Nature's Sunshine reports record results, with Q4 GAAP net income up 107.6% year-over-year to US$13.8M and net sales up 15.9% year-over-year to $117.9M; business transformation initiatives, new products, easing of COVID-19 restrictions credited for growth

Sample article from our Health Care Sector

LEHI, Utah , March 10, 2022 (press release) –

  • Net Sales in the Fourth Quarter of 2021 Increased 15.9% to $117.9 Million, Marking the Sixth Consecutive Quarter of Record Net Sales -
  • Net Sales in 2021 Increased 15.3% to a Company Record of $444.1 million -
  • Announces $30 Million Share Repurchase Program -

Nature’s Sunshine Products, Inc. (Nasdaq: NATR) (“Nature’s Sunshine” and/or the “Company”), a leading natural health and wellness company of premium-quality herbal and nutritional products, reported financial results for the fourth quarter and full year ended December 31, 2021.

Fourth Quarter 2021 Financial Highlights vs. Same Year-Ago Quarter

  • Net sales increased 15.9% to a record $117.9 million compared to $101.7 million.
  • GAAP net income increased 107.6% to $13.8 million, or $0.67 per diluted share, compared to $6.7 million, or $0.29 per diluted share.
  • Adjusted net income per diluted share was $0.68, compared to an adjusted net income per diluted share of $0.32.
  • Adjusted EBITDA increased 54.7% to $11.6 million compared to $7.5 million.

Full Year 2021 Financial Highlights vs. 2020

  • Net sales increased 15.3% to a company record $444.1 million compared to $385.2 million
  • GAAP net income increased to $30.2 million, or $1.42 per diluted share, compared to $23.0 million, or $1.07 per diluted share.
  • Adjusted net income per diluted share was $1.41, compared to an adjusted net income per diluted share of $1.07.
  • Adjusted EBITDA increased 36.6% to $49.4 million compared to $36.2 million.

Capital Allocation

Nature’s Sunshine announced today that its board of directors authorized the repurchase of up to $30 million of the Company’s common shares. These authorized repurchases are in addition to the $15 million repurchase program that was announced in March 2021, which will be completed in the coming weeks. Repurchases may be made from time to time as market conditions warrant and are subject to regulatory considerations.

Management Commentary

“2021 was another record-breaking year for Nature’s Sunshine, as net sales and adjusted EBITDA reached historic highs,” said Terrence Moorehead, CEO of Nature’s Sunshine. “This was our sixth consecutive quarter of historic record-breaking growth, driven by effective implementation of our five global growth strategies. Importantly, 2021 was our first full-year implementing the new strategies, and while they have clearly revitalized the business, it’s still early and we believe we’re on the front-end of the growth curve. Overall, we’re ahead of schedule and delivering strong results across all our operating geographies and channels.

“Looking forward to 2022, we continue to invest in our digital, personalization, and manufacturing capabilities to improve the customer experience and will strengthen our branding to drive customer growth. We believe an intensified focus on our five global growth strategies will continue to move our business in the right direction and help us gain traction, over time. Our global strategies are an important aspect of our capital allocation plan and we will continue to invest ahead of growth to accelerate market penetration.

“As we evaluate and consider the effects of the Russian invasion of Ukraine, our hearts go out to our friends, partners, and colleagues in the region. In connection with the Impact Foundation, our charitable arm, we are taking an active role in providing humanitarian support for the people in the region. From a business standpoint, sales in these markets are at significant risk, but it’s still relatively early and the situation is developing. We are monitoring conditions closely and will provide further updates, as needed. In the meantime, we look forward to further maximizing the value we create for our customers, distributors and shareholders in the years ahead.”

