NATURES SUNSHINE PRODUCTS INC
For the period ended Dec 31, 2025. Filed Mar 10, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 10, 2026
NATR$10.87+5.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-11.
0001628280-25-012082
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-10.
0001628280-26-016540
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 102 current paragraphs.
55 unchanged; 38 reworded; 8 added; 6 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
China Joint Ventures
Current report
On June 30, 2025, we entered into share purchase agreements with Fosun Industrial Co., Ltd. (“Fosun Industrial,” an affiliate of Fosun Pharma) to purchase Fosun Industrial’s interest in our two joint ventures, Nature’s Sunshine Hong Kong Limited and Shanghai Nature’s Sunshine Health Products Co., Ltd., for cash consideration in the amount of $3.9 million and $3.1 million, respectively.
Current report
On December 17, 2025, we completed the purchase of Fosun Industrial’s interests in both joint ventures. We acquired the interests in Nature’s Sunshine Hong Kong Limited for cash consideration of $3.1 million and acquired the interest in Shanghai Nature’s Sunshine Health Products for total consideration consisting of $2.9 million paid at closing and an additional $1.0 million payable on December 17, 2027.
Current report
Tariffs
Current report
While we did not experience material impacts as a result of tariffs in 2025, we continue to monitor the additional pressure that tariff-related price increases may have on our business, including the price, availability and quality of raw materials and other ingredients. We expect that tariffs will continue to adversely affect our costs in 2026.
Current report
The increase in net sales was primarily the result a new subscription service that drove greater customer acquisition, total orders and average order value.
Current report
On July 4, 2025, the President of the United States signed into law the One Big Beautiful Bill Act. Pursuant to ASC Topic 740, Income Taxes, the effects of changes in tax law are recognized in the period of enactment and are reflected in our results. There was no material impact to our income tax expense or effective tax rate for the year ended December 31, 2025.
Current report
On December 17, 2025, we completed the purchase of Fosun Industrial’s interests in Shanghai Nature’s Sunshine Health Products for total consideration consisting of $2.9 million paid at closing and an additional $1.0 million payable on December 17, 2027, included in other liabilities on the consolidated balance sheet.
Removed paragraphs (6)
Previous report
Inflation
Previous report
Like many other companies, we are facing significant inflationary pressures in the global economy. Our operations have been, and may continue to be, adversely impacted by inflation, primarily from higher costs of raw materials, labor, production, distribution and transportation costs.
Previous report
•Withholding taxes on royalties related to foreign operations increased the tax rate by 29.3 percent in 2024. These are partially offset by foreign tax credits.
Previous report
•Cumulative unfavorable adjustments related to foreign operations increased the tax rate by 5.2 percent in 2024. These adjustments relate to foreign items that are treated differently for tax purposes than they are for financial reporting purposes.
Previous report
•Adjustments relating to the U.S. tax impact of foreign operations decreased the effective tax rate by 9.2 percentage points in 2024. Included in this amount is the impact of foreign tax credits which expired at the end of the year. The components of this calculation were:
Previous report
Changes to the effective rate due to impact of foreign tax credits, foreign tax rate differentials, foreign withholding taxes, transfer pricing, Subpart F, GILTI and FDII are expected to be recurring; however, depending on various factors, the changes may be favorable or unfavorable for a particular period. Given the large number of jurisdictions in which we do business and the number of factors that can impact effective tax rates in any given year, this rate is likely to reflect significant fluctuations from year-to-year.
Reworded paragraphs (38)
Previous wording
We are a natural health and wellness company primarily engaged in the manufacture and sale of nutritional and personal care products. We are a Utah corporation with our principal place of business in Lehi, Utah, and sell our products directly to customers and to a sales force of independent consultants who resell our products to consumers.
Current wording
We are a global leader in manufacturing and marketing high-quality herbal and nutritional supplements. We are a Utah corporation with our principal place of business in Lehi, Utah, and sell our products directly to customers and to a sales force of independent consultants who resell our products to consumers.
