------------------------------------------------------------------------- ------------------------------------------------------------------------- FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________to __________________ Commission File #0-8707 NATURE'S SUNSHINE PRODUCTS, INC. (Exact Name of Registrant) Utah 87-0327982 ----------------------- -------------------------------------- (State of Incorporation) (I.R.S. Employer Identification Number) 75 East 1700 South Provo, Utah 84606 (801) 342-4300 (Address of Principal Executive Offices) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, during the preceding 12 months (or such shorter period that the Registrant was required to file such report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- ---- The number of shares of common stock, without par value, outstanding as of July 31, 1995, was 12,169,670. ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited) June 30 December 31 1995 1994 ----------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $12,906,462 $11,200,550 Accounts receivable, net 5,902,348 4,787,333 Inventories 18,749,819 17,277,762 Notes receivable due from related parties 345,000 205,000 Prepaid expenses and other 3,508,084 3,092,438 ----------- ----------- Total Current Assets 41,411,713 36,563,083 PROPERTY, PLANT AND EQUIPMENT, net 10,411,837 9,918,699 LONG-TERM INVESTMENTS 3,034,544 3,053,156 OTHER ASSETS 2,991,569 2,922,621 ----------- ------------ $57,849,663 $52,457,559 ----------- ----------- ----------- -----------
The accompanying notes to the financial statements are an integral part of these consolidated condensed balance sheets 2 NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
(Unaudited) June 30 December 31 1995 1994 ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term debt $ 2,166,497 $ 1,533,042 Accounts payable 3,809,847 4,472,689 Accrued volume incentives 7,434,561 5,877,083 Accrued liabilities 7,002,340 4,818,173 Income taxes payable 1,475,322 1,064,239 ------------ ------------ Total Current Liabilities 21,888,567 17,765,226 ------------ ------------ DEFERRED INCOME TAXES 742,767 971,434 ------------ ------------ MINORITY INTEREST 194,879 441,684 ------------ ------------ SHAREHOLDERS' EQUITY: Common stock, no par value, 20,000,000 shares authorized; 13,278,544 shares issued 29,987,943 29,849,452 Retained earnings 13,547,818 9,778,478 Treasury stock, at cost, 1,117,894 and 1,033,278 shares at June 30, 1995 and December 31, 1994, respectively (5,022,685) (3,742,495) Receivables due from related parties (365,477) (404,804) Cumulative translation adjustments (3,124,149) (2,201,416) ------------ ----------- Total Shareholders' Equity 35,023,450 33,279,215 ------------ ----------- $57,849,663 $52,457,559 ------------ ------------- ------------ -------------
The accompanying notes to the financial statements are an integral part of these consolidated condensed balance sheets. 3 NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Three Months Ended June 30 ------------------------------------------ (Unaudited) 1995 1994 ----------- ----------- SALES REVENUE $50,725,319 $38,312,202 ----------- ----------- COSTS AND EXPENSES: Cost of goods sold 9,523,314 7,508,340 Volume incentives 23,104,274 17,839,741 Selling, general and administrative 13,446,072 9,358,762 ----------- ---------- 6,073,660 34,706,843 ----------- ---------- OPERATING INCOME 4,651,659 3,605,359 ----------- ---------- OTHER INCOME (EXPENSE): Interest and other income 498,489 354,657 Interest expense (52,871) --- Foreign exchange loss, net (85,845) (55,659) Minority interest 20,947 77,266 ---------- --------- 380,720 376,264 ---------- --------- INCOME BEFORE INCOME TAXES 5,032,379 3,981,623 PROVISION FOR INCOME TAXES 2,060,151 1,744,748 ---------- --------- NET INCOME $2,972,228 $2,236,875 ---------- ---------- ---------- ---------- NET INCOME PER COMMON SHARE $0.24 $0.18 ---------- ---------- ---------- ---------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 12,419,242 12,534,343 ---------- ---------- ---------- ----------
The accompanying notes to the financial statements are an integral part of these consolidated condensed statements of income. 4 NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Six Months Ended June 30 ------------------------------------------ (Unaudited) 1995 1994 ----------- ----------- SALES REVENUE $97,787,079 $75,649,184 ----------- ----------- COSTS AND EXPENSES: Cost of goods sold 18,752,687 14,556,877 Volume incentives 44,897,802 35,557,515 Selling, general and administrative 26,497,881 18,862,232 ----------- ---------- 90,148,370 8,976,624 ----------- ---------- OPERATING INCOME 7,638,709 6,672,560 ----------- ---------- OTHER INCOME (EXPENSE): Interest and other income 897,165 500,402 Interest expense (97,015) --- Foreign exchange loss, net (212,863) (266,744) Minority interest 246,805 113,125 ----------- ---------- 834,092 346,783 ----------- ---------- INCOME BEFORE INCOME TAXES 8,472,801 7,019,343 PROVISION FOR INCOME TAXES 3,486,686 3,081,350 ----------- ---------- NET INCOME $4,986,115 $3,937,993 ----------- ---------- ----------- ---------- NET INCOME PER COMMON SHARE $0.40 $0.31 ----------- ---------- ----------- ---------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 12,411,308 12,530,602 ----------- ---------- ----------- ----------
