Nature’s Sunshine Products, Inc., a leading natural health and wellness company engaged in the manufacture and direct selling of nutritional and personal care products, recently reported its financial results for the second quarter ended June 30, 2016.
Second Quarter 2016 Financial Highlights
Net sales revenue of $89.4 million increased 10.0%, compared to $81.2 million in the second quarter of 2015. On a local currency basis, net sales revenue increased 11.5% compared to the second quarter of 2015.
In addition to sustained local currency net sales revenue growth in NSP United States and NSP Canada, Synergy Asia delivered 28.5% local currency growth as compared to the second quarter of 2015.
The quarter included incremental net sales revenue of $4.4 million related to pre-opening product sales through Hong Kong. Net sales revenue was negatively impacted by $1.2 million of unfavorable foreign currency exchange rate fluctuations, as well as a $0.5 million decline in net sales in the NSP Russia, Central and Eastern Europe segment.
Net income from continuing operations was $2.4 million, or $0.14 per diluted common share, compared to $2.4 million, or $0.12 per diluted common share, in the second quarter of 2015.
Adjusted EBITDA was $6.2 million, compared to $5.1 million in the second quarter of 2015. 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 adjusted to exclude share-based compensation expense.
First Half of 2016 Financial Highlights
- Net sales revenue of $171.8 million increased 4.0%, compared to $165.1 million in the first six months of 2015. On a local currency basis, net sales revenue increased 6.3% compared to the first six months of 2015. Net sales revenue growth adjusted for foreign currency fluctuations was largely driven by an $8.9 million, or 23.7% increase in Synergy Asia and an incremental net sales revenue increase of $4.4 million related to sales through Hong Kong, when compared to the first six months of 2015. Net sales revenue was negatively impacted by $3.8 million of unfavorable foreign currency exchange rate fluctuations, as well as a $1.5 million decline in net sales in the NSP Russia, Central and Eastern Europe segment.
- Net income from continuing operations was $4.2 million, or $0.24 per diluted common share, compared to $6.6 million, or $0.34 per diluted common share, in the first six months of 2015. Earnings per diluted common share for the first six months of 2016, were impacted by several factors including: the Company’s investment in China of approximately $0.12 per share and unfavorable changes in the effective tax rate of $0.02 per share.
- Adjusted EBITDA was $10.4 million compared to $12.8 million in the first six months of 2015.
“We are very pleased to report accelerated revenue growth during the second quarter with strength across several regions,” commented Gregory L. Probert, Chairman and Chief Executive Officer.
“Sustained local currency growth in both NSP United States and NSP Canada continues to reflect the strong foundation within our most mature markets and is a reflection of our high quality products and effective business model. The improvements we have put in place at Synergy WorldWide are delivering strong results across all geographical regions, led by 28.5% local currency growth in Synergy Asia.”
Mr. Probert continued, “We are optimistic about our new market opportunity in China and believe we have the management team, the business model and product offering in place to achieve success. We also remain encouraged by the success of our patent-pending IN.FORM weight loss and daily habit of health program and continue to target geographical expansion of this promising new program offering.”
Active Distributors and customers include Nature’s Sunshine Products’ 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. Total Manager, Distributors and Customers, which includes those who have made a purchase in the last twelve months, was 554,500 as of June 30, 2016.
Cash Flow and Balance Sheet Highlights
- Net cash provided by operating activities was $6.5 million for the six months ended June 30, 2016, as compared to $3.1 million of net cash provided by operating activities for the six months ended June 30, 2015.
- Total assets on June 30, 2016 were $211.0 million, compared to $200.5 million on December 31, 2015.
- The Company’s Board of Directors approved a quarterly cash dividend of $0.10 per share, payable on September 2, 2016, to shareholders of record as of the close of business on August 23, 2016. Dividend payments were $3.8 million during the first six months of 2016.
About Nature’s Sunshine Products
Nature’s Sunshine Products, a leading natural health and wellness company, markets and distributes nutritional and personal care products through a global direct sales force of over 554,000 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 four 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; NSP Russia, Central and Eastern Europe; Synergy WorldWide; and China and New Markets).
The Company also supports health and wellness for children around the world through its partnership with the Sunshine Heroes Foundation. Additional information about the Company can be obtained at its website, www.naturessunshine.com.