Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature Sunshine financial results for the fourth quarter and full year ended December 31, 2025. Joining us today are Nature Sunshine CEO, Ken Romancy, CFO Shane Jones, and General Counsel Nate Brower. Following their remarks, we'll open the call for analyst questions. Before we go further, I would like to turn the call over to Mr. Brower as she reads the company's safe harbor statement within the meaning of the Private Securities Latigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nate, please go ahead.

Hey, thank you. Good afternoon, and thanks for joining our conference call to discuss our fourth quarter and full-year 2025 financial results. I'd like to remind everyone that this call is available for replay by telephonic dial-in through March 24th and by a live webcast that will be posted on the Investor Relations portion of our website at ir.naturesunshine.com. The information on this call contains forward-looking statements. These statements are often characterized by terminologies such as believe, hope, may, anticipate, expect, will, and other similar expressions. Forward-looking statements are not guarantees of future performance, and the actual results may be materially different from the results implied by forward-looking statements. Factors that could cause results to differ materially from those implied herein include, but are not limited to, Those factors disclosed in the company's annual report on Form 10-K under the caption risk factors and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date, and the company disclaims any duty to update the information provided herein. Now I would like to turn the call over to the CEO of Nature Sunshine, Ken Romanthe. Thank you, Nate.

And good afternoon, everyone. Thank you for joining our fourth quarter and full year 2025 earnings call. I've now been at Nature Sunshine for 131 days, and I am even more delighted to be here than when I last spoke to you on our third quarter earnings call on November 6th of last year. Nature's Sunshine delivered another terrific quarter, growing sales 5% and EBITDA 10% by continuing to execute against its key drivers of success, leading to its highest annual sales level ever. But I'm most pleased by what I have found in this great company over the past three months. Simply put, I love what I see. Two very strong brands steeped in heritage and quality Nature's Sunshine and Synergy Operating in the large, global, and rapidly growing category of natural health supplements A globally diverse business operating in over 40 countries around the world Exceptional product development capabilities Sourcing and blending hundreds of nature's best ingredients from around the world and scientifically verifying their effectiveness. An army of independent consultants passionately representing our products every day to consumers all over the world. A rapidly growing digital business penetrating new channels driven by a subscription strategy that enables consistent recurring revenue streams. A rock-solid balance sheet with nearly $100 million in cash and no debt. And last but not least, a passionate, mission-driven organization dedicated to elevating people's lives globally through improving their health and economic well-being while delivering industry-leading results for our shareholders. Suffice to say, I see so much to build upon at Nature's Sunshine, and I believe we can drive even more accelerated growth going forward. I will share an outline for the future of Nature's Sunshine after our CFO, Shane Jones, provides the details of our strong fourth quarter performance.

Thank you, Ken. We're pleased to report another outstanding quarter with strong growth across North America and Europe. This growth continues to be bolstered by our expansion into new digital channels, strong adoption of our subscription auto ship programs, exceptional new customer acquisitions, and strong partnerships with our independent consultants across the globe. Our efforts to modernize the business, expand digital capabilities, and strengthen customer and consultant engagement continue to pay big dividends. Now, diving into specific financial performance. Net sales in the fourth quarter were $123.8 million, representing our second largest quarter in company history and our strongest fourth quarter ever. This represents a 5% increase versus $118.2 million in the year-ago quarter, or a 4% increase, excluding the impact of foreign exchange rates. Growth was driven by continued acceleration in both North America and Europe. Net sales for the full year, 2025, finished at $480.1 million, our best year ever and slightly higher than the high end of our most recent guidance range. This compares to $454.4 million of net sales in 2024 and represents 6% year-over-year growth or 5% excluding the impact of foreign exchange. These results reinforce the traction we're seeing from our digital and other transformation initiatives, the strength of our product portfolio manufactured in-house with the very highest quality ingredients, and the power of our passionate and knowledgeable independent consultants. Looking at our results in more detail, let's start with regional performance. In North America, we continue to see building momentum as digital accelerates while maintaining our core business of specialty retailers, practitioners, affiliates, and independent consultants. Q4 sales grew 6% year-over-year to $37.4 million. We're particularly excited about the strength in our digital business, which continued to show exceptional growth in Q4, increasing 47% versus prior year. Our work to move to an improved platform, leverage digital tools, optimize our digital marketing, enhance the customer experience, and increase lifetime value continues to pay off, evidenced by very robust growth in new customers, coupled with better retention and frequency from returning customers. Similar to what we reported in Q3, during Q4 we saw new digital customers nearly double compared to the prior year. We're also pleased to see very strong adoption of our subscription auto-ship program. This program provides the strongest value proposition for the consumer while improving consistent use to ensure the very best results for improved health. It also promotes increased frequency and retention and provides the company with a predictable, recurring revenue stream. In Q4, digital subscriptions coming through our website increased 260 basis points versus prior year to 47% of revenue. And subscription auto-ship on TikTok, which only started this past summer, reached 25% of TikTok revenue. Finally, we also continue to make progress with the efficiency of our digital marketing spend, which is resulting in meaningful improvements in customer acquisition cost and enhanced return on ad spend. We are excited to see these fundamentals continue to move in the right direction, validating the strategic investments we are making and strengthening our confidence that we will meet and exceed the goals we have set. As we've said many times, digital momentum is a key component of our broader transformation and represents an important long-term growth lever for our business. As digital continues to see robust growth, we expect continued mid-single-digit revenue growth in North America during 2026. Sales in Asia Pacific declined 1% year-over-year to $55.7 million, or a 1% decline on a currency a constant currency basis. As we highlighted in our discussion last quarter, Q4 was a very difficult compare for AIPAC, as sales increased 21% in constant currency terms during Q4 2024. This performance over that difficult compare was driven by outstanding execution in China and Japan, where sales increased 35% and 21% respectively, excluding the impact of foreign exchange. We are pleased with the commitment and strong execution from our independent consultants in both markets, which has allowed Japan to sustain 20% plus growth for six consecutive quarters now and has helped to drive the meaningful turnaround in China. In addition to great execution, strong adoption of our subscription autoship program also continues to drive meaningful growth, along with predictable recurring revenue. We are seeing rapid adoption of this program across all of our markets in APAC. In Japan, subscription autoship accounts for nearly half of all sales in that market. We only recently launched the subscription autoship program in China during the first half of 2025. Last quarter, we announced that the program already accounted for 12% of sales in Q3. We are pleased to report that subscription auto ship in China continued to surge in Q4, increasing to 18% of revenue. We are very pleased with the progress being made in APAC and expect continued mid-single-digit growth from this region in the coming year, but acknowledge the inherent lumpiness of quarter-to-quarter sales due to the nature of our field activation efforts. We're also pleased with the continued strength in our European business, where Q4 sales increased 18% versus the prior year to $25.2 million, or 14% on a constant currency basis. These outstanding results were driven by 23% growth in Eastern Europe in local currency terms. The strength in Eastern Europe has been fueled by improved product availability, as we have worked to ensure appropriate in-stock levels of our key products where we see high demand. This improvement was combined with outstanding execution from our independent consultants and some economic stabilization in the region. This remarkable growth is a testament to the perseverance and commitment of our staff in that area, given the continued war in the region. For 2026, we expect continued mid-single-digit growth in Europe as well. Now turning to gross margin. We continue to build on the progress we've made over the past several quarters as gross margin increased 55 basis points to 72.5% compared to 72.0% a year ago. This improvement represents the benefit of our ongoing gross margin initiatives and favorable market mix. We've been talking about these margin improvement efforts for some time. These initiatives include renegotiating logistics contracts, better conversion costs through improved manufacturing efficiency, improved sourcing, more disciplined pricing, and other cost-saving measures. We're proud of our team's continued efforts to streamline our supply chain. and pleased to see the benefit reflected in our results. As we look forward, we anticipate continued modest improvement in gross margin during 2026, but note that some uncertainty remains around the impact of tariffs and inflation. Therefore, gross margins are likely to settle into the upper 72% range during 2026, which represents a significant step up from where we've been historically. Volume incentives as a percentage of net sales were 29.1% compared to 31.1% in the year-ago quarter. The decrease was primarily due to the strong growth in our digital business as well as changes in market mix. Selling, general, and administrative expenses during the fourth quarter were $48.4 million compared to $43.7 million in the year-ago quarter. As a percentage of net sales, SG&A expenses were 39.1% for the fourth quarter compared to 35.7% a year ago. The $4.7 million increase versus prior year was primarily related to digital ad spend, variable costs associated with the sales increase, and non-recurring expenses. The decision to increase digital ad spend during Q4 was based upon the opportunity for very strong customer acquisition at a favorable customer acquisition cost. Looking forward to 2026, we expect quarterly SG&A of $46 to $48 million. Operating income increased to $5.3 million or 4.3% of net sales compared to $4.6 million or 3.8% of net sales in the year-ago quarter. Gap net income attributable to common shareholders for the fourth quarter was $4.1 million, or $0.23 per diluted common share, compared to a loss of $0.3 million, or $0.02 per diluted common share in the year-ago quarter. Adjusted EBITDA, as defined in our earnings release, increased 16% to $11.9 million, compared to $10.3 million in the year-ago quarter. The increase was primarily driven by the growth in net sales and improvement in gross margin. Adjusted EBITDA for the full year 2025 was $49.4 million, above the high end of our most recent guidance range and representing 22% growth versus 2024. The increase for both the quarter and the full year was driven by the increase in net sales, improved gross margin, and cost leverage. Our balance sheet remains clean, with cash and cash equivalents of $93.9 million and zero debt. Inventory increased to $68.3 million at the end of the fourth quarter, a $1 million increase versus Q3, as we work to replenish inventory after the robust growth seen in Q3 and Q4. We expect to see a moderate increase in inventory during 2026 to ensure appropriate in-stock levels and fulfill continued strong demand. Net cash provided by operating activities was $35.3 million compared to $25.3 million in the prior year. We repurchased 1.3 million shares for approximately $16.3 million, or $12.95 per share, during the year ended December 31, 2025, with $17.4 million remaining on our share repurchase program. Looking beyond share repurchases, our healthy capital allocation structure positions us well to continue our digital transformation and other strategic initiatives. Now, turning to our 2026 outlook. We expect full-year 2026 net sales to range between $500 million and $515 million, compared to $480 million for 2025. This equates to year-over-year growth of 4% to 7%. For adjusted EBITDA, we are guiding to a range of $50 million to $54 million, representing year-over-year growth between 1% and 9%. This guidance includes measured investments to improve our technology infrastructure, drive further customer acquisition, advance geographic expansion, expand penetration in existing markets, and accelerate product innovation. While these investments will temper our 2026 EBITDA from our consistent double-digit growth rate, we see strong momentum in the business and believe that now is the time to make these key investments in order to position the company for more rapid, sustained growth in 2027 and beyond. Overall, we continue to believe the business is well-positioned to capitalize on current opportunities in a growing market and remain very optimistic about our ability to continue to unlock the substantial growth prospects that we see. The strategic initiatives we've been implementing are working, and we're confident in our ability to continue to accelerate growth in sales, profitability, and free cash flow. Now, I'll turn the time back to Ken for some further

