Nature's Sunshine(NATR)2024-08-08 21:10Financial Performance - Net sales for the three months ended June 30, 2024, were $110,551,000, a decrease of 5.7% compared to $116,548,000 for the same period in 2023[7] - Gross profit for the three months ended June 30, 2024, was $78,887,000, down from $84,624,000 in the prior year, reflecting a gross margin decrease[7] - Operating income for the three months ended June 30, 2024, was $5,637,000, compared to $7,037,000 for the same period in 2023, indicating a decline of 19.9%[7] - Net income attributable to common shareholders for the three months ended June 30, 2024, was $1,349,000, down from $2,422,000 in the same period last year, representing a decrease of 44.3%[7] - For the six months ended June 30, 2024, net sales were $221,544,000, a slight decrease of 1.4% compared to $225,182,000 for the same period in 2023[9] - Basic earnings per share attributable to common shareholders for the six months ended June 30, 2024, increased to $0.20 from $0.17 in the prior year[9] - The company reported a total comprehensive income of $2,540,000 for the six months ended June 30, 2024, compared to $1,032,000 for the same period in 2023[12] - Net income for the six months ended June 30, 2024, was $3,978 thousand, compared to $3,930 thousand for the same period in 2023, reflecting a growth of 1.2%[17] - Consolidated net sales for Q2 2024 decreased by 5.1% to $110.6 million compared to $116.5 million in Q2 2023[78] - Operating income for Q2 2024 was $5.6 million, a decrease of 19.9% from $7.0 million in Q2 2023[81] - Net income for Q2 2024 was $1.5 million, down 44.4% from $2.7 million in Q2 2023[81] Assets and Liabilities - Total assets as of June 30, 2024, were $235,831,000, a decrease from $249,773,000 as of December 31, 2023[6] - Total liabilities decreased to $79,431,000 as of June 30, 2024, from $90,233,000 at the end of 2023, reflecting a reduction of 11.9%[6] - Total shareholders' equity as of June 30, 2024, was $156,400 thousand, a decrease from $159,707 thousand as of March 31, 2024[14] - Cash and cash equivalents at the end of the period on June 30, 2024, were $68,695 thousand, slightly down from $68,970 thousand at the end of June 30, 2023[17] - As of June 30, 2024, working capital was $88.4 million, slightly down from $89.1 million as of December 31, 2023[105] Expenses - Selling, general and administrative expenses decreased to $79.3 million for the six months ended June 30, 2024, down from $85.9 million in the same period in 2023, representing a 7.7% reduction[96] - Total selling, general, and administrative expenses for the three months ended June 30, 2024, were $38,557 thousand, down from $42,273 thousand in the same period in 2023[48] - Depreciation and amortization expenses for the six months ended June 30, 2024, were $6,659 thousand, compared to $5,638 thousand for the same period in 2023, reflecting an increase of 18.1%[17] - Cost of sales as a percentage of net sales increased to 28.6% in Q2 2024 from 27.4% in Q2 2023[79] - Cost of sales as a percentage of net sales increased to 28.7% for the six months ended June 30, 2024, compared to 28.3% for the same period in 2023[94] Shareholder Activities - The company repurchased common stock amounting to $7,725 thousand during the six months ended June 30, 2024, compared to $920 thousand in the same period of the previous year[17] - The company repurchased 453,000 shares for $7.7 million during the six months ended June 30, 2024, compared to 99,000 shares for $0.9 million in the same period of 2023[36] - As of June 30, 2024, the remaining balance available for share repurchases under the program was $9.9 million[36] Foreign Exchange and Taxation - The company experienced a foreign currency translation loss of $1,438,000 for the six months ended June 30, 2024, compared to a loss of $2,898,000 in the prior year[12] - The company experienced foreign exchange losses of $1,543 thousand during the six months ended June 30, 2024, compared to a gain of $309 thousand in the same period in 2023[17] - The provision for income taxes for the three months ended June 30, 2024, was 66.4% of income before income taxes, compared to 55.0% for the same period in 2023[55] - The effective tax rate for the six months ended June 30, 2024, was 56.2%, compared to 48.5% for the same period in 2023[98] Market Performance - Service fees in China totaled $3.8 million for the three months ended June 30, 2024, compared to $5.2 million for the same period in 2023[49] - Net sales from the United States for the three months ended June 30, 2024, were $30,948 thousand, a decrease of 3.5% from $32,088 thousand in 2023[49] - In Asia, net sales decreased by 8.9% to $49.98 million for the three months ended June 30, 2024[84] - Net sales in the Asia segment decreased by 5.0% to $96.2 million for the six months ended June 30, 2024, compared to $101.2 million for the same period in 2023[87] - In Europe, net sales increased by 2.9% to $43.9 million for the six months ended June 30, 2024, compared to $42.6 million for the same period in 2023[90] - North America segment net sales increased by 1.1% to $70.1 million for the six months ended June 30, 2024, compared to $69.3 million for the same period in 2023[91] - Latin America and Other markets saw a decrease in net sales of 5.5% to $11.4 million for the six months ended June 30, 2024, compared to $12.0 million for the same period in 2023[92] Legal and Regulatory Matters - The company is involved in legal proceedings and disputes, which may require adjustments to estimated liabilities that could materially affect results of operations[116] - The provision for income taxes reflects management's best assessment of estimated future taxes to be paid, with significant judgments required in determining the consolidated provision[117] - Deferred income taxes arise from temporary differences, and management evaluates the ability to recover deferred tax assets based on various assumptions[118] - The company intends to grow international operations, which are affected by fluctuations in currency exchange rates and other uncertainties[120]