NATURES SUNSHINE PRODUCTS INC Q4 FY2024 earnings call

• In Asia-Pacific, strategic changes like rebalancing product proposition and field incentives led to customer order growth and strong revenue growth in Q4. • In North America, upgraded digital platform improved site performance, and Subscribe & Thrive auto-ship program expands. • In Europe, strong field execution and Power Line product adoption drove growth in Central Europe. • Implemented cost-saving initiatives like extending supplier contracts, building inventory, and workforce adjustments to navigate macroeconomic challenges.

In the fourth quarter, net sales were $118.2 million, up 9% vs prior year. Asia-Pacific saw Q4 revenue of $56.3 million, a 18% growth (21% ex FX), driven by Taiwan, Japan, and Korea with local currency growth of 29%, 27%, and 21% respectively. Full year 2024 Asia-Pacific sales were $207.8 million, up 3% (8% ex FX). Europe Q4 sales increased 8% (reported and local currency), with Central Europe up 17% due to Power Line products. Full year 2024 Europe sales were $84.8 million, up 5% (3% ex FX). North America Q4 sales declined 2% vs prior year, with digital sales up 17% Q4 and 22% full year, representing about 26% of sales.

• Full year 2025 net sales expected to range between $445 million and $470 million, inclusive of an estimated $5 million headwind from foreign exchange, implying year-over-year growth, net of foreign exchange, between negative 1% and 5%. • Adjusted EBITDA expected to range between $38 million and $44 million, assuming modestly higher gross margin in 2025 and quarterly SG&A slightly more than $40 million.

• Potential tariff impact: If proposed tariffs are enacted for the entire year, expected to have a $2 million to $3 million impact on gross margin. • Macroeconomic uncertainty: Impact on consumer spending and geopolitical issues in Eastern Europe pose risks to business performance.

Q: Talk about Asia's successes and future outlook, and macro pressures impact.

A: Asia-Pacific has good momentum with strategies working, expecting robust growth. Macro pressures include China's small portion and foreign exchange impact, also affecting North America consumers.

Q: Discuss North America digital business upgrade, tool rollout.

A: Digital platform largely set, new toolkit with e-mails, social media posts, managed CRM to be launched in back half of 2025, with AI backing.

Q: Tariff impact quantification and raw materials source.

A: Modeled tariffs could have $2M-$3M gross margin impact, raw materials 18% sourced from China, 80% produced in US.

Q: Follow up on tariffs, retaliatory tariffs.

A: Retaliatory tariffs discussed could impact, but no current impact on Korea, Japan, Taiwan production. Impact modeled at $2M-$3M if all proposed tariffs enacted.

Q: Asia sales performance, China and Korea.

A: Asia Q4 sales good, Taiwan up 29%, Japan 27%, Korea 21%, China up slightly in Q4 after prior decline. Growth sustainable but not at 21% ongoing.

Q: Russia business and Eastern Europe.

A: Hard to say on Russia business return, Eastern Europe growth driven by Poland, Baltic states, Slovenia, Slovakia with double-digit growth.

Q: North America digital revenue percentage.

A: North America digital sales about 25% in fourth quarter/year, China 100% digital live streaming.