NATURES SUNSHINE PRODUCTS INC
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 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-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054468
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001628280-26-070270
Item 2. 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 81 previous paragraphs and 81 current paragraphs.
44 unchanged; 31 reworded; 6 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 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 (6)
Current report
Third Quarter Performance
Current report
Net sales related to Asia for the three and nine months ended September 30, 2026, were $55.1 million and $160.2 million, respectively, compared to $64.7 million and $166.0 million for the same periods in 2025, or decreases of 14.9 percent and 3.5 percent, respectively. In local currencies, net sales for the three and nine months ended September 30, 2026, decreased 11.2 percent and 0.9 percent, respectively, compared to the same periods in 2025.
Current report
In our South Korea market, net sales decreased $0.7 million and increased $0.2 million, or decreased 4.8 percent and increased 0.5 percent, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. In local currency, net sales for the three and nine months ended September 30, 2026 decreased 2.5 percent and increased 3.9 percent, respectively, compared to the same periods in 2025. The decrease for the three months ended September 30, 2026 was primarily due to a reduction in average order values. The increase for the nine months ended September 30, 2026 was primarily the result of increases in total orders, subscription sales and active consultants.
Current report
In our China market, net sales decreased $5.5 million and $3.4 million, or 48.8 percent and 12.1 percent, for the three and nine months ended September 30, 2026, compared to the same periods in 2025. In local currency, net sales for the three and nine months ended September 30, 2026 decreased 51.6 percent and 16.4 percent, respectively, compared to the same periods in 2025. The decrease in net sales was primarily the result of the passing of two key leaders and sales disruptions resulting in part from corrective actions involving independent consultants whose activities we deemed inconsistent with our policies.
Current report
Net sales related to North America for the three and nine months ended September 30, 2026, were $34.0 million and $108.3 million, respectively, compared to $36.2 million and $106.2 million for the same periods in 2025, or a decrease of 6.1 percent and an increase of 1.9 percent, respectively. In local currencies, net sales for the three and nine months ended September 30, 2026, decreased 6.0 percent and increased 1.9 percent, respectively, compared to the same periods in 2025.
Current report
Selling, general and administrative expenses decreased $3.4 million and increased $0.8 million, respectively, to $42.3 million and $130.7 million for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. Selling, general and administrative expenses were 36.3 percent and 36.7 percent of net sales for the three and nine months ended September 30, 2026, compared to 35.6 percent and 36.5 percent for the same periods in 2025. The dollar decrease was primarily related to a reduction in variable selling expenses and cost management.
Removed paragraphs (6)
Previous report
Second Quarter Performance
Previous report
Net sales related to Asia for the three and six months ended June 30, 2026 were $53.0 million and $105.2 million, respectively, compared to $52.7 million and $101.3 million for the same periods in 2025, or increases of 0.6 percent and 3.8 percent, respectively. In local currency, net sales for the three and six months ended June 30, 2026 increased 5.3 percent and 5.6 percent, respectively, compared to the same periods in 2025.
Previous report
In our South Korea market, net sales decreased $0.5 million and increased $0.9 million, or decreased 4.1 percent and increased 4.0 percent, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. In local currency, net sales for the three and six months ended June 30, 2026 increased 2.9 percent and 8.1 percent, respectively, compared to the same periods in 2025. The increase in net sales in local currency was primarily the result of an increase in total orders and average order value.
Previous report
In our China market, net sales decreased $1.4 million and increased $2.1 million, or decreased 15.3 percent and increased 12.7 percent, for the three and six months ended June 30, 2026, compared to the same periods in 2025. In local currencies, net sales for the three and six months ended June 30, 2026 decreased 20.1 percent and increased 7.3 percent, respectively, compared to the same periods in 2025. The decrease in net sales for the three months ended June 30, 2026 was primarily the result of a decrease in average order value and total orders, partially offset by an increase in subscription orders. The increase in net sales for the six months ended June 30, 2026 was primarily the result of an increase in total orders and average order value.
Previous report
Net sales related to North America for the three and six months ended June 30, 2026 were $36.0 million and $74.3 million, respectively, compared to $35.0 million and $70.0 million for the same periods in 2025, or increased 2.8 percent and 6.1 percent, respectively. In local currency, net sales for the three and six months ended June 30, 2026 increased 2.8 percent and 6.0 percent, respectively, compared to the same periods in 2025.
