Greetings. Welcome to Natural Health Trends Corp. Fourth Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Michelle Glidewell with Natural Health Trends Corp. Thank you. You may begin.

Thank you and welcome to Natural Health Trends fourth quarter and full year 2023 earnings conference call. During today's call, there 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 or as a results 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 for accessing the archived version of the conference call can be found in today's financial results press release, which was issued at approximately 9 o'clock a.m. Eastern Time. At this time, I'd like to turn the call over to Chris Sharng, President of Natural Health Trends.

Thank you, Michelle, and thanks to everyone for joining us this morning to discuss our fourth quarter and full year 2023 financial results. With me today is Scott Davidson, our Senior Vice President and Chief Financial Officer. As indicated in our financial results released earlier today, we managed to achieve a 3% sequential increase in orders compared to the third quarter of 2023 despite continued tepid consumer sentiment in China and an overall challenging macroeconomic environment in this market. Revenue for the quarter totaled $10.9 million compared to $10.6 million last quarter and $12.5 million in the fourth quarter a year ago. We believe the quarter-over-quarter sequential uptick is largely due to the increased frequency and size of our in-person activities during the period, and we plan to sponsor more such events in the coming months to build on our growth and to help improve the effectiveness of our market campaigns. In addition, during the quarter, we generated positive net income partly due to our ability to effectively protect margins and control costs despite lingering inflation and a stronger dollar. In Hong Kong, we held a Fly High event in November with nearly 500 members in attendance. This activity allowed us to offer in-person training and introduce a promising new product, Relaxo Pro, uniquely formulated to help reduce stress and promote calmness. We look forward to hosting more of these activities in the months to come and as it allow us to engage directly with members and build upon the excitement and energy that comes from in-person gatherings. We have just wrapped up our Abu Dhabi trip, bringing 300 Chinese members along for training and team building. This marks our first international travel for this market since the onset of the pandemic. Our participants are enthusiastic to embark on more…

Thank you, Chris. Total revenue for the fourth quarter was $10.9 million, an increase of 3% compared to $10.6 million in the third quarter of 2023 and a decrease of 13% compared to $12.5 million in the fourth quarter last year. As Chris mentioned, we were able to increase revenue sequentially despite tepid consumer sentiment in China. For the full year 2023, total revenue was $43.9 million compared to $49.1 million in 2022. The decrease year-over-year was largely accounted for by changes in deferred revenue. Deferred revenue increased $569,000 [ph] during 2023 but decreased $2.9 million last year, resulting in a $3.5 million unfavorable revenue variance. Our active member base declined 6% to 32,410 at December 31st from 34,660 at September 30th and was down 16% from 38,660 at December 31st last year. Turning to our cost and operating expenses. Gross profit margin of 74.5% improved slightly from 73.9% in the fourth quarter of last year due to lower logistics costs. Commissions expense as a percent of net sales for the fourth quarter decreased to 41.6% from 43% in the same quarter last year. Selling, general and administrative expenses for the quarter were $3.8 million, consistent with a year ago. As a result, operating loss for the quarter was $242,000 compared to $292,000 in the third quarter of 2023 and operating income of $43,000 in the fourth quarter last year. We recorded an income tax provision of $108,000 for the quarter compared to $255,000 in the fourth quarter last year. Net income for the fourth quarter totaled $358,000 or $0.03 per diluted share compared to $172,000 or $0.02 per diluted share in the third quarter and $188,000 or $0.02 per diluted share in the fourth quarter of 2022. For the full year, net income totaled $568,000 or $0.05 per diluted…

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.