Natural Health Trends Reports First Quarter 2022 Financial Results

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HONG KONG, May 04, 2022 (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 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.
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

“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.”

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.


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  
 

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  
 

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  

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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Source: Natural Health Trends Corp.

Released May 4, 2022