Please standby. Good afternoon, everyone. And thank you for participating in today’s Conference Call to discuss Nature’s Sunshine’s Financial Results for the Third Quarter ended September 30, 2022. Joining us today are Nature’s Sunshine CEO, Terrence Moorehead, Executive Vice President of Global Supply Chain, Martin Gonzalez, Interim CFO, Jon Lanoy; and General Counsel, Nate Brower. Following their remarks, we will open the call for your questions. Before we go further, I would like to turn the call over to Mr. Brower as he reads the company’s safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nate, please go ahead.

Yeah. Thank you, Sarah. Good afternoon. And thanks for joining our conference call to discuss our third quarter 2022 financial results. I’d like to remind everyone that this call is available for replay via telephonic dial-in through November 17th and via a live webcast that will be posted in the Investor Relations portion of our website at ir.naturessunshine.com. The information on this call contains forward-looking statements. Those are statements often characterized by terminologies such as believe, hope, may, anticipate, expect 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, but -- 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’s Sunshine, Terrence Moorehead. Terrence?

Thank you, Nate, and good afternoon, everyone. I want to thank you for joining today’s call to review our third quarter results. The resilience of our portfolio was on display in the third quarter, where despite unprecedented external headwinds, we delivered third quarter sales of $105 million on a reported basis or $112 million when removing the impact of foreign exchange. To put these results in perspective, our third quarter sales were only down 2% versus prior year on a constant dollar basis, and year-to-date, sales were actually up 3% in local currency. Both measures reflect the underlying strength of our business, especially given the current environment, where it has become more difficult to drive customer engagement. What’s more, due to inflationary pressures and volatile foreign exchange rates, everything has become more expensive. As a result, third quarter gross margins contracted as inflation and foreign exchange negatively impacted cost of goods by approximately $3 million or roughly 300 basis points versus Q3 of the prior year. Sales declines driven by foreign exchange also negatively impacted profitability by an additional $3 million, which contributed to adjusted EBITDA of $6.8 million for the third quarter versus $12.9 million in Q3 of the prior year. As I shared last quarter, we are committed to meeting these challenges head on and now have a detailed plan to deliver $10 million to $12 million of gross savings to help improve profitability. I have invited our new supply chain lead, Martin Gonzalez to join us today so he can briefly walk you through our plans. But first, I want to share a few more comments about the quarter to help provide some perspective. Despite the challenges from the external headwinds, we continue to gain traction from three key strategic investments. First, our investment in field activation…

Good afternoon, everyone. It’s good to be here with all of you. As you may know, I joined Nature’s Sunshine a little over five months ago as the Executive Vice President for Global Supply Chain. And since joining the company, I have been working in partnership with our finance, sales, marketing, R&D and supply chain team to identify opportunities to optimize our gross margins and offset increased costs driven by inflation. Working together over the past few months, the team has identified three key initiatives that will deliver significant savings and will allow us to make meaningful progress against our gross margin targets. The initiatives will be launched over the next 12 months to 18 months and will deliver approximately $10 million of gross savings. I would like to briefly give you a sense of -- for the initiatives we are working on. Our first initiative involves a deep dive review of our ingredients, packaging and formulations. Raw materials represent a significant portion of our cost of goods, so they are an important area to explore. We believe there are significant savings from optimizing the materials using our products and we are aggressively looking for opportunities to drive out cost, while maintaining quality and performance. Using one of our top products, as an example, we found that by optimizing the ingredients, we could improve the flavor, produce sugar, improve the fiber content and increase the gross margin profile by $0.5 million per year. That’s just one example, but there are many products in our portfolio that will help us to deliver the efficiencies we are looking to achieve. Our second initiative focuses on improving efficiencies and driving waste out of our manufacturing processes. Our small batch manufacturing capabilities give us real advantage when it comes to product quality and performance, but they can also add complexity to the process when run times are negatively impacted by unnecessary changeovers. For the past few months, we have been analyzing how we can more effectively optimize our production schedules by prioritizing production rounds, improving preventive maintenance and reducing change over time. This initiative will allow us to increase uptime, improve yield and deliver significant savings. Our third initiative focuses on logistics and transportation, where we are working to improve truck utilization, increased pallet density in the warehouse and reduce the amount of air freight. We believe this offers significant potential to drive savings. Again, we expect these initiatives to improve our gross profit by approximately $10 million or 200 basis points to 250 basis points of gross margin. Now I will turn the call back over to Terrence. Terrence?

Thank you, Martin. While we expect these savings to start impacting results in late 2023 to 2024, the project teams are already up and running and making progress. This initiative is an important part of a comprehensive approach to improve gross margin and we are committed to delivering the initiatives that Martin outlined. I want to reiterate our steadfast commitment to successfully navigating this unique period of market volatility and uncertainty, and I want to leave you with three key takeaways. First, the persistent challenges posed by inflation, foreign exchange and COVID-related disruptions were the primary factors negatively impacting our performance. Second, despite the challenging environment, Nature’s Sunshine continues to be healthy and the underlying fundamentals of the business are sound. We have a strong balance sheet, customer orders are still largely holding and when we adjust for currency, performance is still near historical highs. Third, we continue to see positive results from our targeted investments that we have made. So, we are going to lean into the investments we believe will drive growth going forward. And finally, we are fighting back against the challenges of the current macroeconomic landscape by introducing a comprehensive initiative that will deliver gross savings of $10 million to $12 million from the gross margin initiatives Martin reviewed and SG&A reductions from across the business. In challenging times like these, it’s more important than ever to stay focused and drive our strategies forward and that’s exactly what we are going to do. Backed by our strong balance sheet and our team of experts around the globe, we remain confident in our ability to provide long-term value to our stakeholders. Before passing the call over to Jon, I’d like to recognize our outgoing CFO, Joe Baty. On behalf of the Board and all of our employees here at Nature’s Sunshine, I want to thank Joe for his valuable contributions. Joe played a key role in developing a strong finance team and driving improvements that have put Nature’s Sunshine in a position to win. I am deeply appreciative of Joe’s service and leadership and wish him all the best. With that, I’d like to turn the call over to Jon Lanoy, our Interim CFO, who will walk you through our financials in more detail. Jon?