commentary. Thank you, Shane. Very well done. As I mentioned earlier, I see many opportunities for Nature's Sunshine. To take advantage of those opportunities, we're doubling down in 2026 to make the investments Shane shared with you to accelerate our growth. We're setting a goal of growing Nature's Sunshine to $1 billion in sales with improved profitability along the way. As our plan is still in its early stages, we'll present more details of when and how we'll get there in future presentations. But simply put, we expect to accelerate our top-line growth ahead of the 4% to 5% we've been growing over the past few years and then leverage that higher growth to improve our bottom-line profitability. We're calling our accelerated-rated growth plan Nature's Sunshine Vision for Growth. The core drivers of our vision for growth include the following seven elements. One, continued rapid expansion of our digital business into new channels. Two, deeper penetration in our core direct selling markets. Three, expansion, geographic expansion in new high-value markets. Four, exploring opportunities in retail channels. Five, deepening our consumer relationship with differentiated brand positioning, marketing, and product innovation for both nature's sunshine and synergy. Six, leveraging our supply chain for scale efficiencies. And seven, searching for complementary, accretive M&A opportunities. By executing our vision for growth, we see $1 billion in sales clearly in our grasp. The future has never been brighter for Nature Sunshine, and I look forward to sharing more about our vision for growth in the near future. Thank you for your time today and your continued support of Nature Sunshine. I would now like to turn the call back to the operator for questions. Operator?

Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star 4 by the one on your telephone keypad. And should you wish to cancel your request, please press star 4 by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Thank you. And your first question comes from the line of Brian Holland from DA Davidson. Please go ahead.

Thanks. Good afternoon and congratulations on the strong 2025 results. Maybe just starting, Shane, with the outlook for 2026. You've obviously provided a wider range of outcomes on the EBITDA line than the net sales line. And I assume that's fairly straightforward, i.e., you know, obviously you talked about more investment behind advertising, marketing, et cetera, as well as innovation, bringing new products to market, et cetera. um so is it as simple as you know kind of the bottom end of the EBITDA range assumes that those investments don't um kind of perform at the level that maybe some of the incremental investment that you put into the business in the second half of 2025 showed um and maybe and similarly maybe just help me understand also the midpoint and the high end of the range does the midpoint assume that 2026 looks similar to the second half of 25 and maybe the high end is better. Just trying to understand what's all in there. Sorry, that was kind of a jumbled one.

