Natural Health Trends Reports Second Quarter 2021 Financial Results

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  • Fifth consecutive quarter of positive operating income and net income
  • Strong balance sheet with ample liquidity and $88.1 million in cash and cash equivalents
  • Third consecutive quarter of positive cash flow from operations
  • Declared a quarterly cash dividend of $0.20 per share

HONG KONG, Aug. 04, 2021 (GLOBE NEWSWIRE) -- 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 June 30, 2021.

Second Quarter 2021 Financial Highlights

  • Revenue of $16.2 million increased 20% compared to $13.5 million in the first quarter of 2021 and decreased 2% compared to $16.4 million in the second quarter of 2020.
  • Operating income was $385,000 compared to $220,000 in the first quarter of 2021 and $183,000 in the second quarter of 2020.
  • Net income was $229,000, or $0.02 per diluted share, compared to $153,000, or $0.01 per diluted share, in the first quarter of 2021 and $34,000, or break-even per diluted share, in the second quarter of 2020.
  • The number of Active Members1 decreased 5% to 46,860 at June 30, 2021 compared to 49,420 at March 31, 2021, and decreased 14% compared to 54,370 at June 30, 2020.

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.

Year-to-Date 2021 Financial Highlights 

  • Revenue of $29.6 million decreased 6% compared to $31.4 million in the first six months of 2020.
  • Operating income was $605,000 compared to operating loss of $1.3 million in the first six months of 2020.
  • Net income was $382,000, or $0.03 per diluted share, compared to a net loss of $539,000, or $0.05 per diluted share, in the first six months of 2020.

Management Commentary

“We were pleased with our second quarter financial performance which reflected sequential growth despite ongoing macroeconomic challenges,” commented Chris Sharng, President of Natural Health Trends Corp. “Revenue of $16.2 million increased 20% compared to the first quarter of 2021 driven by multiple in-person events and roadshows which are helping to rejuvenate momentum in our core markets.  Partially offsetting our growth were sporadic outbreaks hampering meeting turnout and global supply chain constraints lengthening lead times, which contributed to a $1.5 million increase in our deferred revenue balance from March to June.”

Mr. Sharng continued, “We are still navigating through the complexities associated with the COVID-19 pandemic around the world and the occasional pockets of outbreaks that occur in Asia. Aside from these challenges, we reported our fifth consecutive quarter of positive operating income and net income, in addition to our third consecutive quarter of positive cash flow generation. Looking ahead, we remain cautiously optimistic that the continued easing of pandemic-related restrictions will be positive development for our business.”

Balance Sheet and Cash Flow

  • Net cash provided by operating activities was $548,000 in the first six months of 2021, compared to cash used of $1.0 million in the first six months of 2020.
  • Total cash and cash equivalents were $88.1 million at June 30, 2021, down slightly from $90.2 million at March 31, 2021.
  • On August 2, 2021, 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 August 27, 2021 to stockholders of record as of August 17, 2021.

Second Quarter 2021 Financial Results Conference Call

Management will host a conference call to discuss the second quarter 2021 financial results today, Wednesday, August 4, 2021 at 11:30 a.m. Eastern Time. The conference call details are as follows:

Date: Wednesday, August 4, 2021
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: 13721247
Webcast: http://public.viavid.com/index.php?id=145583 

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 August 4, 2021 through 11:59 p.m. Eastern Time on August 18, 2021 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13721247.

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 26, 2021 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.


NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) 

