013 and declared a regular quarterly cash dividend of $0.10 per
share.

"We're pleased with our third quarter results which reflect continued progress
across both our NSP and Synergy businesses," commented Gregory L. Probert,
Chairman and Chief Executive Officer. "In addition to Synergy's record sales
quarter and NSP Russia, Central and Eastern Europe's fourth consecutive
quarter of year-over-year sales growth, we experienced double digit growth in
Mexico.

"These improvements are the early result of our incremental investments in
sales and marketing personnel, R&D and new product development, distributor
training, sales incentive programs and information technology. These
investments amounted to $1.3 million of additional SG&A expense in the third
quarter, the majority of which is recurring and will negatively impact our
near-term operating income margin. However, these essential investments
position us to drive sales growth in all of our markets and to restore our
operating income margin to double digits in 2015.

"In addition, we are in the early stages of a $40 million Oracle ERP
implementation that will provide us with a single integrated software solution
and greatly enhance our ability to better integrate our people, process and
business systems in all of our markets around the world. This investment will
allow us to streamline many of our processes, provide better data and
visibility into our business, facilitate delivering products to market faster
and more efficiently, as well as to better serve our Managers, Distributors
and customers. We anticipate completion of this project by mid-2016."

Mr. Probert continued, "The $0.10 quarterly cash dividend and our ongoing
share repurchase program demonstrate our confidence in the Company's growth
prospects and strong cash flow generation, and our commitment to return excess
capital to shareholders."

For the Third Quarter of 2013:

  *Net sales revenue increased 1.3 percent to $92.5 million, compared to
    $91.2 million in the third quarter of 2012. In local currencies, net sales
    revenue increased by 2.4 percent.
    
  *Selling, general and administrative expenses increased 7.4 percent to
    $28.2 million, compared with $26.2 million in the third quarter of 2012.
    The increase was primarily due to the Company's incremental investment in
    sales, marketing, science and product development personnel and programs
    to stimulate sales growth and drive profitability.
    
  *Operating income decreased 22.9 percent to $6.7 million, compared to $8.7
    million in the third quarter of 2012. The decrease was primarily due to a
    $1.9 million increase in selling, general and administrative expenses
    attributable to investments in growth initiatives.
    
  *Adjusted EBITDA, defined here as net income before taxes, depreciation,
    amortization and other income, adjusted to exclude share-based
    compensation expense, decreased 18.4 percent to $8.5 million, compared to
    $10.4 million in the third quarter of 2012.
    
  *Net income was $4.9 million, or $0.29 per diluted common share, compared
    to $6.4 million, or $0.40 per diluted common share in the third quarter of
    2012.
    
  *Cash and cash equivalents as of September 30, 2013 were $76.6 million,
    compared to $79.2 million as of December 31, 2012, which reflects $24.0
    million paid in a special one-time dividend, $4.8 million paid in regular
    quarterly dividends, and $1.9 million used to repurchase shares in the
    first nine months of the year.
    
  *Shareholders' equity as of September 30, 2013 was $104.8 million, compared
    to $115.6 million as of December 31, 2012.Including dividends paid in the
    first nine months of the year, shareholders' equity increased by 15.6
    percent.
    
  *Active Managers worldwide were 16,900 and active Distributors and
    customers worldwide were 324,900 as of September 30, 2013 compared to
    16,900 and 325,900, respectively in the third quarter of 2012. New manager
    were flat with the prior year, as were new Distributor and customer
    recruiting.

NSP Americas, Asia Pacific and Europe Results for the Third Quarter of 2013:

  *Net sales revenue decreased 2.4 percent to $50.6 million, compared to
    $51.8 million in the third quarter of 2012. In local currencies, net sales
    revenue decreased by 0.7 percent compared to the third quarter of 2012.
    Higher net sales in Mexico and South America were more than offset by
    lower net sales in the United States and Japan. In Mexico, net sales
    increased year-over-year for the second consecutive quarter, up 11.1
    percent from the third quarter of 2012. In the United States, net sales
    declined 2.2 percent year-over-year.
    
  *Contribution margin, defined as net sales revenue less cost of sales and
    volume incentive expense, was $20.0 million, compared to $20.5 million in
    the third quarter of 2012, primarily as a result of lower net sales
    revenue.
    
  *Active Managers within the segment totaled approximately 8,500 and active
    Distributors and customers within the segment were approximately 153,200
    as of September 30, 2013, and compared to 8,800 and 159,600, respectively,
    as of September 30, 2012. New Managers were down 10.0 percent as compared
    to the prior year and new Distributor and Customer recruits were down 8.3
    percent.

