Nature's Sunshine Products Reports Fourth Quarter and Year End Results

PROVO, Utah--(BUSINESS WIRE)--Feb. 12, 2002--Nature's Sunshine Products, Inc. (NASDAQ:NATR), a leading manufacturer and marketer of encapsulated herbs and vitamins, today announced operating results for the quarter and year ended December 31, 2001.

Sales revenue for the quarter ended December 31, 2001, was $77.3 million compared to $76.6 million for the same period in the prior year, an increase of approximately 1 percent. Net income for the fourth quarter totaled $3.7 million compared to $3.3 million for the same period in the prior year, an increase of approximately 12 percent. Basic and diluted earnings per common share for the quarter ended December 31, 2001, were $0.23 and $0.22, respectively, compared to basic and diluted earnings per common share of $0.20 each for the same period in the prior year.

For the year ended December 31, 2001, sales revenue totaled $318.7 million compared to $314.8 million for the same period of the prior year, an increase of approximately 1 percent. Net income for the year ended December 31, 2001, was $16.7 million, compared to $17.1 million for the same period in the prior year, a decrease of approximately 3 percent. Basic and diluted earnings per common share for the year ended December 31, 2001, were $1.02 and $.99, respectively, compared to basic and diluted earnings per common share of $1.02 each for the same period in the prior year. Net income for the quarter and year ended December 31, 2001, benefited from a lower effective tax rate compared to the same period of the prior year, primarily due to a tax benefit realized upon the Company's sale of its Argentina subsidiary. Nature's Sunshine plans to continue to sell product to Argentina on an export basis.

For the quarter ended December 31, 2001, sales revenue for the Company's domestic operation was $43.3 million compared to $41.3 million for the same period in the prior year, an increase of 5 percent. For the year ended December 31, 2001, the Company's domestic operation reported an increase in sales revenue to $177.8 million compared to $177.2 million for the same period in the prior year. Domestic sales revenue in the Hispanic market continued to grow, increasing approximately 19 percent for the year ended December 31, 2001, compared to the same period in the prior year.

For the quarter ended December 31, 2001, sales revenue for the Company's international operations totaled $34.0 million compared to $35.3 million for the same period in the prior year, a decrease of approximately 4 percent. For the year ended December 31, 2001, the Company's international operations reported sales revenue of $140.9 million compared to $137.6 million for the same period of the prior year, an increase of approximately 2 percent. The most notable gains were achieved in South Korea, the Russian Federation, Ecuador, Venezuela and Mexico. These gains were offset by a revenue decrease in Brazil. Import regulations imposed by the Brazilian government continued to negatively impact operating results, with sales revenue for the year ended 2001 totaling $9.6 million compared to $22.1 million for the same period of the prior year. The Company has launched a program designed to reduce costs and improve profitability in Brazil.

The number of worldwide distributors was approximately 596,000 at December 31, 2001, compared to approximately 589,000 in the same period of the prior year, an increase of 1 percent. The number of worldwide managers was approximately 18,000 compared to 16,100 in the same period of the prior year, an increase of 12 percent.

During the year, the Company successfully completed the move of its manufacturing operation into the expanded production facility in Spanish Fork, Utah. The $14.0 million expansion was fully funded from working capital. Capacity of the expanded facility will allow consolidation of manufacturing, product storage and shipping into one location. It provides increased production capability via the installation of additional processing equipment to accommodate double the Company's current level of revenue. The facility is expected to heighten efficiency and further improve product quality.

Working capital amounted to $40.6 million on December 31, 2001, with cash and cash equivalents increasing to $29.8 million compared to $28.8 million on December 31, 2000.

"The past year has been a challenging one for Nature's Sunshine," said Daniel P. Howells, President and Chief Executive Officer. "Nonetheless, we have made progress with the sale of our subsidiary in Argentina, and we continue to maintain our focus and determination to maximize our profitability in Brazil, which remains a critical market. Noting the sales improvement in our domestic market, we intend to continue with programs aimed at stimulating this sector."

Nature's Sunshine Products manufactures and markets through direct sales encapsulated and tableted herbal products, high quality natural vitamins and other complementary products. In addition to the U.S., the Company has operations in South Korea, Brazil, Mexico, Venezuela, Japan, Canada, Colombia, the United Kingdom and Ireland, Peru, Chile, Central America, Ecuador and Israel. The Company also has exclusive distribution agreements with selected companies in Argentina, Australia, New Zealand, Malaysia, Norway and the Russian Federation.

Statements in this press release concerning the Company's business outlook or future economic performance, anticipated profitability, revenues, expenses or other financial items, and product line growth, together with other statements that are not historical facts, are "forward-looking statements" as that term is defined under Federal Securities Laws. "Forward-looking statements" are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those set forth in such statements. Such risks, uncertainties and factors include, but are not limited to, foreign business risks, industry cyclicality, fluctuations in customer demand and order pattern, the seasonal nature of the business, changes in pricing and general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission.

For more information, contact us at our website at www.natr.com.

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