The accompanying notes to the financial statements are an integral part of these consolidated condensed statements of income. 5 NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended June 30 ------------------------------------------ Increase (Decrease) in Cash and Cash Equivalents (Unaudited) 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from sales revenue $96,631,728 $75,165,565 Cash paid as volume incentives (43,340,324) (35,247,158) Cash paid to suppliers and employees (45,602,935) (32,671,106) Interest paid (97,015) --- Interest received 724,638 398,150 Income taxes paid (2,716,700) (1,609,700) ------------ ----------- Net Cash Provided by Operating Activities 5,599,392 6,035,751 ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (1,710,118) (1,939,919) Purchase of other assets (11,700) (1,735,688) Investments in subsidiaries (246,805) 813,336 Payments received on long-term receivables 67,752 98,426 Short-term related party receivables, net (330,673) 130,898 Proceeds from sale of assets 257,566 --- Purchase (sale) of long-term investments, net 18,612 (460,598) ----------- ----------- Net Cash Used in Investing Activities (1,955,366) (3,093,545) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Payment of cash dividends (1,220,683) (1,114,715) Purchase of treasury stock (1,297,981) --- Proceeds from short-term debt, net 633,455 --- Issuance of treasury stock --- 200,003 Proceeds from exercise of stock options 160,190 158,744 ----------- ---------- Net Cash Used in Financing Activities (1,725,019) (755,968) ----------- ---------- EFFECT OF EXCHANGE RATES ON CASH (213,095) (149,334) ----------- ---------- NET INCREASE IN CASH AND CASH EQUIVALENTS 1,705,912 2,036,904 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 11,200,550 8,666,915 ----------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $12,906,462 $10,703,819 ----------- ----------- ----------- -----------
The accompanying notes to the financial statements are an integral part of these consolidated condensed statements of cash flows. 6 NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED) Reconciliation of Net Income to Net Cash Provided by Operating Activities
Six Months Ended June 30 ----------------------------------------- (Unaudited) 1995 1994 ---------- ---------- NET INCOME $4,986,115 $3,937,993 ----------- ---------- Bad debt expense 19,954 566,150 Depreciation and amortization 1,216,980 1,324,665 Increase in accounts receivable (1,134,969) (885,277) Increase in inventories (1,472,057) (638,629) Increase in prepaid expenses and other assets (568,212) (408,021) Increase in income taxes payable 411,083 878,712 Increase in accrued liabilities and volume incentives 3,741,645 1,122,780 Increase (decrease) in accounts payable (662,842) 375,878 Decrease in deferred income taxes (228,667) (3,071) Cumulative translation adjustments (709,638) (235,429) ----------- ---------- Total Adjustments 613,277 2,097,758 ----------- ---------- Net Cash Provided by Operating Activities $5,599,392 $6,035,751 ----------- ---------- ----------- ----------
The accompanying notes to the financial statements are an integral part of these consolidated condensed statements of cash flows. 7 NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (1) INTERIM FINANCIAL STATEMENT POLICIES AND DISCLOSURES The unaudited, consolidated, condensed financial statements of Nature's Sunshine Products, Inc. and subsidiaries included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally required in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated, condensed financial statements reflect all adjustments, which in the opinion of management, are necessary to a fair statement of the results of operations for the interim periods presented. All of the adjustments which have been made in these consolidated, condensed financial statements are of a normal recurring nature. Weighted average shares outstanding and all per share amounts included in the condensed financial statements have been adjusted to reflect the ten percent stock dividend effected in February of 1995. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K. (2) INVENTORIES Inventories consist of:
(Unaudited) June 30 December 31 1995 1994 ------------- ------------ Raw materials $ 6,297,593 $ 6,124,791 Work in process 1,089,893 1,303,024 Finished goods 11,362,333 9,849,947 ------------ ----------- $18,749,819 $17,277,762 ------------ ----------- ------------ -----------
8 NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED) (3) EARNINGS PER SHARE Outstanding stock options are considered common stock equivalents and are included in the computation of primary earnings per share. As of June 30, 1995, the Company had a total of 1,416,129 options outstanding. The options were all granted at market prices, which vary from $2.69 to $13.25 per share. (4) QUARTERLY CASH DIVIDENDS The Company has declared 28 consecutive quarterly cash dividends. The most recent quarterly cash dividend of $.05 per common share was declared on August 8, 1995, to shareholders of record on August 18, 1995, payable August 29, 1995. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY The following table identifies (i) the relationship that net income items disclosed in the consolidated condensed financial statements have to total sales, and (ii) amount and percent of change of such items compared to the corresponding prior period.