NSP Russia, Central and Eastern Europe Results for the Third Quarter of 2013:

  *Net sales revenue increased 10.5 percent to $14.6 million, compared to
    $13.2 million in the third quarter of 2012. Net sales revenue increased
    year-over-year for the fourth consecutive quarter as a result of improved
    recruiting, Distributor leadership engagement, Distributor recognition,
    promotion and training, and the enhanced focus afforded by the corporate
    organizational realignment during 2012. In addition, we launched a new
    weight management program at our annual regional convention in September.
    
  *Contribution margin increased 7.3 percent to $5.4 million, compared to
    $5.0 million in the third quarter of 2012, primarily as a result of higher
    net sales revenue.
    
  *Active Managers within the segment were approximately 5,200 and active
    Distributors and customers within the segment were approximately 119,400
    as of September 30, 2013, and compared to 5,000 and 112,900, respectively
    as of September 30, 2012. New Managers were flat with prior year and new
    Distributor and Customer recruiting was up 22.2 percent.

Synergy WorldWide Results for the Third Quarter of 2013:

  *Net sales revenue increased 4.0 percent to $27.3 million, compared to
    $26.3 million in the third quarter of 2012. This marks the highest
    quarterly sales in the segment's history. In local currencies, net sales
    revenue increased by 4.6 percent compared to the third quarter of 2012
    driven by increased sales in South Korea, Scandinavia and Central Europe,
    partially offset by declines in North America. The increase in net sales
    revenue is primarily a result of re-engaged leadership, strong execution,
    and momentum stemming from the Company's global summit and pre-launch of
    the SLMsmart weight management line in South Korea. This program will be
    rolled out to other markets around the world throughout 2014.
    
  *Contribution margin increased 1.3 percent to $9.5 million, compared to
    $9.4 million in the third quarter of 2012, primarily as a result of
    increased net sales revenue.
    
  *Active Managers within the segment were approximately 3,200 and active
    Distributors and customers within the segment were approximately 52,300 as
    of September 30, 2013, and compared to 3,100 and 53,400, respectively as
    of September 30, 2012. New Managers increased 20.0 percent over prior
    year, while Distributor and customer recruiting decreased 5.6 percent over
    prior year.

Effective Income Tax Rate

The effective income tax rate for the third quarter of 2013 was 24.7 percent
compared to 25.0 percent in the third quarter of 2012. The current quarter's
effective tax rate was below the U.S. federal statutory tax rate of 35.0
percent which was primarily attributable to foreign tax credit benefits, net
favorable foreign items related to foreign tax rate differences, the impact of
unremitted earnings, and adjustments to foreign valuation allowances, offset
by an increase in tax liabilities associated with uncertain tax positions.

Quarterly Cash Dividend and Ongoing Share Repurchase Program

The Company's Board of Directors approved its regular quarterly cash dividend
of $0.10 per share payable on November 18, 2013 to shareholders of record as
of the close of business on November 29, 2013.

On August 8, 2013, the Board of Directors authorized a $10 million share
repurchase program to be implemented over two years. Such purchases may be
made in the open market, through block trades, in privately negotiated
transactions or otherwise. The timing and amount of any shares repurchased
will be determined based on the Company's evaluation of market conditions and
other factors and the program may be discontinued or suspended at any time.

During the three months ended September 30, 2013, the Company repurchased
107,722 shares of its common stock under the share repurchase program for $1.9
million. At September 30, 2013, the remaining balance available for
repurchases under the program was $8.1 million.

The regular quarterly dividend, in addition to the special one-time dividend
that was announced and paid in August 2013, and the on-going share repurchase
program are due to the Company's strong cash flow, healthy cash balance of
$76.6 million, the Board's commitment to return capital to shareholders and
its confidence in the Company's long-term growth prospects.

Non-GAAP Financial Measures

The Company has included information which has not been prepared in accordance
with generally accepted accounting principles (GAAP), such as 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. These non-GAAP financial measures
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, these non-GAAP financial measures, 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.

Conference Call

Nature's Sunshine Products will host a conference call to discuss its third
quarter 2013 results on Thursday, November 7, 2013 at 11:00 AM Eastern Time.
The toll-free dial-in number for callers in the U.S. and Canada
is1-877-407-0789, conference ID: 10000592. International callers can
dial1-201-689-8562, conference ID: 10000592. A replay will be available from
November 7, 2013 at 2:00 PM Eastern Time through November 21, 2013 at 11:59 PM
Eastern Time at1-877-870-5176(U.S. and Canada) or1-858-384-5517
(International), replay PIN: 10000592. The call will also be webcast live and
will be available on the Investing section of Nature's Sunshine Products'
website at www.naturessunshine.com for 90 days.

