Good afternoon, everyone. And thank you for participating in today's conference call to discuss Nature's Sunshine's Financial Results for the First Quarter Ended March 31, 2025. Joining us today are Nature's Sunshine CEO, Terrence Moorehead; CFO, Shane Jones; and General Counsel, Nate Brower. Following the remarks, we'll open the call for analyst questions. Before we go further, I would like to turn the call over to Mr. Brower as he reads the company's safe harbor statements within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nate, please go ahead.

Good afternoon. And thanks for joining our conference call to discuss our first quarter 2025 financial results. I'd like to remind everyone that this call is available for replay via telephonic dial-in through May 20 and via a live webcast that will be posted in the Investor Relations portion of our website at ir.naturesunshine.com. The information on this call contains forward-looking statements. These statements are often characterized by terminologies such as believe, hope, may, anticipate, expect, will and other similar expressions. Forward-looking statements are not guarantees of future performance, and the actual results may be materially different from the results implied by forward-looking statements. Factors that could cause results to different materially from those implied herein include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K under the caption Risk Factors and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date, and the company disclaims any duty to update the information provided herein. Now I would like to turn the call over to the CEO of Nature's Sunshine, Terrence Moorehead. Terrence?

Thank you, Nate. And good afternoon, everyone. I want to thank you for joining today's call to discuss our first quarter results. Today, I'll provide an overview of our first quarter performance and offer some insights into how the business is building momentum. From there, Shane will take you through our financials in more detail. To begin, we find ourselves operating in an increasingly uncertain macroeconomic environment as international trade, tariffs and consumer sentiment have become increasingly volatile. So before I dive in, I want to take a moment to share some thoughts on how we're approaching the current situation. And specifically, I'd like to talk about our plans to get ahead of the evolving tariff situation and the actions we're taking to protect the business and our customers. Despite increased market uncertainty, the underlying demand for our products remains strong, and our outlook for 2025 remains positive. Importantly, we've taken some aggressive steps to minimize our exposure to the tariffs like increasing raw ingredient inventory, enforcing pricing contracts with key suppliers, and moving finished goods into selected markets to avoid retaliatory tariffs. For our high-risk products, we're holding anywhere from nine to 12 months of inventory. This gives us time to realign our supply chain, find alternative suppliers, identify product substitutes, evaluate pricing or make any other necessary adjustments. Based on our plans, we believe we're well positioned to address the threat posed by the tariffs in 2025. We continue to monitor the situation and are particularly sensitive to how consumer spending will be impacted if household budgets come under increased pressure. Our goal is to continue our positive customer growth trend so we've tried to position ourselves in a way that allows us to avoid tariff-related price increases that might interrupt our momentum. Now with that as a…

Thank you, Terrence. Let's talk about results in more detail. Net sales in the first quarter were $113.2 million compared to $111 million in the year ago quarter, a 2% increase versus the prior year were a 5% increase, excluding the impact of foreign exchange rates. As Terrence discussed, this was driven by strong performance across both Asia Pacific and Europe. Looking at sales by market in Q1, I'll start with APAC. In Asia Pacific, we reported growth of 5% to $48.7 million or up 10% when excluding the impact of foreign exchange. This was driven by a very strong growth in Taiwan and Japan, where sales on a local currency basis grew 18% and 24%, respectively, in Q1. The strategies we implemented last year continue to produce the results intended doing growth in both customers and transactions. We're especially excited about the momentum that we see in Japan, where new customer growth has exceeded 20% for 3 straight quarters now. Sales in Europe during Q1 increased 8% on a reported basis and 9% on a local currency basis. Excellent field execution, combined with the strong adoption of our Power Line products and continued expansion in the Baltics drove robust growth in Central Europe, where sales increased 15%. We're also seeing some encouraging signs in Eastern Europe, where sales grew 8% year-over-year during Q1. Looking at our North America business, sales declined 4% on both a reported and local currency basis. The sales decline in North America is reflective of a difficult year-over-year comp as Q1 2024 was a strong quarter over 5% growth. In addition to that, we continue to see increased uncertainty in the North America macroeconomic environment, which is impacting consumer sentiment. Despite that headwind, we see encouraging signs in both our digital and core businesses. The…

[Operator Instructions] Our first question will come from Brian Holland from Davidson.

To start with guidance. To clarify this, how did 1Q come in vis-a-vis internal expectations, were they ahead…

We were slightly ahead of our internal expectations for the quarter.

So just maybe a little bit more specificity around thinking about guidance over the balance of the year, trying to discern how much of what we're seeing here in the maintaining of guidance is a reflection of, and it's only one quarter versus trying to signal forthcoming pressures or headwinds whether it's tariffs or whatever. So I guess what I'm getting at is, can you assume at the midpoint of guidance that the macro backdrop worsens from what we saw in 1Q over the balance of the year or sustains from where we've been over the last three months?

Why don't you take that, Shane?

So we're very encouraged by the way that the year has started. We had a good Q1. Our continued -- our business continues to run very well. We just noted an uncertain environment. And so therefore, we're taking a conservative stance. As you think about the guidance that we've given, really, the midpoint of the guidance would say that we continue to have some macroeconomic instability that we continue to see some issues with tariffs, and we continue to see that impact not only in the United States but other parts of the country. The lower end of that guidance would say we're really in a recession type environment where things get very bad. And then the upper end would say that we continue to see the things that we've seen in Q1. We continue to see good results, and we get to that number.

And one other follow-up on the guidance. Relative to whatever may have been factored into the initial guide for tariffs, if anything, going back a couple of months, based on what's known today, any changes there for better or worse with respect to -- other than obviously some of the pauses that have been put in place, anything look better or worse relative to what might have been embedded in initial expectations?

