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.

  • 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.

    “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.”

    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.

  • 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.

    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.

    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.

    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     $ —  
                   

    Categorized in : Natural Health News