SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PLAN YEAR ENDED DECEMBER 31, 2000
NATURE'S SUNSHINE PRODUCTS, INC.
TAX DEFERRED RETIREMENT PLAN
(Full Title of the Plan)
COMMISSION FILE NO. 0-8707
NATURE'S SUNSHINE PRODUCTS, INC.
(Name of Issuer of the Securities Held Pursuant to the Plan)
75 EAST 1700 SOUTH
P.O. BOX 19005
PROVO, UT 84605-9005
(Address of Principal Executive Office)
NATURE'S SUNSHINE PRODUCTS, INC.
TAX DEFERRED RETIREMENT PLAN
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
DECEMBER 31, 2000 AND 1999
C O N T E N T S
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 3
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS 4
NOTES TO FINANCIAL STATEMENTS 5
SUPPLEMENTAL INFORMATION
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES 10
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Plan Administrator and Trustee
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
We have audited the accompanying statements of net assets available for benefits
of Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan (the Plan), as
of December 31, 2000 and 1999, and the related statement of changes in net
assets available for benefits for the year ended December 31, 2000. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Nature's
Sunshine Products, Inc. Tax Deferred Retirement Plan as of December 31, 2000 and
1999, and the changes in net assets available for benefits for the year ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ GRANT THORNTON LLP
Provo, Utah
May 23, 2001
1
FINANCIAL STATEMENTS
2
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
2000 1999
----------- -----------
Assets
Cash $ -- $ 5,214
Investments, at fair value 18,035,206 19,467,624
Contributions receivable
Participants 60,816 28,443
Employer 48,125 22,346
----------- -----------
Total assets 18,144,147 19,523,627
Liabilities - payables 73,221 20,965
----------- -----------
Net assets available for benefits $18,070,926 $19,502,662
=========== ===========
The accompanying notes are an integral part of these statements.
3
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS
Year ended December 31, 2000
Additions to net assets attributed to
Interest and dividend income $ 1,223,834
Contributions
Participants salary deferrals 795,557
Employer 574,408
-----------
Total additions 2,593,799
-----------
Deductions from net assets attributed to
Benefits paid to participants 874,101
Net depreciation in fair value of investments 3,151,434
-----------
Total deductions 4,025,535
-----------
Net deductions 1,431,736
Net assets available for benefits
at beginning of year 19,502,662
-----------
Net assets available for benefits
at end of year $18,070,926
===========
The accompanying notes are an integral part of this statement.
4
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
NOTE A - DESCRIPTION OF PLAN
The following description of the Nature's Sunshine Products, Inc. Tax
Deferred Retirement Plan (the Plan) provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
GENERAL
Nature's Sunshine Products, Inc. (the Company) adopted the Plan effective
October 13, 1986. The Plan is a defined contribution plan, which was
established to provide employees with an opportunity to accumulate funds
for retirement or disability and to provide death benefits for employees'
dependents and beneficiaries. The Plan is subject to the Employee
Retirement Income Security Act of 1974 (ERISA). Effective December 28,
1994, the Company amended and restated the Plan to comply with the Tax
Reform Act of 1986. Effective October 18, 1999, the Company restated the
Plan in conjunction with a change of third party administrators.
During 1999, certain corporate officers served as trustees of the Plan's
assets. During 1999, the Plan changed its third party administrator from
Rocky Mountain Employee Benefits, Inc. to Merrill Lynch Trust Company.
ELIGIBILITY
Employees of the Company who are 18 years of age and who have completed six
months of service are eligible to participate in the Plan. Each eligible
employee is required to make an election in order to actively participate
in the Plan.
CONTRIBUTIONS
Eligible participants may contribute annually up to $10,500 in 2000
($10,000 in 1999). Participants elect both the amount of salary deferral
contributions and the allocation of the salary deferral contributions among
the various participant-directed investment funds available within the
Plan. Salary deferral contributions cannot exceed 10 percent of a
participant's gross compensation. Participants are 100 percent vested at
all times in their salary deferral contributions and related earnings. The
Company remits each participant's salary deferral contribution to the Plan
on a biweekly basis. Participants may not make voluntary contributions to
the Plan other than through salary deferral contributions.
The Company may make matching contributions at its discretion which are
allocated to participants on a pro rata basis based on the ratio of their
compensation for the year to total compensation for all participants.
During 2000 and 1999, the Company matched employee contributions at a rate
of 100 percent of such contributions up to a maximum of five percent of the
employee's gross compensation.
The Company may also make additional contributions to the Plan at its
discretion. The amount contributed annually is determined by the Board of
Directors of the Company. No such additional contributions were made to the
Plan during 2000.
5
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
NOTE A - DESCRIPTION OF PLAN - CONTINUED
VESTING
Vesting in Company contributions occurs upon (1) completion of four years
of service with the Company, (2) attaining the Plan's normal retirement age
of 59-1/2, (3) death, or (4) disability.
PAYMENT OF BENEFITS
Benefits are normally paid upon retirement, death, disability, or other
termination and may be paid in lump sums, installments over a designated
period, or rolled over into an IRA or other retirement plan. Participants
may withdraw funds from the Plan while actively employed for hardships
subject to specific restrictions set forth in the Plan agreement.
TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company may
terminate the Plan at any time subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended. If the Plan is
suspended or terminated, all participants shall be fully vested in their
accounts, including employer contributions and related earnings.
