Good morning, everyone. Welcome to the Sidoti June 2024 Small Cap Investor Conference. My name is Anthony Lebiedzinski, and I will be the host for today's presentation of Nature's Sunshine Products, ticker symbol NATR. We are certainly happy to have Nature's Sunshine present once again at our conference, and it is my pleasure to introduce Terrence Moorehead, the CEO of the company, as well as John Lanoy, Chief Accounting Officer, who's here with us as well. The format for today will be a management presentation for the first 20 or so minutes, followed by Q&A. For those in the audience that may have a question, please type it into the Q&A box at the bottom of your Zoom screen, and I'll read the questions out loud. So with no further delay, Terrence, the floor is yours. Thank you, Anthony, and thanks, everybody, for joining us today. Wanna walk you through a little bit of background about the company and tell you a little bit about our story. John, if we go to the first slide. You can skip this one. Yeah. Yeah, so Nature's Sunshine was the first company to encapsulate herbs, founded in 1972, by Gene and Kristine Hughes, sitting around their kitchen table, filling capsules by hand, to help improve their health, as well as their kind of friends and families. And the company has then expanded from a small operation at a kitchen table to being in over 40 markets around the world. 50+ years of experience of manufacturing products, through sourcing ingredients, so really a rich history behind the company. We are the number one, herbal and botanical company in the world. We sell over 300 different types of herbs and botanicals. We have over 800 products in our portfolio, so we really do have targeted solutions and customized solutions that we can create for consumers who may have different health issues. We have a fully integrated model in that we do our own in-house R&D. We have our own procurement team, our own sourcing team, that has real, kind of real-life, tangible relationships with farmers and producers and processors. It's a very unique relationship that we have out there. And then we do all of our own in-house testing as well with... driven by PhDs and kind of specialty tests that we both create and administer ourselves, and we have our own manufacturing as well. So it's a fully integrated model, end-to-end, that is very unique in the industry. We also have an omni-channel approach to going to market. And we use advanced digital tools and selling techniques in order to penetrate the marketplace, and we've got a tremendous growth opportunity in our digital channels in particular. Go to the next slide. Talk a little bit about the marketplace. You know, the global supplement industry, since, you know, 2019, and really even before that, is growing at about 6% annually, ±, depending on what category you're focused on. In categories like herbal and botanical, you can even see even higher growth rates in some years, hitting kind of that 9%-12% growth rate. So it really is a large, steadily growing, very healthy marketplace with good distribution globally around the world, where North America is the largest kind of marketplace, followed by Asia, then Europe, Latin America, and then Africa. Let's go to the next slide and talk about our business and kind of how our business is distributed. Again, I mentioned that we're in 40 markets around the world. Right now, Asia Pacific represents about 45% of our business. We've seen tremendous growth, double-digit growth in our business in Asia over the past 3-4 years. Really seeing some strong growth. Now, followed by North America. North America has really been on a tear in the last year or so, really turned the corner, driven by our investment and our focus on digital. But North America is about 31% of our business, followed by Europe at just under 20%, and then Latin America is our smallest OBU. Let's go to the next slide. Talk a little bit about our consumer audience, and we really target and serve premium consumers that care about the ingredients that are in their products. They care about where their products come from and how they're sourced, and the type of company that they're, you know, kind of working with. They want to work with a company that they can trust, that they believe in, and that have... will deliver products that deliver results. So you know, what we do perfectly aligns with that consumer. They're delighted and pleased when they find Nature's Sunshine; they tend to stay with us. We have good, solid, enduring relationships with consumers because of the highly specialized and robust product offering that we do have. Again, we're truly differentiated based on our sourcing strategies and our in-house manufacturing capabilities. 85%-90% of the companies that are out there don't do their own sourcing; they don't make their own products, so that really is something that differentiates Nature's Sunshine with our consumers. And the in-depth testing that we do is also a real differentiating factor that allows consumers to really believe in what we do because our products do consistently deliver results. Let's go to the next slide and talk about our portfolio, which largely focuses on, you know, the largest area is general health. That's about just under 40% of the products that we sell, would be some type of general health kind of product to focus on issues that most consumers you know, kind of might have. The next largest segment would be something in the area of gut health. So digestive products is about 23% of our product line, and then cardiovascular products would represent just about 20% of the product line. Next slide. I talked a little bit about our in-house manufacturing capabilities, but that really is where it all starts to come together, that our ability to manufacture those products and take the high premium, you know, kind of the high-quality raw ingredients that we use, that have, you know, the highest bioavailability. You know, you hear a lot of companies out there talk about how they use only the finest ingredients in their products. But again, 85%-90% of the companies out there don't do any sourcing, they don't do any testing, they don't do any manufacturing. So when they say that, you know, it's kind of a marketing message. But in Nature's Sunshine, it really is something that is quite true, that we believe in, and that we can substantiate. Because, again, we've got those relationships with the farmers, and the producers, and the processors, and we do the testing. We perform over 600 tests on every single product, you know, kind of, that's out there. We don't do 600 tests on every product, but we have 600 different tests that we perform, and we perform the, you know, kind of different tests, the relevant tests, on each and every single product, on each and every single ingredient. You know, we go to have strict compliance with FDA standards, which of course are the bare minimum that you can do, and we go well beyond that. And you can see off to the... on the lower right, the broad range of third-party certifications that Nature's Sunshine has. And we go well beyond what most companies have. You know, they've got GMP and NSF, which are the minimum levels, you know, kind of standards that we have. We go well beyond that with ISO 9001 quality certifications, ISO 17025 quality testing certifications and standards. Really unique in this industry. The highest level of kosher certification, USDA organic certified facility, TGA certifications, which is like having a pharmaceutical-grade quality and quality testing for supplements. So really, a truly differentiated level of quality testing and transparency with what we do versus other companies in the market. Our 270,000 sq ft manufacturing facility is located right here in Utah. That produces about 82% of the products that we sell globally. And we've got an additional 5,400 sq ft research center where our PhD, our team of PhDs work on the next generation of products for the company, working with outside partners, but also doing kind of their own research, to make certain that, you know, we have cutting-edge products to deliver to consumers. Let's go to the next slide and talk about how we bring those products to market. And we really have this quite a unique and powerful omni-channel platform that we're building, and that diverse platform is a significant—we believe it's a significant competitive advantage for us as we move forward in the marketplace. And let me just give you know... Use North America as an example, where you can see that about 30% of our sales come through independently owned, local, kind of independent specialty retailers. Those specialty retailers would be kind of herb shops and kind of local health grocery stores that specialize in high-end, high-quality products that our consumers are looking for. About 25% of the sales come through health practitioners, nutritional health practitioners. Those would be nutritionists, herbalists, chiropractors, herbal healers. You know, these are folks that are calling on clients, doing some type of diagnostic on their health or following up on maybe a diagnostic that the client has received, and then making recommendations to them. 25% of our business comes from direct to consumer, our digital side of the business, and that would include both our company-owned website and the investments that we make to drive traffic to our website and retain those people, but it also includes our Amazon business as well. And then finally, the remaining 20% would come from a mix of influencers, social sellers, and business builders. Looking at our overall strategy on the next slide, you can see that three strategies guide everything that we do globally and are really helping to kind of move our business forward and truly differentiate us from the competition as we move forward. Those three strategies are, we call the first one Digital First, which is all about driving sustainable, profitable growth through digital sales channels. Field Energy is our second strategy, and that's all about kind of recruiting and developing that next generation of sellers, and whether that be kind of the next generation of health practitioners or that next generation of specialty retailers. Really is about, you know, kind of finding that next group of sellers that are out there that can help us expand our footprint in the marketplace. And then finally, Brand Power really is about driving customer acquisition and reactivation through, you know, having a brand that resonates with consumers and having best-in-class product innovation. Let's go to the next slide and talk about a little bit about Digital First, our first strategy, which again is all about increasing customer engagement, loyalty, and affinity using digital tools. Our objective in North America specifically is to have digital sales be about 50% of our business in the next 3-5 years. We're already seeing tremendous growth in this area in the first quarter and previous quarters as well. We know we continue to see you know kind of strong growth. We had over 30% growth of sales growth from digital in Q1 34% growth in new customer sales. So this is a powerful growth tool for us. It's a powerful way for us to attract new customers to the business and retain them. And it's also our most profitable component of our business. So again the digital platform is. It's all about digital kind of acquisition and retention of consumers. So we've built out capabilities there, and we're gonna continue to build our skills and capabilities. One of the really kind of special parts about that we love about our digital platform is our Subscribe and Thrive program, which is it's our that's our version of our autoship