<PAGE>
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 (FEE REQUIRED)
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE PLAN YEAR ENDED DECEMBER 31, 1997
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)
<PAGE>
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 15, 1998 By: /s/ Douglas Faggioli, Chief Operating Officer
------------------- -----------------------------------------------
<PAGE>
CONSENT
We consent to the incorporation by reference in this annual report on Form 11-K
for the year ended December 31, 1997, of our report dated June 26, 1998,
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, 1998
<PAGE>
C O N T E N T S
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR
PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997 AND 1996 3
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION FOR THE YEAR ENDED
DECEMBER 31, 1997 4
NOTES TO FINANCIAL STATEMENTS 5
SUPPLEMENTAL INFORMATION
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES 10
SCHEDULE OF REPORTABLE TRANSACTIONS 11
<PAGE>
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 plan
benefits with fund information of Nature's Sunshine Products, Inc. Tax Deferred
Retirement Plan (the Plan), as of December 31, 1997 and 1996, and the related
statement of changes in net assets available for plan benefits with fund
information for the year ended December 31, 1997. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 plan benefits with fund
information of Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan as
of December 31, 1997 and 1996, and the changes in net assets available for plan
benefits with fund information for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements, but are 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. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
GRANT THORNTON LLP
Provo, Utah
June 26, 1998
<PAGE>
FINANCIAL STATEMENTS
<PAGE>
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
WITH FUND INFORMATION
December 31, 1997 and 1996
<TABLE>
<CAPTION>
Participant directed
-------------------------------------------------------------------------
Nature's Fidelity
Fidelity Sunshine Merrill Advisor
Investments Products, Inc. Bond Lynch RP Growth
Magellan Common Fund of Trust Opportunities
December 31, 1997 Fund Stock America Fund Fund
----------- -------------- -------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Assets
Cash $ 9,124 $ 21,989 $ 1,793 $ 3,097 $ 8,326
Investments, at fair value 2,672,338 4,524,429 677,170 1,012,746 2,282,215
Contributions receivable
Participant 3,679 9,375 716 796 3,419
Employer 2,488 6,337 484 537 2,313
---------- ---------- -------- ---------- ----------
Total assets 2,687,629 4,562,130 680,163 1,017,176 2,296,273
Liabilities - payables 8,966 20,878 1,762 2,519 8,182
---------- ---------- -------- ---------- ----------
Net assets available for plan benefits $2,678,663 $4,541,252 $678,401 $1,014,657 $2,288,091
---------- ---------- -------- ---------- ----------
---------- ---------- -------- ---------- ----------
December 31, 1996
Assets
Cash $ 17,899 $ 64,729 $ 2,290 $ 6,619 $ 14,425
Investments, at fair value 2,298,220 3,191,832 560,992 738,952 1,452,796
Contributions receivable
Participant 1,743 5,207 606 522 1,872
Employer 1,308 3,771 437 371 1,395
---------- ---------- -------- ---------- ----------
Total assets 2,319,170 3,265,539 564,325 746,464 1,470,488
Liabilities - payables 11,612 41,913 1,486 3,733 9,358
---------- ---------- -------- ---------- ----------
Net assets available for plan benefits $2,307,558 $3,223,626 $ 562,839 $ 742,731 $1,461,130
---------- ---------- -------- ---------- ----------
---------- ---------- -------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
<TABLE>
<CAPTION>
Nonparticipant
directed
----------------------------------------------------- --------------
Merrill
Lynch Nature's
Global Mutual Wasatch Sunshine
Allocation Beacon Growth PBHG Products, Inc.
