Natural Health Trends Reports Strong Fourth Quarter and Full Year 2015 Financial Results

Download as PDF

Related Documents

  • Fourth quarter revenue increased 108% year-over-year to $73.7 million
  • Fourth quarter net income of $13.7 million or $1.13 per diluted share
  • Record full year revenue increased 113% year-over-year to $264.9 million
  • Record full year net income of $47.2 million or $3.82 per diluted share

LOS ANGELES, Feb. 02, 2016 (GLOBE NEWSWIRE) -- Natural Health Trends Corp. (NASDAQ:NHTC), a leading direct-selling and e-commerce 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 fourth quarter and full year ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights

  • Total revenue increased 108% to $73.7 million, compared to $35.4 million in the fourth quarter of 2014.

    • Revenue from the Company’s Hong Kong operations, which represented 92% of total revenue, increased 120% to $67.7 million, compared to $30.7 million in the fourth quarter of 2014.

    • Revenue outside of Hong Kong increased 27% to $5.9 million, compared to $4.7 million in the fourth quarter of 2014.

  • Operating income increased 129% to $13.9 million, compared to $6.1 million in the fourth quarter of 2014.

  • Net income available to common stockholders was $13.7 million, or $1.13 per diluted share, compared to $5.8 million, or $0.45 per diluted share, in the fourth quarter of 2014.

  • The number of Active Members1 increased 15% to 109,360 at December 31, 2015, compared to 94,700 at September 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.

Full Year 2015 Financial Highlights

  • Total revenue increased 113% to $264.9 million, compared to $124.6 million for the full year of 2014.
     
  • Operating income increased 130% to $47.9 million, compared to $20.8 million for the full year of 2014.
     
  • Net income available to common stockholders was $47.2 million, or $3.82 per diluted share, compared to $20.4 million, or $1.61 per diluted share, for the full year of 2014.

Management Commentary

“2015 was a record year for Natural Health Trends and we are very pleased with all we have accomplished,” commented Chris Sharng, President of Natural Health Trends Corp. “The triple-digit increase in revenue and net income over 2014 was driven by impressive growth in our active member base as well as the ongoing development of our leadership programs, product development initiatives and successful execution of our marketing programs and member services. 2016 marks NHT Global's 15th anniversary and our committed leadership's enthusiasm for our products and opportunity are at an all-time high.”

Mr. Sharng continued, “In light of the recent short selling campaign which sought to damage our brand, reputation and shareholder value, we are diligently working to defend our Company. Nevertheless, it provides a great opportunity to allocate our capital towards repurchasing our shares which our Board of Directors strongly believes is an attractive investment. Their authorization of an additional $55 million for repurchases underscores their confidence. Separately, we are in regular contact with Chinese officials at several government agencies. While we take our disclosure obligations very seriously, we do not intend to make any additional comments regarding this matter unless and until there are additional material developments to disclose.”

Balance Sheet and Cash Flow

  • At December 31, 2015, cash and cash equivalents totaled $104.9 million, compared to $94.6 million at September 30, 2015.
     
  • Net cash provided by operating activities in the fourth quarter of 2015 was $16.1 million, compared to $9.7 million in the fourth quarter of 2014. For the full year of 2015, net cash provided by operating activities was $81.3 million, compared to $30.6 million for the full year of 2014.
     
  • During the three months ended December 31, 2015, the Company repurchased a total of $5.0 million of its common stock under its stock repurchase program. On January 13, 2016, the Company announced that its Board of Directors authorized an increase in the stock repurchase program from $15.0 million to $70.0 million. The Company expects to continue executing against the $70.0 million stock repurchase program and anticipates it will begin repurchasing soon. Since November 2014, the Company has repurchased 906,882 shares of common stock at a cost of $20.6 million.

Fourth Quarter and Full Year 2015 Financial Results Conference Call

Management will host a conference call to discuss the fourth quarter and full year 2015 financial results today, Tuesday, February 2, 2016 at 4:30 p.m. Eastern Time. The conference call details are as follows:

Date: Tuesday, February 2, 2016
Time: 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time
Dial-in: 1-877-407-0789 (Domestic)
  1-201-689-8562 (International)
Conference ID:   13627796
Webcast: http://public.viavid.com/index.php?id=117686
   

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 February 2, 2016 through 11:59 p.m. Eastern Time on February 16, 2016 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing the replay pin number: 13627796.

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.

