Good afternoon, everyone. And thank you for participating in today's conference call to discuss Nature's Sunshine Financial Results for the Fourth Quarter and Full Year ended December 31, 2023. Joining us today are Nature's Sunshine's CEO, Terrence Moorehead; 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 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.

Thank you. Good afternoon. And thanks for joining our conference call to discuss our fourth quarter and full year 2023 financial results. I'd like to remind everyone that this call is available for replay via telephonic dial-in through March 26th and via a live webcast that will be posted in the Investor Relations portion of our Web site at ir.naturessunshine.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's Sunshine, Terrence Moorehead. Terrence?

Thank you, Nate. And good afternoon, everyone. I want to thank you for joining today's call to discuss our fourth quarter and full year results. Today, I'll provide some context for our performance, which has been fueled by the continued execution of our global strategies. I'll also share some insights on how we believe the business is progressing as we move into 2024. From there, Shane will take you through the specifics of our financials in more detail. Starting with our full year results. We reported net sales of $445 million, making 2023 one of the strongest sales years in our company's history. When you adjust for the impact of foreign exchange, our 2023 sales were $453 million, up 7% versus 2022. This is a tremendous accomplishment given the backdrop of geopolitical unrest in Europe, elevated inflation, high interest rates and lagging consumer confidence. These results demonstrate that our high-quality products, strong field activation and omnichannel approach can drive strong financial performance even during periods of economic uncertainty and social unrest. 2023 was also the first year to benefit from our gross margin improvement initiatives. You'll remember that we committed to delivering $10 million of gross savings by focusing on several areas; first, reducing the cost of our ingredients, packaging and formulations while maintaining quality and performance; second, improving efficiency and reducing waste from our manufacturing processes; and third, reducing costs related to logistics and transportation. I'm pleased to say that we've made excellent progress on these initiatives in 2023 as gross margins increased 110 basis points to 72.1%. Moving forward, we expect to meet or exceed our $10 million savings plan with quarterly fluctuations in gross margins throughout 2024 due to mix and seasonal promotions. Our 2023 gross margin performance, along with our top line momentum, aided our adjusted…

Thank you, Terrence. We continue to be excited about the positive momentum that we're seeing in North America and Asia Pacific, resulting in another strong quarter and full year. Net sales in the fourth quarter were $108.9 million compared to $102.7 million in the year ago quarter, representing a 6% increase versus prior year. This was driven by 13% growth in North America and 6% growth in Asia Pacific. Consolidated net sales for full year 2023 finished at $445.3 million compared to $421.9 million in the previous year, representing 6% growth or 7% growth, excluding the $7.5 million headwind from foreign exchange rates. Looking at sales by market in Q4. North America sales grew 13% versus last year. The double digit growth in North America sales was a result of strong growth from both our digital business and our core business of practitioners and retailers. As Terrence mentioned, in Q4, our digital business was up 97% with new customer growth of 27%. For full year 2023, North America sales increased 5% to $139.8 million, driven by a 58% increase in digital. Asia Pacific also saw continued growth with sales increasing 6% or 7% on a local currency basis. This was driven by local currency growth in Taiwan, Japan and China of 21%, 9% and 8% respectively. This above market growth was driven by our continued emphasis on field energy along with healthy increases in customers and transactions. Full year 2023 sales in Asia Pacific were $201.3 million, representing growth of 8% or 13% excluding the impact of foreign exchange. Sales in Europe during Q4 decreased 5% or 8% on a local currency basis. This is reflective of the continued impact of the war as well as macroeconomic challenges that are pressuring consumer spending and demand, especially in Eastern Europe. Net…

[Operator Instructions] And your first question comes from Linda Bolton-Weiser from Davidson.

So I was wondering about, in the quarter, in the fourth quarter, what would you say, was there any particular regions that came in a fair amount better than what you expected and then anything that was softer than expected? Just a little color would be helpful.

Shane, do you want to start with that?

Linda, first of all, let’s start with North America. We have very strong growth as you see in North America, double digit growth there. And as we reflected, that's really -- our digital growth was very, very strong, 97% there, driven by both customer count increase and a healthy increase from our Amazon business. And then in addition, our core business there performed very well as well. So very pleased with what we're seeing and the momentum there, a lot of good things happening there. As far as areas where we're not quite as good as we would have hoped. If you look at Europe, there continue to be struggles with Europe and they continue to work through a lot of those issues that are there. But nonetheless, both economic as well as other issues in that area are putting a cap on our ability to grow in the short term there.

And with regard to Europe, is there any way to break down the performance a little bit, roughly tell us how Eastern Europe was versus Western Europe in the quarter?

So as we look at the total European business, as you know that on an -- I’ll just talk local currency basis, it was down 8%. If we look at Eastern Europe, Eastern Europe is down 10% and then Western Europe, down 13%, and Central Europe, up slightly.

And a fair amount of the pressure we're seeing in Eastern Europe is just related to exchange rates there and the value of the dollar impact negatively impacting people's ability to buy right now. So once we get some stability there, again, we expect those markets to start to stabilize for us and move in the right direction.

And at this point, are you booking any revenue in Russia or Ukraine, or is that pretty much zero at this point?

We continue to have revenue in both those locations at this point in time.

And is there any way to quantify that?