Previous wording
In 2024, we experienced an increase in our consolidated net sales of 2.0 percent (or 3.8 percent in local currencies) compared to 2023. Asia net sales increased approximately 3.3 percent (or 7.5 percent in local currencies) compared to 2023. Europe net sales increased approximately 4.6 percent (or 3.3 percent in local currencies) compared to 2023. North America net sales decreased approximately 0.7 percent (or 0.6 percent in local currencies) compared to 2023. Latin America and Other net sales decreased approximately 1.2 percent (or 0.9 percent in local currencies) compared to 2023. The strengthening of the U.S. dollar versus the local currencies, primarily in our Asian markets, resulted in an approximate 1.8 percent, or $7.7 million, decrease of our net sales during the year ended December 31, 2024.
Current wording
In 2025, we experienced an increase in our consolidated net sales of 5.7 percent (or 5.3 percent in local currencies) compared to 2024. Asia net sales increased approximately 6.7 percent (or 6.4 percent in local currencies) compared to 2024. Europe net sales increased approximately 9.8 percent (or 7.8 percent in local currencies) compared to 2024. North America net sales increased approximately 3.4 percent (or 3.6 percent in local currencies) compared to 2024. Latin America and Other net sales decreased approximately 5.5 percent (or 4.2 percent in local currencies) compared to 2024. The strengthening of the U.S. dollar versus the local currencies, primarily in our Europe and Asia markets, resulted in an approximate 0.4 percent, or $1.8 million, increase of our net sales during the year ended December 31, 2025.
Previous wording
Cost of sales increased $5.5 million during 2024, compared to the same period in 2023, and as a percentage of net sales were 28.5 percent and 27.9 percent for 2024 and 2023, respectively. The increase in cost of sales percentage is primarily due to inflation and unfavorable foreign exchange which more than offset our savings initiatives.
Current wording
Cost of sales increased $2.7 million during 2025, compared to the same period in 2024, and as a percentage of net sales, were 27.6 percent and 28.5 percent for 2025 and 2024, respectively. The decrease in cost of sales percentage is primarily due to cost savings initiatives and market mix.
Previous wording
In absolute terms, selling, general and administrative expenses decreased $3.1 million during 2024, and as a percentage of net sales were 36.1 percent and 37.5 percent for 2024 and 2023, respectively. The decrease was primarily related to the streamlining of our global overhead expenses and reduced service fees due to China’s lower net sales.
Current wording
In absolute terms, selling, general and administrative expenses increased $14.4 million during 2025, and as a percentage of net sales, were 37.2 percent and 36.1 percent for 2025 and 2024, respectively. The increase was primarily related to the timing of compensation costs, incremental investment in digital marketing and consultant events, increased service fees due to China’s higher net sales, as well as other non-recurring expenses.
Previous wording
On February 24, 2022, Russian forces launched significant military action against Ukraine. There continues to be sustained conflict and disruption in the region, which is expected to endure for the foreseeable future. Our consultants in our Eastern Europe market, a market within our Europe business segment that includes Russia, Ukraine, Belarus and other Common Independent States in the region, continue to operate their independent businesses, albeit at a reduced level than prior to the start of the conflict. We expect that this will continue to impact our business for the foreseeable future. We will continue monitoring the social, political, regulatory and economic environment in Ukraine and Russia and will consider further actions as appropriate.
Current wording
On February 24, 2022, Russian forces launched significant military action against Ukraine. There continues to be sustained conflict and disruption in the region, which is expected to endure for the foreseeable future. Our consultants in the impacted regions continue to operate their independent businesses, albeit at a reduced level than prior to the start of the conflict. We expect that this will continue to impact our business for the foreseeable future. We will continue monitoring the social, political, regulatory and economic environment in Ukraine and Russia and will consider further actions as appropriate.
Previous wording
Net sales related to Eastern Europe for the years ended December 31, 2024 and 2023, were$54.8 million and $54.3 million, respectively. Operating income related to Eastern Europe for the years ended December 31, 2024 and 2023, were $4.2 million and $3.1 million, respectively. As of December 31, 2024, Eastern Europe had assets of $7.2 million, net of working capital reserves related to inventories.