Previous report
Selling, general and administrative expenses increased $1.2 million and $4.2 million, respectively, to $44.9 million and $88.4 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. Selling, general and administrative expenses were 38.4 percent and 36.9 percent of net sales for the three and six months ended June 30, 2026, compared to 38.1 percent and 37.0 percent for the same periods in 2025. The increase was primarily related to consultant events and variable selling expenses, partially offset by compensation costs.
Reworded paragraphs (31)
Previous wording
In the second quarter of 2026, we experienced an increase in our consolidated net sales of 1.9 percent (or 3.8 percent in local currencies) compared to the same period in 2025. Asia net sales increased approximately 0.6 percent (or 5.3 percent in local currencies) compared to the same period in 2025. Europe net sales increased approximately 4.4 percent (or 3.7 percent in local currencies) compared to the same period in 2025. North America net sales increased approximately 2.8 percent (or 2.8 percent in local currencies) compared to the same period in 2025. Latin America and Other net sales decreased approximately 0.5 percent (or 3.7 percent in local currencies) compared to the same period in 2025. The weakening of the local currencies versus the U.S. dollar, primarily in our Asian markets, resulted in an approximate 1.9 percent, or $2.1 million, decrease of our net sales during the quarter.
Current wording
In the third quarter of 2026, we experienced a decrease in our consolidated net sales of 9.1 percent (or 7.2 percent in local currencies) compared to the same period in 2025. Asia net sales decreased approximately 14.9 percent (or 11.2 percent in local currencies) compared to the same period in 2025. Europe net sales decreased approximately 0.1 percent (or increased 0.9 percent in local currencies) compared to the same period in 2025. North America net sales decreased approximately 6.1 percent (or 6.0 percent in local currencies) compared to the same period in 2025. Latin America and Other net sales increased approximately 3.4 percent (or decreased 0.1 percent in local currencies) compared to the same period in 2025. The weakening of the local currencies versus the U.S. dollar, primarily in our Asian markets, resulted in an approximate 1.9 percent, or $2.5 million, decrease of our net sales during the quarter.
Previous wording
Cost of sales decreased $1.6 million during the three months ended June 30, 2026, compared to the same period in 2025, and as a percentage of net sales were 26.3 percent and 28.3 percent for the three months ended June 30, 2026 and 2025, respectively. The decrease in cost of sales percentage is primarily due to cost savings initiatives and market mix.
Current wording
Cost of sales decreased $2.6 million during the three months ended September 30, 2026, compared to the same period in 2025, and as a percentage of net sales were 27.1 percent and 26.7 percent for the three months ended September 30, 2026 and 2025, respectively. The increase in cost of sales percentage is primarily due to unfavorable foreign currency translation.
Previous wording
In absolute terms, selling, general and administrative expenses increased $1.2 million during the three months ended June 30, 2026, compared to the same period in 2025, and as a percentage of net sales were 38.4 percent and 38.1 percent for the three months ended June 30, 2026 and 2025, respectively. The increase was primarily related to consultant events and variable selling expenses, partially offset by compensation costs.
Current wording
In absolute terms, selling, general and administrative expenses decreased $3.4 million during the three months ended September 30, 2026, compared to the same period in 2025, and as a percentage of net sales were 36.3 percent and 35.6 percent for the three months ended September 30, 2026 and 2025, respectively. The dollar decrease was primarily related to a reduction in variable selling expenses and cost management.
Previous wording
Despite the war in Ukraine, net sales related to Eastern Europe for the three and six months ended June 30, 2026, were $15.1 million and $32.7 million, respectively, compared to $13.5 million and $29.3 million for the same periods in 2025. Operating income related to Eastern Europe for the three and six months ended June 30, 2026 was $1.6 million and $3.6 million, respectively, compared to $1.0 million and $2.4 million for the same periods in 2025. As of June 30, 2026, Eastern Europe had assets of $7.1 million, net of working capital reserves related to inventories.
Current wording
Despite the war in Ukraine, net sales related to Eastern Europe for the three and nine months ended September 30, 2026, were $14.8 million and $47.6 million, respectively, compared to $13.9 million and $43.2 million for the same periods in 2025. Operating income related to Eastern Europe for the three and nine months ended September 30, 2026, was $1.8 million and $5.4 million, respectively, compared to $1.3 million and $3.7 million for the same periods in 2025. As of September 30, 2026, Eastern Europe had assets of $7.3 million, net of working capital reserves related to inventories.
