NHTC Reports 76% Increase in First Quarter Revenues to $40.7 Million; Net Income Increased 119% to $6.7 Million
Board Increases Dividend to $0.03 Per Share; Announces Special Share Repurchase Program
DALLAS, May 5, 2015 (GLOBE NEWSWIRE) -- Natural Health Trends Corp. (Nasdaq: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 ended March 31, 2015.
First Quarter Highlights
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Total revenues increased 76% to $40.7 million, compared to $23.2 million in the first quarter last year.
- Revenue from Hong Kong operations, which represents 92% of total revenue, increased $16.9 million, or 83% over last year
- Revenue outside of Hong Kong increased $619,000, or 23% over last year
- Operating income increased 122% to $6.9 million, compared to $3.1 million in the first quarter last year.
- Net income was $6.7 million, or $0.54 per diluted share, compared to $3.1 million, or $0.26 per diluted share, in the first quarter last year.
- Total number of active distributors increased 14% to 62,010 at March 31, 2015 compared to year end 2014.
"We have delivered a great start for the year," commented Chris Sharng, President of Natural Health Trends Corp. "Our success in Greater China continues, attributable to the effectiveness of our leadership development, products, training and marketing programs."
"We are also excited to see significant increases in North America, albeit from a small base," continued Mr. Sharng. "Along with our initiatives in Southeast Asia, we may develop more sources for growth."
Balance Sheet
At March 31, 2015, cash and cash equivalents totaled $59.9 million, compared to $44.8 million as of December 31, 2014. At March 31, 2015, the Company had working capital of $30.9 million, an increase of $5.7 million compared to December 31, 2014, resulting in a current ratio of 1.88 to 1.
Dividend and Share Repurchase
Yesterday, the Board of Directors declared a dividend of $0.03 per share, a 50% increase over the prior quarter dividend, on outstanding common stock payable in cash on May 29, 2015 to stockholders of record on May 19, 2015.
Also yesterday, the Board of Directors approved a special stock repurchase of up to $5 million of the Company's outstanding shares of common stock. Such repurchases are expected to begin soon and be made in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934 (the "Exchange Act"). For all or a portion of the authorized repurchase amount, the Company may enter into a plan that is compliant with Rule 10b5-1 of the Exchange Act that is designed to facilitate these purchases. The repurchase program does not require the Company to acquire a specific number of shares, and may be suspended from time to time or discontinued. The share repurchases will be funded from available working capital.
Shareholder Conference Call
Management will conduct a conference call to discuss its first quarter financial results. Details of the call are as follows:
- Date: Tuesday May 5, 2015
- Time: 10 a.m. ET/9 a.m. CT/7 a.m. PT
- Dial-in number: 1-888-455-2260 (domestic) 1-719-785-1765 (international)
- Webcast link: http://public.viavid.com/index.php?id=114212
A replay will be available from 1 p.m. ET on May 5, 2015 through 11:59 p.m. ET on May 12, 2015 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing replay pin number 7712921.
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 6, 2015, 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 --
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NATURAL HEALTH TRENDS CORP. CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Data) |
||
|
December 31, 2014 |
March 31, 2015 |
|
| (Unaudited) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $44,816 | $59,866 |
| Accounts receivable | 107 | 178 |
| Inventories, net | 3,760 | 4,859 |
| Other current assets | 930 | 1,179 |
| Total current assets | 49,613 | 66,082 |
| Property and equipment, net | 476 | 699 |
| Goodwill | 1,764 | 1,764 |
| Restricted cash | 315 | 312 |
| Other assets | 372 | 591 |
| Total assets | $52,540 | $69,448 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $2,232 | $2,543 |
| Income taxes payable | 268 | 208 |
| Accrued distributor commissions | 8,853 | 7,430 |
| Other accrued expenses | 6,743 | 7,874 |
| Deferred revenue | 2,687 | 10,371 |
| Deferred tax liability | 65 | 65 |
| Amounts held in distributor eWallets | 2,064 | 4,962 |
| Other current liabilities | 1,513 | 1,717 |
| Total current liabilities | 24,425 | 35,170 |
| Long-term incentive | 1,665 | 1,603 |
| Total liabilities | 26,090 | 36,773 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Preferred stock | – | – |
| Common stock | 13 | 13 |
| Additional paid-in capital | 85,750 | 85,608 |
| Accumulated deficit | (54,799) | (48,359) |
| Accumulated other comprehensive income: | ||
| Foreign currency translation adjustments | 62 | 199 |
| Treasury stock, at cost | (4,576) | (4,786) |
| Total stockholders' equity | 26,450 | 32,675 |
| Total liabilities and stockholders' equity | $52,540 | $69,448 |
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NATURAL HEALTH TRENDS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In Thousands, Except Per Share Data) |
||
| Three Months Ended March 31, | ||
| 2014 | 2015 | |
| Net sales | $23,162 | $40,709 |
| Cost of sales | 5,252 | 8,930 |
| Gross profit | 17,910 | 31,779 |
| Operating expenses: | ||
| Distributor commissions | 10,423 | 18,397 |
| Selling, general and administrative expenses | 4,347 | 6,423 |
| Depreciation and amortization | 21 | 41 |
| Total operating expenses | 14,791 | 24,861 |
| Income from operations | 3,119 | 6,918 |
| Other expense, net | (9) | (109) |
| Income before income taxes | 3,110 | 6,809 |
| Income tax provision | 39 | 71 |
| Net income | 3,071 | 6,738 |
| Preferred stock dividends | (4) | – |
| Net income available to common stockholders | $3,067 | 6,738 |
| Income per common share: | ||
| Basic | $0.27 | $0.54 |
| Diluted | $0.26 | $0.54 |
| Weighted-average number of common shares outstanding: | ||
| Basic | 11,361 | 12,453 |
| Diluted | 11,673 | 12,548 |
| Cash dividends declared per share: | ||
| Common | $0.005 | $0.02 |
| Series A preferred stock | $0.815 | $– |
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NATURAL HEALTH TRENDS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In Thousands) |
||
| Three Months Ended March 31, | ||
| 2014 | 2015 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net income | $3,071 | $6,738 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 21 | 41 |
| Stock-based compensation | 25 | 15 |
| Changes in assets and liabilities: | ||
| Accounts receivable | (39) | (69) |
| Inventories, net | (1,527) | (1,101) |
| Other current assets | (1,105) | (259) |
| Other assets | – | (221) |
| Accounts payable | 1,381 | 352 |
| Income taxes payable | 28 | (59) |
| Accrued distributor commissions | 21 | (1,419) |
| Other accrued expenses | 1,040 | 1,808 |
| Deferred revenue | 5,320 | 7,683 |
| Amounts held in distributor eWallets | – | 2,897 |
| Other current liabilities | 47 | 212 |
| Long-term incentive | – | (62) |
| Net cash provided by operating activities | 8,283 | 16,556 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchases of property and equipment, net | (63) | (266) |
| Net cash used in investing activities | (63) | (266) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Proceeds from exercise of warrants | 598 | – |
| Repurchase of common stock | (24) | (1,082) |
| Dividends paid | – | (250) |
| Net cash provided by (used in) financing activities | 574 | (1,332) |
| Effect of exchange rates on cash and cash equivalents | (10) | 92 |
| Net increase in cash and cash equivalents | 8,784 | 15,050 |
| CASH AND CASH EQUIVALENTS, beginning of period | 14,550 | 44,816 |
| CASH AND CASH EQUIVALENTS, end of period | $23,334 | $59,866 |
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 May 5, 2015