Natural Health Trends Reports First Quarter 2021 Financial Results
May 05 2021 - 9:00AM
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 quarter ended March 31, 2021.
First Quarter 2021 Financial
Highlights
- Revenue of $13.5 million decreased 10% compared to $14.9
million in the first quarter of 2020 due to a $1.1 million increase
in deferred revenue which the Company expects to recognize as
revenue in the second quarter of 2021. Orders taken were relatively
consistent with the first quarter of 2020.
- Operating income was $220,000 compared to an operating loss of
$1.4 million in the first quarter of 2020.
- Net income was $153,000, or $0.01 per diluted share, compared
to a net loss of $573,000, or $0.05 per diluted share, in the first
quarter of 2020.
- The number of Active Members1 decreased 5% to 49,420 at March
31, 2021 compared to 52,230 at December 31, 2020, and decreased 13%
compared to 56,490 at March 31, 2020.
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.
Management Commentary
“Following a highly productive January, severe
government-mandated restrictions and limitations surrounding
in-person events and the Chinese New Year
holiday restricted our leaders from properly conducting
business,” commented Chris Sharng, President of Natural Health
Trends Corp.
Mr. Sharng continued, “That said, our first quarter order trends
sustained positive momentum with order volume approaching levels
achieved in the prior year quarter. A strong contributor
to our order volume was our January in-person training event which
attracted nearly 700 participants. We also saw notable
progress in Japan, India, Peru, Europe and Malaysia which all
experienced strong top-line growth year-over-year. In an effort to
further boost sales, we began the implementation of social selling
in select markets to raise awareness and knowledge of our
product lines and business opportunity. In addition, our diligent
expense management resulted in our fourth consecutive quarter of
positive operating income and net income, in addition to our second
consecutive quarter of positive cash flow generation.”
Mr. Sharng concluded, “Despite having to delay our second
Fly-High training to April, the event was successful and exceeded
the attendance of our January event with follow-up marketing
activities already well underway. Next, we expect to hold our first
major in-person event since the beginning of the pandemic in Macau
in June, where we intend to introduce a new wellness product, Time
Release Ultra B Complex, to an audience of over 1,500. As we
continue to emerge from the pandemic, we believe we are
well-positioned to begin the process of safely resuming our normal
business operations as the economy recovers.”
Balance Sheet and Cash Flow
- Net cash provided by operating
activities was $414,000 in the first quarter of 2021, compared to
cash used of $990,000 in the first quarter of 2020.
- Total cash and cash equivalents were
$90.2 million at March 31, 2021, down slightly from $92.4 million
at December 31, 2020.
- On May 3, 2021, the Company’s Board of
Directors declared a quarterly cash dividend of $0.20 on each share
of common stock outstanding. The dividend will be payable on May
28, 2021 to stockholders of record as of May 18, 2021.
First Quarter 2021 Financial Results Conference
Call
Management will host a conference call to discuss the first
quarter 2021 financial results today, Wednesday, May 5,
2021 at 11:30 a.m. Eastern Time. The conference call
details are as follows:
Date: |
Wednesday, May 5, 2021 |
Time: |
11:30 a.m. Eastern Time / 8:30
a.m. Pacific Time |
Dial-in: |
1-877-407-0789
(Domestic)1-201-689-8562 (International) |
Conference
ID: |
13718088 |
Webcast: |
http://public.viavid.com/index.php?id=144114 |
For those unable to participate during the live broadcast, a
replay of the call will also be available from 2:30 p.m. Eastern
Time on May 5, 2021 through 11:59 p.m. Eastern Time on May 19,
2021 by dialing 1-844-512-2921 (domestic) and
1-412-317-6671 (international) and referencing the replay pin
number: 13718088.
