EX-99.1 2 natrq22019earningsrelease.htm EXHIBIT 99.1 Exhibit


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FOR IMMEDIATE RELEASE

NATURE’S SUNSHINE PRODUCTS REPORTS SECOND QUARTER 2019 FINANCIAL RESULTS WITH CONTINUED STRONG MARGIN IMPROVEMENT

Second Quarter 2019 Highlights

•
Net sales decreased 0.6 percent to $90.7 million from $91.3 million in the prior year
•
GAAP net income was $2.6 million compared to a net loss of $0.1 million in the prior year
•
GAAP net income per diluted share was $0.14 compared to $0.00 per diluted share in the prior year
•
Adjusted net income per share was $0.15 compared to an adjusted net loss per share of $0.07 in the prior year
•
Adjusted EBITDA increased 80.4 percent to $8.0 million from $4.4 million in the prior year

LEHI, Utah, August 8, 2019 - Nature’s Sunshine Products, Inc. (NASDAQ: NATR), a leading natural health and wellness company engaged in the manufacture and sale of nutritional and personal care products, today reported its financial results for the second quarter ended June 30, 2019.

Management Commentary

"We’re about three months into our transformation and are pleased with the progress we’re seeing. It’s still early, but the business is performing in line with expectations, delivering strong second quarter growth in net income and adjusted EBITDA, as a direct result of our strategic restructuring initiatives. Net sales were relatively flat versus prior year despite double-digit growth in Europe and four percent plus growth in Asia, excluding impact of foreign currency. Continued softness in North America and the disruption of sales in China, from the government’s 100-Day review of the direct selling industry, were the key factors inhibiting top-line performance,” stated Terrence Moorehead, President and Chief Executive Officer. “To support top-line growth and drive market penetration, we recently launched a new regional leadership structure designed to build regional capabilities and intensify our consumer focus. We’re also finalizing launch plans for our five growth strategies and will start phasing them in later this year. As a result, we believe we’re well positioned to drive improved performance and shareholder value for the year.”




1



Second Quarter 2019 Financial Summary

 
Net Sales by Operating Segment
 
Three Months Ended
June 30, 2019
 
Three Months Ended
June 30, 2018
 
Percent
Change
 
Impact of
Currency
Exchange
 
Percent
Change
Excluding
Impact of
Currency
Asia
$
35,162

 
$
35,767

 
(1.7
)%
 
$
(2,061
)
 
4.1
 %
Europe
15,075

 
13,922

 
8.3

 
(388
)
 
11.1

North America
34,620

 
35,518

 
(2.5
)
 
(88
)
 
(2.3
)
Latin America and Other
5,867

 
6,059

 
(3.2
)
 
(95
)
 
(1.6
)
 
$
90,724

 
$
91,266

 
(0.6
)%
 
$
(2,632
)
 
2.3
 %

Net sales of $90.7 million decreased 0.6 percent compared to $91.3 million in the second quarter of 2018. Net sales were also negatively impacted by $2.6 million of unfavorable foreign currency exchange rate fluctuations. On a local currency basis, net sales increased 2.3 percent compared to 2018. The increase in local currency net sales was primarily related to growth in Asia and Europe, partially offset by declines in North America and Latin America and Other.

Gross margin, as a percentage of net sales, increased to 73.7 percent from 73.4 percent in the second quarter of 2018. The increase in gross margin as compared to the prior year was primarily driven by changes in market mix and reserves for obsolete inventory recorded in the prior year.

Volume incentives, as a percentage of net sales, remained constant at 34.5 percent compared to the second quarter 2018.

Selling, general and administrative expenses ("SG&A") expenses decreased by approximately $2.3 million to $31.0 million for the second quarter of 2019. The decrease in SG&A expenses is primarily due to the decrease in independent service fees in China and savings from restructuring activities. As a percentage of net sales, SG&A expenses decreased to 34.2 percent from 36.5 percent in the second quarter of 2018. Excluding the impact of restructuring and other non-recurring expenses and net gains on sales of properties, SG&A expenses as a percentage of net sales were 33.8 percent and 37.3 percent for the second quarters of 2019 and 2018, respectively.