Forward-Looking Statements

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
(In thousands)
 
  December 31, 2015   December 31, 2014
  (Unaudited)    
ASSETS      
Current assets:      
Cash and cash equivalents $ 104,914     $ 44,816  
Accounts receivable 57     107  
Inventories, net 10,455     3,760  
Other current assets 2,286     930  
Total current assets 117,712     49,613  
Property and equipment, net 894     476  
Goodwill 1,764     1,764  
Restricted cash 3,166     315  
Other assets 616     372  
Total assets $ 124,152     $ 52,540  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 2,862     $ 2,232  
Income taxes payable 379     268  
Accrued commissions 19,634     8,853  
Other accrued expenses 16,703     6,743  
Deferred revenue 4,011     2,687  
Deferred tax liability 60     65  
Amounts held in eWallets 16,414     2,064  
Other current liabilities 1,510     1,513  
Total current liabilities 61,573     24,425  
Long-term incentive 5,770     1,665  
Total liabilities 67,343     26,090  
Commitments and contingencies      
Stockholders’ equity:      
Preferred stock —     —  
Common stock 13     13  
Additional paid-in capital 85,963     85,750  
Accumulated deficit (9,647 )   (54,799 )
Accumulated other comprehensive (loss) income (101 )   62  
Treasury stock, at cost (19,419 )   (4,576 )
Total stockholders’ equity 56,809     26,450  
Total liabilities and stockholders’ equity $ 124,152     $ 52,540  


 
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
  Three Months Ended
December 31,		   Year Ended
December 31,
  2015   2014   2015   2014
  (Unaudited)   (Unaudited)    
               
Net sales $ 73,656     $ 35,406     $ 264,860     $ 124,590  
Cost of sales 15,073     7,464     54,098     26,981  
Gross profit 58,583     27,942     210,762     97,609  
Operating expenses:              
Commissions expense 33,155     16,607     126,598     56,997  
Selling, general and administrative expenses 11,453     5,233     36,024     19,687  
Depreciation and amortization 82     33     263     105  
Total operating expenses 44,690     21,873     162,885     76,789  
Income from operations 13,893     6,069     47,877     20,820  
Other income (expense), net 28     (145 )   (84 )   (184 )
Income before income taxes 13,921     5,924     47,793     20,636  
Income tax provision 222     122     552     266  
Net income 13,699     5,802     47,241     20,370  
Preferred stock dividends —     (1 )   —     (10 )
Net income available to common stockholders $ 13,699     $ 5,801     $ 47,241     $ 20,360  
Income per common share:              
Basic $ 1.13     $ 0.46     $ 3.84     $ 1.67  
Diluted $ 1.13     $ 0.45     $ 3.82     $ 1.61  
Weighted-average number of common shares outstanding:              
Basic 12,118     12,692     12,302     12,131  
Diluted 12,159     12,780     12,372     12,600  
Cash dividends declared per share:              
Common $ 0.050     $ 0.010     $ 0.140     $ 0.030  
Series A preferred stock $ —     $ 0.032     $ —     $ 0.894  


 
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
  Year Ended December 31,
  2015   2014
  (Unaudited)    
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net income $ 47,241     $ 20,370  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 263     105  
Stock-based compensation 86     49  
Cumulative translation adjustment realized in net income (82 )   —  
Deferred income taxes (15 )   (43 )
Changes in assets and liabilities:      
Accounts receivable 41     —  
Inventories, net (6,762 )   (2,029 )
Other current assets (1,066 )   (501 )
Other assets (267 )   (85 )
Accounts payable 637     (822 )
Income taxes payable (115 )   243  
Accrued commissions 10,840     5,077  
Other accrued expenses 10,714     3,706  
Deferred revenue 1,331     147  
Amounts held in eWallets 14,350     2,065  
Other current liabilities 25     666  
Long-term incentive 4,105     1,665  
Net cash provided by operating activities 81,326     30,613  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchases of property and equipment, net (710 )   (339 )
Increase in restricted cash (3,028 )   —  
Net cash used in investing activities (3,738 )   (339 )
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from exercise of warrants 309     4,948  
Repurchase of common stock (16,071 )   (4,661 )
Dividends paid (1,709 )   (476 )
Net cash used in financing activities (17,471 )   (189 )
Effect of exchange rates on cash and cash equivalents (19 )   181  
Net increase in cash and cash equivalents 60,098     30,266  
CASH AND CASH EQUIVALENTS, beginning of period 44,816     14,550  
CASH AND CASH EQUIVALENTS, end of period $ 104,914     $ 44,816  
NON-CASH FINANCING ACTIVITY:      
Conversion of preferred stock $ —     $ 111
  
Issuance of treasury stock 666     —  

 

CONTACTS:

Company Contact:
Scott Davidson
Senior Vice President and Chief Financial Officer
Natural Health Trends Corp.
Tel: 310-541-0888
scott.davidson@nhtglobal.com

Investors:
Addo Communications
Tel: 310-829-5400
investor.relations@nhtglobal.com

Primary Logo

Source: Natural Health Trends Corp.

Released February 2, 2016