<PAGE>
=======================================================================
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 September 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 October 30, 1995, was 12,263,057.
=======================================================================
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
September 30 December 31
1995 1994
------------ -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $16,126,854 $11,200,550
Accounts receivable, net 6,355,808 4,787,333
Inventories 20,023,437 17,277,762
Notes receivable due from related
parties 320,676 205,000
Prepaid expenses and other 3,857,407 3,092,438
----------- -----------
Total Current Assets 46,684,182 36,563,083
PROPERTY, PLANT AND EQUIPMENT, net 10,261,984 9,918,699
LONG-TERM INVESTMENTS 2,698,266 3,053,156
OTHER ASSETS 2,417,700 2,922,621
----------- -----------
$62,062,132 $52,457,559
----------- -----------
----------- -----------
</TABLE>
The accompanying notes to the financial statements are an
integral part of these consolidated condensed balance sheets.
2
<PAGE>
NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>
(Unaudited)
September 30 December 31
1995 1994
------------ -----------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt $ 2,199,562 $ 1,533,042
Accounts payable 4,230,151 4,472,689
Accrued volume incentives 8,091,401 5,877,083
Accrued liabilities 6,563,150 4,818,173
Income taxes payable 1,553,385 1,064,239
----------- -----------
Total Current Liabilities 22,637,649 17,765,226
----------- -----------
DEFERRED INCOME TAXES 578,522 971,434
----------- -----------
MINORITY INTEREST --- 441,684
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, no par value, 20,000,000
shares authorized; 13,278,544 shares
issued 31,158,413 29,849,452
Retained earnings 16,240,740 9,778,478
Treasury stock, at cost, 1,018,567 and
1,033,278 shares at September 30, 1995,
and December 31, 1994, respectively (4,947,438) (3,742,495)
Receivables due from related parties (297,787) (404,804)
Cumulative translation adjustments (3,307,967) (2,201,416)
----------- -----------
Total Shareholders' Equity 38,845,961 33,279,215
----------- -----------
$62,062,132 $52,457,559
----------- -----------
----------- -----------
</TABLE>
The accompanying notes to the financial statements are an
integral part of these consolidated condensed balance sheets.
3
<PAGE>
NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
September 30
--------------------
(Unaudited)
1995 1994
----------- -----------
<S> <C> <C>
SALES REVENUE $53,163,688 $41,003,141
----------- -----------
COSTS AND EXPENSES:
Cost of goods sold 9,816,922 7,917,100
Volume incentives 24,222,291 18,689,624
Selling, general and administrative 13,859,872 10,930,139
----------- -----------
47,899,085 37,536,863
----------- -----------
OPERATING INCOME 5,264,603 3,466,278
----------- -----------
OTHER INCOME (EXPENSE):
Interest and other income 451,261 8,140
Interest expense (48,858) (31,617)
Foreign exchange gain (loss), net (262,686) 10,084
Minority interest 311,997 205,247
----------- -----------
451,714 191,854
----------- -----------
INCOME BEFORE INCOME TAXES 5,716,317 3,658,132
PROVISION FOR INCOME TAXES 2,410,686 1,436,966
----------- -----------
NET INCOME $ 3,305,631 $ 2,221,166
----------- -----------
----------- -----------
NET INCOME PER COMMON SHARE $ 0.26 $ 0.18
----------- -----------
----------- -----------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 12,679,602 12,508,616
----------- -----------
----------- -----------
</TABLE>
The accompanying notes to the financial statements are an integral
part of these consolidated condensed statements of income.
4
<PAGE>
NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Nine Months Ended
September 30
--------------------
(Unaudited)
1995 1994
----------- -----------
<S> <C> <C>
SALES REVENUE $150,950,767 $116,652,325
------------ ------------
COSTS AND EXPENSES:
Cost of goods sold 28,569,609 22,473,977
Volume incentives 69,120,093 54,247,139
Selling, general and administrative 40,357,753 29,792,371
------------ ------------
138,047,455 106,513,487
------------ ------------
OPERATING INCOME 12,903,312 10,138,838
------------ ------------
OTHER INCOME (EXPENSE):
Interest and other income 1,348,426 508,563
Interest expense (145,873) (31,638)
Foreign exchange loss, net (475,549) (256,660)
Minority interest 558,802 318,372
------------ ------------
1,285,806 538,637
------------ ------------
INCOME BEFORE INCOME TAXES 14,189,118 10,677,475
PROVISION FOR INCOME TAXES 5,897,372 4,518,316
------------ ------------
NET INCOME $ 8,291,746 $ 6,159,159
------------ ------------
------------ ------------
NET INCOME PER COMMON SHARE $ 0.66 $ 0.49
------------ ------------
------------ ------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 12,518,910 12,523,634
------------ ------------
------------ ------------
</TABLE>
The accompanying notes to the financial statements are an integral
part of these consolidated condensed statements of income.
