Date: June 28, 2011

By:

/s/ Stephen M. Bunker

Chief Financial Officer, Executive Vice President and Treasurer of Nature’s Sunshine Products, Inc., and Member of the Governing Board which is the Plan Administrator

Report of Independent Registered Public Accounting Firm

1

Financial Statements

Statements of Net Assets Available for Benefits

2

Statement of Changes in Net Assets Available for Benefits

3

Notes to Financial Statements

4

Supplementary Schedule*

Schedule H, Part IV, Item 4i - Schedule of Assets (Held at End of Year)

14

/s/ Tanner LLC

Salt Lake City, Utah

June 28, 2011

As of December 31,

2010

2009

Assets

Investments at fair value

$

34,896,551

$

31,617,366

Receivables:

Employee contributions

55,247

56,987

Employer contributions

20,807

43,273

Total receivables

76,054

100,260

Total net assets available for benefits at fair value

34,972,605

31,717,626

Adjustment from fair value to contract value for fully benefit-responsive investment contracts

(82,372

)

(31,437

)

Net assets available for benefits

$

34,890,233

$

31,686,189

Additions:

Investment income:

Net appreciation in fair value of investments

$

3,534,033

Interest and dividends

434,503

Other income

14,735

Total investment income

3,983,271

Contributions:

Employee

1,808,372

Employer

1,162,853

Rollover

309,821

Total contributions

3,281,046

Total additions

7,264,317

Deductions:

Benefits paid to participants

4,059,185

Plan expenses

1,088

Total deductions

4,060,273

Net increase in net assets available for benefits

3,204,044

Net assets available for benefits:

Beginning of the year

31,686,189

End of the year

$

34,890,233

1.

Description of the Plan

The following brief description of the Nature’s Sunshine Products, Inc. Tax Deferred Retirement Plan (the “Plan”) provides only general information. Participants, and other users of the financial statements, should refer to the Plan document and summary plan description for a more complete description of the Plan’s provisions.

General

The Plan is a defined contribution plan established to provide retirement benefits to eligible employees of Nature’s Sunshine Products, Inc. (the “Company” or the “Employer”) and its domestic subsidiaries, Synergy Worldwide, Inc. and Nature’s Sunshine Products Direct, Inc., collectively. Employees that are 18 years of age or older are eligible to participate in the Plan immediately upon hire. The Plan is intended to be a qualified retirement plan under the Internal Revenue Code (“IRC”) and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended.

Contributions

Eligible employees automatically become a participant and are enrolled into the Plan at a 5 % deferral rate, unless the employee elects otherwise. Participants may change their deferral percentage of their eligible compensation up to 100%, not to exceed the IRC limits. Contributions are limited by the IRC, which established a maximum contribution of $16,500 ($22,000 for participants age 50 and older) for the year ended December 31, 2010. Highly compensated employees, as defined in the IRC, may contribute a percentage of their eligible compensation, not to exceed 5%.

The Company matches the participants’ contributions to the Plan. Effective October 1, 2010, the Company began matching 50% of the employee deferrals, up to a maximum of 5% of their eligible compensation. Prior to October 1, 2010, the Company matched 100% of the employee deferral, up to a maximum of 5% of their eligible compensation.

The Plan permits rollovers to the Plan from certain types of retirement plans.

Participant Accounts

Individual accounts are maintained for each Plan participant. Each participant’s account is credited with the participant’s contributions, the Company’s matching contributions, and an allocation of investment earnings, and is charged with withdrawals, an allocation of investment losses and its share of any expenses of the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

1.

Description of the Plan Continued

Participant-Directed Options for Investments

Participants direct the investment of their contributions and the Company matching contributions into various investments offered by the Plan. Investment options include mutual funds and a common/collective trust fund. Participants may change their election or transfer monies between funds at any time.

Since March 2006, purchases of Company common stock under the Plan were suspended. Participants with common stock of the Company in their accounts may direct the sale of the stock and the investment of the resulting monies into other investments offered by the Plan.

Vesting

Participants are immediately vested in their contributions to the Plan plus actual earnings thereon. A participant is 100% vested in the employer contributions and related earnings after three years of qualifying service, upon attaining the Plan’s normal retirement age of 59 ½, or upon death or certain types of disability while an employee.

