SecProbe.io

CORRESP
1
filename1.htm

Thomas W. Kellerman

650-843-7550

tkellerman@morganlewis.com

October 19,
2010

VIA
EDGAR & EXPRESS MAIL

Securities
and Exchange Commission

Division
of Corporation Finance

100
F Street, N.E.

Washington,
D.C. 20549

  Attention:

  Jim
  B. Rosenberg, Senior Assistant Chief Accountant

  Tabatha
  Atkins, Staff Accountant

  Re:

  Nature’s
  Sunshine Products, Inc.

  Form 10-K
  for the Fiscal Year Ended December 31, 2009

  Form 10-q
  for the Quarterly Periods Ended March 31 and June 30, 2010

  File
  No. 001-34483

Dear
Mr. Rosenberg:

On
behalf of Nature’s Sunshine Products, Inc. (the “Company”), we submit this
letter in response to the comments from the Staff of the Securities and
Exchange Commission (the “Commission”) to the Company, dated September 22,
2010 (the “Comment Letter”), with respect to the Company’s filings referenced
above.  The numbered paragraphs below
restate the numbered paragraphs in the Comment Letter in bold and italics, and
the discussion set out below each such paragraph is the Company’s response to
the Staff’s comment.

Form 10-K for the fiscal year ended December 31, 2009

Item 9A.  Controls and Procedures

Changes in Internal Control over Financial Reporting, page 72

1.                                      While
it appears that you have conducted an evaluation of internal control over financial
reporting, it does not appear that you have disclosed your conclusion as
required by Item 308(a)(3) of Regulation S-K as of December 31,
2009.  Please amend your filing to
provide management’s conclusion as to the effectiveness of your internal control
over financial reporting as of December 31, 2009.  Further please ensure your revised disclosure
complies with Item 308(a) in its entirety.

In
response to the Staff’s comment, the Company proposes to amend Item 9A of its
annual report on Form 10-K for the fiscal year ended December 31,
2009 (the “Form 10-K”) as indicated by the revised disclosure set forth in
Exhibit 1 attached hereto.  The
Company proposes to file the amended Form 10-K immediately following the
Staff’s clearance for the revised disclosure.

2.                                      In
addition, it does not appear that you have disclosed your conclusion regarding
the effectiveness of your disclosure controls and procedures as required by
Item 307 of Regulation S-K as of December 31, 2009.  Please amend your filing to provide
management’s conclusion as of December 31, 2009 and consider whether
management’s failure to provide the disclosure required by Item 308(a)(3) impacts
its conclusions regarding the effectiveness of your disclosure controls and
procedures as of December 31, 2009 and revise your disclosure as
appropriate.

In
response to the Staff’s comment, the Company proposes to amend Item 9A of its Form 10-K
as indicated by the revised disclosure set forth in Exhibit 1 attached
hereto.  The Company proposes to file the
amended Form 10-K immediately following the Staff’s clearance for the
revised. disclosure.

Forms 10-Q for the quarterly periods ended March 31 and June 30,
2010

Item 4.  Controls and Procedures,
page 31

3.             Please
amend your filings to comply with Item 308(c) of Regulation S-K.

In
response to the Staff’s comment and based on a discussion with the Staff on September 30,
2010, the Company respectfully submits that it is not necessary to amend the
Forms 10-Q for the quarterly periods ended March 31 and June 30, 2010
for the following reasons.

Item
308(c) of Regulation S-K requires the Company to disclose, in its Forms
10-Q, any changes during the Company’s last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, its internal control
over financial reporting.  The existing
disclosures in the Forms 10-Q provide a summary of the ongoing remediation
measures implemented by the Company since December 31, 2009 with respect
to a material weakness relating to accounting for taxes.  As reported in the Form 10-K, this is
the only remaining material weakness that has not been remediated as of December 31,
2009.  Accordingly, the existing
disclosures in the Forms 10-Q provide useful updates relating to the
remediation actions taken during the quarterly periods that affected the
Company’s internal control following the end of the fiscal year.  Furthermore, as indicated by our responses to
paragraphs 1 and 2 above, the Company proposes to amend the Form 10-K to
ensure that disclosures in the Form 10-K relating to internal control over
financial reporting will comply fully with Item 308(a) of Regulation
S-K.  The existing disclosures in the
Forms 10-Q, when read together with the revised disclosures to be included in
the amended Form 10-K, will provide investors with clear and most
up-to-date information on the status of the Company’s internal control
remediation process.  Accordingly, the
Company does not believe that any additional amendment to the Forms 10-Q is
required or desirable.