Operating income in the second quarter of 2019 was $4.5 million, or 5.0 percent of net sales, as compared to $2.2 million, or 2.4 percent of net sales in the second quarter of 2018. Excluding non-recurring items related to restructuring, CEO transition and net gains on sales of properties, operating income was $4.9 million, or 5.4 percent of net sales, compared to a $1.5 million, or 1.6 percent of net sales in the prior year period.

Other income (loss), net, in the second quarter of 2019 was $0.3 million compared to a loss of $1.8 million in the second quarter of 2018. The provision for income taxes was $2.2 million in the second quarter of 2019 compared to $0.4 million in the second quarter of 2018.

GAAP net income attributable to common shareholders was $2.7 million, or $0.14 per diluted common share, compared to $0.1 million, or $0.00 per diluted common share in the second quarter of 2018. Net loss attributable to NSP China was $0.1 million or $0.02 per diluted common share for the quarter, compared to a loss of $0.1 million, or $0.03 per common share for the second quarter of 2018.


2



Adjusted net income attributable to common shareholders was $2.9 million, or $0.15 per diluted common share, compared to adjusted net loss of $1.2 million, or $0.07 per diluted common share in the prior year period. A reconciliation of adjusted net income to GAAP net income is provided in the attached financial tables.

Adjusted EBITDA was $8.0 million, compared to $4.4 million in 2018. Adjusted EBITDA, which is a non-GAAP financial measure, is defined here as net income from continuing operations before taxes, depreciation, amortization and other income/loss adjusted to exclude share-based compensation expense and certain noted adjustments. A reconciliation of Net Income to Adjusted EBITDA is provided in the attached financial tables.

Six Months Ended June 30, 2019 Financial Summary

 
Net Sales by Operating Segment
 
Six Months Ended
June 30, 2019
 
Six Months Ended
June 30, 2018
 
Percent
Change
 
Impact of
Currency
Exchange
 
Percent
Change
Excluding
Impact of
Currency
Asia
$
68,758

 
$
63,530

 
8.2
 %
 
$
(3,531
)
 
13.8
 %
Europe
30,672

 
28,525

 
7.5

 
(955
)
 
10.9

North America
71,143

 
73,623

 
(3.4
)
 
(222
)
 
(3.1
)
Latin America and Other
11,423

 
12,930

 
(11.7
)
 
(219
)
 
(10.0
)
 
$
181,996

 
$
178,608

 
1.9
 %
 
$
(4,927
)
 
4.7
 %

Net sales of $182.0 million increased 1.9 percent compared to $178.6 million in the six months ended June 30, 2018. Net sales were also negatively impacted by $4.9 million of unfavorable foreign currency exchange rate fluctuations. On a local currency basis, net sales increased 4.7 percent compared to 2018. The increase in local currency net sales was primarily related to growth in Asia and Europe partially offset by a $2.3 million decline in North America and a $1.3 million decline in Latin America and Other.

Gross margin, as a percentage of net sales, increased to 74.0 percent from 73.7 percent in the six months ended June 30, 2018. The increase in gross margin as compared to the prior year was primarily driven by changes in market mix and reserves for obsolete inventory recorded in the prior year.

Volume incentives, as a percentage of net sales, decreased to 34.2 percent from 35.2 percent in the six months ended June 30, 2018. The decrease in volume incentives as a percent of net sales is primarily due to changes in market mix, reflecting growth in markets where volume incentives as a percentage of net sales are lower than the consolidated average, and the growth in NSP China where sales commissions to independent service providers are included in SG&A.

SG&A expenses decreased by approximately $0.8 million to $64.9 million for the six months ended June 30, 2019. The decrease in SG&A expenses is primarily due to savings from restructuring activities. As a percentage of net sales, SG&A expenses decreased to 35.6 percent from 36.8 percent in the six months ended June 30, 2018. Excluding the impact of restructuring and other non-recurring expenses and net gains on sales of properties, SG&A expenses as a percentage of net sales were 34.6 percent and 37.2 percent for the six months ended June 30, 2019 and 2018, respectively.

Operating income in the six months ended June 30, 2019 was $7.5 million, or 4.1 percent of net sales, as compared to $3.1 million, or 1.7 percent of net sales for the same period 2018. Excluding non-recurring

3



items related to restructuring, CEO transition and net gains on sales of properties, operating income was $9.5 million, or 5.2 percent of net sales, compared to a $2.3 million, or 1.3 percent of net sales in the prior year period.