(i) (ii) Income and Expense Three Months Ended June 30 ------------------------------------------------- Items as a Percent of Sales 1995 to 1994 1994 to 1993 ----------------------------- ------------------------------ ------------- Three Months Ended Amount of Percent Percent June 30 Income and Increase/ of of ---------------------------- 1995 1994 Expense Items (Decrease) Change Change ---------- ------ ------------- ----------- -------- -------- 100.00% 100.00% Sales revenue $12,413,117 32.40% 21.15% --------- ------- ----------- ------- ------- 18.77 19.60 Cost of sales 2,014,974 26.84 28.82 45.55 46.56 Volume incentives 5,264,533 29.51 19.94 26.51 24.43 SG&A expenses 4,087,310 43.67 21.14 -------- ------- ----------- ------- ------- 90.83 90.59 11,366,817 32.75 22.09 -------- ------- ----------- ------- ------- 9.17 9.41 Operating income 1,046,300 29.02 12.81 -------- ------- ----------- ------- ------- 0.98 0.93 Interest and other income 143,832 40.56 161.04 (0.10) --- Interest expense (52,871) (100.00) -- (0.17) (0.14) Foreign exchange loss (30,186) (54.23) (7,242.88) 0.04 0.20 Minority interest (56,319) (72.89) 302.51 -------- ------- ----------- ------- ------- 0.75 0.99 4,456 1.18 143.85 -------- ------- ----------- ------- ------- 9.92 10.39 Income before income taxes 1,050,756 26.39 18.84 -------- ------- 4.06 4.55 Provision for income taxes 315,403 18.08 25.91 -------- ------- ----------- ------- ------- 5.86% 5.84% Net income $ 735,353 32.87% 13.86% -------- ------- ----------- ------- ------- -------- ------- ----------- ------- -------
10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY The following table identifies (i) the relationship that net income items disclosed in the consolidated condensed financial statements have to total sales, and (ii) amount and percent of change of such items compared to the corresponding prior period.