5
<PAGE>
NATURE'S SUNSHINE PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
September 30
--------------------
(Unaudited)
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from sales revenue $148,976,972 $115,487,111
Cash paid as volume incentives (66,905,775) (51,601,269)
Cash paid to suppliers and employees (70,453,116) (53,433,536)
Income taxes paid (4,343,987) (2,504,700)
Interest received 1,278,197 408,938
Interest paid (145,873) (31,638)
------------ ------------
Net Cash Provided by Operating
Activities 8,406,418 8,324,906
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,271,986) (2,152,655)
Purchase of other assets (80,205) (2,400,083)
Investments in subsidiaries (558,802) 608,089
Payments received on long-term receivables 343,485 327,475
Short-term related party receivables, net (113,659) 194,247
Proceeds from sale of assets 257,566 ---
Sale (purchase) of long-term investments,
net 354,890 (394,289)
------------ ------------
Net Cash Used in Investing Activities (2,068,711) (3,817,216)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of cash dividends (1,833,392) (1,671,997)
Purchase of treasury stock (1,297,981) (206,147)
Short-term borrowing 666,520 1,010,000
Tax benefit from exercise of stock options 635,108 ---
Issuance of treasury stock --- 200,002
Proceeds from exercise of stock options 770,799 169,372
------------ ------------
Net Cash Used in Financing Activities (1,058,946) (498,770)
------------ ------------
EFFECT OF EXCHANGE RATES ON CASH (352,457) (120,907)
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 4,926,304 3,888,013
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 11,200,550 8,666,915
------------ ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 16,126,854 $ 12,554,928
------------ ------------
------------ ------------
</TABLE>
The accompanying notes to the financial statements are an integral
part of these consolidated condensed statements of cash flows.
6
<PAGE>
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
<TABLE>
<CAPTION>
Nine Months Ended
September 30
--------------------
(Unaudited)
1995 1994
---------- ----------
<S> <C> <C>
NET INCOME $8,291,746 $6,159,159
---------- ----------
Bad debt expense 219,954 566,150
Depreciation and amortization 2,075,342 1,691,770
Increase in accounts receivable, net (1,588,429) (1,574,329)
Increase in inventories (2,745,675) (2,298,307)
(Increase) decrease in prepaid expenses
and other assets (905,417) 711,485
Increase in income taxes payable 489,146 1,001,410
Increase in accrued liabilities and volume
incentives 3,959,295 1,483,006
(Decrease) increase in accounts payable (242,538) 934,552
Decrease in deferred income taxes (392,912) (55,072)
Cumulative translation adjustments (754,094) (294,918)
---------- ----------
Total Adjustments 114,672 2,165,747
---------- ----------
Net Cash Provided by Operating
Activities $8,406,418 $8,324,906
---------- ----------
---------- ----------
</TABLE>
The accompanying notes to the financial statements are an integral
part of these consolidated condensed statements of cash flows.
7
<PAGE>
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 consolidated 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:
<TABLE>
<CAPTION>
(Unaudited)
September 30 December 31
1995 1994
----------- -----------
<S> <C> <C>
Raw materials $ 6,858,376 $ 6,124,791
Work in process 1,085,197 1,303,024
Finished goods 12,079,864 9,849,947
----------- -----------
$20,023,437 $17,277,762
----------- -----------
----------- -----------
</TABLE>
8
<PAGE>
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 September 30, 1995, the Company had a total of 1,291,703
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, and was paid August 29, 1995.
9
<PAGE>
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.