program. And it it's a great way for us to kinda grow the business, but it's also a real win for consumers because it's easy to use, it gives them the best, you know, kind of cost savings. They get free shipping, and it really is the only way, you know, if you're gonna get healthy, you have to take our products on an ongoing basis. You gotta take them for at least 90 days. But in many cases, you need to keep taking them because they're. You need to keep taking them because they are—they're, you know, they're nutritional products. It's, you know, this is—it's plants, it's food. So you're supplementing your diet, and you need to do that on an ongoing basis. Subscribe and Thrive is the easiest way and the most economical way for consumers to do that. It's also a win for us because we know that, when we get people in to Subscribe and Thrive, repeat orders increase by 50% or more. So it's a great way for us to drive the business, for us to keep consumers on board, build that lifetime value. Right now, Subscribe and Thrive is about 25% of our business in North America, but it can go as high as 45%-50%, say, in a market like Japan, so where we pioneered the program. So, again, you can imagine, if you're getting half of your sales from automatic repeat business, every single new customer that you bring in is largely incremental in helping to drive growth. So we really think this is an important component of our strategy, and we'll continue to build out our Subscribe and Thrive engagement levels as we move forward. Let's talk a little bit about Field Energy. And again, Field Energy really is just about making sure that we've got a sales force that's employed deploying strong field fundamentals. They've got the right set of, you know, kind of field tools and systems in place, the right set of analytics in place to make sure that we're kinda focusing on the right set of things. And if you go to the next slide, you can just see the power of having, you know, kind of good, solid field fundamentals and driving field energy. When you look at a market like Taiwan over the last five years, which is shown out on the graph up top on the left, or Japan below it, you know, Taiwan growing at with a CAGR of 141%, which is now the- our largest market in Asia Pacific. But look at Japan, growing 23% over the last five years, again, through strong field fundamentals, strong analytics, attracting kind of young, new practitioners and sellers to the organization, focusing our product line, focusing people on Subscribe and Thrive. Really, it's a great formula for growth, and we can see that. And both of those markets continue to perform for us, even today. So again, we're gonna expand our Field Energy and field activation initiatives going forward. But I just wanted to kind of touch base here to just illustratively show how powerful good, strong Field Energy programs can be. Let's shift gears and talk a little bit about Brand Power, which is, again, all about capturing the imagination of our distribution network, right? Those practitioners, the retailers, gotta capture their imagination 'cause you want them to put the product on the shelf. But it's also about capturing the imagination of consumers with best-in-class product innovation and really very strong branding. And just as an example, we've recently launched something called the Power Line. It consists of three products right now: Power Greens, Power Meal, and Power Beets. It's a, you know, innovative product that we've launched in the marketplace that really does represent foundational nutrition that everybody can take every single day. So it's a great kind of landing platform for consumers. But each one of these products represents, you know, and offers breakthrough technology and breakthrough performance in their respective areas. Whether it be our Greens product that has, you know, therapeutic and clinically kind of proven levels of adaptogens and nootropics in it, so you can actually get the kind of benefits of taking greens every day. But it also includes two full servings of vegetables in it. And it's the only product that includes two full servings of vegetables in it. So most of the popular products that are out there, most of those popular greens products that are out there, don't actually have any vegetables in them at all. They've got greens in them, but our Power Greens is the only one that has two full servings of vegetables in it. So, that's a big deal for folks who are again looking to supplement their diet with something that is has great, pure, potent ingredients in it. Power Meal would have a similarly unique story, as would our Power Beets product. And let's go on to just talk about these a little bit more because again, we've fully developed kind of ad campaigns for each one of these digital campaigns for each one of these products in the Power Line, where you know, we'll even go up against kinda market leaders like AG1, where you know, you've gotta take three glasses of AG1 to equal one glass of our Power Greens. And that's again just how potent and how effective we would be formulating these types of products. Power Meal, Power Beets would have similarly compelling stories behind them, but I just wanted to show you. You know, we do have kind of full digital campaigns against each one of these. A tremendously successful launch in North America, and it was the most successful new product launch in the history of our European business. So we're very pleased about the Power Line and then other things that we have in our pipeline as well. In terms of our management team, I won't go through each one of the members of the management team, but just wanna say, you know, we have a strong, dedicated, and very experienced management team on the ground that's committed to building shareholder value and continuing to drive growth, and drive growth kind of