Current wording
Net sales related to Eastern Europe for the years ended December 31, 2025 and 2024, were $60.0 million and $54.8 million, respectively. Operating income related to Eastern Europe for the years ended December 31, 2025 and 2024, were $4.7 million and $4.2 million, respectively. As of December 31, 2025, Eastern Europe had assets of $5.0 million, net of working capital reserves related to inventories.
Previous wording
In addition, in November 2024 we began an internal investigation regarding our past compliance with relevant U.S. trade controls and made voluntary disclosures of apparent trade controls violations to the U.S. Department of Commerce's Bureau of Industry and Security (“BIS”). We estimate that such potential violations being investigated represented less than one percent of our net revenue in each of our last three fiscal years. An unfavorable outcome of this investigation may include fines or penalties imposed in response to our voluntary disclosures. While we believe the amount of any fines or penalties would not be material to our financial condition and results of operation, we are unable to predict the outcome or to reasonably estimate the time it may take to resolve these matters.
Current wording
Bureau of Industry and Security (“BIS”). In addition, in April 2025, we filed an initial voluntary self-disclosure with the Office of Foreign Asset Control (“OFAC”) relating to the same internal investigation. Following our internal investigation, we filed final voluntary self-disclosures with BIS and OFAC on September 5, 2025. We estimate that such potential violations represented less than one percent of our net revenue in each of our last three fiscal years. An unfavorable outcome of this investigation may include fines or penalties imposed in response to our voluntary disclosures. While we believe the amount of any fines or penalties would not be material to our financial condition and results of operation we are unable to predict the outcome or the timing of resolution of these matters.
Previous wording
We accrue expenses associated with our direct sales program, which rewards independent consultants with paid attendance for incentive trips, including our conventions and meetings. Expenses associated with incentive trips are accrued over qualification periods as the trips are earned. We specifically analyze incentive trip accruals based on historical and current sales trends as well as contractual obligations when evaluating the adequacy of the incentive trip accrual. Actual results could generate liabilities in amounts greater or less than the amounts recorded. We had accrued incentive trip costs of approximately $5.2 million and $4.8 million at December 31, 2024 and 2023, respectively, which are included in accrued liabilities in the consolidated balance sheets.
Current wording
We accrue expenses associated with our direct sales program, which rewards independent consultants with paid attendance for incentive trips, including our conventions and meetings. Expenses associated with incentive trips are accrued over qualification periods as the trips are earned. We specifically analyze incentive trip accruals based on historical and current sales trends as well as contractual obligations when evaluating the adequacy of the incentive trip accrual. Actual results could generate liabilities in amounts greater or less than the amounts recorded. We had accrued incentive trip costs of approximately $4.8 million and $5.2 million at December 31, 2025 and 2024, respectively, which are included in accrued liabilities in the consolidated balance sheets.
Previous wording
We are involved in certain legal proceedings. When a loss is considered probable in connection with litigation or non-income tax contingencies and when such loss can be reasonably estimated, we recognize a liability within a best estimate range related to the contingency. If there is no best estimate, we record the minimum of the range. As additional information becomes available, we assess the liability related to the contingency and revise the estimate. Revisions in estimates of the liabilities could materially affect our results of operations in the period of adjustment. Contingencies are discussed in further detail in Note 11, “Commitments and Contingencies,” to our Consolidated Financial Statements, in Item 8, Part 2 of this report.
Current wording
We are involved in certain legal proceedings and disputes. When a loss is considered probable in connection with litigation or non-income tax contingencies and when such loss can be reasonably estimated with a range, we record our best estimate within the range related to the contingency. If there is no best estimate, we record the minimum of the range. As additional information becomes available, we assess the potential liability related to the contingency and revise the estimates. Revisions in estimates of the potential liabilities could materially affect our results of operations in the period of adjustment. Our contingencies are discussed in further detail in Note 11, “Commitments and Contingencies,” to our Consolidated Financial Statements, in Item 8, Part 2 of this report.
