Exhibit 99.1

 

Natural Health Trends Reports First Quarter 2022 Financial Results

 

  Hong Kong and China COVID restrictions impacted our logistics
 

Sales momentum in Japan and Southeast Asia continued

  Declared a quarterly cash dividend of $0.20 per share

 

HONG KONG – May 4, 2022 – 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 quarter ended March 31, 2022.

 

First Quarter 2022 Financial Highlights

 

 

Revenue of $11.5 million decreased 14% compared to $13.5 million in the first quarter of 2021.

 

 

Operating loss was $383,000 compared to operating income of $220,000 in the first quarter of 2021.

 

 

Net loss was $105,000, or $0.01 per diluted share, compared to net income of $153,000, or $0.01 per diluted share, in the first quarter of 2021.

 

 

The number of Active Members1 decreased 3% to 44,490 at March 31, 2022 compared to 45,760 at December 31, 2021, and decreased 10% compared to 49,420 at March 31, 2021.

 

 

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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

 

“The first quarter was challenging due to a significant increase in COVID-19 government-mandated restrictions and lockdowns impacting Hong Kong and China, especially Shenzhen, immediately following the Chinese New Year holiday. The additional measures disrupted supply chains, created order delivery uncertainty, and prohibited us from holding in-person member events in China and Macau. Even though much of the Mainland Chinese population was under some forms of lockdown during the quarter, our leaders remain committed to finding and implementing innovative ways to conduct business as our staff continues to adjust to the ever-changing needs of our global business,” said Chris Sharng, President of Natural Health Trends Corp.

 

Mr. Sharng continued, “We are encouraged by the sustained growth in Japan and Southeast Asia and continue to ready ourselves for expansion and diversification in Latin America. We recently conducted successful virtual events for members in North America, Peru, Japan, India and CIS markets and an in-person event for members in Europe. We are pleased with the enthusiasm and participation to embrace our products and marketing programs as they bring our health, wellness and beauty products to customers around the world.”

 

 

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Balance Sheet and Cash Flow

 

 

Net cash used in operating activities was $2.3 million in the first quarter of 2022, compared to net cash provided by operating activities of $414,000 in the first quarter of 2021.

 

Total cash and cash equivalents were $79.4 million at March 31, 2022, down from $83.8 million at December 31, 2021.

 

On May 2, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 on each share of common stock outstanding. The dividend will be payable on May 27, 2022 to stockholders of record as of May 17, 2022.

 

First Quarter 2022 Financial Results Conference Call

 

Management will host a conference call to discuss the first quarter 2022 financial results today, Wednesday, May 4, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:

 

Date:

Wednesday, May 4, 2022

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:

13727755

Webcast:

https://viavid.webcasts.com/starthere.jsp?ei=1534881&tp_key=6bc04f960d

 

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 4, 2022 through 11:59 p.m. Eastern Time on May 18, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13727755.

 

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 February 25, 2022 with the Securities and Exchange Commission (SEC), as well as in subsequent reports filed this year with the SEC. The Company assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

 

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CONTACT:

 

Scott Davidson

Senior Vice President and Chief Financial Officer

Natural Health Trends Corp.

Tel (Hong Kong): +852-3107-0800

Tel (U.S.): 310-541-0888

investor.relations@nhtglobal.com

 

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NATURAL HEALTH TRENDS CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data) 

 

   

March 31, 2022

   

December 31, 2021

 
   

(Unaudited)

         

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 79,382     $ 83,843  

Inventories

    4,860       5,257  

Other current assets

    4,674       4,369  

Total current assets

    88,916       93,469  

Property and equipment, net

    450       463  

Operating lease right-of-use assets

    2,708       3,021  

Restricted cash

    82       522  

Deferred tax asset

    318       309  

Other assets

    568       571  

Total assets

  $ 93,042     $ 98,355  

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

Current liabilities:

               

Accounts payable

  $ 824     $ 761  

Income taxes payable

    1,397       1,345  

Accrued commissions

    2,512       3,636  

Other accrued expenses

    1,332       1,933  

Deferred revenue

    8,049       8,536  

Amounts held in eWallets

    6,055       6,341  

Operating lease liabilities

    1,174       1,239  

Other current liabilities

    855       865  

Total current liabilities

    22,198       24,656  

Income taxes payable

    12,130       12,130  

Deferred tax liability

    153       153  

Operating lease liabilities

    1,691       1,928  

Total liabilities

    36,172       38,867  

Stockholders’ equity:

               

Preferred stock

           

Common stock

    13       13  

Additional paid-in capital

    86,102       86,102  

Accumulated deficit

    (2,621 )     (231 )

Accumulated other comprehensive loss

    (720 )     (492 )

Treasury stock, at cost

    (25,904 )     (25,904 )

Total stockholders’ equity

    56,870       59,488  

Total liabilities and stockholders’ equity

  $ 93,042     $ 98,355  

 

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NATURAL HEALTH TRENDS CORP. 

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except per share data)

 

   

Three Months Ended March 31,

 
   

2022

   

2021

 

Net sales

  $ 11,546     $ 13,469  

Cost of sales

    2,908       3,255  

Gross profit

    8,638       10,214  

Operating expenses:

               

Commissions expense

    4,740       5,514  

Selling, general and administrative expenses

    4,281       4,480  

Total operating expenses

    9,021       9,994  

Income (loss) from operations

    (383 )     220  

Other income, net

    110       20  

Income (loss) before income taxes

    (273 )     240  

Income tax provision (benefit)

    (168 )     87  

Net income (loss)

  $ (105 )   $ 153  

Net income (loss) per common share:

               

Basic

  $ (0.01 )   $ 0.01  

Diluted

  $ (0.01 )   $ 0.01  

Weighted average common shares outstanding:

               

Basic

    11,254       10,874  

Diluted

    11,254       11,424  

 

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NATURAL HEALTH TRENDS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

 

   

Three Months Ended March 31,

 
   

2022

   

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

               

Net income (loss)

  $ (105 )   $ 153  

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

               

Depreciation and amortization

    53       79  

Noncash lease expense

    302       294  

Deferred income taxes

    (9 )     9  

Changes in assets and liabilities:

               

Inventories

    350       123  

Other current assets

    (332 )     195  

Other assets

    (3 )     2  

Accounts payable

    64       176  

Income taxes payable

    53       67  

Accrued commissions

    (1,129 )     (344 )

Other accrued expenses

    (592 )     (245 )

Deferred revenue

    (447 )     1,093  

Amounts held in eWallets

    (253 )     (727 )

Operating lease liabilities

    (296 )     (322 )

Other current liabilities

    (4 )     (139 )

Net cash provided by (used in) operating activities

    (2,348 )     414  

CASH FLOWS FROM INVESTING ACTIVITIES:

               

Purchases of property and equipment

    (40 )     (63 )

Net cash used in investing activities

    (40 )     (63 )

CASH FLOWS FROM FINANCING ACTIVITIES:

               

Dividends paid

    (2,285 )     (2,285 )

Net cash used in financing activities

    (2,285 )     (2,285 )

Effect of exchange rates on cash, cash equivalents and restricted cash

    (228 )     (222 )

Net decrease in cash, cash equivalents and restricted cash

    (4,901 )     (2,156 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

    84,365       92,892  

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

  $ 79,464     $ 90,736  

SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:

               

Right-of-use assets obtained in exchange for operating lease liabilities

  $     $ 400  

 

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