We aren't disclosing the specifics of those at this point. But I will tell you that the Ukraine business has stabilized and is actually growing slightly, it's really the Russian business that's -- yes, Ukraine is up significantly…

It was up double digits. Actually, Ukraine was up double digits versus prior year. So we continue to drive business through our Ukrainian team, they're on the ground building customer growth, still servicing orders. So they're actually doing quite a good job. We've got some nice stability there. So most of the downward pressure would be driven by the ruble and kind of further Eastern European markets.

And then your North American performance was pretty encouraging. Would you say it's sustainable or was it a little bit -- is it going to be lumpier based on the new product launches that you've had that drove that growth or maybe you could just give a little more color?

I think it was a bit kind of all in for us. Again, digital was clicking, the new product launches of the Power Line, we're very strong, one of our strongest launches kind of certainly within the last decade. And then the tremendous response and activation that we saw with our practitioners and specialty retailers was good also. So we believe we'll have continued strength in digital. Our goal is to continue to stabilize our kind of the core business with the practitioners and retailers and build on the Power Line sales going forward. We don't want to have a launch them and leave them type of strategy, that's one of our key master brands. So we're going to be supporting that one and building our footprint around the power line going forward. So we do expect to see continued strength in North America. You've heard Shane and myself talk about how North America has turned a corner and we really don't want to look back. But I don't necessarily expect to see double digit growth every quarter from North America, but we do expect to see continued strength, especially driven by our digital business, which continues to drive new customer growth and order activation.

And what percentage of North America is digital sales now?

Shane, it’s about 25%?

25%, yes.

And then you mentioned maybe some variability in gross margin by quarter in 2024, depending on a couple of things, I guess, promotional cadence maybe is one. Is there any color you could give to help in modeling how that will go through the year?

Shane, do you want to take that one?

So as Terrence mentioned, there's going to be some variability there. In other words, it's not going to be a stair step up every single quarter just ratably in a straight line. Part of that is because of promotionality. Part of that is just as we're working through old inventory and the cost savings and things that we're doing are coming through in different amounts. And then on top of that, you've got the year-over-year amounts that you're going over as well. So what we would say is, as you look through the year as a whole, we are very committed to getting to the numbers that we've talked about, that won't necessarily mean that it will be exactly by quarter to get to that.

But you did say that gross margin should be up for the full year in 2024?

Absolutely. We were up 110 basis points last year. Clearly, to get to our $10 million, we'll need a very good year again this year as well. And the other thing to realize, Linda, is if you think about our promotionality, there's definitely seasonality to that. For instance, the Cyber-Five period in Q4, obviously, that's a more promotional period. That's something that we started for the first time this year, we were actually involved in Cyber-Five period, where we hadn't done that before for the first time. Very successful for us, by the way, but that has some impact on gross margin. And then likewise, in Q1, there is a little bit more -- not as much necessarily as Q4, but there is a little bit more promotionality there as well. And then Q2 and Q3 less so.

And then maybe you could give a little more color on what you're seeing in Asia and in particular, I think you said what it was in a new training center in Japan, maybe like what you think that will do in terms of helping to drive performance there.

So if I start with Japan, the team has done a great job there, driving people into the business, getting them into Subscribe and Thrive. So roughly 70% of the people that join us go right into a Subscribe and Thrive Autoship, that kind of nets out to right now about 50% of sales. So I think we've got a great engine of driving customer growth. The new kind of training center that's going to double their capacity, it's just a new facility to train staff, to train people. It will just allow us to put kind of more people through the system. So I think that somewhat speaks for itself. We're doing more, I call it, field activation upfront kind of building the team in Korea to get our Korean business back on its feet and back on track. Taiwan continues to be a powerhouse. So we expect to see continued strength in Taiwan. And as I said, kind of China, we're just keeping our eye on China. I think we’ve had a great run in 2023. There's a fair amount of uncertainty around the economy in China going forward. So I think we should expect to see maybe some lumpy performance in China, but still very good outlook overall for the business there on an ongoing basis. Does that help you?

And then finally, the last thing I wanted to ask about was the long term, you used to have some longer term multiyear sort of EBITDA margin target type of objectives. Is that something you are still thinking about? And like what kind of numbers are you talking about getting to eventually on your margin profile?

I don't think our outlook on that has changed. Shane, do you want to provide some more color around that?

As we've talked about, there are several things that will help us to continue to enhance our margins, our gross margins -- our EBITDA margins. As we get our gross margins improved and a lot of the initiatives that we're doing, we've committed to $10 million or more to be able to drive that out over the longer term, there's probably even more than that. So that will enhance that as well as just as we leverage the SG&A that we have and even just from a mix perspective as we mix to channels that are more profitable. All of those things over time should help us go from the EBITDA margins that we have today to at least mid-single or mid double digits and probably closer to high double digit.

Yes, exactly.

At this time, this concludes our question-and-answer session. I would now like to turn the call over back to Mr. Moorehead for closing remarks.

Okay, thank you. And we'd like to thank everybody for listening to today's call. We look forward to speaking with you when we report our first quarter 2024 results in May of 2024. So thanks again for joining us and take care. Have a great evening.

Ladies and gentlemen, this concludes today's conference. You may now disconnect. Thank you for your participation.