Fund Fund Fund Fund Common Stock Total
---------- -------- -------- --------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,453 $ 4,119 $ 3,454 $ 4,420 $ - $ 57,775
130,304 406,213 278,488 379,335 12,335,791 24,699,029
655 1,800 1,263 1,808 - 23,511
443 1,216 855 1,224 - 15,897
-------- -------- -------- -------- ----------- -----------
132,855 413,348 284,060 386,787 12,335,791 24 ,796,212
1,428 4,048 3,394 4,343 - 55,520
-------- -------- -------- -------- ----------- -----------
$131,427 $409,300 $280,666 $382,444 $12,335,791 $24,740,692
-------- -------- -------- -------- ----------- -----------
-------- -------- -------- -------- ----------- -----------
$ 5,325 $ 2,927 $ 5,336 $ 9,954 $ - $ 129,504
44,002 57,152 72,713 196,776 9,543,384 18,156,819
135 101 187 409 - 10,782
114 92 151 325 - 7,964
-------- -------- -------- -------- ----------- -----------
49,576 60,272 78,387 207,464 9,543,384 18,305,069
3,455 1,899 3,462 6,457 - 83,375
-------- -------- -------- -------- ----------- -----------
$ 46,121 $ 58,373 $ 74,925 $201,007 $9,543,384 $18,221,694
-------- -------- -------- -------- ----------- -----------
-------- -------- -------- -------- ----------- -----------
</TABLE>
<PAGE>
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
Year ended December 31, 1997
<TABLE>
<CAPTION>
Participant directed
------------------------------------------------------------------------
Nature's Fidelity
Fidelity Sunshine Merrill Advisor
Investments Products, Inc. Bond Lynch RP Growth
Magellan Common Fund of Trust Opportunities
Fund Stock America Fund Fund
----------- -------------- ------- --------- -------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Interest income $ 1,043 $ - $ 205 $ 1,192 $ 951
Dividend income 180,097 24,295 44,981 55,275 149,229
Net appreciation (depreciation)
in fair value of investments 420,049 1,432,614 (11,450) - 345,449
Contributions
Participant salary deferrals 87,961 329,222 41,699 30,955 103,753
Employer 56,627 229,960 26,441 21,053 68,841
---------- ---------- -------- ---------- ----------
Total additions 745,777 2,016,091 101,876 108,475 668,223
Net interfund transfers (222,467) (469,606) 48,745 719,092 313,557
Deductions from net assets
attributed to
Benefits paid to participants 152,170 228,824 35,024 555,606 154,784
Other 35 35 35 35 35
---------- ---------- -------- ---------- ----------
Total deductions 152,205 228,859 35,059 555,641 154,819
---------- ---------- -------- ---------- ----------
Net additions 371,105 1,317,626 115,562 271,926 826,961
Net assets available for plan benefits
at beginning of year 2,307,558 3,223,626 562,839 742,731 1,461,130
---------- ---------- -------- ---------- ----------
Net assets available for plan benefits
at end of year $2,678,663 $4,541,252 $678,401 $1,014,657 $2,288,091
---------- ---------- -------- ---------- ----------
---------- ---------- -------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
<TABLE>
<CAPTION>
Nonparticipant
directed
------------------------------------------------------- --------------
Merrill
Lynch Nature's
Global Mutual Wasatch Sunshine
Allocation Beacon Growth PBHG Products, Inc. 1997 1996
Fund Fund Fund Fund Common Stock Total Total
---------- -------- ------- -------- --------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
(memorandum
only)
$ 166 $ 471 $ 395 $ 505 $ - $ 4,928 $ 37,975
14,922 34,435 20,793 - 66,241 590,268 583,913
(9,214) 2,952 16,602 (4,852) 3,906,003 6,098,153 1,088,392
25,371 47,633 37,408 70,654 - 774,656 727,161
20,027 34,491 25,396 40,901 - 523,737 476,298
-------- -------- -------- -------- ----------- ----------- -----------
51,272 119,982 100,594 107,208 3,972,244 7,991,742 2,913,739
40,167 272,844 109,327 127,074 (938,733) - -
6,098 41,864 4,145 52,810 241,069 1,472,394 1,679,140
35 35 35 35 35 350 581
-------- -------- -------- -------- ----------- ----------- -----------
6,133 41,899 4,180 52,845 241,104 1,472,744 1,679,721
-------- -------- -------- -------- ----------- ----------- -----------
85,306 350,927 205,741 181,437 2,792,407 6,518,998 1,234,018
46,121 58,373 74,925 201,007 9,543,384 18,221,694 16,987,676
-------- -------- -------- -------- ----------- ----------- -----------
$131,427 $409,300 $280,666 $382,444 $12,335,791 $24,740,692 $18,221,694
-------- -------- -------- -------- ----------- ----------- -----------
-------- -------- -------- -------- ----------- ----------- -----------
</TABLE>
<PAGE>
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
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. Effective December 28, 1994, the
Company amended and restated the Plan to comply with the Tax Reform Act of
1986.
During 1997 and 1996, certain corporate officers served as trustees and
plan administrator of the Plan's assets. Rocky Mountain Employee Benefits,
Inc., is the third party administrator.
ELIGIBILITY
Employees 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.
INVESTMENT OPTIONS
The Plan currently provides nine separate participant-directed investment
funds and one nonparticipant-directed investment fund as follows:
PARTICIPANT-DIRECTED INVESTMENT FUNDS
FIDELITY INVESTMENTS MAGELLAN FUND - Funds are invested in shares
of various common stocks.
NATURE'S SUNSHINE PRODUCTS, INC. COMMON STOCK - Funds are
invested in shares of Nature's Sunshine Products, Inc. Common
Stock (a party-in-interest) which is traded on the NASDAQ
National Market System.
BOND FUND OF AMERICA - Funds are invested in long-term bonds.
MERRILL LYNCH RETIREMENT PRESERVATION TRUST FUND - Funds are
invested in short-term debt securities such as Treasury Bills.
5
<PAGE>
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
NOTE A - DESCRIPTION OF PLAN - CONTINUED
PARTICIPANT-DIRECTED INVESTMENT FUNDS - CONTINUED
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - Funds are invested
in shares of various common stocks.
