Nature's Sunshine Products Comments on Fourth Quarter Results
January 13 2006 - 1:11PM
Business Wire
Nature's Sunshine Products, Inc. (NASDAQ:NATRE) announced today
that it expects to report an approximate 4 percent increase in
sales for the fourth quarter ended December 31, 2005 as compared to
the fourth quarter of 2004. Operating income is anticipated to be
approximately 3 percent higher for the fourth quarter ended
December 31, 2005 as compared to the fourth quarter of 2004.
Operating results were negatively impacted by increased expenses in
Synergy Worldwide and Brazil, and expenses related to a previously
announced ongoing review of selected financial information with
respect to certain foreign operations, which resulted in operating
income being less than anticipated. In addition, the fourth quarter
net income will be reduced significantly by a tax rate higher than
the 35 percent statutory rate. The higher tax rate resulted from
the strategic transfer last month of certain assets from the United
States to international locations, a move that is expected to
result in reduced rates in future periods, beginning in 2006. This
tax strategy has been implemented to position the Company to
achieve its future profitability objectives. This transfer will
result, for financial reporting purposes, in a tax expense above
the statutory rate for the year ended December 31, 2005. However,
because of existing foreign income tax credits, the asset transfer
is not expected to significantly affect actual cash taxes to be
paid for the year. As a result of the higher taxes, the Company
anticipates reporting a fourth quarter net loss of approximately
$3.2 million. With respect to the ongoing review of selected
financial information regarding certain foreign operations, the
related expenses were incurred for professional fees and related
costs. The Company continues to believe that unaudited consolidated
financial statements contained in the 10-Q filed on November 22,
2005, for which the Company's independent auditors have not
completed their review, are a fair presentation for the three and
nine month periods ended September 30, 2005. Nature's Sunshine said
that it expects to report complete operating results for the fourth
quarter and 12 months ended December 31, 2005 later in February
2006, at which time it also will hold its regular quarterly
conference call. About Nature's Sunshine Nature's Sunshine Products
manufactures and markets through direct sales encapsulated and
tableted herbal products, high quality natural vitamins, and other
complementary products. In addition to the United States, the
Company has operations in Japan, Mexico, Central America, South
Korea, Canada, Dominican Republic, Venezuela, Ecuador, Peru, the
United Kingdom and Ireland, Colombia, Brazil, Thailand, Israel,
Singapore and Taiwan. The Company also has exclusive distribution
agreements with selected companies in Argentina, Australia, Chile,
New Zealand, Norway, and the Russian Federation. Statements in this
press release concerning the Company's business outlook, the
ongoing review of selected financial information of certain
operations, or future economic performance, anticipated
profitability, revenues, expenses or other financial items, and
product line growth, together with other statements that are not
historical facts, are "forward-looking statements" as that term is
defined under Federal Securities Laws. "Forward-looking statements"
are subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from those set forth in
such statements. Such risks, uncertainties, and factors include,
but are not limited to, foreign business risks, industry
cyclicality, fluctuations in customer demand and order pattern,
changes in pricing and general economic conditions, as well as
other risks detailed in the Company's filings with the Securities
and Exchange Commission. The Company disclaims any obligations to
update any forward-looking statement as a result of developments
occurring after the date of this press release.
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