Previous wording
Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover deferred tax assets, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, we develop assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that we are using to manage the underlying businesses. Valuation allowances are recorded as reserves against net deferred tax assets when it is determined that net deferred tax assets are not likely to be realized in the foreseeable future. As of December 31, 2024 and 2023, we had recorded valuation allowances of $18.9 million and $18.5 million, respectively, as offsets to deferred tax assets.
Current wording
Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, we develop assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that we are using to manage the underlying businesses. Valuation allowances are recorded as reserves against net deferred tax assets by us when it is determined that net deferred tax assets are not likely to be realized in the foreseeable future. As of December 31, 2025 and 2024, we had recorded valuation allowances of $20.9 million and $18.9 million, respectively, as offsets to deferred tax assets.
Previous wording
At December 31, 2024, foreign subsidiaries had unused operating loss carryovers for tax purposes of approximately $5.4 million. The net operating losses will expire at various dates from 2025 through 2035, with the exception of those in some foreign jurisdictions where there is no expiration. As of December 31, 2024, we had approximately $12.4 million of foreign tax and withholding credits. Of the $12.4 million credits, $12.1 million are foreign tax credits, many of which we do not expect to use before expiration and are offset by a valuation allowance.
Current wording
At December 31, 2025, foreign subsidiaries had unused operating loss carryovers for tax purposes of approximately $5.1 million. The net operating losses will expire at various dates from 2026 through 2036, with the exception of those in some foreign jurisdictions where there is no expiration. As of December 31, 2025, we had approximately $14.8 million of foreign tax and withholding credits. Of the $14.8 million credits, $14.7 million are foreign tax credits, which we do not expect to use before expiration and are offset by a valuation allowance.
Previous wording
Additionally, the majority of our purchases from suppliers are generally made in U.S. dollars. Consequently, a strengthening of the U.S. dollar versus a foreign currency can have a negative impact on our reported sales and contribution margins and can generate transaction losses on intercompany payable balances in the local markets.
Current wording
Most of our sales to independent consultants outside the United States are made in the respective local currencies. In preparing our consolidated financial statements, sales are translated into U.S. dollars using average exchange rates. Additionally, the majority of our purchases from suppliers are generally made in U.S. dollars. Consequently, a strengthening of the U.S. dollar versus a foreign currency can have a negative impact on our reported sales and contribution margins and can generate transaction losses on intercompany payable balances in the local markets.
Previous wording
The following table summarizes our consolidated net income (loss) from continuing operations results as a percentage of net sales for the periods indicated:
Current wording
The following table summarizes our consolidated net income from continuing operations results as a percentage of net sales for the periods indicated:
Previous wording
Consolidated net sales for the year ended December 31, 2024, were $454.4 million compared to $445.3 million in 2023, or an increase of approximately 2.0 percent. The increase was related to product sales increases in our Asia and Europe operating segments. Excluding the impact of foreign currency exchange rate fluctuations, consolidated net sales for the year ended December 31, 2024 would have increased by 3.8 percent from 2023.
Current wording
Consolidated net sales for the year ended December 31, 2025, were $480.1 million compared to $454.4 million in 2024, or an increase of approximately 5.7 percent. The increase was related to product sales increases in our Asia, Europe and North America operating segments. Excluding the impact of foreign currency exchange rate fluctuations, consolidated net sales for the year ended December 31, 2025 would have increased by 5.3 percent from 2024.
Previous wording
Net sales related to Asia for the year ended December 31, 2024, were $207.8 million compared to $201.3 million for 2023, an increase of 3.3 percent. In local currency, net sales increased by 7.5 percent compared to 2023. Fluctuations in foreign exchange rates had an $8.5 million unfavorable impact on net sales for the year ended December 31, 2024.
Current wording
Net sales related to Asia for the year ended December 31, 2025, were $221.8 million compared to $207.8 million for 2024, an increase of 6.7 percent. In local currency, net sales increased by 6.4 percent compared to 2024. Fluctuations in foreign exchange rates had an $0.7 million favorable impact on net sales for the year ended December 31, 2025.
