Greetings, and welcome to the Nature’s Sunshine Products Third Quarter 2017 Earnings Conference Call. All participants are in a listen-only mode and this conference is being recorded. I would now like to turn the conference over to your host, Mr. Richard Strulson, General Counsel and Chief Compliance Office of Nature Sunshine Products. Thank you. Mr. Strulson, you now have the floor.

Thanks. Hi, everyone and thanks to all of you for joining our conference call to discuss our third quarter 2017 financial results. This call is available for replay in a live webcast that we posted on our website at www.naturessunshine.com in the Investors section. The press release which was issued this afternoon and the information on this call may contain certain forward-looking statements, which are based on a number of assumptions that are subject to change and involve known and unknown risks, uncertainties or other factors, which may not be within the Company’s control. 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, performance or achievement of the Company may be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors 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 press release and the information on this call speak only as of today’s date and the Company disclaims any duty to update the information provided herein and therein. I will now turn the call over to Greg Probert, Chairman and CEO of Nature’s Sunshine Products.

Thanks, Rich. Good afternoon, everyone, and thank you for your participation in today’s call. Also joining me today is our Chief Financial Officer, Joe Baty. We are pleased to report an improved third quarter with net sales of $89.3 million, representing growth of 4.5% year-over-year and 9.8% sequentially. We saw sales growth return to Synergy Worldwide where Synergy reported the highest sales quarter in the Company’s 18 year history. We also posted strong growth in China along with continued growth in NSP Russia, Central and Eastern Europe, partially offset by decline in NSP Americas. While we continue to see declines in NSP Americas, sales have begun to stabilize as a disruptions associated with the implementations of the Company's Oracle ERP system in April have moderated. We continue to be in the process of implementation and have more work to do to complete implementation. However, we're pleased to report that we have seen improvement in the operational challenges and materialize in our call center and online ordering system. During the third quarter, we saw improvements in Korea where revenue is up 3% in local currency. As we noted last quarter, we have been focused on increasing distributor engagement and saw a return to positive sales comparisons and improve focus on core products in the market. Next week, I will be attending our Korea National Convention where we're expecting over 400 attendees. With Korea sales recovering, it allowed the strength in Japan to contribute to good growth for the regions. Sales in Japan increased to 113% in local currency versus the prior year. China sales included within our China and New Markets category display strong growth following the receipt of our direct selling license that we announced in May. On a local currency basis, third quarter sales in China increased 33% sequentially…

Thank you, Greg, and good afternoon everyone. Net sales in the third quarter of 2017 were $89.3 million, compared to $85.4 million in the same quarter last year. On a local currency basis, net sales increased 4.3% year-over-year. As Greg noted, the increase was primarily driven by recovered growth in Synergy Worldwide and significant growth in China as well as continued growth in NSP Russia, Central and Eastern Europe slightly offset by decline in NSP Americas. NSP Americas sales declined 4.5% to $41.3 million during the third quarter. Net sales in the NSP North America declined 4.6% in local currencies with sales in the U.S. down 4.3% primarily due to the interruptions in customer service as a result of the Oracle implementation Greg discussed. Sales in NSP Latin America were also impacted by the implementation of Oracle as well as continued headwinds relating to product registration that have affected sales over the last year. NSP Latin America was down 8.1% on a local currency basis. Synergy Worldwide net sales in the third quarter grew 10.7% year-over-year on a local currency basis to $34.5 million. This increase was primarily due to sales growth in Asia Pacific and North America regions partially offset by declines in Europe. Net sales and Synergy Asia Pacific increased 16.5% on a local currency basis. In Europe, Synergy sales declined 8.4% on a local currency basis while sales in North America increased 5% over the third quarter last year. In NSP Russia, Central and Eastern Europe, net sales rose 9.8% in local currencies to 7.1 million. We continue to see consistently improved results as a result of currency stabilization and the benefits of product promotions that are driving distributor engagement. China and New Markets sales increased to 6.4 million versus 4.4 million last year and increased from…

[Operation Instructions] Our first question is with Doug Lane from Lane Research. Please proceed with your question.

Let's talk about a couple of things. It sounds like an interesting inflection point here. You mentioned the drag on sales and profitability from ERP in the second and third quarters and that this could be impacting future quarters as well, but I mean it sounds like we are -- it shouldn't be impacting any worse than it was in the second and third quarter. So could we characterize the situation as being, yes, with the drag but not as much of a drag as we had in the second and third quarter?

Yes, we can characterize it. And hi, Doug, this is Joe Baty. We continue to see improvement regarding the implementation and the drag or the impact is clearly going down this place forward and we expect the impact in Q4 to be less than it was here in this current quarter.

And looking at China here, the losses in China, the rate improved a lot in the first half $0.03 quarter versus $0.15 for the year. So can we be looking at a breakeven point at some quarter in 2018 for China?

Yes, Doug, this is Greg. Yes, I think the way to look at it is, we are going to continue to invest. I think we are in early stages and we want to continue to drive the business and create strong momentum. So with that investment, I think you can still expect to see us get to breakeven point towards the back half of next year.

So, that’s getting pretty, pretty good traction. And then you've talking about Korea being a drag you know I guess from where I see just sort of reintroduce the Company here, but return to deposit sales growth, sales growth seems to be pretty good progress. Now, do you think that’s sustainable? Or do you think it could go either way for next couple of quarters as you sort things out?

No, we feel comfortable. I think as we have said, we had some distributor engagement issues earlier in the year. That’s been resolved and I feel it's very, very engaged, as I mentioned, I'm going over the next week for having over 4,000 people to Korea National Convention. The field is very excited. We are launching a brand new product, next week. It's an energy product that we have already pre-launched and are having tremendous sales. So I think the field back engaged, we have also attracted some new leadership from other companies. So I feel very good about continued strong performance in Korea.

That’s definitely positive relative to recent trend, that’s for sure. And then lastly, I know we knew each other from Herbalife and other than scale, where they're much bigger company. Is there anything structurally about Nature's Sunshine that would be different from Herbalife from a margin structure standpoint, as you go through your analysis of cost opportunities?

No, I think it's slightly different in the sense if you look at the mix of the businesses that we have. We have Synergy brand as well as the traditional NSP practitioner business, so its slightly different model. But in terms of I think driving cost it's pretty consistent I think what you look at it any company. And so Joe and I and the management team are taking a hard look at that and I think we will be able to talk in more detail about it at the next earnings call.

[Operator Instructions] There seems to be no further questions at this time. I’d now like to pass the call over to Greg Probert for closing remarks.

Thanks again for your support and for everyone participating on today’s call. Everyone have a great day and we will talk to you next quarter.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.