faster than the market as well. Let's go to the next slide, talk about a little bit about capital allocation, because we have a very strong cash flow as a company. And that's gonna continue to allow us to invest in our growth strategies. In terms of capital allocation, we do have kind of $1.8 million in shares that we repurchased at an average cost of $17.61 per share in the first three months of the year. As of the end of the first quarter, we still had almost $16 million remaining on our buyback authorization program. So, we're gonna continue to invest in the shares. We believe they're still a great bargain. We think we're kind of... It's a value, it's when we're undervalued, so we continue to be active in the marketplace, buying back our shares. We're also investing in process improvements in supply chain. We've made significant investments to upgrade the equipment, upgrade our facilities, so that we can be more efficient, more effective, have more automation. We're looking to add AI capabilities into our demand planning and manufacturing capabilities as well, to help us be just more efficient in inventories and service levels. That's gonna be an important thing for us going forward. We've got ongoing investments that we're gonna make in our organic growth, particularly in the area of digital. We're gonna continue to invest in digital, make sure our digital capabilities continue to expand, and we'll do that globally. And then finally, you know, we are kind of opportunistically, we will look at M&A. We've got the cash, I think we've got the track record for driving growth and doing kind of responsibly building our business. So, you know, anything that would certainly provide adjacencies or accelerate some of our growth strategies, one of our three growth strategies, we would certainly entertain. And we're well-positioned to drive shareholder value kind of based on, we believe, based on our capital allocation plans. In terms of our historical performance, you know, we've had good, solid performance briefly interrupted by some, you know, kind of external headwinds in 2022, but good, solid growth. You can see over the timeframe on the left, going from about $360 million of sales to almost $450 million of sales. And EBITDA, again, strong, steady growth, going from about $31 million to over $40 million of EBITDA, and that doesn't include our $10 million of gross savings program that we've discussed and committed to, going forward. So I think we've got a great track record and a good runway that lies ahead of us. If you look at our financial outlook going forward, the guidance that we've provided on the top line is for the full year of 2024, ranges from $455 million - $480 million, and on the bottom line, EBITDA guidance is $42 million - $48 million. So just to wrap up, you know, why Nature's Sunshine? We've got a great and strong, powerful, very, very powerful product platform. An enormous market opportunity, given the markets that we play in and the consumers that we're going after. Our herbal and our herbal focus and our focus on herbal products is, is really quite unique and, and does set us, set us apart. Our branding really also speaks to consumers today, and our omni-channel approach is, is unique, it's powerful. We know that consumers wanna shop across, and, and they, they are shopping across two to three different channel platforms at any point in time, depending on whether they, they're trying to get information and get smarter about something, or whether they actually need some support. That would determine kind of where they might wanna shop at any point in time. So our omni-channel approach really is kind of one of the most consumer-friendly and market kind of sensitive approaches to the business out there. And it's... And that's one of the things that really has differentiated us and has allowed us to have growth that's been double what the external market is has been delivering. And we're well-positioned financially. We've got a good, strong cash position, healthy EBITDA, and low debt. So that's our story. Anthony, I'll turn it back to you for Q&A, and I look forward to answering any questions folks might have. Thank you very much, Terence, for the terrific overview of the company. And, as a quick reminder, for those in the audience, if you do wanna ask a question, please type it into the Q&A box at the bottom of the Zoom screen. We do have a few questions already in the queue. But, you know, first I'll just have a kind of a just a clarifying question about your business model. So slide number nine, you had the North American breakdown of your revenue. How does that look on a global basis? I'm just curious. Yeah, different regions would be quite different. In Latin America, for example, there's a large portion of those sales that are coming through specialty retailers. So, and then those would go directly out to consumers. In APAC... Excuse me, in, I'll go to Europe first. In Europe, you're seeing, especially in Central and Eastern Europe, we've got very much an omni-channel approach in Central and Eastern Europe. We have over 300 physical locations where consumers can come in, walk in off the street, buy products. Direct sales practitioners can be trained in those facilities as well. Consumers can buy online anywhere in Europe, so we've got a kind of a digital platform there. China is a very different platform for us. It's 100% digital live streaming model, so, you know, kind of selling through, largely kind of think of them as influencers who will be selling those products through digital live streaming sessions. So it's a very powerful, very unique, digital approach in, in China. And then rest of Asia would largely be called... I kind of describe the rest of Asia as a, kind of a customer club type of, type of model, where, enthusiasts would or sellers would kind of go out to kind