Previous wording
In our Taiwan market, net sales increased approximately $8.9 million, or 14.4 percent, for the year ended December 31, 2024, compared to 2023. Fluctuations in foreign exchange rates had a $2.2 million unfavorable impact on net sales for the year ended December 31, 2024. In local currency, net sales increased 17.9 percent for the year ended December 31, 2024, compared to 2023. We attribute the growth in net sales primarily to strong growth in consultant activity and total orders.
Current wording
In our Taiwan market, net sales decreased approximately $3.3 million, or 4.7 percent, for the year ended December 31, 2025, compared to 2024. Fluctuations in foreign exchange rates had a $2.0 million favorable impact on net sales for the year ended December 31, 2025. In local currency, net sales decreased 7.5 percent for the year ended December 31, 2025, compared to 2024. We attribute the decrease in net sales primarily to slower customer acquisition and a reduction in average order value.
Previous wording
In our Japan market, net sales increased approximately $2.9 million, or 7.1 percent, for the year ended December 31, 2024, compared to 2023. Fluctuations in foreign exchange rates had a $3.5 million unfavorable impact on net sales for the year ended December 31, 2024. In local currency, net sales increased 15.6 percent for the year ended December 31, 2024, compared to 2023. The growth in net sales was primarily the result of improved consultant activity and order growth.
Current wording
In our Japan market, net sales increased approximately $12.1 million, or 27.6 percent, for the year ended December 31, 2025, compared to 2024. Fluctuations in foreign exchange rates had a $0.6 million favorable impact on net sales for the year ended December 31, 2025. In local currency, net sales increased 26.1 percent for the year ended December 31, 2025, compared to 2024. The increase in net sales was primarily the result of strong field fundamentals that drove greater customer acquisition, total orders and average order value.
Previous wording
In our South Korea market, net sales increased approximately $1.5 million, or 3.0 percent, for the year ended December 31, 2024, compared to 2023. Fluctuations in foreign exchange rates had a $2.2 million unfavorable impact on net sales for the year ended December 31, 2024. In local currency, net sales increased 7.5 percent compared to 2023. We attribute the growth in net sales primarily to improved customer acquisition that was bolstered by higher average order values.
Current wording
In our South Korea market, net sales decreased approximately $0.5 million, or 1.0 percent, for the year ended December 31, 2025, compared to 2024. Fluctuations in foreign exchange rates had a $2.2 million unfavorable impact on net sales for the year ended December 31, 2025. In local currency, net sales increased 3.2 percent compared to 2024. The increase in net sales in local currency was primarily the result of greater average order value.
Previous wording
In our China market, net sales decreased approximately $7.0 million, or 16.3 percent, for the year ended December 31, 2024, compared to 2023. Fluctuations in foreign exchange rates had a $0.5 million unfavorable impact on net sales for the year ended December 31, 2024. In local currency, net sales decreased 15.0 percent for the year ended December 31, 2024, compared to 2023. The decrease in net sales was primarily the result of challenging macroeconomic factors and lower consultant activity.
Current wording
In our China market, net sales increased approximately $6.0 million, or 16.9 percent, for the year ended December 31, 2025, compared to 2024. Fluctuations in foreign exchange rates had minimal impact on net sales for the year ended December 31, 2025. In local currency, net sales increased 16.9 percent for the year ended December 31, 2025, compared to
Previous wording
Net sales related to Europe were $84.8 million for the year ended December 31, 2024, compared to $81.1 million for 2023, an increase of 4.6 percent. The functional currency for many of these markets is the U.S. dollar which reduces the effect from foreign currency fluctuations. Fluctuations in foreign exchange rates had a $1.1 million favorable impact on net sales for the year ended December 31, 2024. We attribute the increase in net sales in local currency primarily due to the increased focus on our field activation initiatives.
Current wording
Net sales related to Europe were $93.1 million for the year ended December 31, 2025, compared to $84.8 million for 2024, an increase of 9.8 percent. The functional currency for many of these markets is the U.S. dollar which reduces the effect from foreign currency fluctuations. Fluctuations in foreign exchange rates had a $1.7 million favorable impact on net sales for the year ended December 31, 2025. Net sales increased primarily as a result of improved customer acquisition and existing customer engagement, as evidenced by expanded total order count and average order size.