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.naturessunshine.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 Products 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 Products' 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 Products 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)
(Unaudited)

                                                   September30, December31,
                                                    2013          2012
Assets                                                           
Current assets:                                                  
Cash and cash equivalents                          $ 76,623      $ 79,241
Accounts receivable, net of allowance for doubtful  10,908        9,614
accounts of $1,008 and $631, respectively
Investments available for sale                     2,080         2,071
Inventories                                        43,643        43,280
Deferred income tax assets                         5,284         5,307
Prepaid expenses and other                         6,864         5,820
Total current assets                               145,402       145,333
                                                                
Property, plant and equipment, net                 29,347        27,950
Investment securities                              1,109         1,276
Intangible assets, net                             891           1,002
Deferred income tax assets                         11,487        11,516
Other assets                                       6,851         6,842
                                                   $ 195,087     $ 193,919
                                                                
Liabilities and Shareholders' Equity                             
Current liabilities:                                             
Accounts payable                                   $ 7,209       $ 6,226
Accrued volume incentives                          20,014        18,130
Accrued liabilities                                28,803        27,302
Deferred revenue                                   3,820         4,311
Current installments of long-term debt             3,110         3,350
Income taxes payable                               2,174         2,071
Total current liabilities                          65,130        61,390
                                                                
Liability related to unrecognized tax benefits     11,486        10,571
Long-term debt                                     10,000        2,270
Deferred compensation payable                      1,109         1,276
Other liabilities                                  2,535         2,776
Total long-term liabilities                        25,130        16,893
                                                                
Commitments and Contingencies                                   
                                                                
Shareholders' equity:                                            
Common stock, no par value, 50,000 shares
authorized, 16,208 and 15,810 shares                82,246        77,292
issuedandoutstanding as of September30, 2013 and
December31, 2012, respectively
Retained earnings                                  35,879        48,910
Accumulated other comprehensive loss               (13,298)      (10,566)
Total shareholders' equity                         104,827       115,636
                                                   $ 195,087     $ 193,919



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

                                                    ThreeMonthsEnded
                                                     September30,
                                                    2013      2012
                                                             
Net sales revenue                                   $ 92,458  $ 91,232
Cost of sales                                       (23,655)  (23,144)
Gross profit                                        68,803    68,088
                                                             
Operating expenses:                                           
Volume incentives                                   33,920    33,155
Selling, general and administrative                 28,170    26,228
Operating income                                    6,713     8,705
Other income (expense), net                         (269)     (214)
Income before provision for income taxes            6,444     8,491
Provision for income taxes                          1,594     2,121
Net income                                          $ 4,850   $ 6,370
                                                             
Basic and diluted net income per common share                
                                                             
Basic:                                                        
Net income                                          $ 0.30    $ 0.41
                                                             
Diluted:                                                      
Net income                                          $ 0.29    $ 0.40
                                                             
Weighted average basic common shares outstanding    16,068    15,628
Weighted average diluted common shares outstanding  16,490    15,971
                                                             
Dividends declared per common share                 $ 1.60    $ 0.05



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

                                                    NineMonthsEnded
                                                     September30,
                                                    2013      2012
                                                             
Net sales revenue                                   $ 282,612 $ 277,091
Cost of sales                                       (70,730)  (69,483)
Gross profit                                        211,882   207,608
                                                             
Operating expenses:                                           
Volume incentives                                   103,420   100,276
Selling, general and administrative                 86,996    79,142
Operating income                                    21,466    28,190
Other income (expense), net                         1,543     (159)
Income before provision for income taxes            23,009    28,031
Provision for income taxes                          7,243     7,147
Net income                                          15,766    20,884
                                                             
Basic and diluted net income per common share                
                                                             
Basic:                                                        
Net income                                          $ 0.99    $ 1.34
                                                             
Diluted:                                                      
Net income                                          $ 0.97    $ 1.31
                                                             
Weighted average basic common shares outstanding    15,930    15,603
Weighted average diluted common shares outstanding  16,327    15,917
                                                             