Other income (loss), net, in the six months ended June 30, 2019 was income of $0.3 million compared to a loss of $1.1 million for the same period 2018. The provision for income taxes was $3.4 million in the six months ended June 30, 2019 compared to $1.7 million for the same period 2018.

GAAP net income attributable to common shareholders was $4.4 million, or $0.23 per diluted common share, compared to $0.6 million, or $0.03 per diluted common share in the six months ended June 30, 2018. Net loss attributable to NSP China was $0.4 million or $0.02 per diluted common share for the quarter, compared to a loss of $1.5 million, or $0.08 per common share for the six months ended June 30, 2018.

Adjusted net income attributable to common shareholders was $5.7 million, or $0.29 per diluted common share, compared to adjusted net loss of $0.7 million, or $0.04 per diluted common share in the prior year period. A reconciliation of adjusted net income to GAAP net income is provided in the attached financial tables.

Adjusted EBITDA was $15.3 million, compared to $8.5 million in 2018.

Balance Sheet and Cash Flow

Net cash used in operating activities was $1.1 million for the six months ended June 30, 2019, compared to $9.4 million provided in the prior year period. Capital expenditures during the six months ended June 30, 2019 totaled $2.8 million compared to $2.7 million in the same period of 2018. As of June 30, 2019, the Company had cash and cash equivalents of $46.3 million.

Active Distributors and Customers by Segment (1) 

 
2019
 
2018
 
Distributors
& Customers
 
Managers
 
Distributors
& Customers
 
Managers
Asia
38,300

 
3,000

 
35,800

 
3,200

Europe
85,200

 
4,000

 
74,600

 
3,700

North America
78,400

 
4,700

 
78,200

 
5,000

Latin America and Other
30,100

 
1,200

 
28,600

 
1,200

 
232,000

 
12,900

 
217,200

 
13,100


(1)
Active Distributors and customers include Nature’s Sunshine Products’ independent Distributors and customers who have purchased our products directly for resale and/or personal consumption during the previous three months ended as of the date indicated. Total Managers, Distributors and Customers, which includes those who have made a purchase in the last twelve months, was 502,100 as of June 30, 2019.

In China, we do not sell our products through Managers and Distributors, but rather through independent service providers who are compensated for marketing, sales support, and other services.

4




Conference Call

Nature’s Sunshine Products will host a conference call to discuss its second quarter 2019 results on Thursday, August 8, 2019 at 5:00 PM Eastern Time. The toll-free dial-in number for callers in the U.S. and Canada is 1-800-239-9838, conference ID: 7565503. International callers can dial 1-323-794-2551, conference ID: 7565503. A replay will be available from August 8, 2019 at 8:00 PM Eastern Time through Thursday, August 22, 2019 at 11:59 PM Eastern Time by dialing 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (International), replay PIN: 7565503. The call will also be webcast live and will be available on the Investors section of Nature’s Sunshine Products’ website at www.naturessunshine.com for 90 days.

About Nature’s Sunshine Products

Nature’s Sunshine Products (NATR), a leading natural health and wellness company, markets and distributes nutritional and personal care products 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. Additional information about the Company can be obtained at its website, www.naturessunshine.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This press release contains forward-looking statements regarding the Company’s future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to the Company’s objectives, plans, strategies and financial results. All statements (other than statements of historical fact) that address activities, events or developments that the Company intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are often characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions, and are based on assumptions and assessments made by management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, including the following:

•
laws and regulations regarding direct selling may prohibit or restrict our ability to sell our products in some markets or require us to make changes to our business model in some markets;
•
extensive government regulations to which the Company's products, business practices and manufacturing activities are subject;
•
legal challenges to the Company's direct selling program or to the classification of its independent distributors;
•
impact of anti-bribery laws, including the U.S. Foreign Corrupt Practices Act;
•
the Company’s ability to attract and retain independent distributors;
•
the loss of one or more key independent distributors who have a significant sales network;
•
the full implementation of the Company’s joint venture for operations in China with Fosun Industrial Co., Ltd.;
•
registration of products for sale in foreign markets, or difficulty or increased cost of importing products into foreign markets;
•
cybersecurity threats and exposure to data loss;