Previous wording
Net sales related to North America for the year ended December 31, 2024, were $138.8 million, compared to $139.8 million for 2023, a decrease of 0.7 percent. Fluctuations in foreign exchange rates had a $0.2 million unfavorable impact on net sales for the year ended December 31, 2024. Excluding the impact of fluctuations in foreign exchange rates, local currency net sales in North America decreased by 0.6 percent from 2023.
Current wording
Net sales related to North America for the year ended December 31, 2025, were $143.6 million, compared to $138.8 million for 2024, an increase of 3.4 percent. Fluctuations in foreign exchange rates had a $0.2 million unfavorable impact on net sales for the year ended December 31, 2025. Excluding the impact of fluctuations in foreign exchange rates, local currency net sales in North America increased by 3.6 percent from 2024.
Previous wording
In the United States, net sales decreased $2.0 million, or 1.6 percent, for the year ended December 31, 2024, compared to 2023. The decrease was primarily due to lower activity rates.
Current wording
In the United States, net sales increased $5.5 million, or 4.3 percent, for the year ended December 31, 2025, compared to 2024. The increase was primarily due to improved customer acquisition through our digital channels with a notable increase in subscription sales.
Previous wording
Net sales related to Latin America and Other markets for the year ended December 31, 2024, were $22.9 million, compared to $23.2 million for 2023, a decrease of 1.2 percent. Fluctuations in foreign exchange rates had a $0.1 million unfavorable impact on net sales for the year ended December 31, 2024. Excluding the impact of fluctuations in foreign exchange rates, local currency net sales in Latin America and Other decreased by 0.9 percent from 2023.
Current wording
Net sales related to Latin America and Other markets for the year ended December 31, 2025, were $21.6 million, compared to $22.9 million for 2024, a decrease of 5.5 percent. Fluctuations in foreign exchange rates had a $0.3 million unfavorable impact on net sales for the year ended December 31, 2025. Excluding the impact of fluctuations in foreign exchange rates, local currency net sales in Latin America and Other decreased by 4.2 percent from 2024.
Previous wording
Cost of sales as a percent of net sales increased to 28.5 percent in 2024, compared to 27.9 percent in 2023. The increase in cost of sales percentage is primarily due to inflation and unfavorable foreign exchange which more than offset our savings initiatives.
Current wording
Cost of sales as a percent of net sales decreased to 27.6 percent in 2025, compared to 28.5 percent in 2024. The decrease in cost of sales percentage is primarily due to cost savings initiatives and market mix.
Previous wording
Volume incentives as a percent of net sales increased to 30.9 percent in 2024, compared to 30.4 percent in 2023. The increase was primarily due to changes in market mix and the timing of promotional incentives. These payments are designed to provide incentives for reaching certain sales levels. Volume incentives vary slightly, on a percentage basis, by product due to pricing policies and commission plans in place in our various geographies. We do not pay volume incentives in China, instead we pay independent service fees which are included in selling, general and administrative expenses.
Current wording
Volume incentives as a percent of net sales decreased to 30.1 percent in 2025, compared to 30.9 percent in 2024. The decrease was primarily due to changes in market mix and the timing of promotional incentives. These payments are designed to provide incentives for reaching certain sales levels. Volume incentives vary slightly, on a percentage basis, by product due to pricing policies and commission plans in place in our various geographies. We do not pay volume incentives in China, instead we pay independent service fees which are included in selling, general and administrative expenses.
Previous wording
Selling, general and administrative expenses decreased by $3.1 million to $164.0 million for the year ended December 31, 2024. Selling, general and administrative expenses were 36.1 percent and 37.5 percent of net sales for the years ended December 31, 2024 and 2023, respectively. The dollar decrease was primarily related to the streamlining of our global overhead expenses and reduced service fees due to China's lower net sales.
Current wording
Selling, general and administrative expenses increased by $14.4 million to $178.4 million for the year ended December 31, 2025. Selling, general and administrative expenses were 37.2 percent and 36.1 percent of net sales for the years ended December 31, 2025 and 2024, respectively. The increase was primarily related to the timing of compensation costs, incremental investment in digital marketing and consultant events, increased service fees due to China’s higher net sales, as well as other non-recurring expenses.