Dividends declared per common share                 $ 1.80    $ 0.10



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

                                                           NineMonthsEnded
                                                            September30,
                                                           2013      2012
CASH FLOWS FROM OPERATING ACTIVITIES:                                
Net income                                                 $ 15,766  $ 20,884
Adjustments to reconcile net income to net cash provided by          
operating activities:
Provision for doubtful accounts                            322       39
Depreciation and amortization                              3,279     3,028
Share-based compensation expense                           2,599     2,001
(Gain) loss on sale of property and equipment              (127)     23
Deferred income taxes                                      52        (307)
Amortization of bond discount                              1         3
Purchase of trading investment securities                  (62)      (60)
Proceeds from sale of trading investment securities        308       268
Realized and unrealized gains on investments               (78)      (63)
Foreign exchange (gains) losses                            (1,057)   856
Changes in assets and liabilities:                                   
Accounts receivable                                        (1,781)   (429)
Inventories                                                (678)     (1,926)
Prepaid expenses and other current assets                  (1,083)   (1,021)
Other assets                                               (97)      (148)
Accounts payable                                           878       (361)
Accrued volume incentives                                  2,047     386
Accrued liabilities                                        1,284     (1,264)
Deferred revenue                                           (491)     403
Income taxes payable                                       199       (4,222)
Liability related to unrecognized tax benefits             915       (654)
Deferred compensation payable                              (167)     (112)
Net cash provided by operating activities                  22,029    17,324
CASH FLOWS FROM INVESTING ACTIVITIES:                                
Purchases of property, plant and equipment                 (4,590)   (5,617)
Proceeds from sale of property, plant and equipment        233       25
Proceeds from maturity and sale of investments available    100       3,689
for sale 
Purchase of investments available for sale                 (278)     (197)
Net cash used in investing activities                      (4,535)   (2,100)
CASH FLOWS FROM FINANCING ACTIVITIES:                                
Net borrowings on line of credit                           10,000    —
Principal payments of long-term debt                       (2,509)   (2,465)
Dividends paid                                             (28,797)  (1,560)
Proceeds from the exercise of stock options                4,300     1,982
Repurchase of common stock                                 (1,945)   —
Net cash used in financing activities                      (18,951)  (2,043)
Effect of exchange rates on cash and cash equivalents      (1,161)   393
Net increase (decrease) in cash and cash equivalents       (2,618)   13,574
Cash and cash equivalents at the beginning of the period   79,241    58,969
Cash and cash equivalents at the end of the period         $ 76,623  $ 72,543
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                    
Cash paid for income taxes                                 $ 7,068   $ 12,694
Cash paid for interest                                     95        97



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

                                          Three Months Ended
                                          September 30,
                                          2013               2012
                                                            
Net income                                $ 4,850            $ 6,370
Adjustments:                                                 
Depreciation and amortization             1,098              1,013
Share-based compensation expense          669                680
Other (income) expense, net*              269                214
Taxes                                     1,594              2,121
Adjusted EBITDA                           $ 8,480            $ 10,398
                                                            
                                                            
                                          Nine Months Ended
                                          September 30,
                                          2013               2012
                                                            
Net income                                $ 15,766           $ 20,884
Adjustments:                                                 
Depreciation and amortization             3,279              3,028
Share-based compensation expense          2,599              2,001
Other (income) expense, net*              (1,543)            159
Taxes                                     7,243              7,147
Adjusted EBITDA                           $ 27,344           $ 33,219
                                                            
* 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

            September 30, 2013    June 30, 2013         September 30, 2012
            Distributors Managers Distributors Managers Distributors Managers
             &Customers           &Customers           &Customers
                                                                
NSP
Americas,
Asia         329,300      8,500    331,500      9,100    362,200      8,800
Pacificand
Europe
NSP Russia,
Central and  257,800      5,200    254,700      5,000    252,900      5,000
Eastern
Europe
Synergy      118,500      3,200    119,900      3,100    115,900      3,100
WorldWide 
            705,600      16,900   706,100      17,100   731,000      16,900

"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

                          September 30, 2013 June 30, 2013 September 30, 2012
                          Distributors       Distributors  Distributors
                           &Customers        &Customers   &Customers
                                                         
NSP Americas, Asia         153,200            155,400       159,600
Pacificand Europe 
NSP Russia, Central and    119,400            102,900       112,900
Eastern Europe 
Synergy WorldWide         52,300             54,700        53,400
                          324,900            331,000       325,900

"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

            September 30, 2013    June 30, 2013         September 30, 2012
            Distributors Managers Distributors Managers Distributors Managers
             &Customers           &Customers           &Customers
                                                                
NSP
Americas,
Asia         37,600       900      38,300       1,100    41,000       1,000
Pacificand
Europe
NSP Russia,
Central and  21,500       300      20,500       400      17,600       300
Eastern
Europe
Synergy      16,900       600      19,400       500      17,900       500
WorldWide 
            76,000       1,800    78,200       2,000    76,500       1,800

"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.

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 Twelve Months

            September 30, 2013    June 30, 2013         September 30, 2012
            Distributors Managers Distributors Managers Distributors Managers
             &Customers           &Customers           &Customers
                                                                
NSP
Americas,
Asia         148,900      3,900    152,300      4,000    173,000      4,400
Pacificand
Europe
NSP Russia,
Central and  86,300       1,600    82,400       1,600    77,000       1,500
Eastern
Europe
Synergy      73,400       1,800    74,300       1,700    73,600       1,900
WorldWide 
            308,600      7,300    309,000      7,300    323,600      7,800

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

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