Previous wording
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 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 received a response from BIS closing the matter without further action. The voluntary self-disclosure with OFAC remains pending. 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.
Current wording
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 Bureau of Industry and Security (“BIS”). In addition, in April 2025 we filed an initial voluntary self-disclosure with the Office of Foreign Assets 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 received a response from BIS closing the matter without further action. The voluntary self-disclosure with OFAC remains pending. 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 operations, we are unable to predict the outcome or the timing of resolution of these matters.
Previous wording
While we did not experience material impacts as a result of tariffs for the six months ended June 30, 2026 and 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 may adversely affect our costs in the remainder of 2026.
Current wording
While we did not experience material impacts as a result of tariffs for the nine months ended September 30, 2026 and 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 may adversely affect our costs in the remainder of 2026.
Previous wording
The following table summarizes our unaudited consolidated operating results from continuing operations in U.S. dollars and as a percentage of net sales for the six months ended June 30, 2026 and 2025 (dollar amounts in thousands):
Current wording
The following table summarizes our unaudited consolidated operating results from continuing operations in U.S. dollars and as a percentage of net sales for the nine months ended September 30, 2026 and 2025 (dollar amounts in thousands):
Previous wording
The following table summarizes the changes in net sales by operating segment with a reconciliation to net sales excluding the impact of currency fluctuations for the six months ended June 30, 2026 and 2025 (dollar amounts in thousands):
Current wording
The following table summarizes the changes in net sales by operating segment with a reconciliation to net sales excluding the impact of currency fluctuations for the nine months ended September 30, 2026 and 2025 (dollar amounts in thousands):
Previous wording
Consolidated net sales for the three and six months ended June 30, 2026, were $117.0 million and $239.9 million, respectively, compared to $114.8 million and $228.0 million for the same period in 2025, which represents an increase of 1.9 percent and 5.2 percent, respectively. The increase was primarily 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 three and six months ended June 30, 2026 increased 3.8 percent and 5.3 percent, respectively, from the same periods in 2025.
Current wording
Consolidated net sales for the three months ended September 30, 2026 and 2025, were $116.6 million and $128.3 million, which represents a decrease of 9.1 percent. Consolidated net sales for the nine months ended September 30, 2026 and 2025, remained flat at $356.5 million and $356.3 million, respectively. The decrease for the three months ended September 30, 2026 was primarily related to product sales decreases in our Asia, Europe and North America operating segments. Excluding the impact of foreign currency exchange rate fluctuations, consolidated net sales for the three and nine months ended September 30, 2026 decreased 7.2 percent and increased 0.8 percent, respectively, from the same periods in 2025.
Previous wording
In our Japan market, net sales increased $5.0 million and $6.5 million, or 38.3 percent and 26.7 percent, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. In local currencies, net sales for the three and six months ended June 30, 2026 increased 50.7 percent and 34.9 percent, respectively, compared to the same periods in 2025. The increase in net sales was primarily the result of strong momentum and timing of event qualifications that drove greater consultant activity and an increase in total orders and average order value.
Current wording
In our Japan market, net sales decreased $0.4 million and increased $6.0 million, or decreased 2.5 percent and increased 14.4 percent, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. In local currency, net sales for the three and nine months ended September 30, 2026 increased 5.2 percent and 22.4 percent, respectively, compared to the same periods in 2025. The increase in local currency was primarily the result of strong momentum that drove greater consultant activity and an increase in total orders and average order value.
Previous wording
In our Taiwan market, net sales decreased $3.0 million and $5.9 million, or 17.9 percent and 17.0 percent, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. In local currencies, net sales for the three and six months ended June 30, 2026 decreased 15.6 percent and 17.5 percent, respectively, compared to the same periods in 2025. The decrease was primarily the result of slower consumer acquisition and a reduction in total orders as well as average order values.
Current wording
In our Taiwan market, net sales decreased $2.8 million and $8.7 million, or 14.8 percent and 16.2 percent, for the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. In local currency, net sales for the three and nine months ended September 30, 2026 decreased 9.5 percent and 14.7 percent, respectively, compared to the same periods in 2025. The decrease was primarily the result of slower consumer acquisition and a reduction in total orders, slightly offset by increases in average order values.