Previous wording
Other income (loss), net, for the years ended December 31, 2024 and 2023, was losses of $1.7 million and gains of $1.5 million, respectively. Other income (loss), for the year ended December 31, 2024 primarily consisted of foreign exchange losses in Latin America and Europe, partially offset by foreign exchange gains in Asia, that resulted from net changes in foreign currencies.
Current wording
Other income (loss), net, for the years ended December 31, 2025 and 2024, were gains of $5.1 million and losses of $1.7 million, respectively. Other income, for the year ended December 31, 2025 primarily consisted of foreign exchange gains in Europe and Asia, partially offset by foreign exchange losses in North America and Latin America and Other, that resulted from net changes in foreign currencies.
Previous wording
Our effective tax rate was 57.2 percent for 2024 compared to 18.7 percent for 2023. The increase in the effective rate from 2023 to 2024 was primarily attributable to taxes paid in foreign jurisdictions. We expect to be limited in our ability to offset these foreign taxes with U.S. foreign tax credits. The effective rate for 2024 differed from the federal statutory rate of 21.0 percent primarily due to the following:
Current wording
Our effective tax rate was 31.4 percent for 2025 compared to 57.2 percent for 2024. The decrease in the effective rate from 2024 to 2025 was primarily attributable to the expiration of foreign tax credits in the prior period which did not repeat in the current period and to reduced valuation allowances in some foreign jurisdictions.
Previous wording
•Adjustments to valuation allowances increased the effective rate by 6.0 percent in 2024. Included is the effect of recording a valuation allowance on foreign tax credits which are not expected to be utilized before expiration along with the impact of current year foreign losses of foreign affiliates that currently do not provide tax benefit. These impacts are partially offset by a release of valuation allowance on foreign tax credits which expired at the end of the year.
Current wording
The effective rate for 2025 differed from the federal statutory rate of 21.0 percent primarily due to recording a valuation allowance on foreign tax credits which are not expected to be utilized before expiration.
Previous wording
Our principal use of cash is to pay for operating expenses and costs, including volume incentives, inventory and raw material purchases, capital assets and funding of international expansion. As of December 31, 2024, working capital was $94.9 million, compared to $89.1 million as of December 31, 2023. At December 31, 2024, we had $84.7 million in cash and cash equivalents, of which $71.5 million was held in our foreign markets and may be subject to various withholding taxes and other restrictions related to repatriation before becoming available to be used along with the normal cash flows from operations to fund any unanticipated shortfalls in future cash flows.
Current wording
Our principal use of cash is to pay for operating expenses and costs, including volume incentives, inventory and raw material purchases, capital assets and funding of international expansion. As of December 31, 2025, working capital was $100.3 million, compared to $94.9 million as of December 31, 2024. At December 31, 2025, we had $93.9 million in cash and cash equivalents, of which $87.5 million was held in our foreign markets and may be subject to various withholding taxes and other restrictions related to repatriation before becoming available to be used along with the normal cash flows from operations to fund any unanticipated shortfalls in future cash flows.
Previous wording
For the year ended December 31, 2024, operating activities provided cash in the amount of $25.3 million compared to $41.2 million in 2023. Operating cash flows decreased primarily due to the timing of payments for accrued liabilities, income taxes payable, accrued volume incentives and service fees, lease liabilities and timing of receipts of accounts receivable, partially offset by a reduction in inventories.
Current wording
For the year ended December 31, 2025, operating activities provided cash in the amount of $35.3 million compared to $25.3 million in 2024. Operating cash flows increased primarily due to improved net income, the timing of payments for accrued liabilities, accrued volume incentives and service fees, and deferred revenue, partially offset by an increase in inventories.
Previous wording
Cash used in investing activities includes cash paid for capital expenditures related to the purchase of equipment, computer systems and software. For the years ended December 31, 2024 and 2023, these amounts were $11.0 million and $10.5 million, respectively.