of two or three friends and kind of recommend the product, and then they would recommend and recommend from, kind of from there. So largely a customer club type of model in, in Asia, as I would describe it. So hopefully that answers your question. Yes, thank you. And, we have a few questions here. I'll just try to combine some. So there are questions about your market share, market penetration, and competitors. You know, we had, for example, I cover USANA, which actually presented our conference yesterday, and then we've had LifeVantage, which is another- Yeah Utah-based company. They've also presented at some of the Sidoti conferences. So, you know, maybe, you know, just talk about, you know, your market share. How do you see that changing over time? How do you view competitors, like the ones I mentioned? How do you distinguish yourselves from them? Curious to get your thoughts. Yeah, great, great question. In terms of market share, you know, our goal is to grow at least at or faster than the market. As I mentioned, in 2023, our growth rate was double the market, so we're stealing share. And that's a core underlying tenet of our strategy, is to make sure that we're getting at least getting our fair share of the market or our disproportionate fair share of the market. So we are kind of positioning ourselves to take share and grow faster than the market. That's that first. In terms of the competitors that were mentioned, great companies, fine companies, you know, very different from Nature's Sunshine in terms of how they go to market, how they... You know, the types of products that they would bring to market. You know, I think we would compare ourselves to the Gaia Herbs and the Thornes of the world, maybe the Pure Encapsulations or Metagenics, you know, kind of possibly serious therapeutic, you know, companies that are selling through, you know, kind of professionals. And again, whether those professionals are nutritional health practitioners or a kind of a the type of local, independent specialty retailers that we would go to. Very, very different approach and different go-to-market strategy. Again, our goal is to have 50% of our business in North America be digital, and to have our digital platform expanded around the world. So, just a very different approach to what I would say most players are kind of pursuing right now. And, again, it continues to pay dividends as, like I said, in 2023, we grew twice what the market grew, and doing that globally. So, hope that, again, hope that answers your question. Mm-hmm. Right, and so as you look forward, are there any, you know, limiting factors or risks to your growth in Asia and North America and you know, even the other markets that you participate in? I think that, you know, many of the external headwinds are, you know, ongoing challenges. I think we've proven through Covid and through 2022 with the global supply chain crisis, war in Ukraine, you know, foreign exchange rates, inflation, that I think we've proven that we are kind of up to the task and that our brand is up to the task of continuing to attract new customers into the business, to drive growth. So, you know, internally for us, it's not so much of an if, it's a when, and just making certain that we continue to drive forward and execute against our strategies. And then, you know, who knows with external factors? But like I said before, I think we've done a very good job of addressing kind of whatever the external headwinds are and continuing to move the business forward. But one way or another, we will continue to stay focused on our core three strategies: Digital First, Field Energy, Brand Power, because we believe those are kind of the transformative fuel that will allow us to build out that Omni-channel platform going forward. ... Gotcha. Okay, so we're pretty much almost up against time, but, I mean, we do have. There is one sort of like a direct question from a investor here. You know, as far as your stock performance has been kind of range-bound for a long time. Kind of, you know, what are your thoughts about trying to break out of that cycle, especially in light of the fact that your gross margins are, you know, much better than some of your peers, like or competitors like Mondelēz, for example? You know, I know you just spoke about, like, your strategies, but there is there anything else you can add to that, to that point, as far as trying to break out of the cycle as far as where your stock price has been, and kind of like how we should think about that going forward? Yeah, you know, I think, again, if I think about our strategy and if you're building your models, and you're building your model to say that Nature's Sunshine is gonna grow, kind of with or faster than the market, right? High single digit, maybe, maybe low double digit, you know, kind of top-line growth with continued expansion of operating margins and EBITDA margins to the operating margins to that low- to mid-teens, and EBITDA margins to the mid to upper teens. You know, you'll start to see numbers that are pretty irrefutable from an EBITDA standpoint in a market that's driven by, you know, off multiples at least. I think that message is gonna start coming through louder and louder and louder. And again, just based on the momentum that we've seen in this business and the potential that we have, still being at the front end of our runway, you know, we believe... Well, we believe we're undervalued today, and that will become increasingly apparent going forward. Understood. Okay. Well, thank you very much for that, Terence and John, for participating here in our conference. Thank you also, everyone asking thoughtful questions. Sorry we couldn't get to all of them, but we have to wrap it up here. So again, thank you and have a productive day. Take care. Thanks, everybody. Take care. Thanks, Anthony. Thank you.