Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. NATURES SUNSHINE PRODUCTS INC (275053) 10-Q published on Aug 08, 2019 at 5:35 pm
Reporting Period: Jun 29, 2019
During the second quarter of 2019, we realigned into geographic focused operating business segments across brands to further align regional strategies and drive synergies in product, organizational and go-to-market strategies in local markets. Our internal reporting structure was reorganized to support the new reporting segments and the chief operating decision maker now reviews the operating results of the four segments utilizing a geographic focused format. The presentation of the comparative information has been recast to conform to the 2019 presentation.
During the three and six months ended June 30, 2019, NSP China did not borrow any amounts from the Company or our joint venture partner. During the three and six months ended June 30, 2018, NSP China borrowed $0 and $2.0 million from the Company and $0 and $0.5 million from our joint venture partner, respectively. These notes are payable in one year and bear interest of 3.0 percent. As of June 30, 2019 and December 31, 2018 outstanding borrowings by NSP China from the Company were $6.2 million and $6.0 million, respectively. As of June 30, 2019 and December 31, 2018 outstanding borrowings by NSP China from our joint venture partner were $1.5 million and $1.5 million, respectively. The notes between NSP China and the Company eliminate in consolidation.
Consolidated net sales for the three and six months ended June 30, 2019, were $90.7 million and $182.0 million, respectively, compared to $91.3 million and $178.6 million for the same period in 2018, which represents a decrease of 0.6 percent and an increase of 1.9 percent, respectively. The decrease for the three months ended June 30, 2019, was primarily related to declines in the Asia, North America and Latin America and Other markets. Declines in these markets were partially offset by product sales growth in the Europe market. The increase for the six months ended June 30, 2019, was primarily related to product sales growth in the Asia and Europe markets. Growth in these markets was offset by declines in the North America and Latin America and Other markets. Excluding the unfavorable impact of foreign currency exchange rate fluctuations, consolidated net sales for the three and six months ended June 30, 2019, increased by 2.3 percent and 4.7 percent, respectively, from the same periods in 2018.
Net sales related to Europe for the three and six months ended June 30, 2019, were $15.1 million and $30.7 million, respectively, compared to $13.9 million and $28.5 million for the same periods in 2018, or increases of 8.3 percent and 7.5 percent. In local currency, net sales for the three and six months ended June 30, 2019, increased 11.1 percent and 10.9 percent, respectively, compared to the same periods in 2018. 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 $0.4 million and $1.0 million unfavorable impact on net sales for the three and six months ended June 30, 2019, respectively. Net sales increased primarily as a result of the relative stabilization of the Russian ruble against the U.S. dollar and product promotions that have improved distributor engagement. Active independent Managers within Europe totaled approximately 4,000 and 3,700 at June 30, 2019 and 2018, respectively. Active independent Distributors and customers within Europe totaled approximately 85,200 and 74,600 at June 30, 2019 and 2018, respectively.
Net sales related to Latin America and Other for the three and six months ended June 30, 2019, were $5.9 million and $11.4 million, respectively, compared to $6.1 million and $12.9 million for the same periods in 2018, or decreases of 3.2 percent and 11.7 percent. In local currency, net sales for the three and six months ended June 30, 2019, decreased 1.6 percent and 10.0 percent, respectively, compared to the same periods in 2018. Currency devaluation had a $0.1 million and $0.2 million unfavorable impact on net sales for the three and six months ended June 30, 2019, respectively. The decline in the market is mainly due to decreases in Distributor retention and average purchase size. Active independent Managers totaled approximately 1,200 and 1,200 at June 30, 2019 and 2018, respectively. Active independent Distributors and customers totaled approximately 30,100 and 28,600 at June 30, 2019 and 2018, respectively.