Current wording
Cash used in investing activities includes cash paid for capital expenditures related to the purchase of equipment, computer systems and software. For the years ended December 31, 2025 and 2024, these amounts were $6.5 million and $11.0 million, respectively.
Previous wording
For the year ended December 31, 2024, financing activities used $9.9 million in cash, compared to $8.0 million in cash used for the same period in 2023.
Current wording
For the year ended December 31, 2025, financing activities used $23.8 million in cash, compared to $9.9 million in cash used for the same period in 2024.
Previous wording
For the year ended December 31, 2024, we used cash to repurchase 540,000 shares of our common stock under the share repurchase program for $8.9 million. At December 31, 2024, the remaining balance available for repurchases under the program was $8.8 million.
Current wording
For the year ended December 31, 2025, we used cash to repurchase 1,260,000 shares of our common stock under the share repurchase program for $16.3 million. At December 31, 2025, the remaining balance available for repurchases under the program was $17.4 million.
Previous wording
(1) At December 31, 2024, there were $1.2 million of liabilities. We retain a significant portion of the risks associated with certain employee medical benefits and product liability insurance. Recorded liabilities for self-insured risks are calculated using actuarial methods and are not discounted. Amounts for self-insurance obligations are included in accrued liabilities and long-term other liabilities on the consolidated balance sheet.
Current wording
(1) At December 31, 2025, there were $0.9 million of liabilities. We retain a significant portion of the risks associated with certain employee medical benefits and product liability insurance. Recorded liabilities for self-insured risks are calculated using actuarial methods and are not discounted. Amounts for self-insurance obligations are included in accrued liabilities and other liabilities on the consolidated balance sheet.
Previous wording
(2) At December 31, 2024, there were $0.9 million of liabilities. We provide a non-qualified deferred compensation plan for our officers and certain key employees. Under this plan, participants may defer up to 100 percent of their annual salary and bonus (less the participant’s share of employment taxes). The deferrals become an obligation owed to the participant by us under the plan. Upon separation of the participant from the service with us, the obligation owed to the participant under the plan will be paid as a lump sum or over a period of either three or five years. As we cannot easily determine when our officers and key employees will separate from us, we are unable to estimate the years in which cash settlement may occur.
Current wording
(2) At December 31, 2025, there were $1.1 million of liabilities. We provide a non-qualified deferred compensation plan for our officers and certain key employees. Under this plan, participants may defer up to 100 percent of their annual salary and bonus (less the participant’s share of employment taxes). The deferrals become an obligation owed to the participant by us under the plan. Upon separation of the participant from the service with us, the obligation owed to the participant under the plan will be paid as a lump sum or over a period of either three or five years. As we cannot easily determine when our officers and key employees will separate from us, we are unable to estimate the years in which cash settlement may occur.
Previous wording
(3) At December 31, 2024, there were $0.6 million of liabilities. Because of the high degree of uncertainty regarding the timing of future cash outflows associated with these liabilities, if any, we are unable to estimate the years in which cash settlement may occur with the respective tax authorities.
Current wording
(3) At December 31, 2025, there were $0.4 million of liabilities. Because of the high degree of uncertainty regarding the timing of future cash outflows associated with these liabilities, if any, we are unable to estimate the years in which cash settlement may occur with the respective tax authorities, aside from the current portion.
Previous wording
We have entered into long-term agreements with third-parties in the ordinary course of business, in which we have agreed to pay a percentage of net sales in certain regions in which we operate or royalties on certain products. In 2024 and 2023, the aggregate amounts of these payments were $8,000 and $8,000, respectively.
Current wording
We have entered into long-term agreements with third-parties in the ordinary course of business, in which we have agreed to pay a percentage of net sales in certain regions in which we operate or royalties on certain products.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In November 2024, we began an internal investigation regarding our past compliance with relevant U.S. trade controls and made an initial voluntary self-disclosure of apparent trade controls violations to the U.S. Department of Commerce's
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Most of our sales to independent consultants outside the United States are made in the respective local currencies. In preparing our consolidated financial statements, sales are translated into U.S. dollars using average exchange rates.