INVESTMENTS
Net unrealized appreciation or depreciation caused by fluctuations in the
market value of investments is reflected in the Statement of Changes in Net
Assets Available for Benefits. Amounts invested earn interest and
dividends, which in turn are reinvested in the participant's respective
funds. Contributions are invested by the trustee as directed by the
participants.
EXPENSES
The Company paid all administrative expenses of the Plan including legal
and accounting fees during 2000 and 1999.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and an allocation of (a) the Company's contribution and (b) Plan earnings.
Allocations are based on participant earnings or account balances, as
defined. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's vested account.
Additional Company contributions are allocated to individual participant
accounts based on a pro rata basis.
FORFEITURES
Forfeited nonvested amounts are used to reduce future employer
contributions.
6
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared in conformity with
accounting principles generally accepted in the United States of America as
applied to employee benefit plans, and in accordance with the Plan
agreement.
ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America, requires the
Plan administrator to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results may differ
from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices, which represent
the net asset value of shares held by the Plan at year-end. The Company
stock is valued at its quoted market price.
Purchases and sales of securities are recorded on a trade-date basis.
Income from interest and dividends is recorded on the accrual basis.
Earnings and losses within each fund are allocated to participants based on
their proportionate shares in the fund.
BENEFITS
Benefits are recorded when paid.
NOTE C - FEDERAL INCOME TAXES
The Plan is subject to the Employee Retirement Income Security Act of 1974
and certain provisions of the Internal Revenue Code (IRC). The Plan is
intended to qualify under Section 401(a) of the IRC and prior to the latest
plan restatement the Internal Revenue Service has issued a favorable
determination letter ruling dated June 17, 1995, that the Plan was designed
in accordance with applicable IRC requirements as of the date of their
letter. The latest Plan was restated using a Merrill Lynch prototype plan
document. Although a determination letter has not yet been issued,
management believes that the Plan is currently designed and operated in
accordance with applicable IRC requirements. As a result, the Plan has not
provided for federal income taxes.
7
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 2000 and 1999
NOTE D - INVESTMENTS
The following presents investments that represent five percent or more of
the Plan's net assets.
2000 1999
--------- ---------
Nature's Sunshine Products, Inc. common stock, 595,164 and 589,573
shares, respectively 4,054,258 4,716,586
Merrill Lynch Return Preservation Trust Fund, 1,706,201 and 1,872,617
shares, respectively 1,706,201 1,872,617
Massachusetts Investors Trust Fund, 170,933 and 189,759 shares,
respectively 3,422,078 3,975,441
Alliance Premier Growth Fund, 175,700 and 155,122 shares, respectively 4,692,949 5,661,948
Van Kampen Emerging Growth Fund, 22,655 and 10,972 shares, respectively 1,422,263 958,602
During 2000, the Plan's investments (including realized and unrealized
gains and losses) depreciated in fair value by $3,151,434 as follows:
Common stock $ 716,840
Mutual funds 2,434,594
----------
Net depreciation $3,151,434
==========
NOTE E - RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Merrill
Lynch Trust Company. Merrill Lynch Trust Company is the third party
administrator as defined by the Plan and, therefore, these transactions
qualify as party-in-interest transactions.
8
SUPPLEMENTAL INFORMATION
9
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
Employer Identification Number: 87-0327982
Plan Number: 003
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 2000
(a) (b) (c) (e)
IDENTITY OF ISSUE, BORROWER, LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT INCLUDING MATURITY CURRENT
DATE, RATE OF INTEREST, COLLATERAL, PAR OR VALUE
MATURITY VALUE
- --- ------------------------------------------------------ -------------------------------------------- ------------
* Merrill Lynch Return Preservation Trust Fund Money Market Fund $ 1,706,201
* Nature's Sunshine Products, Inc. Common Stock Corporate Stock 4,054,258
* Mercury HW International Value Distribution Fund Mutual Fund 183,104
* Merrill Lynch Fundamental Growth Fund Mutual Fund 113,283
* Merrill Lynch Basic Value Fund Mutual Fund 13,164
* Merrill Lynch Balanced Capital Fund Mutual Fund 1,260
* Merrill Lynch Bond High Income Fund Mutual Fund 10,689
* Merrill Lynch Global Allocation Fund Mutual Fund 9,303
* Merrill Lynch Equity Income Fund Mutual Fund 1,133
Dreyfus Premier Balanced Fund Mutual Fund 515,955
Franklin Mutual Beacon Fund Mutual Fund 522,345
PIMCO Total Return Fund Mutual Fund 787,983
PIMCO Stockplus Fund Mutual Fund 16,722
Lord Abbett Developing Growth Fund Mutual Fund 444,059
Van Kampen Emerging Growth Fund Mutual Fund 1,422,263
* Merrill Lynch US Government Mortgage Fund Mutual Fund 93,351
Alliance Premier Growth Fund Mutual Fund 4,692,949
Ivy International Fund Mutual Fund 25,106
Massachusetts Investors Trust Fund Mutual Fund 3,422,078
------------
$ 18,035,206
============
* Party-in-interest
10
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
Nature's Sunshine Products Tax Deferred Retirement Plan
Date: July 13, 2001 By: /s/ Douglas Faggioli, Chief Operating Officer
---------------------------------------------
CONSENT
We consent to the incorporation by reference in this annual report on Form 11-K
for the year ended December 31, 2000, of our report dated May 23, 2001,
appearing in the Registration Statement on Form S-8 (file No. 0-8707) of
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1993 which
became effective May 22, 1995.
GRANT THORNTON LLP
Provo, Utah
July 13, 2001