Nature's Sunshine Products Reports Second Quarter Financial Results and Declares Quarterly Cash Dividend

LEHI, Utah, Aug. 1, 2012 (GLOBE NEWSWIRE) -- Nature's Sunshine Products, Inc. (Nasdaq:NATR), including its subsidiary Synergy Worldwide, Inc., 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 second quarter ended June 30, 2012, and declared a quarterly cash dividend.

For the Second Quarter of 2012:

• Net sales were $93.0 million, compared with $91.8 million in the same quarter a year ago, an increase of 1.3 percent.
   
• As of June 30, 2012, active Managers worldwide were 29,100, a decrease of 1.7 percent from June 30, 2011, while active Distributors and customers worldwide were 656,500, a decrease of 2.8 percent from the end of the quarter a year ago.
   
• Operating income was $10.3 million, compared with $8.1 million in the same quarter a year ago, an increase of 28.1 percent.
   
• Adjusted EBITDA, defined here as net income before taxes, depreciation and amortization, and other income, and adjusted to exclude share-based compensation expense, was $11.9 million, compared with $10.2 million in the same quarter a year ago, an increase of 17.3 percent.
   
• Net income was $7.3 million, compared with net income of $5.6 million in the same quarter a year ago, an increase of 29.8 percent.
   
• Basic and diluted net income per share was $0.47 and $0.46, respectively, compared with earnings per share of $0.36 and $0.36, for the same quarter a year ago.
   
• As of June 30, 2012, shareholders' equity was $102.6 million, compared to $87.4 million on December 31, 2011, an increase of 17.3 percent.

For the First Six Months of 2012:

• Net sales were $185.9 million, compared with $184.7 million in the same period a year ago, an increase of 0.7 percent.
   
• Operating income was $19.5 million, compared with $15.7 million in the same period a year ago, an increase of 24.3 percent.
   
• Adjusted EBITDA, defined here as net income before taxes, depreciation and amortization, and other income, and adjusted to exclude share-based compensation expense, was $22.8 million, compared with $18.9 million in the same period a year ago, an increase of 20.5 percent.
   
• Net income was $14.5 million, compared with net income of $12.2 million in the same period a year ago, an increase of 18.6 percent.
   
• Basic and diluted net income per share was $0.93 and $0.91, respectively, compared with earnings per share of $0.79 and $0.78, for the same period a year ago, respectively.

NSP United States Segment Results for the Second Quarter:

• Net sales were $35.5 million, compared with $35.9 million in the same quarter a year ago, a decrease of 1.0 percent. Active Managers within NSP United States totaled approximately 5,800 and 6,200 at June 30, 2012 and 2011, respectively. Active Distributors and customers within NSP United States totaled approximately 193,700 and 194,200 at June 30, 2012 and 2011, respectively. Managers and Distributors within NSP United States are predominantly practitioners of nutritional supplement therapies and retailers or consumers of our products. The number of active Managers, Distributors and customers decreased due to lower retention, partially offset by a modest improvement in recruiting. Net sales for NSP United States core products (Herbal Products, Vitamin, Mineral, and Other Nutritional Supplements, and Personal Care Products) increased by 0.3%, but were offset by the discontinuance of non-core products (other products including essential oils, sales aids and other miscellaneous products).
   
• Operating income was $4.2 million, compared with $3.7 million in the same quarter a year ago, an increase of 13.4 percent. The increase in operating income is due primarily to a reduction of the cost of goods sold.

NSP International Segment Results for the Second Quarter:

• Net sales were $31.2 million, compared with $33.1 million in the same quarter a year ago, a decrease of 5.5 percent. In local currencies, net sales decreased by 4.0 percent compared to the same quarter a year ago. Active Managers within NSP International totaled approximately 20,100 and 20,900 at June 30, 2012 and 2011, respectively. Active Distributors and customers within NSP International totaled approximately 373,600 and 398,000 at June 30, 2012 and 2011, respectively. Managers and Distributors within NSP International are predominantly practitioners of nutritional supplement therapies and retailers or consumers of our products, with the exception of our Russian markets, which are more network marketing oriented. The number of active Managers, Distributors and customers decreased in NSP International (excluding our Russian markets) due to lower retention, partially offset by a modest improvement in recruiting, in a business environment that continues to be challenging.
   
• Operating income was $3.3 million, compared with $1.8 million in the same quarter a year ago, an increase of 77.7 percent. This increase was primarily the result of the elimination of royalty fees and lower professional fees in our Russian markets related to the termination of the Company's contract with NutriPlus LLC, offset by lower net sales in our Japan, Mexico and Peru markets.

Synergy Worldwide Results for the Second Quarter:

• Net sales were $26.2 million, compared with $22.9 million in the same quarter a year ago, an increase of 14.8 percent. In local currencies, net sales increased 20.0 percent compared to the same quarter a year ago. Active Managers within Synergy Worldwide totaled approximately 3,200 and 2,500 at June 30, 2012 and 2011, respectively. Active Distributors and customers within Synergy Worldwide totaled approximately 89,200 and 82,900 at June 30, 2012 and 2011, respectively. Synergy Worldwide is more network-marketing oriented, and the increase in net sales was primarily due to strong recruiting and retention of Managers and Distributors in our Korean and European markets.
   
• Operating income was $2.8 million, compared with $2.5 million for the same quarter in the prior year, an increase of 13.0 percent. The increase in operating income is primarily due to net sales growth in our European and Korean markets somewhat offset by the decreased sales in Japan and the negative effect of foreign currency fluctuations.

Effective Income-tax Rate

The effective income tax rate was 30.5 percent, compared with 26.4 percent in the same quarter a year ago. The current quarter's effective income tax rate was below the U.S. federal statutory tax rate of 35.0 percent, which was primarily attributed to a valuation allowance release, related to the utilization of foreign tax credits, in addition to net favorable foreign items. The effective income tax rate of 26.4 percent for the same quarter a year ago was below the U.S. federal statutory tax rate of 35.0 percent due to a decrease in deferred tax liabilities related to taxes on foreign earnings.

Declaration of Quarterly Cash Dividend:

The Company's Board of Directors declared a regular quarterly cash dividend of $0.05 per share, or $0.20 per share on an annual basis, payable on August 23, 2012 to shareholders of record as of the close of business on August 13, 2012.

Non-GAAP Financial Measures

The Company has included information concerning adjusted EBITDA because management utilizes this information in the evaluation of its operations and believes that this measure is a useful indicator of the Company's ability to fund its business. Adjusted EBITDA has not been prepared in accordance with generally accepted accounting principles (GAAP). This non-GAAP financial measure should not be considered as an alternative to, or more meaningful than, net income as an indicator of the Company's operating performance. Moreover, this non-GAAP financial measure, as presented by the Company, may not be comparable to similarly titled measures reported by other companies. The Company has included a reconciliation of adjusted EBITDA to reported earnings under GAAP in the attached financial tables.

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 600,000 independent distributors in more than 40 countries. Nature's Sunshine manufactures 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 two reportable business segments that operate under the Nature's Sunshine Products brand and are divided based on their geographic operations in the United States (NSP United States) and in countries outside the United States (NSP International), as well as a third reportable business segment operates under the Synergy Worldwide brand. 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.natr.com.

Cautionary Statement Regarding Forward-Looking Statements

In addition to historical information, this release contains forward-looking statements. Nature's Sunshine 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 encompass Nature's Sunshine's 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 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: further reviews of 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.

CONTACT: Stephen M. Bunker
         Chief Financial Officer
         Nature's Sunshine Products, Inc.
         Lehi, Utah 84043
         (801) 342-4370 effective through August 3, 2012
         (801) 341-7303 effective August 6, 2012

Released August 1, 2012