Payment of Benefits

The Plan provides for benefit distributions (either in installments or as a lump sum) to Plan participants or their beneficiaries of their vested account balance upon termination of employment, certain types of disability or attainment of age 59 ½ (retirement age) while employed by the Company. Vested benefits may also be rolled over into another retirement plan.

If the value of a vested account is not greater than $1,000 when employment is terminated, the benefit will be distributed to the participant following the date of termination.

If the value of a vested account is not more than $5,000 and the participant does not elect to receive the distribution or roll it over to an eligible retirement plan, the Plan Administrator will automatically initiate a distribution to a Principal Financial Group Individual Retirement Rollover Account when employment is terminated.

The Plan provides that the remaining vested account balance of a Plan participant at death will be distributed in a lump sum to the beneficiary.

Hardship Withdrawals

Participants may withdraw all or part of their vested account balances, including voluntary contributions (but none of the income earned on such contributions after December 31, 1988), upon demonstration of a financial hardship subject to the requirements of the Plan. Hardship withdrawals are permitted based on the safe harbor rules.

1.

Description of the Plan Continued

Forfeitures

Forfeitures are first used to pay Plan administrative expenses and then used to reduce employer contributions. During the year ended December 31, 2010, the forfeiture account had investment gains of $6,680 and forfeitures utilized to reduce Company contributions totaled $57,185. Additional forfeitures that became available for general use for the year ended December 31, 2010 totaled $51,181. As of December 31, 2010 and 2009, the balance in the forfeiture account was $46,017 and $45,341, respectively.

Nature’s Sunshine Products, Inc. Common Stock Voting Rights

Each participant is entitled to exercise voting rights attributable to shares of Nature’s Sunshine Products, Inc. common stock allocated to his or her account and is notified prior to the time that such rights are to be exercised.

2.

Summary of Significant Accounting Policies

Basis of Accounting

The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”).

Recent Accounting Pronouncements

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2010-06, Improving Disclosures about Fair Value Measurements (Topic 820) — Fair Value Measurements and Disclosures, which expanded the required disclosures about fair value measurements. In particular, this guidance requires (i) separate disclosure of the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements along with the reasons for such transfers, (ii) information about purchases, sales, issuances and settlements to be presented separately in the reconciliation for Level 3 fair value measurements, (iii) fair value measurement disclosures for each class of assets and liabilities and (iv) disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for fair value measurements that fall in either Level 2 or Level 3. This guidance was effective for annual reporting periods beginning after December 15, 2009 except for (ii) above which is effective for fiscal years beginning after December 15, 2010. The partial adoption of this guidance did not have a material effect on the Plan’s net assets available for benefits, changes in net assets available for benefits or related disclosures.

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (Topic 820) — Fair Value Measurement (ASU 2011-04), to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. ASU 2011-04 is effective for the Plan prospectively for the year ending December 31, 2012. The Plan is currently evaluating the impact of the pending adoption of ASU 2011-04 on its financial statements.

2.

Summary of Significant Accounting Policies Continued

Use of Estimates

The preparation of financial statements in conformity with GAAP requires Plan management to make estimates and assumptions that affect certain reported amounts of net assets available for benefits at the date of the financial statements, the changes in net assets available for benefits during the reporting period and, when applicable, the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates.

Investment Contracts

Fully benefit-responsive investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan.

The Plan invests in investment contracts through a collective trust in the Morley Financial Services Stable Value Fund (the “Stable Value Fund”). The statements of net assets available for benefits present the fair value of the investments in the collective trust as well as the adjustment of the investments in the collective trust from fair value to contract value relating to the investment contracts. The statement of changes in net assets available for benefits is prepared on a contract value basis.

Investment Valuation and Income Recognition

Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 5 for disclosure of fair value measurements.

The Plan utilizes market data or assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally observable. The Plan primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, the Plan uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Plan is able to classify fair value balances based on the observance of those inputs into the fair value hierarchy levels as set forth in the fair value accounting guidance.

Net appreciation (depreciation) in the fair value of investments includes both realized and unrealized gains and losses. Purchases and sales of securities are recorded on a trade-date basis. Dividend income is recorded on the ex-dividend date. Investment earnings are automatically reinvested into the fund from which they were derived.

Following is a description of the valuation methodologies used for the Plan’s investment assets measured at fair value. There have been no changes in the methodologies used at December 31, 2010 and 2009.

·

Common stock: Valued at the closing price reported on the active market on which the individual securities are traded.

