Natural Health Trends Reports Strong Third Quarter 2015 Financial Results
- Record quarterly revenue increased 154% year-over-year to $80.8 million
- Record quarterly net income of $14.5 million or $1.18 per diluted share
- Increased dividend by 25% to $0.05 per share
- Repurchased $5.0 million of common stock during the quarter
LOS ANGELES, Oct. 27, 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 its financial results for the quarter ended September 30, 2015.
Third Quarter 2015 Financial Highlights
Total revenue increased 154% to $80.8 million, compared to $31.8 million in the third quarter of 2014.
Revenue from the Company's Hong Kong operations, which represents 94% of total revenue, increased 168% to $75.9 million, compared to $28.3 million in the third quarter of 2014.
Revenue outside of Hong Kong increased 38% to $4.9 million, compared to $3.5 million in the third quarter of 2014.
- Revenue from the Company's Hong Kong operations, which represents 94% of total revenue, increased 168% to $75.9 million, compared to $28.3 million in the third quarter of 2014.
Operating income increased 171% to $14.8 million, compared to $5.5 million in the third quarter of 2014.
Net income available to common stockholders was $14.5 million, or $1.18 per diluted share, compared to $5.4 million, or $0.42 per diluted share, in the third quarter of 2014.
- The number of Active Members1 increased 24% to 94,700 at September 30, 2015, compared to 76,400 at June 30, 2015.
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.
Year-to-Date 2015 Financial Highlights
Total revenue increased 114% to $191.2 million, compared to $89.2 million in the first nine months of 2014.
Operating income increased 130% to $34.0 million, compared to $14.8 million in the first nine months of 2014.
- Net income available to common stockholders was $33.5 million, or $2.70 per diluted share, compared to $14.6 million, or $1.16 per diluted share, in the first nine months of 2014.
"The third quarter was a record quarter, driven by our successful execution efforts for launching and marketing our products, as well as through supporting our leaders in developing effective sales techniques," commented Chris Sharng, President of Natural Health Trends Corp. "Our record third quarter revenue and net income both posted significant sequential increases and more than doubled versus the third quarter last year. Strengthened consumer demand for our products in China, coupled with strong growth in our active member base helped contribute to this impressive growth."
Mr. Sharng continued, "We were very pleased to report that we have initiated the process for submitting a direct-selling license application in the Chinese province of Guangdong. We are hopeful that a license will enable us to drive incremental growth by leveraging our growing brand recognition in China as well as our Hong Kong distribution infrastructure. As we are still very early in this process, timing for obtaining our direct-selling license remains uncertain. In the interim, we will remain highly focused on managing all aspects of our core business that are within our control."
Balance Sheet and Cash Flow
At September 30, 2015, cash and cash equivalents totaled $94.6 million, compared to $74.4 million at June 30, 2015.
Net cash provided by operating activities in the third quarter of 2015 was $25.7 million, compared to $8.1 million in the third quarter of 2014. For the first nine months of 2015, net cash provided by operating activities was $65.2 million, compared to $20.9 million in the first nine months of 2014.
On October 21, 2015, the Company's Board of Directors declared a quarterly cash dividend of $0.05 per share on outstanding common stock, a 25% increase over the prior quarter dividend, which will be payable on November 20, 2015 to stockholders of record as of November 10, 2015.
- During the three months ended September 30, 2015, the Company repurchased a total of $5.0 million of its common stock under its existing $15.0 million stock repurchase program, which remains available for repurchase through December 2016. The Company expects to continue executing against the $15.0 million stock repurchase program and anticipates it will repurchase an additional $5.0 million under this program soon. Since November 2014, the Company has repurchased 800,618 shares of common stock at a cost of $15.6 million.
"Our healthy liquidity position and strong cash flow generation affords us the flexibility and resources to continue investing in the growth of our business while at the same time providing returns to our shareholders through cash dividends and repurchasing shares of our common stock," added Scott Davidson, Senior Vice President and Chief Financial Officer of Natural Health Trends Corp.
Third Quarter 2015 Financial Results Conference Call
Management will host a conference call to discuss the third quarter 2015 financial results today, Tuesday, October 27, 2015 at 4:30 p.m. Eastern Time. The conference call details are as follows:
|Date:||Tuesday, October 27, 2015|
|Time:||4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time|
For those unable to participate during the live broadcast, a replay of the call will also be available from 7:30 p.m. Eastern Time on October 27, 2015 through 11:59 p.m. Eastern Time on November 10, 2015 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing the replay pin number: 13621699.
