PROVO, Utah— Nature’s Sunshine Products Inc. (NASDAQ:NATR) released the financial results for its first quarter of 2010 (1Q10), ended March 31. Net sales increased 4.7 percent to $87.0 million, compared with $83.2 million in the same period in 2009. Operating income improved by $2.8 million, to break-even, compared with an operating loss of $2.8 million in 1Q09, while net income for 1Q10 hit $4.2 million, compared with a net loss of $1.5 million in the comparable 2009 period. The increase in operating income was primarily the result of increased sales and reduced cost of goods sold and selling, general and administrative expenses as a percent of sales.
The company did record a $3.7 million foreign exchange gain in other income in 1Q10 related to the implementation of highly-inflationary accounting for Venezuela and devaluation of the Venezuelan bolivar. The change reduced reported net sales by approximately 1.7 percent and reduced operating income by approximately $0.4 million for 1Q10.
“We are pleased with the continued progress by Nature’s Sunshine Products and the improved start for 2010,” said Douglas Faggioli, president and CEO. “With improving economies worldwide, most of our markets—notably the United States, Europe, the Ukraine, Canada, and Mexico—demonstrated encouraging growth, aided by selective price increases and more favorable exchange rates. We continue to see increases in sales managers, a key positive indicator, and strengthening cash flow. We remain focused on reducing expenses and improving operating income at Nature's Sunshine.”
By segment, Nature’s Sunshine Products U.S. remains the company’s largest individual segment, posting net sales revenue of $37.8 million for 1Q10, a 3.6 percent increase over the 2009 period. Net sales revenues for the quarter were also up for Nature’s Sunshine Products International, hitting $35.3 million, an increase of 5.1 percent, compared to the same 2009 period. However, the improvements in sales were offset by the impact of the accounting treatment for Venezuela, which reduced operating income to $0.4 million, compared to $1.6 million in 1Q09.