Thank you, Terrence, and good afternoon, everyone. Net sales in the third quarter were $104.5 million, compared to $114.7 million a year ago. This 9% decline was largely driven by declines in North America and Europe. As Terrence mentioned, excluding the impact from foreign exchange rates, consolidated constant currency net sales decreased only 2% in the third quarter. Gross margin in the third quarter was 71.6%, compared to 74.4% a year ago. The decline was primarily driven by inflationary pressures on our cost of goods sold related to increases in materials, production and transportation costs, as well as the adverse movements in foreign exchange rates. Third quarter volume incentives as a percentage of net sales were 31.6% compared to 31.2% in the prior year quarter. The slight increase was due to changes in market mix. Selling, general and administrative expenses during the third quarter were reduced to $36.8 million, compared to $39.5 million a year ago. The reduction was from lower service fees in China and lower overall compensation cost, partially offset by increases from a return to in-person events, promotion related activities and investments in our digital initiatives. As a percentage of net sales, SG&A expenses were 35.2% for the third quarter of 2022, compared to 34.4% a year ago. Reflective of gross margin pressures, operating income was $5 million or 4.8% of net sales compared to $10 million or 8.7% of net sales in the prior year. GAAP net income attributable to common shareholders for the third quarter was $0.1 million or breakeven per diluted share, as compared to $4.9 million or $0.24 per diluted share a year ago. In addition to reduced operating margins, the decline also reflects increases of $1.1 million in valuation allowances against deferred tax assets for which we do not expect to receive…

Thank you. [Operator Instructions] And we will take our first question from Steven Martin with Slater.

Hi, guys.

Hi, Steve.

I have asked you for the last two quarters, why you weren’t looking to save some costs and reduce some expenses? Now you announced you are going to do it, but it’s not going to be effective until the end of 2023. I am not quite sure I understand?

Sure.

And second of all…

Yeah.

… I don’t understand with sales declining, your inventory went down a little, but why are you sitting on so much inventory and why not generate some cash and buy back more shares, buying back 90,000 shares as a joke?

Yeah. So, with respect to your first question on SG&A savings and the gross margin savings, we actually do have -- again this is -- it’s a comprehensive plan. It’s a -- I think it’s a pretty striking plan. We have been working on this for, as Martin pointed out, several months. There’s a lot of complexity involved. We will have some savings rolling off the assembly line, Steve, in advance of kind of the timing that we told you. But it’s just that the bulk of it needs to go through cost of goods. So there’s an inventory turn kind of issue there that we need to -- there’s some complexity involved and Martin talks, for example, about having to reformulate a product. That’s formulation, that’s labels, that’s approvals, then you get it into inventory and it goes through. So these are meaningful savings, I think they are quite impactful and they are sustainable as well, so and we feel really good about them. We do have a range of SG&A savings as well that will be coming through. But again, the lion’s share of the opportunity is from driving out gross margin and we are just getting started here, right? So, this is an ongoing project. I feel very good about it. I think it’s a strong effort. And I want you to remember, we have already taken out some $26 million of savings over the past couple of years. So we are adding on top of that with our SG&A and then the gross margin savings on top of that, I think, are quite substantial. As it relates to second question, Jon, do you want to take a stab at that?

Yeah. Steve, yeah, we do have quite a bit of inventory on hand and we are aware of that. Going into the beginning of last year, I mean, we were in a different place where we had higher expectations of growth before the war and everything else there and we were buying inventory ahead of inflation, trying to make sure we had enough to support our growth and when that growth didn’t come at the levels we expected, we already had commitments there. And so, we are working through those commitments, we have canceled orders, we are buying raw materials were needed, targeted buys and we are continuing to just work down the inventory.

I hope that answers question.

Yeah. Well, then the corollary to that is with your stock at $8, why did you only buy back 90,000 shares?

We do have volume constraints. So we did buy with volume. We are also -- we have prioritized the investments that we talked about. There are some investments that are required in order to drive out some of the costs from gross margin. So we think those are actually very good, very strong priorities for us right now, given where we are. It’s a lot more -- it’s a lot harder and more expensive for us to reacquire -- acquire new customers than it is to try and keep our existing customers. So that’s really where our kind of our focus is right now and then on driving out some of these costs and we do have pretty sizable needs in terms of some of the things to upgrade equipment and upgrade facilities, and that’s just kind of coming online right now in terms of the investments.

Well, speaking as one of your shareholders, I have heard those words before. I just assume you spend some money buying back some stock instead of sitting with $60 million on your balance sheet?

Yeah. We appreciate the sentiment.

All right. I will talk to you offline next week.

Thanks, Steve.

And at this time, that does conclude our question-and-answer session. I would like to turn the conference back over to Mr. Moorehead for closing remarks.

Okay. Thank you. Well, we would like to thank everyone for listening to today’s call and we look forward to speaking with you when we report our fourth quarter and full year 2022 results in March of 2023. Thanks again for joining us. Take care.

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