  June 30, 2021     December 31, 2020  
  (Unaudited)          
ASSETS              
Current assets:              
Cash and cash equivalents $ 88,114     $ 92,367  
Inventories   3,706       3,779  
Other current assets   3,707       3,595  
Total current assets   95,527       99,741  
Property and equipment, net   528       539  
Operating lease right-of-use assets   3,540       3,745  
Restricted cash   523       525  
Deferred tax asset   702       731  
Other assets   586       661  
Total assets $ 101,406     $ 105,942  
LIABILITIES AND STOCKHOLDERS’ EQUITY              
Current liabilities:              
Accounts payable $ 1,027     $ 580  
Income taxes payable   1,721       1,481  
Accrued commissions   3,425       3,496  
Other accrued expenses   1,853       1,922  
Deferred revenue   5,713       3,091  
Amounts held in eWallets   7,305       8,503  
Operating lease liabilities   1,219       1,163  
Other current liabilities   877       1,270  
Total current liabilities   23,140       21,506  
Income taxes payable   12,130       13,748  
Deferred tax liability   216       216  
Operating lease liabilities   2,488       2,775  
Total liabilities   37,974       38,245  
Stockholders’ equity:              
Preferred stock   —       —  
Common stock   13       13  
Additional paid-in capital   86,102       86,102  
Retained earnings   3,634       7,822  
Accumulated other comprehensive loss   (413 )     (336 )
Treasury stock, at cost   (25,904 )     (25,904 )
Total stockholders’ equity   63,432       67,697  
Total liabilities and stockholders’ equity $ 101,406     $ 105,942  


NATURAL HEALTH TRENDS CORP. 
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)

  Three Months Ended June 30,     Six Months Ended June 30,  
  2021     2020     2021     2020  
Net sales $ 16,152     $ 16,404     $ 29,621     $ 31,352  
Cost of sales   3,934       4,817       7,189       9,331  
Gross profit   12,218       11,587       22,432       22,021  
Operating expenses:                              
Commissions expense   6,927       7,113       12,441       13,716  
Selling, general and administrative expenses   4,906       4,291       9,386       9,570  
Total operating expenses   11,833       11,404       21,827       23,286  
Income (loss) from operations   385       183       605       (1,265 )
Other income (expense), net   (59 )     125       (39 )     218  
Income (loss) before income taxes   326       308       566       (1,047 )
Income tax provision (benefit)   97       274       184       (508 )
Net income (loss) $ 229     $ 34     $ 382     $ (539 )
Net income (loss) per common share:                              
Basic $ 0.02     $ 0.00     $ 0.03     $ (0.05 )
Diluted $ 0.02     $ 0.00     $ 0.03     $ (0.05 )
Weighted average common shares outstanding:                              
Basic   10,968       10,580       10,921       10,532  
Diluted   11,424       11,424       11,424       10,532  


NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

  Six Months Ended June 30,  
  2021     2020  
CASH FLOWS FROM OPERATING ACTIVITIES:              
Net income (loss) $ 382     $ (539 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:              
Depreciation and amortization   156       202  
Noncash lease expense   594       834  
Deferred income taxes   24       870  
Changes in assets and liabilities:              
Inventories   53       2,314  
Other current assets   (117 )     845  
Other assets   65       82  
Accounts payable   446       402  
Income taxes payable   (1,376 )     (1,723 )
Accrued commissions   (37 )     212  
Other accrued expenses   (66 )     (617 )
Deferred revenue   2,629       (1,872 )
Amounts held in eWallets   (1,186 )     (1,560 )
Operating lease liabilities   (629 )     (811 )
Other current liabilities   (390 )     343  
Net cash provided by (used in) operating activities   548       (1,018 )
CASH FLOWS FROM INVESTING ACTIVITIES:              
Purchases of property and equipment   (147 )     (68 )
Net cash used in investing activities   (147 )     (68 )
CASH FLOWS FROM FINANCING ACTIVITIES:              
Dividends paid   (4,570 )     (4,570 )
Net cash used in financing activities   (4,570 )     (4,570 )
Effect of exchange rates on cash, cash equivalents and restricted cash   (86 )     (50 )
Net decrease in cash, cash equivalents and restricted cash   (4,255 )     (5,706 )
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period   92,892       99,425  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 88,637     $ 93,719  
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:              
Right-of-use assets obtained in exchange for operating lease liabilities $ 400     $ 1,081  

CONTACTS:

Company 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
scott.davidson@nhtglobal.com 

Investor Contact:
ADDO Investor Relations
Tel: 310-829-5400
investor.relations@nhtglobal.com 


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Source: Natural Health Trends Corp.

Released August 4, 2021