<TABLE>
<CAPTION>
<C> <C> <S> <C> <C> <C>
(i) (ii)
Income and Expense Three Months Ended September 30
Items as a Percent of Sales --------------------------------------
- --------------------------- 1995 to 1994 1994 to 1993
Three Months Ended ------------------------ ------------
September 30 Amount of Percent Percent
- --------------------------- Income and Increase/ of of
1995 1994 Expense Items (Decrease) Change Change
------- ------- ------------- ----------- ------ ------
100.00% 100.00% Sales revenue $12,160,547 29.66% 26.34%
------- ------- ----------- ---------- ---------
18.47 19.31 Cost of sales 1,899,822 24.00 25.90
45.56 45.58 Volume incentives 5,532,667 29.60 23.61
26.07 26.66 SG&A expenses 2,929,733 26.80 42.75
------- ------- ----------- ---------- ---------
90.10 91.55 10,362,222 27.61 29.14
------- ------- ----------- ---------- ---------
9.90 8.45 Operating income 1,798,325 51.88 2.29
------- ------- ----------- ---------- ---------
0.85 0.03 Interest and other income 443,121 5,443.75 (95.52)
(0.09) (0.08) Interest expense (17,241) (54.53) 2,590.81
(0.50) 0.02 Foreign exchange loss (272,770) (2,704.98) 119.15
0.59 0.50 Minority interest 106,750 52.01 923.78
------- ------- ----------- ---------- ---------
0.85 0.47 259,860 135.45 29.72
------- ------- ----------- ---------- ---------
10.75 8.92 Income before income taxes 2,058,185 56.26 3.44
------- -------
4.53 3.50 Provision for income taxes 973,720 67.76 0.53
------- ------- ----------- ---------- ---------
6.22% 5.42% Net income $ 1,084,465 48.82% 5.41%
------- ------- ----------- ---------- ---------
------- ------- ----------- ---------- ---------
</TABLE>
10
<PAGE>
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.
<TABLE>
<CAPTION>
<C> <C> <S> <C> <C> <C>
(i) (ii)
Income and Expense Nine Months Ended September 30
Items as a Percent of Sales --------------------------------------
- --------------------------- 1995 to 1994 1994 to 1993
Three Months Ended ------------------------ ------------
September 30 Amount of Percent Percent
- --------------------------- Income and Increase/ of of
1995 1994 Expense Items (Decrease) Change Change
------- ------- ------------- ----------- ------ ------
100.00% 100.00% Sales revenue $34,298,442 29.40% 24.22%
------- ------- ----------- ---------- ---------
18.93 19.27 Cost of sales 6,095,632 27.12 23.89
45.78 46.50 Volume incentives 14,872,954 27.42 24.45
26.74 25.54 SG&A expenses 10,565,382 35.46 26.64
------- ------- ----------- ---------- ---------
91.45 91.31 31,533,968 29.61 24.93
------- ------- ----------- ---------- ---------
8.55 8.69 Operating income 2,764,474 27.27 17.19
------- ------- ----------- ---------- ---------
0.89 0.44 Interest and other income 839,863 165.14 14.32
(0.10) (0.03) Interest expense (114,235) (361.07) 2,592.60
(0.31) (0.22) Foreign exchange loss (218,889) (85.28) 391.40
0.37 0.27 Minority interest 240,430 75.52 711.26
------- ------- ----------- ---------- ---------
0.85 0.46 747,169 138.71 25.06
------- ------- ----------- ---------- ---------
9.40 9.15 Income before income taxes 3,511,643 32.89 17.57
------- -------
3.91 3.87 Provision for income taxes 1,379,056 30.52 17.32
------- ------- ----------- ---------- ---------
5.49% 5.28% Net income $ 2,132,587 34.62% 17.75%
------- ------- ----------- ---------- ---------
------- ------- ----------- ---------- ---------
</TABLE>
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS
SALES REVENUE:
The Company reported record consolidated sales revenue for both
the three and nine months ended September 30, 1995. Sales revenue
for the three and nine months ended September 30, 1995, was $53.2
million and $151.0 million compared to $41.0 million and $116.7
million the prior year, an increase of 30 percent and 29 percent,
respectively.
Management believes the increase in sales for the three- and
nine-month periods is attributable to the expansion of the Company's
independent sales force, 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
international expansion. Despite a sales decrease of 46 percent in
the Company's operations in Mexico, resulting from the devaluation
of the Peso and related economic turmoil, the Company's
international operations reported sales revenue of $50.8 million for
the nine months ended September 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 11,517 at September 30, 1995, from 8,093 at September
30, 1994. The number of Distributors at September 30, 1995, was
325,711 compared to 180,089 at September 30, 1994.
12
<PAGE>
VOLUME INCENTIVES:
The dollar increase in volume incentives, for the three and nine
months ended September 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 nine-
month period ended September 30, 1995, compared to the same period
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 show a slight decrease,
as a percent of sales, for the year ending December 31, 1995.
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 September
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 decreased selling, general and
administrative expenses (SG&A), as a percent of sales, during the
three-month period ended September 30, 1995, and increased SG&A
expenses, as a percent of sales, for the nine months ended September
30, 1995.
