Natural Health Trends Announces Improved Results in the First Quarter
DALLAS, TX -- (MARKET WIRE) -- 05/14/08 -- Natural Health Trends Corp. (NASDAQ: BHIP) today announced its financial results for the quarter ended March 31, 2008, which were a significant improvement over the previous periods.
Sales in the first quarter of 2008 were $11.4 million and net loss improved to $0.7 million, compared with a net loss of $5.0 million in the first quarter of 2007.
Chris Sharng, the Company's president, said, "Though the Company incurred an operating loss of $0.7 million in the first quarter, non-cash items such as depreciation, stock-based compensation and certain accounting charges on the implicit debentures' interest costs, totaled $0.9 million. In the month of March, our business operations were cash positive. We believe that we have regained nascent revenue momentum through certain personnel changes, compensation plan changes and dynamic training sessions. We recognize that there are plenty of challenges ahead, but the measures we took to stabilize revenue and reduce costs are working."
Mr. Sharng continued, "The sales momentum that picked up in the first quarter is continuing into the second quarter. The price increase that was implemented in certain markets in March is expected to improve our gross profit margin, sufficiently covering the effect of an expected increase in Chinese custom rates and an enhanced commission payout. Although most of the significant cost-saving opportunities have been realized, we are still working to lower certain fixed costs in Hong Kong and China. We expect to see continued improvements in our cash flow now that we have stabilized our revenue and significantly lowered our operating costs."
The company plans to host a conference call at 11:30 a.m. EDT, May 15, 2008. Those who wish to participate may call telephone number (866) 672-2663, or (973) 582-2772 for international callers, 15 minutes before 11:30 a.m. EDT. Callers will need to give the conference identification number, which is 47250099. If you cannot participate in the call, but wish to hear it, you may login to the company's homepage at www.naturalhealthtrendscorp.com and click on the conference call 1 1/2 hours after the completion of the call.
About Natural Health Trends Corp.
Natural Health Trends Corp. is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, North America, Europe and Latin America. The company markets premium quality personal care products under the NHT Global brand. Additional information can be found on the company's website, and management encourages interested parties to register for updated corporate information via email on the company's home page, www.naturalhealthtrendscorp.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption "Risk Factors" in our Annual Report on Form 10-K filed on March 31, 2008, with the Securities and Exchange Commission. We assume 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)
December 31, March 31,
2007 2008
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,282 $ 4,657
Restricted cash 298 196
Accounts receivable 418 357
Inventories, net 3,585 2,827
Other current assets 1,324 1,740
------------ ------------
Total current assets 11,907 9,777
Property and equipment, net 1,537 1,363
Goodwill 1,764 1,764
Intangible assets, net 2,600 2,400
Restricted cash 4,317 4,356
Deferred tax assets 208 196
Other assets 2,363 2,204
------------ ------------
Total assets $ 24,696 $ 22,060
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,168 $ 1,879
Income taxes payable 363 412
Accrued distributor commissions 2,018 1,646
Other accrued expenses 3,599 3,276
Deferred revenue 3,496 2,570
Current portion of convertible debentures,
net of discount of $151 and $382 at
December 31, 2007 and March 31, 2008,
respectively 203 503
Other current liabilities 3,254 3,147
------------ ------------
Total current liabilities 15,101 13,433
Convertible debentures, net of discount of
$3,896 and $3,365 at December 31, 2007 and
March 31, 2008, respectively - -
------------ ------------
Total liabilities 15,101 13,433
Commitments and contingencies
Minority interest 33 37
Stockholders' equity:
Preferred stock, $0.001 par value;
5,000,000 shares authorized; 1,761,900
shares designated Series A convertible
preferred stock, 138,400 shares issued and
outstanding at December 31, 2007 and March
31, 2008, aggregate liquidation value of
$250 124 124
Common stock, $0.001 par value; 50,000,000
shares authorized; 10,327,405 and
10,347,126 shares issued and outstanding
at December 31, 2007 and March 31, 2008,
respectively 10 10
Additional paid-in capital 79,158 79,322
Accumulated deficit (70,989) (71,697)
Accumulated other comprehensive income:
Foreign currency translation adjustments 1,259 831
------------ ------------
Total stockholders' equity 9,562 8,590
------------ ------------
Total liabilities and stockholders' equity $ 24,696 $ 22,060
============ ============
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, Except Per Share Data)
Three Months Ended
March 31,
------------------
2007 2008
-------- --------
Net sales $ 21,515 $ 11,395
Cost of sales 5,697 3,090
-------- --------
Gross profit 15,818 8,305
Operating expenses:
Distributor commissions 10,424 3,997
Selling, general and administrative expenses
(including stock-based compensation expense of $79
and $164 during 2007 and 2008, respectively) 9,389 4,596
Depreciation and amortization 489 386
Impairment of long-lived assets 532 24
-------- --------
Total operating expenses 20,834 9,003
-------- --------
Loss from operations (5,016) (698)
Other income:
Gain on foreign exchange 17 371
Interest income 179 35
Interest expense (including amortization of debt
issuance costs and accretion of debt discount of
$362 in 2008) (3) (387)
Other (4) 8
-------- --------
Total other income, net 189 27
-------- --------
Loss before income taxes and minority interest (4,827) (671)
Income tax provision (210) (37)
Minority interest (1) -
-------- --------
Net loss (5,038) (708)
Preferred stock dividends - (4)
-------- --------
Net loss attributable to common stockholders $ (5,038) $ (712)
======== ========
Loss per share - basic and diluted $ (0.61) $ (0.07)
======== ========
Weighted-average number of shares outstanding 8,200 9,567
======== ========
Contact: Jean Bono Natural Health Trends Corp. Email Contact
Released May 14, 2008