(i) (ii) Income and Expense Six Months Ended June 30 ------------------------------------------------- Items as a Percent of Sales 1995 to 1994 1994 to 1993 ---------------------------- ------------------------------ ------------- Six Months Ended Amount of Percent Percent June 30 Income and Increase/ of of --------------------------- 1995 1994 Expense Items (Decrease) Change Change ---------- ------ ------------- ----------- -------- -------- 100.00% 100.00% Sales revenue $22,137,895 29.26% 23.10% --------- ------- ----------- ------ ------------ 19.18 19.24 Cost of sales 4,195,810 28.82 22.82 45.91 47.00 Volume incentives 9,340,287 26.27 24.89 27.10 24.94 SG&A expenses 7,635,649 40.48 18.86 --------- ------- ----------- ------ ------------ 92.19 91.18 21,171,746 30.69 22.75 --------- ------- ----------- ------ ------------ 7.81 8.82 Operating income 966,149 14.48 26.79 --------- ------- ----------- ------ ------------ 0.92 0.66 Interest and other income 396,763 79.29 90.14 (0.10) --- Interest expense (97,015) 100.00 --- (0.22) (0.35) Foreign exchange loss 53,881 (20.20) (62,863.29) 0.25 0.15 Minority interest 133,680 118.17 489.32 --------- ------- ----------- ------ ------------ 0.85 0.46 487,309 140.52 22.63 --------- ------- ----------- ------ ------------ 8.66 9.28 Income before income taxes 1,453,458 20.71 26.58 --------- ------- 3.56 4.07 Provision for income taxes 405,336 13.15 27.23 --------- ------- ----------- ------ ------------ 5.10% 5.21% Net income $ 1,048,122 26.62% 26.07% --------- ------- ----------- ------ ------------ --------- ------- ----------- ------ ------------
11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) RESULTS OF OPERATIONS SALES REVENUE: The Company reported record consolidated sales for the three and six months ended June 30, 1995. Sales revenue for the three and six months ended June 30, 1995, was $50.7 million and $97.8 million compared to $38.3 million and $75.6 million, an increase of 32 percent and 29 percent for the three and six months, respectively. Management believes the increase in sales for the three- and six-month periods is attributable to the expansion of the Company's independent sales force, a continued increase of consumer awareness and interest in natural health and nutritional products and incentives the Company offers its independent sales force. In addition, the Company's sales revenue growth has been enhanced by its international expansion. Despite a sales decrease of 47 percent in Mexico as a result of the devaluation of the Peso and related economic turmoil, the Company's international operations reported sales revenue of $32.1 million for the six months ended June 30, 1995, an increase of 45 percent compared to the same period in 1994. The Company's independent sales force consists of Managers and Distributors. A Distributor interested in earning additional income by committing more time and effort to selling the Company's products may attain the rank of "Manager." Appointment as a Manager is dependent upon attaining certain purchase volume levels and demonstrating leadership abilities. The number of Managers increased to 10,396 at June 30, 1995, from 7,928 at June 30, 1994. The number of Distributors at June 30, 1995, was 280,830 compared to 172,420 at June 30, 1994. 12 VOLUME INCENTIVES: The dollar increase in volume incentives, for the three and six months ended June 30, 1995, is directly related to the increase in sales revenue. Volume incentives are an integral part of the Company's direct sales marketing program and are payments to independent sales force members for reaching certain levels of sales performance and organizational development. Volume incentives vary slightly, on a percentage basis, by product due to the Company's pricing policies. Volume incentives decreased approximately one percent, as a percentage of sales for the three-and six-month period ended June 30, 1995, compared to the same periods of 1994, primarily as the result of lower volume incentive payments in the Company's newest operations, Japan and Brazil. Lower volume incentive payments are generally expected from newer operations. Management expects volume incentives to decrease slightly, as a percent of sales, during the rest of 1995. The decrease is anticipated as the result of increasing sales from Japan and Brazil, which have comparatively lower volume incentive payments. COST OF GOODS SOLD: The Company has experienced a slight decrease in cost of goods sold, as a percentage of sales, for the three months ended June 30, 1995, compared to the same period last year. The decrease in cost of goods sold, as a percentage of sales, was primarily related to increased efficiencies in the Company's manufacturing operations. Management expects cost of goods sold to decrease slightly as a percent of sales during the rest of 1995. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: The Company experienced increased selling, general and administrative expenses (SG&A) as a percent of sales during the three- and six-month periods ended June 30, 1995, increasing from less than 25 percent in 1994 to more than 26 percent and 27 percent of sales for the three and six months ended June 30, 1995, respectively. 13 The increase in SG&A expenses, as a percentage of sales, results primarily from the incremental costs of approximately $3.9 million for the six months ended June 30, 1995, incurred in the Company's newest operations in Japan and Brazil. Management expects SG&A to decrease from current levels, as a percentage of sales, for the entire year as sales increase in both Brazil and Japan in the remainder of 1995. SUBSIDIARY OPERATIONS: Domestic and international sales for the six months ended June 30, 1995, compared to the previous year are as follows:
SALES (Dollars in Thousands) SIX MONTHS ENDED JUNE 30 1995 1994 ------------------------ ------- -------- DOMESTIC $65,664 $53,539 ------- -------- ------- -------- INTERNATIONAL: Mexico $ 7,210 $13,504 Japan 4,304 102 Colombia 4,181 1,742 Venezuela 3,977 727 Canada 3,825 3,318 Brazil 3,219 98 Great Britain 1,829 1,508 Costa Rica 1,687 --- Malaysia 1,100 426 Export 791 685 ------- -------- TOTAL INTERNATIONAL $32,123 $22,110 ------- -------- ------- --------
14 Domestic and international operating income for the six months ended June 30, 1995, compared to the previous year are as follows:
OPERATING INCOME (Dollars in Thousands) SIX MONTHS ENDED JUNE 30 1995 1994 ------------------------ ------- ------ DOMESTIC $5,140 $4,594 ------- ------ ------- ------ INTERNATIONAL: Mexico $ 311 $2,305 Japan (595) (134) Colombia 782 73 Venezuela 741 (195) Canada 183 48 Brazil (10) (147) Great Britain 37 (23) Costa Rica 611 --- Malaysia 94 (117) Export 345 269 ------ ------ TOTAL INTERNATIONAL $2,499 2,079 ------ ------ ------ ------
Domestic and international assets as of June 30, 1995, compared to December 31, 1994, balances are as follows:
(Dollars in Thousands) June 30 December 31 ASSETS 1995 1994 ------- ----------- DOMESTIC $35,697 $34,973 ------- -------- ------- -------- INTERNATIONAL: Mexico $ 4,733 $ 5,885 Japan 4,022 2,677 Colombia 2,920 1,967 Venezuela 3,358 1,635 Canada 1,407 1,598 Brazil 2,422 1,598 Great Britain 1,167 1,028 Costa Rica 1,102 287 Malaysia 1,022 810 ------- -------- TOTAL INTERNATIONAL $22,153 $17,485 ------- -------- ------- --------
15 BALANCE SHEET ACCOUNTS RECEIVABLE Accounts receivable increased approximately $1.1 million during the period ended June 30, 1995. The increase in receivables is related to the Company's growing international operations. INVENTORIES Inventories increased approximately $1.5 million during the first six months of 1995. The increase in inventories is primarily related to the increase in sales. Sales increased 29 percent, during the six months ended June 30, 1995, while inventories only increased 9 percent. ACCRUED VOLUME INCENTIVES Accrued volume incentives increased approximately $1.6 million during the first six months of the year as a direct result of increased sales. ACCRUED LIABILITIES The balance of accrued liabilities increased approximately $2.2 million during the six months ended June 30, 1995. The increase in accrued liabilities reflects the increased level of sales and related accruals for sales incentives such as conventions and other travel awards. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents increased approximately $1.7 million for the six months ended June 30, 1995. The increase in cash and cash equivalents is primarily the result of the increased sales and income as well as increases in short-term liabilities. 16 The Company acquired approximately $1.7 million in machinery, equipment and building improvements during the first six months of 1995 to improve its manufacturing and administrative capabilities. During the period ended June 30, 1995, the Company acquired approximately $1.3 million of treasury stock in the market. Approximately $1.2 million was used for the payment of dividends during the first quarter. Management believes the Company's stock is an attractive investment and, from time to time pursuant to its previously announced 440,000 share stock buyback program, may utilize a portion of its available cash to purchase up to the remaining balance of approximately 81,000 shares of its stock should market conditions warrant. The Company purchased approximately 115,000 treasury shares during the first half of 1995. During the period ended June 30, 1995, the Company advanced $120,000 to one of its officers on a short-term basis at an interest rate of 9 percent. The loan was repaid with applicable interest shortly after the end of the second quarter. The Company also advanced $250,000 to one of its key employees. The loan is collateralized and is to be repaid in monthly installments over a two-year period with an interest rate of 9 percent. The Company is evaluating the need to expand its domestic manufacturing, inventory and other facilities. The Company may consider long-term financing for these projects in the event that they require significant capital outlays. Management believes that future working capital requirements can be internally funded. Management expects cash and investments to increase during the remainder of 1995, primarily resulting from operations. However, cash and investments may be reduced in the event the Company proceeds with the capital projects mentioned above. 17 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) No exhibits are required to be filed by Item 601 of Regulation S-K. b) No reports were filed on Form 8-K during the quarter for which this report is filed. OTHER ITEMS There were no other items to be reported under Part II of this report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NATURE'S SUNSHINE PRODUCTS, INC. Date: August 11, 1995 /s/ WILLIAM E. SPEARS ------------------- ------------------------------------- WILLIAM E. SPEARS Chief Operating Officer Date: August 11, 1995 /s/ DOUGLAS FAGGIOLI -------------------- -------------------------------------- DOUGLAS FAGGIOLI, Chief Financial Officer 18