Natural Health Trends Reports First Quarter 2018 Financial Results
May 02 2018 - 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, 2018.
First Quarter 2018 Financial
Highlights
- Total revenue of $52.4 million decreased 13% compared to $59.9
million in the first quarter of 2017 and increased 14% compared to
$46.1 million in the fourth quarter of 2017. -- Revenue
from the Company’s Hong Kong operations, which represented 91% of
total revenue, was $47.6 million, a decrease of 13% compared to
$54.6 million in the first quarter of 2017, and an increase of 20%
compared to $39.6 million in the fourth quarter of 2017.-- Revenue
outside of Hong Kong of $4.7 million decreased 11% compared to $5.3
million in the first quarter of 2017 and decreased 28% compared to
$6.5 million in the fourth quarter of 2017.
- Operating income was $10.0 million compared to $13.0 million in
the first quarter of 2017 and $8.7 million in the fourth quarter of
2017.
- Net income was $8.8 million, or $0.78 per diluted share,
compared to net income of $10.4 million, or $0.93 per diluted
share, in the first quarter of 2017.
- The number of Active Members1 decreased 1% to 95,040 at
March 31, 2018, compared to 95,670 at December 31, 2017,
and decreased 16% compared to 113,710 at March 31, 2017.
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
“Our momentum in the back half of 2017 carried into 2018 with
our total revenue increasing 14% over the prior quarter, marking
our second consecutive quarter of sales growth,” commented Chris
Sharng, President of Natural Health Trends Corp. “Our improved
top-line performance is a direct result of the enhancements made to
our commission plan to better incentivize up-and-coming members and
ease rank advancement, along with our effective marketing programs.
We also held our international Ambassador Academy in Hong Kong,
which attracted over 5,500 people. The orders generated by
promotions directly related to the event exceeded those of the last
three years.”
Mr. Sharng further commented, “With our revenue for the quarter
improved, 2018 is off to a good start. Our leaders remain energized
and enthusiastic and we look forward to more productive incentive
trips and targeted training programs this year to drive further
progress and growth.”
Balance Sheet and Cash Flow
- Net cash provided by operating activities was $11.1 million,
compared to $13.8 million in the first quarter of 2017.
- On April 17, 2018, the Company’s Board of Directors
declared a quarterly cash dividend of $0.14, which represents an 8%
increase over the prior quarter dividend, as well as a special cash
dividend of $1.76 per share on outstanding common stock. The
dividends will be payable on May 25, 2018 to stockholders of
record as of May 15, 2018.
First Quarter 2018 Financial Results Conference
Call
Management will host a conference call to discuss the first
quarter 2018 financial results today, Wednesday, May 2, 2018 at
11:30 a.m. Eastern Time. The conference call details are as
follows:
Date: |
Wednesday, May 2,
2018 |
Time: |
11:30 a.m. Eastern Time
/ 8:30 a.m. Pacific Time |
Dial-in: |
1-877-407-0789
(Domestic)1-201-689-8562 (International) |
Conference
ID: |
13678508 |
Webcast: |
http://public.viavid.com/index.php?id=129162 |
For those unable to participate during the live broadcast, a
replay of the call will also be available from 2:30 p.m. Eastern
Time on May 2, 2018 through 11:59 p.m. Eastern Time on May 16, 2018
by dialing 1-844-512-2921 (domestic) and 1-412-317-6671
(international) and referencing the replay pin number:
13678508.