*    *    *

In
connection with the Company’s response to the Comment Letter, the Company
hereby acknowledges that:

·                                          the Company is
responsible for the adequacy and accuracy of the disclosure in the filings;

·                                          Staff comments
or changes to disclosure in response to Staff comments do not foreclose the
Commission from taking any action with respect to the filings; and

·                                          the Company may
not assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.

If
you have any questions or comments as to the foregoing, please contact the
undersigned.

  Sincerely,

  /s/
  Thomas Kellerman

  Thomas
  Kellerman

  cc:
  Jamon Jarvis

Exhibit 1

Item 9A.
Controls and Procedures

This report includes the
certifications of our Chief Executive Officer and Chief Financial Officer
required by Rule 13a-14 of the Securities Exchange Act of 1934 (the “Exchange
Act”). See Exhibits 31.1 and 31.2. This Item 9A includes information concerning
the controls and control evaluations referred to in those certifications.

Overview

Management identified
certain material weaknesses which are described in our Annual Report on Form 10-K/A
for the year ended December 31, 2008. During 2009 and through the date of
this filing, management has been focused on remediating these material
weaknesses. This overview discusses management’s evaluation of our disclosure
controls and procedures as of December 31, 2009. In addition, this item
provides a summary of the status of each of the previously identified material
weaknesses, followed by a discussion of management’s evaluation of disclosure
controls and procedures, and management’s efforts to remediate the material weaknesses,
as set forth in the table below.

During the year ended December 31,
2009, the Company completed the remediation related to the financial reporting
process and information technology material weaknesses. As shown below, the
accounting for taxes material weakness reported as of December 31, 2008
remains a material weakness as of December 31, 2009, for which remediation
efforts are in process.

  Material Weakness Reported

  Status as of

  Status as of the Date

  as of December 31, 2008

  December 31, 2009

  of this Filing

  1. Accounting for Taxes

  Remediation in process

  Remediation in process

  2. Financial Reporting
  Process

  Remediated

  Remediated

  3. Information Technology:

  Access
  Control

  Remediated

  Remediated

  Change
  Management

  Remediated

  Remediated

  Spreadsheets

  Remediated

  Remediated

Evaluation
of Disclosure Controls and Procedures

Disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act) are
designed to ensure that information required to be disclosed in reports filed
or submitted under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in rules and forms adopted by
the SEC, and that such information is accumulated and communicated to
management, including the Chief Executive Officer and the Chief Financial
Officer, to allow timely decisions regarding required disclosures.

In connection with the
preparation of its annual report as of December 31, 2008,2009, the Company’s management, under the
supervision and with the participation of the Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design and operation of
our disclosure controls and procedures as of December 31, 2008.2009. Based on that evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded that our
disclosure controls and procedures were not effective as of December 31, 2008,2009, as a result of the existence of a material weaknessesweakness in our internal control over
financial reporting related to accounting for
taxes.

Since December 31,
2008, we have made significant progress in improving our disclosure controls
and procedures. We have taken, and are taking, the actions described below
under “Remediation Actions Relating to Remaining Material Weaknesses” to
remediate the remaining material weaknesses in our internal control over
financial reporting that existed at that date.

We continue to strive to
improve our processes to enable us to provide complete and accurate public
disclosure. Management believes that we will not be able to conclude that our
disclosure controls and procedures are effective until the material weaknesses
have been fully remediated.

To address the material
weaknesses reported in our 2008 Form 10-K/A, management performed
additional analyses and other post-closing procedures designed to ensure that
our consolidated interim financial statements were prepared in accordance with
U.S. GAAP. These procedures included documentation and testing of processes,
data validation procedures from the systems into the general ledger, testing of
systems, validation of results, disclosure review, and other analytics. As a
result, management believes that the consolidated financial statements included
in this report fairly present, in all material respects, our financial
position, results of operations and cash flows as of the dates, and for the
periods presented.