13
<PAGE>
The increase in SG&A expenses, as a percentage of sales, results
primarily from the incremental costs of approximately $5.1 million
for the nine months ended September 30, 1995, incurred in the
Company's operations in Japan and Brazil. Management expects SG&A
to decrease from current levels for the entire year, as a percentage
of sales, as sales revenue increases in both Brazil and Japan in the
remainder of 1995.
SUBSIDIARY OPERATIONS:
Domestic and international sales for the nine months ended
September 30, 1995, compared to the previous year are as follows:
SALES
<TABLE>
<CAPTION>
<S> <C> <C>
(Dollars in Thousands)
1995 1994
-------- -------
DOMESTIC $100,172 $81,628
-------- -------
-------- -------
INTERNATIONAL:
Mexico $ 10,863 $20,107
Colombia 7,188 2,941
Venezuela 6,918 1,584
Japan 6,582 569
Brazil 5,794 581
Canada 5,789 5,025
Great Britain 2,505 2,282
Costa Rica 2,285 ---
Malaysia 1,738 945
Export 1,117 990
-------- -------
TOTAL INTERNATIONAL $ 50,779 $35,024
-------- -------
-------- -------
</TABLE>
14
<PAGE>
Domestic and international operating income for the nine months
ended September 30, 1995, compared to the previous year are as
follows:
OPERATING INCOME
<TABLE>
<CAPTION>
<C> <S> <S>
(Dollars in Thousands)
1995 1994
------ ------
DOMESTIC $ 8,836 $6,714
-------- ------
-------- ------
INTERNATIONAL:
Mexico $ 746 $3,672
Colombia 1,380 251
Venezuela 1,176 (127)
Japan (1,030) (591)
Brazil 338 (339)
Canada 258 240
Great Britain 15 (13)
Costa Rica 771 ---
Malaysia (71) (70)
Export 484 402
-------- -------
TOTAL INTERNATIONAL $4,067 $3,425
-------- -------
-------- -------
</TABLE>
Domestic and international assets as of September 30, 1995,
compared to December 31, 1994, balances are as follows:
<TABLE>
<CAPTION>
<C> <S> <S>
(Dollars in Thousands)
September 30 December 31
1995 1994
------ ------
ASSETS
DOMESTIC $38,119 $34,973
------- -------
------- -------
INTERNATIONAL:
Mexico $ 4,393 $ 5,885
Colombia 3,277 1,967
Venezuela 4,309 1,635
Japan 3,665 2,677
Brazil 3,178 1,598
Canada 1,405 1,598
Great Britain 1,233 1,028
Costa Rica 938 287
Malaysia 1,428 810
------- -------
TOTAL INTERNATIONAL $23,826 $17,485
------- -------
------- -------
</TABLE>
15
<PAGE>
BALANCE SHEET
ACCOUNTS RECEIVABLE
Accounts receivable increased approximately $1.6 million during
the nine-month period ended September 30, 1995. The increase in
receivables is related to the Company's growing international
operations.
INVENTORIES
Inventories increased approximately $2.7 million during the
first nine months of 1995. The increase in inventories is primarily
related to the increase in sales. Sales increased 29 percent,
during the nine months ended September 30, 1995, while inventories
only increased 16 percent.
ACCRUED VOLUME INCENTIVES
Accrued volume incentives increased approximately $2.2 million
during the first nine months of the year as a direct result of
increased sales.
ACCRUED LIABILITIES
The balance of accrued liabilities increased approximately $1.7
million during the nine months ended September 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 $4.9 million
for the nine months ended September 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
<PAGE>
The Company acquired approximately $2.3 million in property,
plant and equipment during the first nine months of 1995 to improve
its manufacturing and administrative capabilities. During the nine
months ended September 30, 1995, the Company acquired approximately
$1.3 million of treasury stock in the market. Approximately $1.8
million was used for the payment of dividends during the first nine
months.
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 September 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.
During the quarter ended September 30, 1995, the Company
benefited from the exercise of approximately 94,000 shares under the
Company's stock option plans. Approximately $1.2 million in cash
flow was generated during the third quarter as the result of the
options exercised.
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
<PAGE>
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: October 27, 1995 /s/ Alan D. Kennedy
_________________________________________
ALAN D. KENNEDY, President
Chief Executive Officer
Date: October 27, 1995 /s/ Douglas Faggioli
_________________________________________
DOUGLAS FAGGIOLI, Chief Financial Officer
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 16,126,854
<SECURITIES> 0
<RECEIVABLES> 6,355,808
<ALLOWANCES> 0
<INVENTORY> 20,023,437
<CURRENT-ASSETS> 46,684,182
<PP&E> 10,261,984
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0
0
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