About Nature's Sunshine Products

Nature’s Sunshine Products, Inc., together with its subsidiaries, operates as a natural health and wellness company. The company primarily engages in the manufacturing and direct selling of nutritional and personal care products. Business Segments The company operates through four business segments: Asia, Europe, North America, and Latin America and Other. Each of the geographic segments operate under the Nature’s Sunshine Products and Synergy WorldWide brands. The Latin America and Other segment includes the company’s wholesale business in which the company sells products to various locally-managed entities, independent of the company, that it has granted distribution rights for the relevant market. Product Categories The company’s line of over 800 products includes several different product classifications, such as immune, cardiovascular, digestive, personal care, weight management and other general health products. The company purchases herbs and other raw materials in bulk, and after rigorous quality control testing, the company formulates, encapsulates, tablets or concentrates them, labels and packages them for shipment. Contract manufacturers produce some of the company’s products in accordance with the company’s specifications and standards. The following summarizes the company’s product lines by category: General Health: The company distributes a wide selection of general health products. The general health line is a combination of assorted health products related to blood sugar support, bone health, cellular health, cognitive function, joint health, mood, sexual health, sleep, sports and energy, and vision. Immune: The company distributes immune products. The immune line has been designed to offer products that support and strengthen the human immune system. Cardiovascular: The company distributes cardiovascular products. The cardiovascular line has been designed to offer products that combine a variety of superior heart health ingredients to give the cardiovascular system optimum support. Digestive: The company distributes digestive products. The digestive line has been designed to offer products that regulate intestinal and digestive functions in the support of the human digestive system. Personal Care: The company distributes a variety of personal care products for external use, including oils and lotions, aloe vera gel, herbal shampoo, herbal skin treatment, toothpaste and skin cleanser. Weight Management: The company distributes a variety of weight management products. The weight management line has been designed to simplify the weight management process by providing healthy meal replacements and products that increase caloric burn rate. Distribution and Marketing The company markets its products primarily through its network of independent consultants, who market the company’s products to customers through direct selling techniques and sponsor other independent consultants who also market the company’s products to customers. The company seeks to motivate and provide incentives to the company’s independent consultants by offering high quality products and providing independent consultants with product support, training seminars, sales conventions, travel programs and financial incentives. The company also utilizes direct-to-consumer channels, selling its products through the company’s own website, as well as on other e-commerce platforms. This represents a relatively small part of the company’s total business. The company’s products sold in the United States are shipped directly from the company’s manufacturing and warehouse facilities located in Spanish Fork, Utah, as well as from the company’s regional warehouses located in Georgia, Ohio and Texas. Many of the company’s international operations maintain warehouse facilities and inventory to supply their independent consultants. However, in foreign markets where the company do not maintain warehouse facilities, the company has contracted with third-parties to distribute its products and provide support services to the company’s force of independent consultants. In the United States, the company generally sells its products on a cash or credit card basis. From time to time, the company’s U.S. operations extend short-term credit associated with product promotions. For certain of the company’s international operations, it uses independent distribution centers and offers credit terms that are generally consistent with industry standards within each respective country. Trademarks and Trade Names The company has obtained trademark registrations for Nature’s Sunshine, and related logos for all of the company’s Nature’s Sunshine Products product lines. The company has also obtained trademark registrations for Synergy Worldwide for all of the company’s Synergy WorldWide product lines. The company holds trademark registrations in the United States and in many other countries. The duration of the company’s trademark registrations is generally between 10 and 20 years, depending on the country in which the marks are registered, and can be renewed. Seasonality The company operates in several regions around the world and, as a result, are affected by seasonal factors and trends, such as weather changes, holidays and cultural traditions and vacation patterns throughout the world. For instance, the company experiences a decrease in activity in many of its Asia Pacific markets during the first quarter (year ended December 2022) due to cultural events, such as the Lunar New Year. As a result, there is some seasonality to the company’s revenues and expenses reflected in the company’s reported quarterly results. Generally, reductions in one region of the world due to seasonality are offset by increases in another, minimizing the impact on the company’s reported consolidated revenues. Changes in the relative size of the company’s revenues in one region of the world compared to another could cause seasonality to more significantly affect the company’s reported quarterly results. Dependence upon Independent Consultants A significant amount of the company’s revenue in some of its markets is dependent on only a few independent consultants and their extensive sales networks. Research and Development The company’s total research and development expenses were approximately $1.5 million for the year ended December 31, 2022. Regulation In the United States, the Food and Drug Administration (‘FDA’) regulates the company’s products under the Federal Food, Drug and Cosmetic Act, as amended and the regulations promulgated thereunder (‘FDCA’). Additionally, FDA regulations require the company to meet relevant good manufacturing practice regulations relating to, among other things, the preparation, packaging and storage of the company’s food and dietary supplements. The company’s business practices and products are also regulated by the following United States governmental entities: the Federal Trade Commission (‘FTC’), Consumer Product Safety Commission (‘CPSC’), Department of Agriculture (‘USDA’) and Environmental Protection Agency (‘EPA’). Competition The company competes for product sales and independent consultants with many other direct selling companies, including Herbalife, LifeVantage, Nu Skin and USANA, among others. History Nature’s Sunshine Products, Inc. was founded in 1972. The company was incorporated in Utah in 1976.