Evaluation of Internal Control over Financial Reporting

Management,
with the participation of our Chief Executive Officer and Chief Financial
Officer, has conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework set forth in “Internal
Control—Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on management’s assessment
under this framework, management has concluded that our internal control over
financial reporting was not effective as of December 31, 2009, as a result
of the existence of a material weakness in our internal control over financial
reporting related to accounting for taxes.
The effectiveness of our internal control over financial reporting as of
December 31, 2009 has been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their report which
is included herein.

Changes in
Internal Control over Financial Reporting

Overview

Management, with the
participation of our Chief Executive Officer and Chief Financial Officer, has
assessed whether any changes in our internal control over financial reporting
that occurred during the period from January 1, 2009 through December 31,
2009 have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting. Significant
changes were implemented and tested during the period from January 1, 2009
through December 31, 2009 to continue the remediation of our material
weaknesses in internal control over financial reporting. Management believes
the measures that we have implemented during 2009 to remediate the material
weaknesses in internal control over financial reporting have had a favorable
impact on our internal control over financial reporting since December 31,
2008. Changes in our internal control over financial reporting from January 1,
2009 through December 31, 2009 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting are described below.

Remediation
Actions Relating to Remaining Material Weaknesses

The discussion below
describes the actions that management took during 2009 and is currently in the
process of taking in 2010 to remediate our remaining material weaknesses in
internal control over financial reporting.

Accounting
for Taxes

Description of Material
Weakness as of December 31, 2008

The Company’s processes,
procedures and controls related to the preparation and review of the annual tax
provision and the accrual of other non-income tax contingencies were not
effective to ensure that amounts related to the tax provision, related current
or deferred income tax asset and liability accounts, and non-income tax
contingencies were accurate, recorded in the proper period, and determined in
accordance with U.S. GAAP. Specifically, we did not (i) analyze and
reconcile certain deferred income and tax payable accounts, (ii) appropriately
consider the need to record or disclose contingencies for certain income tax
positions in accordance with U.S. GAAP, and (iii) file tax returns in
certain foreign jurisdictions. Additionally, we had insufficient personnel with
appropriate qualifications and training in accounting for taxes.

Description of 2009
Remediation Actions

In late 2008, we hired an
Executive Director of Corporate Tax and during 2009, we have utilized
outsourced service providers for tax consulting services to assist in our
accounting for income taxes and the recording of non-income tax contingencies.
In October 2009, the Company engaged tax consultants with specific
expertise related to the remediation of accounting for taxes to assist the
Company in completing the remediation of its material weakness in this area. We
continue to evaluate our tax process and tax resource requirements. We continue
to work towards the completion of delinquent foreign statutory filings
identified during the prior years as result of management’s analysis, as well
as refining our process to help ensure timely completion of future filings. In
addition, in 2008 our management performed an analysis with the assistance of
outside consultants to assess, estimate, and record the exposure related to our
uncertain tax positions and non-income tax contingencies in accordance with
U.S. GAAP. During 2009 we continued to monitor and assess the uncertain tax
positions and non-income tax contingencies and are now evaluating and
implementing plans to reduce these contingencies. We continue to evaluate the
adequacy of our tax resources. This material weakness still exists, and the
Company is in the process of remediating this material weakness.

Financial
Reporting Process

Description of Material
Weakness as of December 31, 2008

The Company did not maintain
an effective financial reporting process to prepare financial statements in
accordance with U.S. GAAP. Specifically, our process lacked timely and complete
financial statement reviews, appropriate account closing procedures, and
appropriate reconciliation processes. Further, we were unable to complete
regulatory filings as required by the rules of the SEC.

Description of 2009 Remediation
Actions

During 2008, we redesigned
and implemented improved procedures and controls related to our monthly and
quarterly close processes including account reconciliations, enhancement of the
formal monthly close and reporting checklists, variance analysis of financial
statement fluctuations, and budget to actual reviews. As a result of the
remediation efforts, the Company