That's okay, Brian. Absolutely, there's a lot of things that are going into, obviously, those EBITDA projections that we have out there. One of it, as we talked about, there's still some uncertainty about things like tariffs and inflation. At the bottom end, Obviously, we've got some bigger impacts from potential inflation increases as well as tariffs this year. They also have the impact then most of our investment, the investments we're talking about. We're making considerable investments in many different ways, as you saw there. Some of those benefit us this year. Many of those, the real benefit comes in the out years, in 27 and beyond. So that is incorporated into that as well. And then there's also just some macro uncertainty currently in the world with what's happening with current war that's out there and all the implications that that could have for the consumer, for oil prices, for all of that. We've tried to encompass all of those factors into our guidance, and so that's why you have a little bit bigger range from that 50 to 54. Does that answer your question?

Yeah, no, that's extremely helpful. I appreciate it. And then maybe just a good segue into 2026, your comment about some of the uncertainties here. We're two-thirds of the way through 1Q26, you know, a number of factors both within the past week and maybe even earlier in the quarter to consider. Just any sense about how the consumer, your core consumer, is holding up in some of your strategic initiatives here as we're early in 2026, any commentary about that relative to how 25 finished off for you?

Yeah, we're still seeing very strong consumer demand in our markets. We've talked about some of the demand, what you saw in Q4 across the digital, places like digital in China continues to be very, very strong. Japan, and we're seeing no let-up in the current quarter from those trends.

and then maybe just to and I'll keep in mind the recent issues in the world I don't even think they showed up at the gas pump yet so we haven't seen anything

to summarize we're not seeing anything yet we're still seeing very strong demand but who knows

I appreciated changes by the day and then maybe just to finish off on kind of some of the long term stuff that you teased there, Ken. Maybe first of all, obviously when you guys have really kind of stepped into something here, the digital side with North America, the auto-subscribe in China, and I imagine those are things you're going to double down on, obviously sort of embedded within the outlook for 2026. You're going to continue to lean into some of this. What have you learned about the addressable market for nature's sunshine over the past year? Is there any way to quantify the extent to which that's expanded that might inform a billion-dollar business at some point in the future? I know you haven't pinned down to a time on that. And then maybe just a second one on that, would that be – are you assuming the path to a billion dollars would be all organic, or could M&A be part of that path to a billion? And I'll leave it there.

Yeah, great. Thank you. Well, first of all, what we've seen in the market, this is a big and growing market. And depending on what sources you use, you can look at health and wellness trends. You can look at total supplement trends. You can look at natural supplement trends. there's a lot of different sources, and we're honing in on what source we really want to use to kind of measure our market share. But basically, the market's been growing mid-single digits, 5%, 6%. And it's projected to, like, step up to grow a little bit higher than that, maybe 6% to 7% in what we're measuring in terms of health supplements going forward. Because if you look at health and wellness trends, some of the data includes exercise equipment, weight loss, GLP one, we're really looking at the supplement market. So it's large, the TAM is huge. And we've looked at market share in some places. And right now we're looking at per capita consumption. And there's just opportunity everywhere. You know, in our some of our strongest markets, we only have like a two to 3% share of health supplements. So we just think there's tremendous opportunity to both grow with the market as well as increase market share. In terms of growth going forward, to double a business in 10 years, you've got to grow 7% a year. To double a business in 7 years, you've got to grow about 10% or 11% a year. So we think that there's strong organic growth, but we also think that new channels and M&A have to play a part of that. So I listed a menu of things. We're not leaving anything unturned. But, you know, as we've discussed it with the board, it depends on how fast we want to get there. We believe there's opportunities in the M&A area because we have capacity in our manufacturing facility. So we can do bolt-on acquisitions and get a lot of variable margin by leveraging our fixed costs in our manufacturing facility, as well as perhaps brands that might be able to help us get into other channels. So, you know, we have amazing product development. We have two brands, and we're going to open up our aperture and not be limited by whatever channel we've done in the past. We have so much product development capabilities. We could probably have different products and different channels underneath the brands we already have, even before we consider buying anything new. Great. I'll leave it there. Best of luck. Thank you.

Thank you. And your next question comes from the line of Susan Anderson from Canico Genuity. Please go ahead.

Hi, good evening. Nice job in the quarter. Thanks for taking my questions. I guess maybe I kind of wanted to drill down a little bit on the strong digital growth in North America. I guess I'm kind of curious, you know, if you're seeing customers come to the site, maybe they were buying your products in another channel or elsewhere, or I guess how are you guys applying these customers? And then also, you know, when they do go to the site, I guess, are they, you know, purchasing any different products you're seeing in other channels? Are they looking for anything different or, you know, it's kind of basically their interest is very similar to consumers purchasing in another channel.

