Cloudy times for Nature's Sunshine
Sunshine, with challenging international and domestic market
conditions still held responsible.
The sales decline continues for herb and vitamin maker Nature's Sunshine, with challenging international and domestic market conditions still held responsible.
Sales revenue for the quarter ended June 30, 2003 totaled $73.2 million, compared to $77.9 million for the same period of the prior year, a drop of 6 per cent. For the quarter ended June 30, 2003, domestic sales declined 2 per cent compared to the hefty 12 per cent drop in international sales.
Despite reducing costs by 5.8 per cent over the comparable quarter in 2002, pre-tax income for the quarter totaled $1.5 million, or $0.08 per share on a diluted basis. In the same period in 2002, pre-tax income totaled $5.3 million, or $0.18 per share on a diluted basis, thus representing a 72 per cent drop in pre-tax income at the end of the second quarter in 2003 over the same period in 2002.
However the company states that the $0.08 per share figure reflects the other-than-temporary impairment of an equity investment in the after-tax amount of $1.2 million. Without this impairment it notes that net income per share would have equaled $0.17 per share on a diluted basis.
For the first half of 2003, sales revenue declined by slightly less - 5.5 per cent - to $145.4 million, compared to $153.8 million for the same period of the prior year. Domestic sales revenue for the first six months of 2003 was equal to the comparable period of 2002, while international sales revenue declined 12.9 per cent.
Again, although the company shows signs of reacting to the situation with a 5.1 per cent reduction in costs compared to 2002, pre-tax income for the first six months of 2003 still declined 17 per cent, to $4 million - $0.19 per share on a diluted basis - from $4.8 million - $0.13 per share - in 2002.
The company outlook remains nevertheless positive, citing results from its international operations for the quarter ended 30 June 2003, which it says included strong sales revenues gains in Ecuador, El Salvador, Israel and the Russian Federation as well as Japan. However the company adds that these were more than offset by reduced sales revenue in Brazil, Colombia, Costa Rica, Korea and Venezuela.
The number of Nature's Sunshine worldwide distributors also continues to grow, with the company recording approximately 525,000 at June 30, 2003, compared to approximately 509,000 at December 31, 2002. In addition, the number of worldwide managers at June 30, 2003 was approximately 15,200, compared with 14,000 at December 31, 2002.
'Our liquidity position remains strong. Working capital at June 30, 2003 totaled $28.8 million, and cash and cash equivalents totaled $25.1 million,' said the company in a statement. Furthermore, in accordance with a previously announced board-authorized repurchase program, the company has repurchased approximately 1,326,000 common shares during the first six months of 2003 at an average purchase price of $8.89 per share.
"The business environment in our sector, both domestically and internationally, ischallenging. However, the company's core strengths continue to be maintained," commented Daniel P. Howells, president and CEO at Nature's Sunshine. "The upturn last quarter in Japan and continued strength in several international markets is encouraging, and we are focused on improving our business in other countries as well as identifying new market opportunities."