Previous wording
Net sales related to Europe for the three and six months ended June 30, 2026 were $22.7 million and $49.1 million, respectively, compared to $21.7 million and $45.9 million for the same periods in 2025, or increases of 4.4 percent and 7.1 percent, respectively. In local currency, net sales for the three and six months ended June 30, 2026 increased 3.7 percent and 4.9 percent, respectively, compared to the same periods in 2025. The functional currency for many of these markets is the U.S. Dollar which reduces the effect from foreign currency fluctuations. Fluctuations in foreign currency exchange rates had favorable impacts on net sales of $0.2 million and $1.0 million for the three and six months ended June 30, 2026, respectively. Net sales in local currency increased for the three and six months ended June 30, 2026, primarily as a result of growth in average order size and an expanding distributor base.
Current wording
Net sales related to Europe for the three and nine months ended September 30, 2026, were $22.1 million and $71.2 million, respectively, compared to $22.1 million and $68.0 million for the same periods in 2025, or a decrease of 0.1 percent and an increase of 4.7 percent, respectively. In local currencies, net sales for the three and nine months ended September 30, 2026, increased 0.9 percent and 3.6 percent, respectively, compared to the same periods in 2025. The functional currency for many of these markets is the U.S. dollar which reduces the effect from foreign currency fluctuations. Fluctuations in foreign currency exchange rates had unfavorable impacts on net sales of $0.2 million and favorable impacts of $0.8 million for the three and nine months ended September 30, 2026, respectively. Net sales in local currencies increased for the three and nine months ended September 30, 2026, primarily as a result of growth in average order size and active consultants.
Previous wording
In the United States, net sales for the three and six months ended June 30, 2026 increased $1.1 million and $4.2 million, or 3.3 percent and 6.5 percent, respectively, compared to the same periods in 2025. The increase was primarily due to improved consumer acquisition through our digital channels.
Current wording
In the United States, net sales for the three and nine months ended September 30, 2026 decreased $2.0 million and increased $2.2 million, or decreased 6.0 percent and increased 2.3 percent, respectively, compared to the same periods in 2025. The decrease for the three months ended September 30, 2026 was primarily due to reduced consultant engagement. The increase for the nine months ended September 30, 2026 was primarily due to improved consumer acquisition through our digital channels.
Previous wording
Net sales related to Latin America and Other markets for the three and six months ended June 30, 2026 were $5.3 million and $11.3 million, respectively, compared to $5.4 million and $10.8 million for the same periods in 2025, or decreased 0.5 percent and increased 4.6 percent. In local currency, net sales for the three and six months ended June 30, 2026 decreased 3.7 percent and increased 1.0 percent, respectively, compared to the same periods in 2025. Fluctuations in foreign currency had favorable impacts on net sales of $0.2 million and $0.4 million for the three and six months ended June 30, 2026, respectively.
Current wording
Net sales related to Latin America and Other markets for the three and nine months ended September 30, 2026, were $5.5 million and $16.8 million, respectively, compared to $5.3 million and $16.1 million for the same periods in 2025, or increases of 3.4 percent and 4.2 percent, respectively. In local currencies, net sales for the three and nine months ended September 30, 2026, decreased 0.1 percent and increased 0.6 percent, respectively, compared to the same periods in 2025. Fluctuations in foreign currency had favorable impacts on net sales of $0.2 million and $0.6 million for the three and nine months ended September 30, 2026, respectively.
Previous wording
Cost of sales as a percent of net sales was 26.3 percent and 26.6 percent for the three and six months ended June 30, 2026, compared to 28.3 percent and 28.1 percent for the same periods in 2025. The decrease in cost of sales percentage is primarily due to cost savings initiatives and market mix.
Current wording
Cost of sales as a percent of net sales was 27.1 percent and 26.8 percent for the three and nine months ended September 30, 2026, compared to 26.7 percent and 27.6 percent for the same periods in 2025. The increase in cost of sales percentage for the three months ended September 30, 2026, is primarily due to unfavorable foreign exchange. The decrease in cost of sales percentage for the nine months ended September 30, 2026, is primarily the result of offering fewer discounts.
Previous wording
Volume incentives expense as a percent of net sales was 30.6 percent and 30.3 percent for the three and six months ended June 30, 2026, respectively, compared to 29.9 percent and 30.4 percent for the same periods in 2025. The increase for the three months ended June 30, 2026, was primarily due to timing of promotional incentives and market mix. 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 expense as a percent of net sales was 32.0 percent and 30.9 percent for the three and nine months ended September 30, 2026, respectively, compared to 30.7 percent and 30.5 percent for the same periods in 2025. The increases were primarily due to timing of promotional incentives and market mix. 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. Instead of volume incentives, in China, we pay independent service providers for their sales and marketing services, which are included in selling, general and administrative expenses.