Great question, Susan. So one of the things that we're starting to really appreciate is this is an ecosystem. As we're opening different channels in digital, all of those digital channels actually are synergistic and feed one another. Let me give you an example. We've been utilizing TikTok lately and have seen tremendous results in customer acquisition there. And we're able to drive new customer acquisition at a CAC that's way lower than anything we've seen in other channels. Those customers come into TikTok, purchase first time on TikTok, but then many times they'll go and then buy something, and sometimes they don't even buy on TikTok. They'll go to Amazon, and they'll buy the product on Amazon, or they might go to our website, or they might even go to one of our independent consultants and actually buy something there. So it is, and it feeds that way across all of those channels. So I think we're getting to an inflection point where we're starting to see those benefits and starting, frankly, to understand them well enough to feed them in the right way so that we're utilizing our digital media in the right way to get a very strong return on that. We understand when we acquire a customer how much it costs to acquire that customer and then what we're going to get in the lifetime value of that customer and then just maximizing that and improving retention as we go along the way. So we're excited about what we're seeing because the real fuel here is new customer acquisition, which is coming largely through TikTok but also through the other channels but then that overflows into virtually everything else we're doing

yeah and the thing I'd add is that if you think about your own you or your own family's purchase behavior or I just look at our family we don't shop in just one place sometimes we shop in a retail store sometimes we get the same item at Amazon sometimes we get directly to a website some people come to a website learn about it but then they can't you know they can't They can't avoid free shipping being a prime member on Amazon, so they go there. We have a great example of this ecosystem that Shane just mentioned. We worked with an influencer on TikTok, and that influencer got really excited about one of the items that I think was number 83 in our lineup in North America. It's called lymphatic drainage, and lymphatic drainage is a hot health issue right now. We worked with this influencer, and not only did they sell an amazing amount on TikTok shop, We sold a lot more on Amazon, a lot more in our NSP.com, and then a lot more amongst our independent consultants. So an influencer on TikTok created this unbelievable demand across the whole ecosystem, and every channel benefited from that. So they're not as distinct as we sometimes talk about them because consumers are shopping everywhere every day, and they're mixing it up, and it's just the power of If we are where the consumer is, we can benefit from that. And that item drove to be our number one item last year across the board after being like number 83 for years.

Oh, wow. Okay, great. So it sounds like you guys are definitely, you know, acquiring new customers. So I guess if you think about kind of like this plan to accelerate growth to a billion and maybe, you know, go into some additional channels such as retail. I guess the thought is that you'll continue to drive new customer acquisition through those new channels. I guess, is there any point where there's risk of kind of cannibalizing the older channels, such as some of the partners that you work with and everything?

Well, one of the ways we can do this is we can do it through product differentiation. So, we still want to treat our independent consultants very special. Right now, there's a lot of times where they bring consumers in and then people jump off to Amazon. So that is a little bit of channel conflict. But we believe we have enough products to feed the channel. So if you think about our independent consultant business and direct-to-consumer alone, we've got enough to feed those independently to drive growth. Because our independent consultants can't sell everything, and we can't sell everything DTC. We can't concentrate on the amount of new product activity that we have coming down the pipeline because at some point you can have too much. So we're fortunate enough to have such a robust pipeline. We're going to be able to start to differentiate and pick our way through to drive growth because I'm not very patient, and when my product development team has a great idea, I'm not going to wait for a channel to be ready. We're going to go find where the consumers are, and we'll open up the channels necessary to make sure that we have an outlet for the strong product pipeline we have coming down the road.

Okay, great. That's exciting. Congrats again on another great quarter.

Thank you.

Thank you. And at this time, this concludes our question and answer session. I would like to turn the call back over to Mr. Romanzi for closing remarks.

Well, thank you for your questions. Thank you for your attention. We're really excited, as you can tell, about Nature Sunshine. I just – I see these two – are both brands, Nature Sunshine and Synergy, powered by an amazing organization with great product development capabilities. If we just open up our aperture just a little bit to think about being where the consumers are, that lymphatic drainage example is a great one to share with you, that if we start to untap that type of potential and not be limited by our channel scope, we really believe we can accelerate the growth. If it's not doing the same thing the same way, we're going to take all of the great levers that the team's been working on and replicate that and add a few new levers to accelerate our growth. So we're looking forward to sharing more details of that plan going forward. So thanks so much for your time and attention and your continued support in Nature Sunshine.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.