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 March 27, 2018 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) |
|
|
|
|
|
March 31, 2018 |
|
December 31, 2017 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
145,095 |
|
|
$ |
135,311 |
|
Inventories |
7,944 |
|
|
8,398 |
|
Other
current assets |
6,021 |
|
|
7,534 |
|
Total current
assets |
159,060 |
|
|
151,243 |
|
Property and equipment,
net |
1,040 |
|
|
1,149 |
|
Goodwill |
1,764 |
|
|
1,764 |
|
Restricted cash |
3,279 |
|
|
3,167 |
|
Deferred tax asset |
1,435 |
|
|
1,435 |
|
Other assets |
809 |
|
|
796 |
|
Total assets |
$ |
167,387 |
|
|
$ |
159,554 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
2,669 |
|
|
$ |
1,751 |
|
Income
taxes payable |
42 |
|
|
309 |
|
Accrued
commissions |
10,027 |
|
|
11,170 |
|
Other
accrued expenses |
8,549 |
|
|
7,605 |
|
Deferred
revenue |
4,112 |
|
|
4,455 |
|
Amounts
held in eWallets |
14,623 |
|
|
15,152 |
|
Other
current liabilities |
1,756 |
|
|
1,479 |
|
Total current
liabilities |
41,778 |
|
|
41,921 |
|
Income taxes
payable |
19,052 |
|
|
19,052 |
|
Deferred tax
liability |
55 |
|
|
56 |
|
Long-term
incentive |
7,596 |
|
|
7,904 |
|
Total liabilities |
68,481 |
|
|
68,933 |
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity: |
|
|
|
Preferred
stock |
— |
|
|
— |
|
Common
stock |
13 |
|
|
13 |
|
Additional paid-in capital |
86,415 |
|
|
86,683 |
|
Retained
earnings |
52,253 |
|
|
44,908 |
|
Accumulated other comprehensive loss |
(27 |
) |
|
(413 |
) |
Treasury
stock, at cost |
(39,748 |
) |
|
(40,570 |
) |
Total stockholders’
equity |
98,906 |
|
|
90,621 |
|
Total liabilities and
stockholders’ equity |
$ |
167,387 |
|
|
$ |
159,554 |
|
|
|
|
|
|
|
|
|
|
|
NATURAL HEALTH TRENDS
CORP.CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
data) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
|
(Unaudited) |
Net sales |
$ |
52,367 |
|
|
$ |
59,874 |
|
Cost of sales |
10,221 |
|
|
11,245 |
|
Gross profit |
42,146 |
|
|
48,629 |
|
Operating
expenses: |
|
|
|
Commissions expense |
22,980 |
|
|
25,965 |
|
Selling,
general and administrative expenses |
9,122 |
|
|
9,672 |
|
Total operating
expenses |
32,102 |
|
|
35,637 |
|
Income from
operations |
10,044 |
|
|
12,992 |
|
Other income, net |
163 |
|
|
156 |
|
Income before income
taxes |
10,207 |
|
|
13,148 |
|
Income tax
provision |
1,383 |
|
|
2,723 |
|
Net income |
$ |
8,824 |
|
|
$ |
10,425 |
|
Net income per common
share: |
|
|
|
Basic |
$ |
0.78 |
|
|
$ |
0.93 |
|
Diluted |
$ |
0.78 |
|
|
$ |
0.93 |
|
Weighted-average number
of common shares outstanding: |
|
|
|
Basic |
11,286 |
|
|
11,229 |
|
Diluted |
11,288 |
|
|
11,251 |
|
Cash dividends declared
per common share |
$ |
0.13 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
|
NATURAL HEALTH TRENDS
CORP.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands) |
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
|
(Unaudited) |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Net income |
$ |
8,824 |
|
|
$ |
10,425 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
131 |
|
|
136 |
|
Stock-based compensation |
— |
|
|
9 |
|
Cumulative translation adjustment realized in net income |
— |
|
|
(258 |
) |
Changes in assets and
liabilities: |
|
|
|
Inventories |
473 |
|
|
2,091 |
|
Other
current assets |
1,548 |
|
|
1,419 |
|
Other
assets |
(5 |
) |
|
(62 |
) |
Accounts
payable |
920 |
|
|
(61 |
) |
Income
taxes payable |
(275 |
) |
|
1,798 |
|
Accrued
commissions |
(1,119 |
) |
|
(428 |
) |
Other
accrued expenses |
1,483 |
|
|
(1,555 |
) |
Deferred
revenue |
(333 |
) |
|
(647 |
) |
Amounts
held in eWallets |
(466 |
) |
|
1,138 |
|
Other
current liabilities |
272 |
|
|
314 |
|
Long-term
incentive |
(308 |
) |
|
(508 |
) |
Net cash provided by
operating activities |
11,145 |
|
|
13,811 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Purchases
of property and equipment |
(17 |
) |
|
(72 |
) |
Net cash used in
investing activities |
(17 |
) |
|
(72 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Dividends
paid |
(1,479 |
) |
|
(4,981 |
) |
Net cash used in
financing activities |
(1,479 |
) |
|
(4,981 |
) |
Effect of exchange
rates on cash, cash equivalents and restricted cash |
247 |
|
|
22 |
|
Net increase in cash,
cash equivalents and restricted cash |
9,896 |
|
|
8,780 |
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH, beginning of period |
138,478 |
|
|
128,884 |
|
CASH, CASH EQUIVALENTS
AND RESTRICTED CASH, end of period |
$ |
148,374 |
|
|
$ |
137,664 |
|
SUPPLEMENTAL
DISCLOSURES OF OTHER CASH FLOW INFORMATION: |
|
|
|
Issuance
of treasury stock for employee awards, net |
554 |
|
|
1,393 |
|
|
|
|
|
|
|
CONTACTS:
Company Contact:Scott DavidsonSenior Vice
President and Chief Financial OfficerNatural Health Trends
Corp.Tel: 310-541-0888scott.davidson@nhtglobal.com
Investor Contact:ADDO Investor RelationsTel:
310-829-5400investor.relations@nhtglobal.com
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