Previous wording
Other income (expense), net, for the three and six months ended June 30, 2026, was expense of $0.1 million and $1.5 million, respectively, compared to income of $3.3 million and $4.2 million during the same periods in 2025, respectively. Other income (expense), net for the three and six months ended June 30, 2026 primarily consisted of foreign exchange losses in Asia, partially offset by foreign exchange gains in Europe and Latin America, that resulted from net changes in foreign currencies.
Current wording
Other income (expense), net, for the three and nine months ended September 30, 2026, was income of $0.1 million and expense of $1.4 million, respectively, compared to income of $0.7 million and $4.9 million during the same periods in 2025, respectively. Other income (expense), net for the three and nine months ended September 30, 2026 primarily consisted of foreign exchange gains and losses, respectively, in Asia that resulted from net changes in foreign currencies.
Previous wording
For the three months ended June 30, 2026 and 2025, our provision for income taxes, as a percentage of income before income taxes was 34.1 percent and 26.8 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent. For the six months ended June 30, 2026 and 2025, our provision for income taxes, as a percentage of income before income taxes was 36.0 percent and 29.0 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent.
Current wording
For the three months ended September 30, 2026 and 2025, our provision for income taxes, as a percentage of income before income taxes, was 64.8 percent and 42.8 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent. For the nine months ended September 30, 2026 and 2025, our provision for income taxes, as a percentage of income before income taxes, was 44.2 percent and 34.5 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent.
Previous wording
The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and six months ended June 30, 2026, was primarily attributed to recording a valuation allowance on foreign tax credits which are not expected to be utilized before expiration, non-deductible executive compensation, and foreign losses that presently do not provide a future tax benefit, partially offset by the deduction allowed for foreign-derived eligible income and favorable deductions for share-based compensation.
Current wording
The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and nine months ended September 30, 2026, was primarily attributed to recording a valuation allowance on foreign tax credits which are not expected to be utilized before expiration, recording a reserve for uncertain tax positions, and non-deductible executive compensation, partially offset by the deduction allowed for foreign-derived eligible income and favorable deductions for share-based compensation.
Previous wording
The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and six months ended June 30, 2025, was primarily attributed to operations in foreign countries which are treated as a branch for U.S. tax purposes, partially offset by favorable adjustments to deferred tax assets, foreign derived intangible income deduction and foreign tax credits.
Current wording
The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and nine months ended September 30, 2025, was primarily attributed to operations in foreign countries which are treated as a branch for U.S. tax purposes, partially offset by foreign derived intangible income deduction.
Previous wording
The difference between the effective tax rate for the three and six months ended June 30, 2026, compared to June 30, 2025, was primarily caused by an increase in foreign losses year over year that presently do not provide future tax benefit and favorable adjustments to deferred tax assets in the prior period which do not repeat in the current period.
Current wording
The difference between the effective tax rate for the three and nine months ended September 30, 2026, compared to September 30, 2025, was primarily caused by recording a reserve in the current period for uncertain tax positions and favorable adjustments to deferred tax assets in the prior period which do not repeat in the current period.
Previous wording
As of June 30, 2026 and December 31, 2025, we had accrued $0.1 million and $0.4 million, respectively, related to unrecognized tax positions.
Current wording
As of September 30, 2026 and December 31, 2025, we had accrued $1.7 million and $0.4 million, respectively, related to unrecognized tax positions net of offsetting tax attributes.
Previous wording
See Note 7, Segment Information, for a summary of the U.S. dollar amounts from the sale of general health, immune, cardiovascular, digestive, personal care and weight management products for the three and six months ended June 30, 2026 and 2025, by business segment.
Current wording
See Note 7, Segment Information, for a summary of the U.S. dollar amounts from the sale of general health, immune, cardiovascular, digestive, personal care and weight management products for the three and nine months ended September 30, 2026 and 2025, by business segment.