5



•
the storage, processing, and use of data, some of which contain personal information, are subject to complex and evolving privacy and data protection laws and regulations;
•
reliance on information technology infrastructure;
•
the effect of fluctuating foreign exchange rates;
•
liabilities and obligations arising from improper activity by the Company’s independent distributors;
•
failure of the Company’s independent distributors to comply with advertising laws;
•
changes to the Company’s independent distributor compensation plans;
•
geopolitical issues and conflicts;
•
negative consequences resulting from difficult economic conditions, including the availability of liquidity or the willingness of the Company’s customers to purchase products;
•
risks associated with the manufacturing of the Company's products;
•
uncertainties relating to the application of transfer pricing, duties, value-added taxes, and other tax regulations, and changes thereto;
•
changes in tax laws, treaties or regulations, or their interpretation;
•
actions on trade relations by the U.S. and foreign governments;
•
product liability claims; and
•
the sufficiency of trademarks and other intellectual property rights.

These and other risks and uncertainties that could cause actual results to differ from predicted results are more fully detailed under the caption “Risk Factors” in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports filed on Form 10-Q.

All forward-looking statements speak only as of the date of this press release and are expressly qualified in their entirety by the cautionary statements included in or incorporated by reference into this press release. Except as is required by law, the Company expressly disclaims any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this press release.


6



Non-GAAP Financial Measures

We have included information which has not been prepared in accordance with generally accepted accounting principles (GAAP), such as information concerning Adjusted EBITDA and net sales excluding the impact of foreign currency exchange fluctuations. We utilize the non-GAAP measure Adjusted EBITDA in the evaluation of our operations and believe that this measure is a useful indicator of our ability to fund our business. These non-GAAP financial measures should not be considered as an alternative to, or more meaningful than, U.S. GAAP net income (loss) as an indicator of our operating performance. Moreover, our Adjusted EBITDA presented may not be comparable to similarly titled measures reported by other companies.

Net sales in local currency removes, from net sales in U.S. dollars, the impact of changes in exchange rates between the U.S. dollar and the functional currencies of our foreign subsidiaries. This is accomplished by translating the current period net sales into U.S. dollars using the same foreign currency exchange rates that were used to translate the net sales for the previous comparable period.

In addition, we believe presenting the impact of foreign currency fluctuations is useful to investors because it allows a more meaningful comparison of net sales of our foreign operations from period to period. Net sales excluding the impact of foreign currency fluctuations should not be considered in isolation or as an alternative to net sales in U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP.

Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of Nature’s Sunshine Products’ performance in relation to other companies. We have included a reconciliation of Net Income to Adjusted EBITDA, the most comparable GAAP measure. We have also included a reconciliation of GAAP net income (loss) to Non-GAAP net income (loss) and Non-GAAP Adjusted EPS, in the attached financial tables.



    

7



NATURE’S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share information)
(Unaudited)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net sales
$
90,724

 
$
91,266

 
$
181,996

 
$
178,608

Cost of sales
23,865

 
24,278

 
47,294

 
46,991

Gross profit
66,859

 
66,988

 
134,702

 
131,617

 
 
 
 
 
 
 
 
Operating expenses:
 

 
 

 
 

 
 

Volume incentives
31,302

 
31,492

 
62,315

 
62,854

Selling, general and administrative
31,019

 
33,310

 
64,871

 
65,696

Operating income
4,538

 
2,186

 
7,516

 
3,067

Other income (loss), net
306

 
(1,807
)
 
258

 
(1,067
)
Income before provision for income taxes
4,844

 
379

 
7,774

 
2,000

Provision for income taxes
2,215

 
441

 
3,416

 
1,729

Net income (loss)
2,629

 
(62
)
 
4,358

 
271

Net loss attributable to noncontrolling interests
(60
)
 
(129
)
 
(88
)
 
(294
)
Net income attributable to common shareholders
$
2,689

 
$
67

 
$
4,446

 
$
565

 
 
 
 
 
 
 
 
Basic and diluted net income per common share:
 

 
 

 
 