·

Mutual funds: Valued at the net asset value (“NAV”) of shares held by the Plan at year end.

2.

Summary of Significant Accounting Policies Continued

·

Common collective trust fund: Valued based on information provided by the trustee and using the audited financial statements of the common collective trust at year end.

Level 1 inputs are quoted prices (unadjusted) or NAVs in active markets that the Plan has the ability to access as of the reporting date and consist of investments in common stock and mutual funds. Level 2 inputs, which are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly corroborated or observable as of the reporting date and generally use valuation methodologies, consist of a common collective trust fund as discussed in “Investment contracts” above. The common collective trust fund is a Level 2 input as participants have the ability to redeem their investments at the contract value at that point in time. Level 3 inputs include significant pricing inputs that are generally less observable from objective sources. The Plan holds no Level 3 investments as of December 31, 2010 and 2009.

The preceding described methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Payment of Benefits

Benefits are recorded when paid by the Plan.

Administrative Costs

Principal Financial Group (“Principal”) direct expenses, some professional fees and certain administrative fees for participant communication and services, recordkeeping and benefit payment services are paid by the Plan. These expenses are borne by participants based on their investments in the Plan’s investment funds. Other administrative expenses and some professional fees are paid by the Company.

3.

Risks and Uncertainties

The Plan invests in various investment securities that are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits.

As of December 31, 2010 and 2009, approximately 6% and 8%, respectively, of total Plan investments were held in Company common stock. This investment is exposed to market risk from changes in the fair market value of such shares.

4.

Investments

The Plan’s investments that represented 5% or more of the total Plan’s net assets available for benefits as of December 31, 2010 and 2009 are as follows:

The Principal Life Time 2010 R4 Fund did not exceed 5% or more of total net assets available for benefits as of December 31, 2010.

During 2010, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in fair value as follows:

2010

Common stock

Nature’s Sunshine Products, Inc.

$

111,478

Common / collective trust

Morley Financial Services Stable Value Fund (at contact value)

101,899

Mutual Funds

Equity

1,210,797

Balanced

1,747,791

Fixed Income

129,288

International Equity

232,780

$

3,534,033

The Plan invests in a fully benefit-responsive investment contract through the Morley Financial Services Stable Value Fund (the Stable Value Fund).  Union Bond & Trust Company, the trustee of the Stable Value Fund, maintains the contributions in a general account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The objective of the Stable Value Fund is to provide a diversified group of investments offering competitive levels of yield consistent with stable fixed-income methodology. The Stable Value Fund seeks to achieve this objective by investing in conventional, synthetic and separate account investment contracts issued by life insurance companies, banks and other financial institutions.

4.

Investments Continued

Market value events may limit the ability of the Stable Value Fund to transact at contract value with the issuer. Such events may include but are not limited to: changes or amendments in fund administration, merger or consolidation of investors, group terminations or layoffs, implementation of an early retirement program, termination or partial termination of the fund, and failure to meet certain tax qualifications. Under the terms of agreement to participate in the Stable Value Fund, withdrawals can be delayed up to 12 months upon request.  The Stable Value Fund may grant withdrawal from the fund if there are sufficient cash assets to satisfy the request.  As of December 31, 2010, 12% of the Stable Value Fund was in cash.

The contract value of the Stable Value Fund at December 31, 2010 and 2009 was $4,067,762 and $4,651,135, respectively. The average yield earned based on actual earnings was 2% at December 31, 2010.

5.

Fair Value Measurements

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).  For disclosures, GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels described below:

Level 1 -

Unadjusted quoted prices in active markets for identical assets.

Level 2 -

Inputs to the valuation methodology include:

·

Quoted prices for similar assets or liabilities in active markets;

·

Quoted prices for identical or similar assets or liabilities in inactive markets;

·

Inputs other than quoted prices that are observable for the asset or liability;

·

Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 -

Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

5.

Fair Value Measurements Continued

Assets Measured at Fair Value on a recurring basis
as of December 31, 2010

Level 1

Level 2

Level 3

Total

Mutual funds

Equity

$

8,092,986

$

¾

$

¾

$

8,092,986

Balanced

15,645,541

¾

¾

15,645,541

Fixed Income

2,948,833

¾

¾

2,948,833

International equity

2,002,547

¾

¾

2,002,547

Common/ collective trust

¾

4,150,134

¾

4,150,134

Common stock

2,056,510

—

¾

2,056,510

Total assets at fair value

$

30,746,417

$

4,150,134

$

¾

$

34,896,551

Assets Measured at Fair Value on a recurring basis
as of December 31, 2009

Level 1

Level 2

Level 3

Total

Mutual funds

Equity

$

6,673,559

$

¾

$

¾

$

6,673,559

Balanced

13,972,128

¾

¾

13,972,128

Fixed Income

2,422,997

¾

¾

2,422,997

International equity

1,486,784

¾

¾

1,486,784

Common/ collective trust

¾

4,682,572

¾

4,682,572

Common stock

2,379,326

¾

¾

2,379,326

Total assets at fair value

$

26,934,794

$

4,682,572

$

¾

$

31,617,366

6.

Plan Termination

Although it has not expressed any intention to do so, the Company has the right under the Plan document to amend or terminate the Plan subject to the terms of the Plan agreement and the provisions of ERISA.  In the event of Plan termination, participants will become 100% vested in their employer matching contributions and these contributions become non-forfeitable.

7.

Tax Status

The Company received a determination letter dated April 27, 2010, from the Internal Revenue Service (“IRS”), informing the Company that the Plan is designed in accordance with applicable sections of the IRC. The Company believes that the Plan continues to be designed and operated in compliance with the applicable requirements of the IRC and the trust established under the Plan is tax-exempt under the IRC.  Accordingly, an income tax provision is not recorded by the Plan.

Management evaluates tax positions taken by the Plan and recognizes a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would be sustained upon examination by taxing authorities.  Plan management has concluded that as of December 31, 2010, there are no uncertain tax positions that require either recognition or disclosure in the financial statements.  The Plan is subject to routine audits by taxing authorities for tax years for which the applicable statutes of limitations have not expired.  There are currently no audits of for any tax periods in progress.  Plan management believes it is no longer subject to income tax examinations for years prior to 2007.

8.

Party-in-Interest Transactions

Certain Plan investments include mutual funds and a common/collective trust fund managed by Principal. Principal has acted as the Plan trustee, and therefore is a party-in-interest.  While transactions involving Plan assets with a party-in-interest are usually prohibited, these transactions are exempt under ERISA Section 408(b)(8).

Transactions associated with the shares of common stock of the Company are also considered exempt party-in-interest transactions. The Plan sold 49,600 shares of the Company’s common stock during the year ended December 31, 2010, and sold 2,840 shares of the Company’s common stock during the year ended December 31, 2009.  As of December 31, 2010 and 2009, the Plan held 229,010 and 278,610 shares, respectively, of common stock of the Company.

9.

Contingencies

The IRS is continuing an examination of the Company’s tax returns for the taxable years 2006 through 2008. The Company’s U.S. federal income tax returns are open from 2003 to 2008 and the Company has several foreign jurisdictions that have open years between 2003 and 2008. The Company is currently unable to determine the outcome of these examinations and their related impact, if any, on the Plan’s financial statements or the market for the shares of the Company’s common stock held by the Plan.

During 2006, multiple parties commenced prospective class action lawsuits against the Company. These suits were subsequently consolidated into one class action lawsuit. Given the Plan’s ownership of shares of the Company’s common stock for the accounts of certain Plan participants, the Plan engaged independent legal counsel to advise the Plan’s investment fiduciary regarding the implications of the pending claims with respect to shares of the Company’s common stock held by the Plan.  Final judgment on the consolidated class action lawsuit was reached on February 9, 2010.  The Plan participants participated in the settlement which is included in other income.

10.

Reconciliation of Financial Statements to Form 5500

The financial statements are prepared on the accrual basis of accounting and the Form 5500 is prepared on the cash basis of accounting.  In addition the Stable Value Fund holds fully benefit-responsive investment contracts. The Stable Value Fund is reported at contract value in the statement of changes in net assets available for benefits and fair value in the Form 5500.  The following is a reconciliation of assets available for benefits of the financial statements to the Form 5500 as of and for the years ended December 31:

2010

2009

Net assets available for benefits as presented in the financial statements

$

34,890,233

$

31,686,189

Employee contributions receivable

(55,247

)

(56,987

)

Employer contributions receivable

(20,807

)

(43,273

)

Adjustment from contract value to fair value for fully benefit-responsive investment contracts