Fourth Quarter 2021 Financial Results

 Net Sales by Operating Segment(Amounts in Thousands)

 Three Months Ended
December 31, 2021 Three Months Ended
December 31, 2020 Percent
Change Impact of
Currency
Exchange Percent
Change
Excluding
Impact of
Currency

Asia$49,152  $36,903  33.2% $(1,081) 36.1%

Europe 26,071   23,590  10.5   (247) 11.6 

North America 36,874   34,696  6.3   102  6.0 

Latin America and Other 5,842   6,554  (10.9)  (40) (10.3)

 $117,939  $101,743  15.9% $(1,266) 17.2%

Net sales in the fourth quarter of 2021 increased 15.9% to $117.9 million compared to $101.7 million in the year-ago quarter. The increase was due to the continued execution of business transformation initiatives, the launch of new products, and the easing of COVID-19-related restrictions in certain key markets. Excluding the impact from foreign exchange rates, net sales in the fourth quarter of 2021 increased 17.2% compared to the year-ago quarter.

Gross margin in the fourth quarter was consistent at 74.0% compared to the year-ago quarter.

Volume incentives as a percentage of net sales were 29.1% compared to 34.1% in the year-ago quarter. The decrease in volume incentives is partially due to changes in market mix and growth in NSP China. The decrease also reflects expected overall cost savings from the September 2020 launch of our new consultant sales and compensation plan in North America and LATAM.

Selling, general and administrative expenses in the fourth quarter were $45.4 million compared to $38.4 million in the year-ago quarter. The increase was primarily attributable to higher costs associated with incremental variable service fees in China from net sales growth, the implementation of business transformation and sales growth initiatives in other markets, and direct selling costs associated with increased sales. As a percentage of net sales, SG&A expenses were 38.5% in the fourth quarter of 2021 compared to 37.8% in the year-ago quarter. Excluding the impact of the restructuring and other unusual expenses, SG&A expenses as a percentage of net sales were 38.2% in the fourth quarter of 2021 compared to 37.1% in the year-ago quarter.

Operating income in the fourth quarter increased 235.4% to $7.5 million, or 6.4% of net sales, compared to $2.2 million, or 2.2% of net sales, in the year-ago quarter. Excluding the impact of restructuring and other unusual expenses, operating income increased to $7.9 million, or 6.7% of net sales, in the fourth quarter of 2021, compared to $2.9 million, or 2.9% of net sales, in the year-ago quarter.

Other income (loss), net, in the fourth quarter of 2021 was $(0.6) million compared to other income of $1.6 million in the year-ago quarter. Other income (loss), net, primarily consisted of foreign exchange gains (losses) as a result of net changes in foreign currencies, including Asia, Europe and Latin America. The benefit from income taxes was $6.8 million in the fourth quarter of 2021 compared to a benefit of $2.8 million for the year-ago quarter. The favorable effective tax rate for the fourth quarters of 2021 and 2020 was primarily due to reduction of valuation allowances relating to certain deferred tax assets.

GAAP net income attributable to common shareholders increased to $13.4 million, or $0.67 per diluted common share, compared to $5.9 million, or $0.29 per diluted common share, in the year-ago quarter. Net income attributable to NSP China was $1.8 million, or $0.09 per diluted common share, for the fourth quarter of 2021, compared to $3.9 million, or $0.20 per diluted common share, in the year-ago quarter.

Non-GAAP net income attributable to common shareholders increased to $13.7 million, or $0.68 per diluted common share, compared to $6.4 million, or $0.32 per diluted common share in the year-ago quarter. Adjusted net income, which is a non-GAAP financial measure, is defined here as net income from continuing operations before less-frequent items including, among other things, restructuring expenses and certain tax refunds. A reconciliation of adjusted net income to GAAP net income is provided in the financial tables below.

Adjusted EBITDA in the fourth quarter of 2021 increased 54.7% to $11.6 million compared to $7.5 million in the year-ago quarter. This increase was driven primarily by incremental operating income due to the aforementioned increase in net sales and reduction in volume incentives. 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/loss adjusted to exclude share-based compensation expense and certain noted adjustments. A reconciliation of net income to adjusted EBITDA is provided in the attached financial tables.

 

For Financial Results, see:

https://ir.naturessunshine.com/news-events/press-releases/detail/200/natures-sunshine-reports-record-fourth-quarter-and-full

 


 

 

 

 

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