Nature's Sunshine Products, Inc.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature's Sunshine's financial results for the third quarter ended September 30, 2024. Joining us today are Nature's Sunshine CEO Terrence 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. Brower 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 third quarter 2024 financial results. I'd like to remind everyone that this call is available for replay via telephonic dial-in through November 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 terminologies 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 therein 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's Sunshine, Terrence Moorhead. Terrence?

Thank you, Nate, and good afternoon, everyone. I want to thank you for joining today's call to discuss our third quarter results. During the third quarter, we continued to make good progress executing our global growth strategies and the investments that we've made to expand our digital capabilities, improve our consumer proposition, strengthen our brand presence, and drive out costs, all combined to help drive performance in the third quarter. While each of the initiatives is at a different stage of execution, We're excited about the actions we've taken to advance our strategic agenda and remain confident that our omnichannel approach will allow us to attract and retain more customers, drive profitable growth, and build shareholder value. Our plans are clearly benefiting the business as the third quarter delivered the highest sales volume this year with $114.6 million of sales, up 4% versus prior year on a local currency basis. The strong third quarter results were driven by a positive consumer response to our global growth strategies and the actions we've taken to amplify those strategies in the second quarter. As you may remember, in the second quarter, we upgraded our digital platform in North America, made the strategic move to rebalance our portfolio in key markets in Asia Pacific, and implemented incremental cost savings initiatives to improve productivity. With respect to our first strategic action, we were excited to upgrade North America's digital platform with new technology and improved mobile-first capabilities. The changes helped improve site load speeds, conversion rates, and stability while creating a pathway for continued improvements in the future. will continue to support meaningful growth. And in the third quarter, digital sales grew 17% in North America as we continued to see a positive consumer response to the brand. Moving forward, we'll continue to invest in our digital capabilities by improving and expanding the tools that are available to our nutritional health practitioners and specialty retailers. Over time, we believe The changes will help improve the performance of distributors looking for a stronger, more modern platform, which is an exciting opportunity. Overall, North America sales were down about 3%, which is a slight improvement on a consecutive basis versus the second quarter. Longer term, we expect to see positive momentum from the North American business, as our omni-channel approach continues to build momentum and as we invest in more powerful tools for our nutritional health practitioners and specialty retailers. Regarding our second strategic action, we placed greater emphasis on introducing more consumer-friendly products packs in markets like South Korea, Taiwan, and Japan. We also invested in field activation to support these programs and generate incremental field activity. The strategy paid strong dividends in the third quarter as customer and order growth surged, leading to significant sales increases in Korea, Taiwan, and Japan of 3%, 20%, and 34% respectively. China's a different story. Our research suggests that consumers continue to have favorable attitudes towards supplements, but the sharp downturn in the macroeconomic environment has negatively affected their willingness to spend, leading to more cautious purchase behavior. As a result, China's third quarter sales decreased 23% versus prior year in local currency. We continue to believe that digital live streaming is a powerful tool with significant upside potential, and our long-term goal is to expand our digital live streaming platform to to allow us to attract and retain more new customers by first strengthening our product line to offer more consumer friendly solutions. Second, upgrading our branding and packaging to align with consumer preferences. And third, introducing a localized version of our successful subscribe and thrive auto ship program to encourage and reward repeat purchases. Overall, we're pleased with the consumer's response to our growth strategies as third quarter sales in Asia Pacific increased 9% versus prior year on a local currency basis. Our plans to improve performance by building a more attractive, consumer-friendly proposition appear to be working, and we believe our results are illustrative of the long-term potential these markets represent. Our third strategic action focused on delivering $5 million of annualized cost savings that allowed us to continue to fund strategic investments while contributing to improved profitability. For the quarter, adjusted EBITDA was strong, coming in at $10.7 million, which was a 5% increase versus prior year. In closing, we're very pleased with the quarter and with the direction we're taking, and we continue to be excited about the long-term potential of our omnichannel business. Once again, we believe the recent changes we've made will lead to a better shopping experience while giving our distributors a more powerful set of tools to build their businesses. Ultimately, that will allow us to attract and retain more customers, drive order growth, and build sustainable, profitable growth to create shareholder value. And with that, I want to turn the call over to our Chief Financial Officer, Shane Jones. Shane?