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, North America, 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.
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 March 6, 2015 with the Securities and Exchange Commission. 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|
|September 30, 2015||December 31, 2014|
|Cash and cash equivalents||$ 94,565||$ 44,816|
|Other current assets||1,706||930|
|Total current assets||103,189||49,613|
|Property and equipment, net||917||476|
|Total assets||$ 109,711||$ 52,540|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable||$ 4,371||$ 2,232|
|Income taxes payable||458||268|
|Other accrued expenses||14,426||6,743|
|Deferred tax liability||65||65|
|Amounts held in eWallets||13,419||2,064|
|Other current liabilities||1,590||1,513|
|Total current liabilities||59,487||24,425|
|Commitments and contingencies|
|Additional paid-in capital||85,940||85,750|
|Accumulated other comprehensive income||17||62|
|Treasury stock, at cost||(14,565)||(4,576)|
|Total stockholders' equity||48,788||26,450|
|Total liabilities and stockholders' equity||$ 109,711||$ 52,540|
|NATURAL HEALTH TRENDS CORP.|
|CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)|
|(In thousands, except per share data)|
Three Months Ended
Nine Months Ended
|Net sales||$ 80,779||$ 31,833||$ 191,204||$ 89,184|
|Cost of sales||16,001||6,756||39,025||19,517|
|Selling, general and administrative expenses||9,867||5,076||24,571||14,454|
|Depreciation and amortization||72||28||181||72|
|Total operating expenses||49,975||19,613||118,195||54,916|
|Income from operations||14,803||5,464||33,984||14,751|
|Other expense, net||(135)||(31)||(112)||(39)|
|Income before income taxes||14,668||5,433||33,872||14,712|
|Income tax provision||137||46||330||144|
|Preferred stock dividends||—||(2)||—||(9)|
|Net income available to common stockholders||$ 14,531||$ 5,385||$ 33,542||$ 14,559|
|Income per common share:|
|Basic||$ 1.19||$ 0.43||$ 2.71||$ 1.22|
|Diluted||$ 1.18||$ 0.42||$ 2.70||$ 1.16|
|Weighted-average number of common shares outstanding:|
|Cash dividends declared per share:|
|Common||$ 0.040||$ 0.010||$ 0.090||$ 0.020|
|Series A preferred stock||$ —||$ 0.027||$ —||$ 0.862|
|NATURAL HEALTH TRENDS CORP.|
|CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)|
|Nine Months Ended September 30,|
|CASH FLOWS FROM OPERATING ACTIVITIES:|
|Net income||$ 33,542||$ 14,568|
|Adjustments to reconcile net income to net cash provided by operating activities:|
|Depreciation and amortization||181||72|
|Cumulative translation adjustment realized in net income||(82)||—|
|Changes in assets and liabilities:|
|Other current assets||(736)||(205)|
|Income taxes payable||190||140|
|Other accrued expenses||8,397||3,479|
|Amounts held in eWallets||11,354||—|
|Other current liabilities||93||442|
|Net cash provided by operating activities||65,197||20,923|
|CASH FLOWS FROM INVESTING ACTIVITIES:|
|Purchases of property and equipment, net||(645)||(199)|
|Increase in restricted cash||(3,028)||—|
|Net cash used in investing activities||(3,673)||(199)|
|CASH FLOWS FROM FINANCING ACTIVITIES:|
|Proceeds from exercise of warrants||309||4,948|
|Repurchase of common stock||(11,079)||(97)|
|Net cash (used in) provided by financing activities||(11,881)||4,503|
|Effect of exchange rates on cash and cash equivalents||106||(29)|
|Net increase in cash and cash equivalents||49,749||25,198|
|CASH AND CASH EQUIVALENTS, beginning of period||44,816||14,550|
|CASH AND CASH EQUIVALENTS, end of period||$ 94,565||$ 39,748|
|NON-CASH FINANCING ACTIVITY:|
|Conversion of preferred stock||$ —||$ 56|
|Issuance of treasury stock||666||—|
CONTACT: Company Contact: Scott Davidson Senior Vice President and Chief Financial Officer Natural Health Trends Corp. Tel: 310-541-0888 email@example.com Investors: Addo Communications Tel: 310-829-5400 firstname.lastname@example.org
Released October 27, 2015