Greetings, and welcome to the Natural Health Trends Corporation Third Quarter 2021 Earnings Conference Call. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ariel Papermaster. Thank you, Ariel. You may begin.

Thank you, and welcome to Natural Health Trends Third Quarter 2021 Earnings Conference Call. During today's call and may be statements made relating to the future results of the company that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements through the result of certain factors, including those set forth in the company's filings with the Securities and Exchange Commission. It should also be noted that today's call will be webcast live and can be found on the Investors section of the company's corporate website at naturalhealthtrendscorp.com. Instructions can be found for accessing the archived version of the conference call in today's financial results press release, which was issued at approximately 9:00 am Eastern Time. At this time, I'd like to turn the call over to Chris Sharng, President of Natural Health Trends.

Thank you, Ari, and thanks to everyone for joining us this morning to discuss our third quarter 2021 financial results. With me today is Scott Davidson, our Senior Vice President and Chief Financial Officer. Our third quarter performance continued to reflect the challenging macroeconomic environment, experienced during the first and second quarters of 2021 as the ongoing COVID-19 pandemic continues to cause disruptions and lockdowns in many of our core markets. Despite the persistence of these difficult operating conditions, we are reporting our sixth consecutive quarter of positive operating income and net income. We generated revenue of $14.3 million, a decrease of 12% compared to $16.2 million in the second quarter of 2021, and an increase of 1% compared to $14.1 million in the third quarter of 2020. Our third quarter results in comparison to the prior quarter reflect the increased frequency and severity of coronavirus outbreaks and the reinstatement of government-mandated restrictions in several key markets, which adversely impacted our members' abilities to hold in-person meetings and events. Revenue increased 1% from the third quarter of 2020 due to improvements in certain markets with net sales increasing 3% year-over-year outside Hong Kong. As we continue to navigate the evolving operating environment, resulting from the COVID-19 pandemic, our members continue to face challenges as they work to conduct their business in the face of renewed government-mandated restrictions and lockdowns. To this point, the third quarter of 2021 marked the first quarter since the beginning of the pandemic. We were unable to sponsor any in-person member events in China, Macau or Hong Kong. In fact, we had to abruptly cancel our previously scheduled event in September. However, due to the hard work and dedication of our employees, leaders and members, we were able to quickly adapt our marketing activities in the…

Thank you, Chris. Total revenue for the third quarter was $14.3 million, a decrease of 12% compared to $16.2 million in the second quarter of 2021, and an increase of 1% compared to $14.1 million in the third quarter of 2020. As Chris highlighted, the sequential quarter decrease in revenue was primarily due to the ongoing operating challenges resulting from scattered COVID-19 outbreak in China, and the superior measures implemented by the Chinese government to control the virus, including business closures, public gathering limitations and travel restrictions. While we remain cautiously optimistic, the macroeconomic environment and operating conditions will improve. We anticipate our financial results will continue to be impacted by the ongoing effects of the pandemic given the continuing outbreak and spikes in COVID-19 cases. Our active member base decreased 2% to 45,950 at September 30 from 46,860 at June 30 and down 14% from 53,300 at September 30 last year. Turning to our cost and operating expenses. Gross profit margin of 74.3% was consistent with the third quarter of last year. Excluding the impact of administrative fee revenue, gross profit margin increased as compared to the comparable period of last year due to lower logistics costs and fewer product promotions. Commissions expense as a percent of total revenue for the third quarter increased to 42.2% from 39.8% in the prior year quarter. Excluding the impact of administrative fee revenue, commissions expense decreased slightly as compared to the prior year period. Selling, general and administrative expenses for the quarter were $4.1 million compared to $4.2 million a year ago. As a result, operating income for the quarter was $479,000 compared to $668,000 in the third quarter last year. We recorded an income tax benefit of $45,000 for the quarter compared to an income tax provision of $418,000 recognized in…

This concludes today's conference. You may now disconnect your lines. Thank you for your participation End of Q&A: