Natural Health Trends Reports First Quarter 2019 Financial Results
May 07 2019 - 9:00AM
Natural Health Trends Corp. (NASDAQ: NHTC), a leading
direct-selling and e-commerce company that markets premium quality
personal care, wellness and “quality of life” products
under the NHT Global brand, today announced its financial results
for the first quarter ended March 31, 2019.
First Quarter 2019 Financial
Highlights
- Total revenue of $19.3 million decreased 63% compared to $52.4
million in the first quarter of 2018 primarily due to a decline in
Greater China revenue.
- Gross profit was $14.1 million compared to $42.1 million in the
first quarter of 2018. As a percent of total revenue, gross profit
was 73% compared to 81% in the first quarter of 2018 primarily due
to product promotions and higher logistics costs.
- Operating loss was $2.7 million compared to operating income of
$10.0 million in the first quarter of 2018.
- Net loss was $1.9 million, or $0.17 per diluted share, compared
to net income of $8.8 million, or $0.78 per diluted share, in the
first quarter of 2018.
- The number of Active Members¹ decreased 11% to 87,340 at
March 31, 2019, compared to 97,840 at December 31, 2018,
and decreased 8% compared to 95,040 at March 31, 2018.
¹ Natural Health Trends defines Active Members as those
that have placed at least one product order with the Company during
the preceding twelve-month period.
Management Commentary
“As we previously disclosed, in response to the Chinese
government’s announcement of its 100-day campaign in January, as
was the case with many peer companies, we voluntarily suspended our
member activities,” commented Chris Sharng, President of Natural
Health Trends Corp. “The suspension covered more than 90% of the
number of days in the first quarter, which also included the
Chinese New Year holidays. We have made it our priority to fully
cooperate with the government and to proactively ensure we continue
to conduct our business in compliance with all applicable laws in
China. While our financial performance was adversely impacted by
this initiative during the quarter, we strongly support the actions
taken by the Chinese government to root out bad products and
deceptive practices in order to protect Chinese consumers.”
Mr. Sharng further commented, “While the 100-day campaign
expired in late April, there has been no official conclusion to end
the program. We have great confidence in our ability to navigate
the business through uncertain times and to renew growth once the
macroclimate improves. While we are cautious as it relates to our
overall performance for the remainder of 2019 given the uncertain
trade and regulatory environment, we were pleased with the outcome
of our successful major event in Hong Kong at the end of March and
ongoing support of our market leaders. We were also thrilled to
have launched NHT Global in India and remain encouraged by the
continued growth we have been experiencing in Latin America, led by
Peru.”
Corporate Development
On April 29, 2019, the Company received a letter from the
Listing Qualifications Department of The Nasdaq Stock Market LLC
stating that the Company has regained compliance with Nasdaq
Listing Rule 5250(c)(1), which requires timely filing of all
required periodic reports with the Securities and Exchange
Commission. The letter was sent to confirm the Company’s compliance
with the rule following the April 26, 2019 filing of the Company’s
Annual Report on Form 10-K for the year ended December 31,
2018.
Balance Sheet and Cash Flow
- Net cash used in operating activities was $11.4 million,
compared to net cash provided by operating activities of $11.1
million in the first quarter of 2018.
- Total cash and cash equivalents were $118.7 million as of March
31, 2019, down from $132.7 million as of December 31, 2018.
- As of March 31, 2019, $32.0 million of the stock repurchase
program previously approved on July 28, 2015 and increased on
January 13, 2016 remained available for future purchases, inclusive
of related estimated income tax.
First Quarter 2019 Financial Results Conference
Call
Management will host a conference call to discuss the first
quarter 2019 financial results today, Tuesday, May 7, 2019 at 1:30
p.m. Eastern Time. The conference call details are as follows:
|
|
|
Date: |
|
Tuesday, May 7, 2019 |
Time: |
|
1:30 p.m. Eastern Time /
10:30 a.m. Pacific Time |
Dial-in: |
|
1-877-407-0789
(Domestic)1-201-689-8562 (International) |
Conference
ID: |
|
13689758 |
Webcast: |
|
http://public.viavid.com/index.php?id=134051 |
|
|
|
For those unable to participate during the live broadcast, a
replay of the call will also be available from 4:30 p.m. Eastern
Time on May 7, 2019 through 11:59 p.m. Eastern Time on May 21, 2019
by dialing 1-844-512-2921 (domestic) and 1-412-317-6671
(international) and referencing the replay pin number:
13689758.
About Natural Health Trends Corp.
Natural Health Trends Corp. (NASDAQ: NHTC) is an international
direct-selling and e-commerce company operating through its
subsidiaries throughout Asia, the Americas, and Europe. The Company
markets premium quality personal care products under the NHT Global
brand. Additional information can be found on the Company’s website
at www.naturalhealthtrendscorp.com.
Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 -- Forward-looking statements in this press
release do not constitute guarantees of future performance. Such
forward-looking statements are subject to risks and uncertainties
that could cause the Company’s actual results to differ materially
from those anticipated. Such risks and uncertainties include the
risks and uncertainties detailed under the caption “Risk Factors”
in Natural Health Trends Corp.’s Annual Report on Form 10-K filed
on April 26, 2019 with the Securities and Exchange Commission. The
Company assumes no obligation to update any forward-looking
information contained in this press release or with respect to the
announcements described herein.
|
NATURAL HEALTH TRENDS CORP. |
CONSOLIDATED BALANCE SHEETS |
(In thousands, except share data) |
|
|
March 31, 2019 |
|
December 31, 2018 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
$ |
118,699 |
|
|
$ |
132,653 |
|
Inventories |
12,310 |
|
|
12,165 |
|
Other
current assets |
6,551 |
|
|
5,369 |
|
Total current
assets |
137,560 |
|
|
150,187 |
|
Property and equipment,
net |
888 |
|
|
934 |
|
Operating lease
right-of-use assets |
4,032 |
|
|
— |
|
Goodwill |
1,764 |
|
|
1,764 |
|
Restricted cash |
3,068 |
|
|
2,998 |
|
Deferred tax asset |
1,207 |
|
|
1,207 |
|
Other assets |
829 |
|
|
831 |
|
Total assets |
$ |
149,348 |
|
|
$ |
157,921 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
1,456 |
|
|
$ |
1,631 |
|
Accrued
commissions |
8,909 |
|
|
12,502 |
|
Other
accrued expenses |
4,823 |
|
|
6,121 |
|
Deferred
revenue |
3,754 |
|
|
6,795 |
|
Amounts
held in eWallets |
14,435 |
|
|
14,611 |
|
Operating
lease liabilities |
1,762 |
|
|
— |
|
Other
current liabilities |
1,191 |
|
|
1,424 |
|
Total current
liabilities |
36,330 |
|
|
43,084 |
|
Income taxes
payable |
16,982 |
|
|
16,982 |
|
Deferred tax
liability |
186 |
|
|
186 |
|
Long-term
incentive |
7,650 |
|
|
7,808 |
|
Operating lease
liabilities |
2,345 |
|
|
— |
|
Total liabilities |
63,493 |
|
|
68,060 |
|
Stockholders’
equity: |
|
|
|
Preferred
stock |
— |
|
|
— |
|
Common
stock |
13 |
|
|
13 |
|
Additional paid-in capital |
86,249 |
|
|
86,415 |
|
Retained
earnings |
39,772 |
|
|
44,431 |
|
Accumulated other comprehensive loss |
(974 |
) |
|
(1,250 |
) |
Treasury
stock, at cost |
(39,205 |
) |
|
(39,748 |
) |
Total stockholders’
equity |
85,855 |
|
|
89,861 |
|
Total liabilities and
stockholders’ equity |
$ |
149,348 |
|
|
$ |
157,921 |
|
NATURAL HEALTH TRENDS CORP. |
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) |
(In thousands, except per share
data) |
|
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
Net sales |
$ |
19,328 |
|
|
$ |
52,367 |
|
Cost of sales |
5,224 |
|
|
10,221 |
|
Gross profit |
14,104 |
|
|
42,146 |
|
Operating
expenses: |
|
|
|
Commissions expense |
9,498 |
|
|
22,980 |
|
Selling,
general and administrative expenses |
7,315 |
|
|
9,122 |
|
Total operating
expenses |
16,813 |
|
|
32,102 |
|
Income (loss) from
operations |
(2,709 |
) |
|
10,044 |
|
Other income, net |
432 |
|
|
163 |
|
Income (loss) before
income taxes |
(2,277 |
) |
|
10,207 |
|
Income tax provision
(benefit) |
(354 |
) |
|
1,383 |
|
Net income (loss) |
$ |
(1,923 |
) |
|
$ |
8,824 |
|
Net income (loss) per
common share: |
|
|
|
Basic |
$ |
(0.17 |
) |
|
$ |
0.78 |
|
Diluted |
$ |
(0.17 |
) |
|
$ |
0.78 |
|
Weighted-average number
of common shares outstanding: |
|
|
|
Basic |
11,333 |
|
|
11,286 |
|
Diluted |
11,333 |
|
|
11,288 |
|
NATURAL HEALTH TRENDS CORP. |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
(In thousands) |
|
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Net income (loss) |
$ |
(1,923 |
) |
|
$ |
8,824 |
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
Depreciation and amortization |
93 |
|
|
131 |
|
Noncash
lease expense |
447 |
|
|
— |
|
Changes in assets and
liabilities: |
|
|
|
Inventories |
(192 |
) |
|
473 |
|
Other
current assets |
(1,159 |
) |
|
1,548 |
|
Other
assets |
(2 |
) |
|
(5 |
) |
Accounts
payable |
(174 |
) |
|
920 |
|
Accrued
commissions |
(3,575 |
) |
|
(1,119 |
) |
Other
accrued expenses |
(795 |
) |
|
1,483 |
|
Deferred
revenue |
(3,030 |
) |
|
(333 |
) |
Amounts
held in eWallets |
(142 |
) |
|
(466 |
) |
Operating
lease liabilities |
(499 |
) |
|
— |
|
Other
current liabilities |
(241 |
) |
|
(3 |
) |
Long-term
incentive |
(158 |
) |
|
(308 |
) |
Net cash provided by
(used in) operating activities |
(11,350 |
) |
|
11,145 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Purchases
of property and equipment |
(46 |
) |
|
(17 |
) |
Net cash used in
investing activities |
(46 |
) |
|
(17 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Dividends
paid |
(2,736 |
) |
|
(1,479 |
) |
Net cash used in
financing activities |
(2,736 |
) |
|
(1,479 |
) |
Effect of exchange
rates on cash, cash equivalents and restricted cash |
248 |
|
|
247 |
|
Net increase (decrease)
in cash, cash equivalents and restricted cash |
(13,884 |
) |
|
9,896 |
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH, beginning of period |
135,651 |
|
|
138,478 |
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH, end of period |
$ |
121,767 |
|
|
$ |
148,374 |
|
SUPPLEMENTAL
DISCLOSURES OF OTHER CASH FLOW INFORMATION: |
|
|
|
Issuance
of treasury stock for employee awards, net |
$ |
377 |
|
|
$ |
554 |
|
Right-of-use assets obtained in exchange for operating lease
liabilities |
$ |
4,462 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
CONTACTS:
Company Contact:Scott DavidsonSenior Vice
President and Chief Financial OfficerNatural Health Trends Corp.Tel
(Hong Kong): +852-3107-0800Tel (U.S.):
310-541-0888scott.davidson@nhtglobal.com
Investor Contact:ADDO Investor RelationsTel:
310-829-5400investor.relations@nhtglobal.com
Natural Health Trends (NASDAQ:NHTC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Natural Health Trends (NASDAQ:NHTC)
Historical Stock Chart
From Apr 2023 to Apr 2024