 
 

 
 
 
 
 
 
 
 
Basic earnings per share attributable to common shareholders
$
0.14

 
$
—

 
$
0.23

 
$
0.03

 
 
 
 
 
 
 
 
Diluted earnings per share attributable to common shareholders
$
0.14

 
$
—

 
$
0.23

 
$
0.03

 
 
 
 
 
 
 
 
Weighted average basic common shares outstanding
19,291

 
19,105

 
19,280

 
19,058

Weighted average diluted common shares outstanding
19,602

 
19,402

 
19,596

 
19,408



8



NATURE’S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
 
June 30,
2019
 
December 31,
2018
Assets
 

 
 

Current assets:
 

 
 

Cash and cash equivalents
$
46,341

 
$
50,638

Accounts receivable, net of allowance for doubtful accounts of $454 and $460, respectively
8,727

 
7,751

Inventories
43,928

 
42,048

Prepaid expenses and other
6,593

 
6,388

Total current assets
105,589

 
106,825

 
 
 
 
Property, plant and equipment, net
61,911

 
64,061

Operating lease right-of-use assets
26,361

 
—

Investment securities - trading
1,432

 
1,308

Intangible assets, net
616

 
618

Deferred income tax assets
8,724

 
9,056

Other assets
11,618

 
11,148

Total assets
$
216,251

 
$
193,016

 
 
 
 
Liabilities and Shareholders’ Equity
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
3,998

 
$
5,219

Accrued volume incentives and service fees
20,296

 
20,562

Accrued liabilities
28,077

 
34,801

Deferred revenue
2,235

 
1,197

Related party note payable
1,585

 
1,530

Income taxes payable
2,173

 
3,378

Current portion of operating lease liabilities
5,241

 
—

Total current liabilities
63,605

 
66,687

 
 
 
 
Liability related to unrecognized tax benefits
2,157

 
2,192

Long-term portion of operating lease liabilities
22,418

 
—

Deferred compensation payable
1,432

 
1,308

Long-term deferred income tax liabilities
1,556

 
1,556

Other liabilities
345

 
705

Total liabilities
91,513

 
72,448

 
 
 
 
Shareholders’ equity:
 

 
 

Common stock, no par value, 50,000 shares authorized, 19,302 and 19,204 shares issued and outstanding, respectively
134,342

 
133,684

Retained earnings (accumulated deficit)
2,374

 
(2,072
)
Noncontrolling interest (deficit)
(25
)
 
63

Accumulated other comprehensive loss
(11,953
)
 
(11,107
)
Total shareholders’ equity
124,738

 
120,568

Total liabilities and shareholders’ equity
$
216,251

 
$
193,016




9



NATURE’S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 
Six Months Ended
June 30,
 
2019
 
2018
CASH FLOWS FROM OPERATING ACTIVITIES:
 

 
 

Net income
$
4,358

 
$
271

Adjustments to reconcile net income to net cash (used in) provided by operating activities:
 

 
 

Provision for doubtful accounts
30

 
255

Depreciation and amortization
4,987

 
5,012

Non-cash lease expense
2,792

 
—

Share-based compensation expense
851

 
1,124

Loss (gain) on sale of property, plant and equipment
3

 
(2,267
)
Deferred income taxes
365

 
(744
)
Purchase of trading investment securities
(57
)
 
(96
)
Proceeds from sale of trading investment securities
105

 
566

Realized and unrealized gains on investments
(173
)
 
(11
)
Foreign exchange (gains) losses
(205
)
 
834

Changes in assets and liabilities:
 

 
 

Accounts receivable
(1,035
)
 
369

Inventories
(2,052
)
 
2,317

Prepaid expenses and other current assets
(259
)
 
(1,471
)
Other assets
(767
)
 
(164
)
Accounts payable
(1,226
)
 
(28
)
Accrued volume incentives and service fees
(235
)
 
673

Accrued liabilities
(6,203
)
 
4,762

Deferred revenue
1,039

 
(1,795
)
Lease liabilities
(2,340
)
 
—

Income taxes payable
(1,207
)
 
197

Liability related to unrecognized tax benefits
(40
)
 
68

Deferred compensation payable
125

 
(435
)
Net cash (used in) provided by operating activities
(1,144
)
 