Previous wording
We pay sales commissions, or “volume incentives,” to our independent consultants based upon their own product sales and the product sales of their sales organization. As an exception, in China, we do not pay volume incentives; rather, we pay independent service fees, which are included in selling, general and administrative expenses. These volume incentives and independent service fees are recorded as an expense in the year earned. The amounts of volume incentives that we expensed during the quarters ended June 30, 2026 and 2025, are set forth in the unaudited Condensed Consolidated Financial Statements in Item 1 of this report. In addition to the opportunity to receive volume incentives, independent consultants who attain certain levels of monthly product sales are eligible for additional incentive programs including automobile allowances, sales convention privileges and travel awards.
Current wording
We pay sales commissions, or “volume incentives,” to our independent consultants based upon their own product sales and the product sales of their sales organization. As an exception, in China, we pay independent service providers for their sales and marketing services, which are included in selling, general and administrative expenses. These volume incentives and independent service fees are recorded as an expense in the year earned. The amounts of volume incentives that we expensed during the quarters ended September 30, 2026 and 2025, are set forth in the unaudited Condensed Consolidated Financial Statements in Item 1 of this report. In addition to the opportunity to receive volume incentives, independent consultants who attain certain levels of monthly product sales are eligible for additional incentive programs including automobile allowances, sales convention privileges and travel awards.
Previous wording
Our principal use of cash is to pay for operating expenses, including volume incentives, inventory and raw material purchases, capital assets, digital investments and funding of international expansion. As of June 30, 2026, working capital was $109.7 million, compared to $100.3 million as of December 31, 2025. At June 30, 2026, we had $82.5 million in cash, of which $15.7 million was held in the U.S. and $66.8 million was held in 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, including volume incentives, inventory and raw material purchases, capital assets, digital investments and funding of international expansion. As of September 30, 2026, working capital was $114.9 million, compared to $100.3 million as of December 31, 2025. At September 30, 2026, we had $89.4 million in cash, of which $13.3 million was held in the U.S. and $76.1 million was held in 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 six months ended June 30, 2026, operating activities used cash of $1.0 million, compared to provided cash of $6.9 million in the same period in 2025. Operating cash flows decreased primarily due to reduced net income and the timing of payments and receipts for accrued liabilities, deferred revenue, income taxes payable, accounts receivable, prepaid expense and other current assets, partially offset by a decrease in inventories and lease liabilities.
Current wording
For the nine months ended September 30, 2026, operating activities provided cash of $9.7 million, compared to $25.4 million in the same period in 2025. Operating cash flows decreased primarily due to reduced net income and the timing of payments and receipts for accrued liabilities, deferred revenue, income taxes payable, and accounts receivable, partially offset by a decrease in inventories and lease liabilities.
Previous wording
For the six months ended June 30, 2026, investing activities used $5.3 million, compared to $2.5 million for the same period in 2025, which consisted of capital expenditures related to the purchase of equipment, computer systems and software.
Current wording
For the nine months ended September 30, 2026, investing activities used $6.8 million, compared to $4.1 million for the same period in 2025, which consisted of capital expenditures related to the purchase of equipment, computer systems and software.
Previous wording
For the six months ended June 30, 2026, financing activities used $5.0 million, compared to $12.9 million for the same period in 2025.
Current wording
For the nine months ended September 30, 2026, financing activities used $8.6 million, compared to $15.2 million for the same period in 2025.
Previous wording
During the six months ended June 30, 2026, we used cash to repurchase 113,000 shares of our common stock under the share repurchase program for $2.6 million. At June 30, 2026, the remaining balance available for repurchases under the program was $14.8 million.
Current wording
During the nine months ended September 30, 2026, we used cash to repurchase 345,000 shares of our common stock under the share repurchase program for $6.1 million. At September 30, 2026, the remaining balance available for repurchases under the program was $11.3 million.
Previous wording
In addition, other things such as a prolonged economic downturn, a decrease in demand for our products, an unfavorable settlement of our unrecognized tax positions or non-income tax contingencies could adversely affect our long-term liquidity.
Current wording
In addition, other factors such as a prolonged economic downturn, a decrease in demand for our products, an unfavorable settlement of our unrecognized tax positions or non-income tax contingencies could adversely affect our long-term liquidity.
Previous wording
There were no significant changes in our critical accounting policies or estimates for the six months ended June 30, 2026. A summary of our significant accounting policies is provided in Note 1 of the Notes to Consolidated Financial Statements in Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
There were no significant changes in our critical accounting policies or estimates for the nine months ended September 30, 2026. A summary of our significant accounting policies is provided in Note 1 of the Notes to Consolidated Financial Statements in Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2025.