Nature's Sunshine Products, the US-based manufacturer of encapsulated herbs and vitamins, reported a 5 per cent drop in sales revenue for the third quarter, which saw a significant decline in international sales.
A small growth in the domestic market did little to boost overall revenue of $73.8 million (€75.4m) compared to $77.9 million for the same period in the prior year.
Sales for the nine months ended 30 September reached $227.5 million compared to $241.4 million for the same period in the prior year, a decrease of approximately 6 per cent.
Net income for the third quarter ended 30 September also dropped to $3.5 million from $4.2 million for the same period in 2001, while net income for the nine months to end of September dropped to $5.6 million compared to $12.9 million for the same period last year.
A 4 per cent increase in domestic revenue was helped by sales in the Hispanic market where revenue grew by 23 per cent. The company said that while the prior year's results were temporarily affected by the aftermath of the events of September 11, recent strength in domestic activity was primarily a result of new marketing and promotional initiatives as well as the introduction of new products. The numbers of US managers and domestic distributors has increased since last year.
Nature's Sunshine, which also has operations in South Korea, several South American markets, Japan, Canada, and the UK and Ireland, saw international sales revenue for the third quarter decrease 17 per cent, and attributed this to revenue declines in South Korea, Brazil and Venezuela. The latter two were significantly impacted by currency devaluations, said Nature's Sunshine.
For the third quarter, gains in sales revenue and in the number of sales managers and distributors were reported in Ecuador, Peru and the Russian Federation, although as a whole, distributors in international markets dropped.
The company added that the introduction of a newly formulated line of 16 natural skin care products manufactured under the Natria name has been positive.
"The strength in the US market and the growth in the number of domestic distributors as the result of newly-instituted programmes is encouraging," said Daniel P. Howells, president and CEO. "Our efforts are directed at further extending the favourable domestic trend, while strengthening our international markets and continuing to target company-wide cost reductions."
He continued: "We have a solid line of new products in the pre-marketing stages that should benefit results as we move forward. We continue to enjoy strong cash flow and have ample cash with no debt, which places Nature's Sunshine in an enviable position in the current market environment."
The company also purchased approximately 561,000 shares of common stock during the quarter following a recent board of directors announcement to repurchase an additional 1,000,000-shares.