MERRILL LYNCH GLOBAL ALLOCATION FUND - Funds are invested in
shares of various international common stocks.
MUTUAL BEACON FUND - Funds are invested in shares of various
common stocks.
WASATCH GROWTH FUND - Funds are invested in shares of various
common stocks.
PBHG FUND - Funds are invested in shares of various common
stocks.
NONPARTICIPANT-DIRECTED INVESTMENT FUNDS
NATURE'S SUNSHINE PRODUCTS, INC. COMMON STOCK (PREVIOUSLY ESOP) -
On December 31, 1991, the Nature's Sunshine Products, Inc.,
Employee Stock Ownership Plan (ESOP) (a party in interest), was
merged with the Plan. The assets transferred to the Plan from the
ESOP are reflected as a separate nonparticipant-directed
investment fund. The nonparticipant-directed investment fund
provides an opportunity for employees to share in the growth and
prosperity of the Company. No employee of the Company is
permitted to contribute to the nonparticipant-directed investment
fund. The Company is the sole contributor. The amount
contributed annually is determined by the Board of Directors of
the Company. Contributions are allocated to individual
participant accounts based on the ratio of their compensation for
the year to total compensation for all participants. No
contributions were made to this fund during 1997.
PARTICIPANT-DIRECTED INVESTMENT FUNDS
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.
6
<PAGE>
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
NOTE A - DESCRIPTION OF PLAN - CONTINUED
PARTICIPANT-DIRECTED INVESTMENT FUNDS - CONTINUED
The Company may make matching contributions at its discretion which
are allocated to participants on a pro rata basis. During 1997 and
1996, 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.
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, rolled over into an IRA or other
retirement plan, or transferred in the form of stock certificates.
Participants may withdraw funds from the Plan while actively employed
subject to specific restrictions set forth in the Plan agreement.
TERMINATION OF THE PLAN
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 Plan Benefits with Fund Information. Amounts invested
earn interest and dividends which in turn are reinvested. Contributions to
the nonparticipant-directed investment fund are invested solely in the
Company's common stock. Contributions related to the participant-directed
investment funds are invested by the trustee as directed by the
participants.
EXPENSES
The Company paid all administrative expense of the Plan including legal and
accounting fees during 1997.
7
<PAGE>
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared in conformity with
generally accepted accounting principles as applied to employee benefit
plans, and in accordance with the Plan agreement.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles 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.
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 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. 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.
8
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
Employer Identification Number: 87-0327982
Plan Number: 002
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF INVESTMENT INCLUDING COST CURRENT
LESSOR, OR SIMILAR PARTY MATURITY DATE, RATE OF INTEREST, VALUE
COLLATERAL, PAR OR MATURITY VALUE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Merrill Lynch RP Trust Fund Money Market Fund $ 1,012,746 $ 1,012,746
- ------------------------------------------------------------------------------------------------------------------
Fidelity Investments Magellan Mutual Fund 2,087,071 2,672,338
Fund
- ------------------------------------------------------------------------------------------------------------------
* Nature's Sunshine Products, Corporate Stock 1,293,951 4,524,429
Inc. Common Stock
(participant directed)
- ------------------------------------------------------------------------------------------------------------------
Fidelity Advisor Growth Mutual Fund 1,720,402 2,282,215
Opportunities Fund
- ------------------------------------------------------------------------------------------------------------------
* Nature's Sunshine Products, Corporate Stock 2,147,360 12,335,791
Inc. Common Stock
(nonparticipant directed)
- ------------------------------------------------------------------------------------------------------------------
Merrill Lynch Global Mutual Fund 141,060 130,304
Allocation Fund
- ------------------------------------------------------------------------------------------------------------------
Mutual Beacon Fund Mutual Fund 376,152 406,213
- ------------------------------------------------------------------------------------------------------------------
Wasatch Growth Fund Mutual Fund 266,361 278,488
- ------------------------------------------------------------------------------------------------------------------
PBHG Fund Mutual Fund 382,116 379,335
- ------------------------------------------------------------------------------------------------------------------
Bond Fund of America Bond Fund 666,048 677,170
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Nature's Sunshine Products, Inc. Tax Deferred Retirement Plan
Employer Identification Number: 87-0327982
Plan Number: 002
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended December 31, 1997
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
IDENTITY OF DESCRIPTION OF ASSET PURCHASE SELLING LEASE EXPENSE COST OF CURRENT NET GAIN
PARTY PRICE PRICE RENTAL INCURRED ASSET VALUE OF OR (LOSS)
INVOLVED WITH ASSET ON
TRANSACTION TRANSACTION
DATE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nature's Corporate Stock $ - $ 1,137,798 $ - $ - $ 945,513 $ - $ 192,285
Sunshine
Products, Inc.
Common Stock
(participant
directed)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
