Nature's Sunshine Products, Inc.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature Sunshine's financial results for the first quarter ended March 31st, 2024. Joining us today are Nature Sunshine's CEO, Terence Moorhead, CFO Shane Jones, and General Counsel Nate Brower. Following their remarks, we'll open the call for analyst questions. Before we go further, I would like to turn the call over to Mr. Bauer as he reads the company's Safe Harbor Statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nate, please go ahead.

Thank you. Good afternoon, and thanks for joining our conference call to discuss our first quarter 2024 financial results. I'd like to remind everyone that this call is available for replay via telephonic dial-ins through May 21st and via a live webcast that will be posted in the investor relations portion of our website at ir.naturesunshine.com. The information on this call contains forward-looking statements. These statements are often characterized by terminology such as believe, hope, may, anticipate, expect, will, and other similar expressions. Forward-looking statements are not guarantees of future performance, and the actual results may be materially different from the results implied by forward-looking statements. Factors that could cause results to differ materially from those implied herein include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K under the caption, Risk Factors and Other Reports Filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date, and the company disclaims any duty to update the information provided herein. Now, I would like to turn the call over to the CEO of Nature Sunshine, Terrence Moorhead. Terrence?

Thank you, Nate, and good afternoon, everyone. I want to thank you for joining today's call to discuss our first quarter results as we continue to advance our global growth strategies, digital first, brand power, and field energy. And in the first quarter, we continue to gain traction and deliver positive results. Today, I'll provide some context for our first quarter performance and offer some insights on how we believe the business is progressing. From there, Shane will take you through our financials in more detail. During the first quarter, our omnichannel approach, high-quality products, and field activation initiatives combined to drive continued momentum in the business as net sales came in at $111 million, up 4% versus prior year on a constant dollar basis, outpacing the market once again. EBITDA slightly improved in the quarter, coming in at $9.2 million, flat versus prior year, as increased macroeconomic headwinds placed added pressure on the business, especially gross margins. I'll come back to discuss gross margins a little bit later, but first I want to talk about our strategic investments in digital and field activation that continued to have a positive and transformative impact on our business. For the quarter, we continued to see strong results in North America as revenue outpaced industry trends with a 5% increase in net sales. Importantly, digital sales surged 33% as new customer growth increased 34% driven by strong consumer campaigns and attractive creative content. Our New Year, New You digital campaign kicked off the year generating strong sales and consumer engagement by featuring some of our most attractive products. Beyond the strong digital performance, we were also pleased to see continued stability with our nutritional health practitioners and specialty retailers. Overall, we're very excited about the momentum we're seeing and believe our omni-channel approach is the key to long-term sustainable growth. In 2024, we expect to build on this momentum by further expanding our digital footprint while increasing the performance of our practitioners and retailers. In Asia Pacific, first quarter sales were up 5% in local currency led by strong growth in Taiwan and South Korea. The challenging economic environment in China negatively impacted performance as macroeconomic headwinds reduced the effectiveness of our customer activation initiatives. Our digital live streaming model is a powerful customer growth driver, but the current economic environment is extremely challenging. Importantly, we continue to be very positive about the long-term potential of our business in China. In Europe, the first quarter marked a return to growth as sales increased 2% in local currency. The successful launch of our new Powerline products in Central and Eastern Europe helped generate increased customer activation as orders increased 7% supported by strong field activations. we expect the positive momentum to continue to generate year-over-year sales growth for the remainder of the year. Returning to gross margins, we remain committed to delivering the $10 million of gross cost of goods savings we previously discussed. Our team has already verified the savings and is making excellent progress implementing our key supply chain initiatives. In 2024, we expect to see gradual improvement in our gross margins with quarterly fluctuations driven by mix, seasonal promotions, and fluctuating costs. Importantly, we're taking the appropriate steps to ensure we achieve our goal. Finally, I'm pleased to announce that we recently released our 2023 impact report. Our sustainability and transparency initiatives demonstrate our commitment to making a positive difference for our planet and its people, and we continue to set bold goals around emissions, waste reduction, renewable energy, and more. As we near the completion of our 2025 goals, we know that there's still much more to do and we look forward to making additional strides that will take us to an entirely new level in the years that come. Our 2023 impact report can be found on the sustainability section of our website and I encourage you to look at some of the exciting things that our organization is doing. In summary, We're very pleased with the progress we've made on our key strategies and our first quarter results demonstrate the strength and resilience of our business. I'd like to leave you with the following thoughts. First, our business continues to outperform the market with sales growth driven by strategic investments in digital, field activation, and brand building initiatives. Working in combination, these investments have allowed us to attract and retain more new customers, drive order growth, and build momentum in the market. Second, we're committed to delivering the $10 million of gross cost of goods savings that we've previously discussed. We're already well into the process, and we expect to see gradual improvements in our 2024 gross margins. Third, and finally, we've built a strong financial position with a solid balance sheet and strong positive cash flow. that will allow us to continue to invest in our growth strategies as we move forward. We're still operating in a very challenging external environment, but our team is focused, they continue to execute our strategies well, and we believe that as we look forward, we'll continue to drive positive momentum in 2024 and beyond. With that, I'd like to turn the call over to our Chief Financial Officer, Shane Jones. Shane?