82,372

31,437

Net assets available for benefits as presented in Form 5500

$

34,896,551

$

31,617,366

The following is a reconciliation of the net increase in net assets available for benefits per the financial statements to Form 5500 for the year ended December 31, 2010:

Net increase in net assets available for benefits per the financial statements

$

3,204,044

Change in adjustment from fair value to contract value for fully benefit responsive investment contract

50,935

Employee contribution receivable not recorded on the Form 5500 at December 31, 2009

56,987

Employer contribution receivable not recorded on the Form 5500 at December 31, 2009

43,273

Employee contribution receivable not recorded on the Form 5500 at December 31, 2010

(55,247

)

Employer contribution receivable not recorded on the Form 5500 at December 31, 2010

(20,807

)

Net income per the Form 5500

$

3,279,185

(a)

(b)

(c)

(d)

(f)

Party in

Identity of

Description of

Number of

(e)

Current

Interest

Issue

Investment

Units

Cost

Value

Common/ Collective Trust:

*

Morley Financial Services, Inc.

Morley Financial Services Stable Value Fund
(contract value of $4,067,762)

227,276

**

$

4,150,134

Mutual Funds:

*

Principal Global Investors

Principal LifeTime 2020 R4 Fund

484,322

**

5,618,138

*

Principal Global Investors

Principal LifeTime 2030 R4 Fund

358,560

**

4,241,768

*

Principal Global Investors

Principal LifeTime 2040 R4 Fund

208,403

**

2,436,230

Capital Research and Management

American Funds Growth Fund of America R4 Fund

77,006

**

2,324,801

PIMCO

PIMCO Total Return A Fund

186,537

**

2,023,924

Columbia Management Advisors

Columbia Value & Restructuring R Fund

28,752

**

1,451,706

*

Principal Global Investors

Principal Life Time 2010 R4 Fund

119,577

**

1,328,505

Columbia Management Advisors

Columbia Acorn A Fund

44,877

**

1,312,164

*

Principal Global Investors

Principal LargeCap S&P 500 Index R4 Fund

121,588

**

1,074,839

*

Principal Global Investors

Principal International Emerging Markets R4 Fund

27,604

**

738,676

*

Principal Global Investors

Principal Life Time Strategic Income R4 Fund

69,448

**

731,284

*

Principal Global Investors

Principal LifeTime 2050 R4 Fund

59,656

**

671,723

Harbor Capital Advisors

Harbor International Inv Fund

11,144

**

668,667

*

Principal Global Investors

Principal Diversified International R4 Fund

58,069

**

595,204

*

Edge Asset Management, Inc.

SAM Balanced R4 Portfolio

35,591

**

448,442

Fidelity Research & Management Co.

Fidelity Advisor Government Income T Fund

40,515

**

422,973

*

Principal Global Investors

Principal Real Estate Securities R4 Fund

26,737

**

420,580

*

Principal Global Investors

Principal MidCap S&P 400 Index R4 Fund

28,701

**

409,273

Davis Selected Advisor

Davis New York Venture A Fund

9,723

**

333,878

Capital Research and Management

American Funds Capital World Bond R4 Fund

16,264

**

331,953

Goldman Sachs / LA Capital Management

Goldman Sachs MidCap Value I R4 Fund

20,000

**

259,605

*

Principal Global Investors

Principal SmallCap 600 Index R4 Fund

12,979

**

209,864

Fidelity Research & Management Co.

Fidelity Advisor High Income Advantage T Fund

17,049

**

169,983

*

Principal Global Investors

SmallCap Value II R4 Fund

16,891

**

160,807

Columbia Management Advisors

Columbia Select Small Cap R Fund

7,885

**

135,469

*

Edge Asset Management, Inc.

SAM Flexible Income R4 Portfolio

10,950

**

123,299

*

Edge Asset Management, Inc.

SAM Conservative Growth R4 Portfolio

1,415

**

18,858

*

Edge Asset Management, Inc.

SAM Strategic Growth R4 Portfolio

1,131

**

16,502

*

Edge Asset Management, Inc.

SAM Conservative Balanced R4 Portfolio

1,029

**

10,792

Total Mutual Funds

28,689,907

Common Stock:

*

Nature’s Sunshine Products Inc.

Common Stock

229,010

**

2,056,510

Total Investments

$

 34,896,551

Exhibit Number

Description

23.1

Consent of Independent Registered Public Accounting Firm — Tanner LLC