SecProbe.io

CORRESP
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filename1.htm

Thomas W. Kellerman

650-843-7550

tkellerman@morganlewis.com

November 9,
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 delivered verbally by Ms. Atkins
on November 1, 2010 (the “Comments”) with respect to the Company’s filings
referenced above and to the Company’s Response Letter, dated October 19,
2010, to the Comment Letter from the Commission, dated September 22,
2010.  The numbered paragraphs below
restate the Comments in bold and italics, and the discussion set out below each
such paragraph is the Company’s response to the Comments.

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

1.                                      We
note your proposed revisions to the disclosure in response to our prior Comment
1.  Please further revise the disclosure
to comply with Item 308(a)(1) of Regulation S-K.

In
response to the Staff’s comment, the Company proposes to further 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 will file the amended Form 10-K
concurrently with this letter.

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

2.                                      We
refer to your response to our prior Comment 3.
Please revise the disclosure in future filings to clarify, if true, that
the only change to your internal control over financial reporting relates to
your accounting for income taxes.

As
previously noted, 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 Company has disclosed, in the Form 10-K
and in each of the Forms 10-Q for the quarterly periods ending March 31,
2010 and June 30, 2010, that the Company’s controls and procedures were
not effective due to a material weakness in the Company’s control over
financial reporting related to accounting for taxes.  Because this material weakness, and
remediation thereof, is ongoing, the Company has not experienced a change
materially affecting its internal control over financial reporting related to
accounting for income taxes requiring disclosure under Item 308(c).  In future filings on Form 10-Q for so
long as applicable, the Company will include an explicit disclosure to clarify
that the only material weakness affecting its internal control over financial
reporting is with respect to accounting for income taxes, and it will provide
the status of any change or ongoing weakness to such internal control.

*    *    *

In
connection with the Company’s response to the Comments, 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 W. Kellerman

  cc:  Jamon Jarvis

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 is responsible for establishing and maintaining adequate
internal control over financial reporting for the Company.

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,
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, 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,
2009, as a result of the existence of a material weakness 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 has completed its regulatory
filings during 2009 as required by the rules of the SEC. Our remediation
efforts during the second and third quarters of 2009 included the enhancement
and testing of the processes and controls instituted in the prior year. We
believe that these remediation efforts have improved our financial reporting
process and that the material weakness was effectively remediated at
September 30, 2009.

Information Technology Systems

Description
of Material Weakness as of December 31, 2008

The
Company did not maintain effective internal control over financial reporting
related to certain information technology applications and general computer
controls that are considered to have an impact on financial reporting and that
resulted in a more than reasonable possibility that material misstatements in
our financial statements would not be prevented or detected.

Specifically,
we lacked effective controls in the following areas:

·                  Access
Control — The Company did not maintain effectively designed
controls to prevent unauthorized access to certain programs and data, and
provide for periodic review and monitoring of access including reviews of
security logs and analysis of segregation of duties conflicts.

·                  Change
Management — The Company did not maintain effectively designed
controls to ensure that all information technology program and data changes
were authorized, developer access to the production environment was limited,
and that all program and data changes were adequately tested for accuracy and
appropr