That's a rapidly changing environment, obviously. So day-to-day, obviously, things can change all the time. So I can't say that nothing has changed. But at the same time, when we issued this guidance last quarter, we were very conservative, very thoughtful about making sure that it would encompass all situations that could occur. I would say -- I would reiterate that again to say we are trying to encompass things that we may not even know at this point as far as impacts to the economy from tariffs.

And I think what we would say is we've tried to do our homework on our end to make sure that we've done everything that we can do to prepare to offset, as Shane has mentioned earlier, the potential impact of tariffs. So we've tried to be prepared. We've tried to buy ourselves some time so that we can react to things across our supply chain. But it's a highly uncertain volatile market but we've done everything we think we can to protect ourselves in 2025.

I'm tired of answering the question. I thought it would be fun to see someone else try to take a swing at it, but I appreciate the color, very helpful. Switching maybe strategically, curious about the new digital toolkit. Just checking to see, is that still on track for launch in North America in the second half of '25. And then maybe to what extent have your practitioners been able to test, get comfortable with the toolkit? And maybe just -- this would be a fairly significant rollout. So anything else you're doing to minimize order disruption during the introductory phase?

We do not anticipate any order disruption. This would be an incremental opportunity for them. So this won't interrupt any of the processes that the practitioners or retailers who want to use the tools it won't disrupt them in any way. We are still on track for a kind of back half of the year launch. In preparation for that, we will be getting it in people's hands. So right now, it's still kind of in our hands internally -- we have some processes to go through before we can kind of start showing it and getting it out to people but on a larger scale. So we're very optimistic and very, very pleased about the potential of really getting some powerful tools in our people's hands that will allow them to manage their customer bases better and hopefully attract new customers to their businesses as well.

Our next question comes from the line of Susan Anderson from Canaccord Genuity.

If you can talk a little bit about Europe and Asia, obviously, seeing very strong performance there. I think Europe has been growing for several quarters now in Asia, kind of just right behind them. So I guess how are you thinking about kind of the tailwinds there, the drivers there to kind of continue that growth as we look forward? Do you still see a lot of kind of market share or customers that you can kind of grab in those markets to continue to drive that growth.

I think the market opportunities continue to be there for us. The businesses in both of those two regions are driven by very strong fundamentals across sales and marketing. So we feel very good about that. We feel confident that when we go to market with either new products or we want to engage with kind of even to penetrate further with existing products, we have a powerful kind of approach to the market. So I think we feel good about both of those businesses and the opportunities are still there. Having said that, in APAC, they'll be going up in the back half of the year against some of their largest sales. And so right now, they've got great runway ahead of them. The challenge is going to be for them to keep that momentum up in the back half of the year. But again, it's a very strong team, very strong kind of opportunity for us. Shane, do you have any additional thoughts kind of on that one?

No, as we look at places like Japan, we're really encouraged. As I mentioned, we see new customer growth of over 20% each quarter for three consecutive quarters. That's our best leading indicator for the future. So we have a lot of confidence, especially in Japan, we should see that continue. But to Terrence's point, if you look at the comps in Q3 and Q4 for both of those, we had an amazing results last year that they'll have to lap. So it's difficult to say that we're going to continue at 20% clip in those markets.

But the good news, again, is the growth we're seeing is based on orders, it's based on customers, that's sustainable. So we're not just trying to sell more products into the same people. So again, we feel good about the business.

And then maybe if you could just talk about North America. And I guess, what do you think needs to -- the digital sales are great, obviously. It's nice to see that 19% growth. In terms of the practitioners and the retailers, like how are you thinking about kind of getting that channel back on track in North America?

Susan, a couple of things. I think kind of first and foremost, it is about focus and building out the fundamentals there, as I had mentioned when I was talking. So we put some new -- a new team in place, this new leadership. Not just at the top, but kind of all the way down throughout the organization. So I think we've got a great team on the ground there to help build out the fundamentals, put some discipline in place, build out kind of stronger support as well I think a big piece of them turning the corner is going to be kind of getting them the right tools in place also. So again, in the back half of the year, they're going to have a completely new toolkit that will allow them to access consumers better, talk to their consumers better, access social media much more effectively. So really, it's a combination of building out the field fundamentals with getting the right kind of tools in their hand and then, of course, getting our marketing proposition, which is kind of really strengthening getting that right as well. So it's kind of a combination of those 3 things, I think, will really help them kind of catch up to the type of growth we're seeing in -- on the digital side of the business and really start to be complementary.

And then if I could just ask a couple of model questions here. I guess how should we think about the balance between gross margin and then op expenses to kind of get to your EBITDA for the rest of the year? And is there any cadence we should be thinking about as well? .

Shane, do you want to grab that?

So for gross margin, we should see modest improvement as we progress through the year, not substantial, but modest improvement. So we should see a slight build each quarter. But modest. And then on our SG&A side, we expect between $40 million and $42 million of SG&A each quarter. .

And then also just any timing on the new share repurchase program or cadence of repurchases or anything like that we should take into consideration.

We're going to take advantage of market opportunities. and we believe we're very undervalued at this point in time. So we're going to buy aggressively when the opportunity present itself.

At this time, this concludes our question-and-answer session. I would now like to turn the call back to Mr. Moorehead for closing remarks.

Okay, thank you, Chloe. We'd like to take -- thank everyone for listening to today's call, and we look forward to speaking with you when we report our second quarter 2025 results. And again, thanks for joining us, and take care.

Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.