9,437

CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Purchases of property, plant and equipment
(2,774
)
 
(2,671
)
Proceeds from sale of property, plant and equipment
—

 
2,558

Net cash used in investing activities
(2,774
)
 
(113
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 

 
 

Principal payments of revolving credit facility
(547
)
 
(33,483
)
Proceeds from revolving credit facility
547

 
27,512

Proceeds from related party borrowing
—

 
500

Proceeds from the exercise of stock awards
—

 
410

Tax benefit from stock awards
(193
)
 
(465
)
Net cash used in financing activities
(193
)
 
(5,526
)
Effect of exchange rates on cash and cash equivalents
(186
)
 
190

Net (decrease) increase in cash and cash equivalents
(4,297
)
 
3,988

Cash and cash equivalents at the beginning of the period
50,638

 
42,910

Cash and cash equivalents at the end of the period
$
46,341

 
$
46,898

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 

 
 

Cash paid for income taxes, net of refunds
$
3,895

 
$
2,272

Cash paid for interest
63

 
160


10



NATURE’S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(Amounts in thousands)
(Unaudited)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net income (loss)
$
2,629

 
$
(62
)
 
$
4,358

 
$
271

Adjustments:
 
 
 
 
 
 
 
Depreciation and amortization
2,491

 
2,411

 
4,987

 
5,012

Share-based compensation expense
621

 
581

 
851

 
1,124

Other (income) loss, net*
(306
)
 
1,807

 
(258
)
 
1,067

Provision for income taxes
2,215

 
441

 
3,416

 
1,729

Other adjustments (1)
367

 
(734
)
 
1,954

 
(734
)
Adjusted EBITDA
$
8,017

 
$
4,444

 
$
15,308

 
$
8,469

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Other adjustments
 
 
 
 
 
 
 
CEO transition
$
—

 
$
1,518

 
$
—

 
$
1,518

Restructuring related expenses
367

 
—

 
1,954

 
—

Gain on sale of properties
—

 
(2,252
)
 
—

 
(2,252
)
Total adjustments
$
367

 
$
(734
)
 
$
1,954

 
$
(734
)

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


11




NATURE’S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME and NON-GAAP ADJUSTED EPS
(Amounts in thousands)
(Unaudited)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net income (loss)
$
2,629

 
$
(62
)
 
$
4,358

 
$
271

Adjustments:
 
 
 
 
 
 
 
CEO transition
—

 
1,518

 
—

 
1,518

Restructuring related expenses
367

 
—

 
1,954

 
—

Net gains on sales of properties
—

 
(2,252
)
 
—

 
(2,252
)
Tax impact of adjustments
(140
)
 
(577
)
 
(743
)
 
(577
)
Total adjustments
227

 
(1,311
)
 
1,211

 
(1,311
)
Non-GAAP net income (loss)
$
2,856

 
$
(1,373
)
 
$
5,569

 
$
(1,040
)
 
 
 
 
 
 
 
 
Reported income (loss) attributable to common shareholders
$
2,689

 
$
67

 
$
4,446

 
$
565

Total adjustments
227

 
(1,311
)
 
1,211

 
(1,311
)
Non-GAAP net income (loss) attributable to common shareholders
$
2,916

 
$
(1,244
)
 
$
5,657

 
$
(746
)
 
 
 
 
 
 
 
 
Basic income per share, as reported
$
0.14

 
$
—

 
$
0.23

 
$
0.03

Total adjustments, net of tax
0.01

 
(0.07
)
 
0.06

 
(0.07
)
Basic income (loss) per share, as adjusted
$
0.15

 
$
(0.07
)
 
$
0.29

 
$
(0.04
)
 
 
 
 
 
 
 
 
Diluted income per share, as reported
$
0.14

 
$
—

 
$
0.23

 
$
0.03

Total adjustments, net of tax
0.01

 
(0.07
)
 
0.06

 
(0.07
)
Diluted income (loss) per share, as adjusted
$
0.15

 
$
(0.07
)
 
$
0.29

 
$
(0.04
)

Contact:

Scott Van Winkle            
Managing Director, ICR
(617) 956-6736
scott.vanwinkle@icrinc.com





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