Natural Health Trends Reports Continued Momentum, Record First Quarter Financial Results

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Revenue of $23.2 Million, up 168%; $0.26 in Diluted EPS

Second Dividend is Declared

DALLAS, May 7, 2014 (GLOBE NEWSWIRE) -- Natural Health Trends Corp. (OTCQB:NHTC), a leading direct selling company that markets premium quality personal care, wellness and "quality of life" products under the NHT Global brand, today announced record financial results for the quarter ended March 31, 2014.

First Quarter Financial Highlights

  • Total revenues were $23.2 million, up 168% compared to $8.7 million in the first quarter last year and up 21% sequentially compared to $19.1 million for the fourth quarter last year. This was the fifth consecutive sequential quarterly increase in revenues.
  • Operating income was $3.1 million, up 968% compared to $292,000 last year, and up 88% sequentially from $1.7 million for the fourth quarter last year.
  • Net income was $3.1 million, or $0.26 per diluted share, compared to $283,000, or $0.03 per diluted share, last year and $1.6 million, or $0.14 per diluted share, for the fourth quarter last year.
  • Cash and cash equivalents increased to $23.3 million as of March 31, 2014 from $14.6 million at December 31, 2013.

"The strong momentum we built in 2013 continued into the first quarter," commented Chris Sharng, President of Natural Health Trends Corp. "Net sales in Hong Kong increased 237% and sales in Taiwan increased 12% compared to the first quarter of last year, demonstrating the strong organization we have built in these two important geographies. We continue to expand our gross profitability, grow our operating income and expand our free cash flow, helping to support our prospect for long-term growth."

"Our focus is on sustaining this momentum and continuing to drive improved results," added Mr. Sharng. "All of the critical business drivers that we built: leader support, promotional plans, training, product development, member services and commissions plan are working effectively. We expect 2014 will be an exceptional year for Natural Health Trends, its members, customers and shareholders."

Dividend

Yesterday the Board of Directors declared its second consecutive quarterly dividend. The declared dividend included a cash dividend of $0.0196 per share on outstanding Series A preferred stock, which represents the accrued unpaid dividends through the declaration date, and a cash dividend of $0.005 per share on common stock outstanding, totaling aggregate dividends of $60,000, payable in cash on June 4, 2014 to stockholders of record on May 27, 2014.

Shareholder Conference Call

Management will conduct a conference call to discuss its first quarter financial results. Details of the call are as follows:

A replay will be available from 7:30 p.m. ET on May 7 through 11:59 p.m. ET on May 14, by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing replay pin number 4681425.

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, and Europe. The company markets premium quality personal care, wellness and "quality of life" products under the NHT Global brand. Additional information can be found on the company's website, www.naturalhealthtrendscorp.com.

Forward Looking Statement

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 7, 2014, 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.

-- Tables follow --

 
 
NATURAL HEALTH TRENDS CORP.
     
CONSOLIDATED BALANCE SHEETS 
(In Thousands, Except Share Data)
     
  December 31,
2013		 March 31,
2014
    (Unaudited)
ASSETS    
Current assets:    
Cash and cash equivalents  $ 14,550  $ 23,334
Accounts receivable 134 168
Inventories, net 1,828 3,323
Other current assets 658 1,742
Total current assets 17,170 28,567
Property and equipment, net 265 294
Goodwill 1,764 1,764
Restricted cash 328 323
Other assets 300 296
Total assets  $ 19,827  $ 31,244
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 3,058  $ 4,438
Income taxes payable 25 53
Accrued distributor commissions 3,962 3,957
Other accrued expenses 3,146 4,321
Deferred revenue 2,569 7,881
Deferred tax liability 108 108
Other current liabilities 882 923
Total current liabilities 13,750 21,681
Commitments and contingencies    
Stockholders' equity:    
Preferred stock 111 93
Common stock 11 12
Additional paid-in capital 80,655 81,272
Accumulated deficit (74,619) (71,706)
Accumulated other comprehensive loss:    
Foreign currency translation adjustments (81) (108)
Total stockholders' equity 6,077 9,563
Total liabilities and stockholders' equity  $ 19,827  $ 31,244
 
 
NATURAL HEALTH TRENDS CORP.
     
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, Except Per Share Data)
     
  Three Months Ended March 31,
  2013 2014
     
Net sales $ 8,651 $ 23,162
Cost of sales 2,228 5,252
Gross profit 6,423 17,910
Operating expenses:    
Distributor commissions 3,674 10,423
Selling, general and administrative expenses 2,445 4,347
Depreciation and amortization 12 21
Total operating expenses 6,131 14,791
Income from operations 292 3,119
Other income (expense), net 7 (9)
Income before income taxes 299 3,110
Income tax provision 12 39
Net income 287 3,071
Preferred stock dividends (4) (4)
Net income available to common stockholders $ 283 $ 3,067
     
Income per common share:    
Basic $ 0.03 $ 0.27
Diluted $ 0.03 $ 0.26
     
Weighted-average number of common shares outstanding:    
Basic 11,069 11,361
Diluted 11,248 11,673
     
Cash dividends declared per share:    
Common $ – $ 0.005
Series A preferred stock $ – $ 0.815
 
 
NATURAL HEALTH TRENDS CORP.
     
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
     
  Three Months Ended March 31,
  2013 2014
     
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 287 $ 3,071
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation and amortization 12 21
Stock-based compensation 30 25
Changes in assets and liabilities:    
Accounts receivable (59) (39)
Inventories, net (28) (1,527)
Other current assets 232 (1,105)
Other assets (2) –
Accounts payable 428 1,381
Income taxes payable 12 28
Accrued distributor commissions 215 21
Other accrued expenses (279) 1,040
Deferred revenue 304 5,320
Other current liabilities (134) 47
Net cash provided by operating activities 1,018 8,283
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment, net (14) (63)
Net cash used in investing activities (14) (63)
     
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from exercise of warrants – 598
Repurchase of common stock (12) (24)
Net cash provided by (used in) financing activities  (12) 574
     
Effect of exchange rates on cash and cash equivalents (26) (10)
Net increase in cash and cash equivalents 966 8,784
CASH AND CASH EQUIVALENTS, beginning of period 4,207 14,550
CASH AND CASH EQUIVALENTS, end of period $ 5,173 $ 23,334
     
NON-CASH FINANCING ACTIVITY:    
Conversion of preferred stock $ – $ 18
Cash dividends declared, but not yet paid – 158 
CONTACT: Company Contact
         Scott Davidson
         Chief Financial Officer
         Natural Health Trends Corp.
         Tel: 972-241-4080
         scott.davidson@nthglobal.com

         Investor Contact
         Brett Maas
         Managing Partner
         Hayden IR
         Tel: 646-536-7331
         brett@haydenir.com
Source: Natural Health Trends Corp.

Released May 7, 2014