NHTC Reports Quarterly Revenue More Than Tripled to $34.2 Million; $0.49 in Diluted EPS; Dividend Increased

Download as PDF

Related Documents

Year-to-Date Revenue Almost Tripled, Net Income Increased 671%
Both Exceed Full Year 2013

DALLAS, July 30, 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 financial results for the quarter and six month periods ended June 30, 2014.

Second Quarter Financial Highlights

  • Total revenues were $34.2 million, up 223% compared to $10.6 million in the second quarter last year.
  • Operating income was $6.2 million, up 551% compared to $948,000 in the second quarter last year.
  • Net income was $6.1 million, or $0.49 per diluted share, compared to $904,000, or $0.08 per diluted share, in the second quarter last year.

Year-to-Date Financial Highlights

  • Year-to-date revenues were $57.4 million, up 198% compared to $19.2 million in the first six months last year.
  • Operating income was $9.3 million, up 649% compared to $1.2 million in the first six months last year.
  • Net income was $9.2 million, or $0.76 per diluted share, compared to net income of $1.2 million, or $0.11 per diluted share, in the first six months last year.

"This was another excellent quarter for Natural Health Trends," remarked Chris Sharng, President of Natural Health Trends Corp. "Orders taken during the second quarter were very strong. In addition, the quarter's financial results also benefited from delivering significant orders taken but unshipped in March, with shipments made during the second quarter."

"For the first six months of 2014, the Company generated more revenue and net income than it did for the entire 2013 year," added Mr. Sharng. "The strong results so far in 2014 clearly demonstrate that our efforts to enhance our leadership development and training programs, and expand our products, services and promotions, can effectively drive strong results. The result has been a more informed base of members, and this has translated to higher average sales per member. We have focused particularly on investments in China, Hong Kong and Taiwan, where we think we have the most promising opportunities. Our programs aim for long-term growth. We are very pleased with the recent performance but are more excited about what we can accomplish in the long run."

Dividend

Yesterday, the Board of Directors declared its third consecutive quarterly dividend. The declared dividend included a cash dividend of $0.0274 per share on outstanding Series A preferred stock, which represents the accrued unpaid dividends through the declaration date, and a cash dividend of $0.01 per share on common stock outstanding, totaling aggregate dividends of $124,000, payable in cash on August 27, 2014 to stockholders of record on August 19, 2014.

Shareholder Conference Call

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

A replay will be available from 1 p.m. ET on July 30 through 11:59 p.m. ET on August 6, by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing replay pin number 8591701.

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		  
June 30, 2014
    (Unaudited)
ASSETS    
Current assets:    
Cash and cash equivalents $14,550 $29,622
Accounts receivable 134 109
Inventories, net 1,828 4,321
Other current assets 658 754
Total current assets 17,170 34,806
Property and equipment, net 265 305
Goodwill 1,764 1,764
Restricted cash 328 340
Other assets 300 323
Total assets $19,827 $37,538
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable $3,058 $4,641
Income taxes payable 25 111
Accrued distributor commissions 3,962 5,224
Other accrued expenses 3,146 5,599
Deferred revenue 2,569 3,171
Deferred tax liability 108 108
Other current liabilities 882 1,030
Total current liabilities 13,750 19,884
Commitments and contingencies    
Stockholders' equity:    
Preferred stock 111 82
Common stock 11 12
Additional paid-in capital 80,655 83,284
Accumulated deficit (74,619) (65,658)
Accumulated other comprehensive loss:    
 Foreign currency translation adjustments (81) (66)
Total stockholders' equity 6,077 17,654
Total liabilities and stockholders' equity $19,827 $37,538
 
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,
  2013 2014 2013 2014
         
Net sales $10,598 $34,189 $19,249 $57,351
Cost of sales 2,570 7,509 4,798 12,761
Gross profit 8,028 26,680 14,451 44,590
Operating expenses:        
Distributor commissions 4,443 15,458 8,117 25,881
Selling, general and administrative expenses 2,609 5,031 5,054 9,378
Depreciation and amortization 28 23 40 44
Total operating expenses 7,080 20,512 13,211 35,303
Income from operations 948 6,168 1,240 9,287
Other income (expense), net (28) 1 (21) (8)
Income before income taxes 920 6,169 1,219 9,279
Income tax provision 16 59 28 98
Net income 904 6,110 1,191 9,181
Preferred stock dividends (4) (3) (8) (7)
Net income available to common stockholders $900 $6,107 $1,183 $9,174
         
Income per common share:        
Basic $0.08 $0.51 $0.11 $0.78
Diluted $0.08 $0.49 $0.11 $0.76
         
Weighted-average number of common shares outstanding:        
Basic 11,131 11,821 11,100 11,592
Diluted 11,269 12,305 11,265 12,050
         
Cash dividends declared per share:        
Common $– $0.005 $– $0.010
Series A preferred stock $– $0.020 $– $0.835
 
NATURAL HEALTH TRENDS CORP.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
 
  Six Months Ended June 30,
  2013 2014
     
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $1,191 $9,181
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 40 44
Stock-based compensation 53 34
Changes in assets and liabilities:    
Accounts receivable (60) 24
Inventories, net (183) (2,502)
Other current assets 110 (104)
Other assets (1) (16)
Accounts payable 242 1,586
Income taxes payable 28 86
Accrued distributor commissions 483 1,268
Other accrued expenses 382 2,466
Deferred revenue 297 606
Other current liabilities (4) 152
Net cash provided by operating activities 2,578 12,825
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment, net (57) (97)
Net cash used in investing activities (57) (97)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from exercise of warrants – 2,630
Dividends paid – (195)
Repurchase of common stock (21) (63)
Net cash provided by (used in) financing activities  (21) 2,372
     
Effect of exchange rates on cash and cash equivalents (12) (28)
Net increase in cash and cash equivalents 2,488 15,072
CASH AND CASH EQUIVALENTS, beginning of period 4,207 14,550
CASH AND CASH EQUIVALENTS, end of period $6,695 $29,622 
CONTACT: Company Contact
         Scott Davidson
         Chief Financial Officer
         Natural Health Trends Corp.
         Tel: 972-241-4080
         scott.davidson@nhtglobal.com

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

Released July 30, 2014