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, the Americas, 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 February 26, 2021 with the Securities and Exchange Commission
(SEC), as well as in subsequent reports filed this year with the
SEC. 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, except share
data)
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
90,214 |
|
|
$ |
92,367 |
|
Inventories |
|
|
3,627 |
|
|
|
3,779 |
|
Other current assets |
|
|
3,393 |
|
|
|
3,595 |
|
Total current assets |
|
|
97,234 |
|
|
|
99,741 |
|
Property and equipment, net |
|
|
521 |
|
|
|
539 |
|
Operating lease right-of-use
assets |
|
|
3,839 |
|
|
|
3,745 |
|
Restricted cash |
|
|
522 |
|
|
|
525 |
|
Deferred tax asset |
|
|
721 |
|
|
|
731 |
|
Other assets |
|
|
648 |
|
|
|
661 |
|
Total assets |
|
$ |
103,485 |
|
|
$ |
105,942 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
756 |
|
|
$ |
580 |
|
Income taxes payable |
|
|
1,547 |
|
|
|
1,481 |
|
Accrued commissions |
|
|
3,116 |
|
|
|
3,496 |
|
Other accrued expenses |
|
|
1,670 |
|
|
|
1,922 |
|
Deferred revenue |
|
|
4,169 |
|
|
|
3,091 |
|
Amounts held in eWallets |
|
|
7,754 |
|
|
|
8,503 |
|
Operating lease liabilities |
|
|
1,252 |
|
|
|
1,163 |
|
Other current liabilities |
|
|
1,125 |
|
|
|
1,270 |
|
Total current liabilities |
|
|
21,389 |
|
|
|
21,506 |
|
Income taxes payable |
|
|
13,748 |
|
|
|
13,748 |
|
Deferred tax liability |
|
|
216 |
|
|
|
216 |
|
Operating lease liabilities |
|
|
2,756 |
|
|
|
2,775 |
|
Total liabilities |
|
|
38,109 |
|
|
|
38,245 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock |
|
|
— |
|
|
|
— |
|
Common stock |
|
|
13 |
|
|
|
13 |
|
Additional paid-in capital |
|
|
86,102 |
|
|
|
86,102 |
|
Retained earnings |
|
|
5,690 |
|
|
|
7,822 |
|
Accumulated other comprehensive loss |
|
|
(525 |
) |
|
|
(336 |
) |
Treasury stock, at cost |
|
|
(25,904 |
) |
|
|
(25,904 |
) |
Total stockholders’ equity |
|
|
65,376 |
|
|
|
67,697 |
|
Total liabilities and
stockholders’ equity |
|
$ |
103,485 |
|
|
$ |
105,942 |
|
|
|
|
|
|
|
|
|
|
NATURAL HEALTH TRENDS
CORP. CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)(In thousands, except per share
data)
|
|
Three Months Ended March 31, |
|
|
|
2021 |
|
|
2020 |
|
Net sales |
|
$ |
13,469 |
|
|
$ |
14,948 |
|
Cost of sales |
|
|
3,255 |
|
|
|
4,514 |
|
Gross profit |
|
|
10,214 |
|
|
|
10,434 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Commissions expense |
|
|
5,514 |
|
|
|
6,603 |
|
Selling, general and administrative expenses |
|
|
4,480 |
|
|
|
5,279 |
|
Total operating expenses |
|
|
9,994 |
|
|
|
11,882 |
|
Income (loss) from
operations |
|
|
220 |
|
|
|
(1,448 |
) |
Other income, net |
|
|
20 |
|
|
|
93 |
|
Income (loss) before income
taxes |
|
|
240 |
|
|
|
(1,355 |
) |
Income tax provision
(benefit) |
|
|
87 |
|
|
|
(782 |
) |
Net income (loss) |
|
$ |
153 |
|
|
$ |
(573 |
) |
Net income (loss) per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.01 |
|
|
$ |
(0.05 |
) |
Diluted |
|
$ |
0.01 |
|
|
$ |
(0.05 |
) |
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
10,874 |
|
|
|
10,483 |
|
Diluted |
|
|
11,424 |
|
|
|
10,483 |
|
|
|
|
|
|
|
|
|
|
NATURAL HEALTH TRENDS
CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(In thousands)
|
|
Three Months Ended March 31, |
|
|
|
2021 |
|
|
2020 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
153 |
|
|
$ |
(573 |
) |
Adjustments to reconcile net
income (loss) to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
79 |
|
|
|
95 |
|
Noncash lease expense |
|
|
294 |
|
|
|
418 |
|
Deferred income taxes |
|
|
9 |
|
|
|
869 |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Inventories |
|
|
123 |
|
|
|
1,001 |
|
Other current assets |
|
|
195 |
|
|
|
(1,033 |
) |
Other assets |
|
|
2 |
|
|
|
52 |
|
Accounts payable |
|
|
176 |
|
|
|
168 |
|
Income taxes payable |
|
|
67 |
|
|
|
(164 |
) |
Accrued commissions |
|
|
(344 |
) |
|
|
(528 |
) |
Other accrued expenses |
|
|
(245 |
) |
|
|
(398 |
) |
Deferred revenue |
|
|
1,093 |
|
|
|
(521 |
) |
Amounts held in eWallets |
|
|
(727 |
) |
|
|
(175 |
) |
Operating lease liabilities |
|
|
(322 |
) |
|
|
(440 |
) |
Other current liabilities |
|
|
(139 |
) |
|
|
239 |
|
Net cash provided by (used in)
operating activities |
|
|
414 |
|
|
|
(990 |
) |
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(63 |
) |
|
|
(12 |
) |
Net cash used in investing
activities |
|
|
(63 |
) |
|
|
(12 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Dividends paid |
|
|
(2,285 |
) |
|
|
(2,285 |
) |
Net cash used in financing
activities |
|
|
(2,285 |
) |
|
|
(2,285 |
) |
Effect of exchange rates on cash,
cash equivalents and restricted cash |
|
|
(222 |
) |
|
|
(240 |
) |
Net decrease in cash, cash
equivalents and restricted cash |
|
|
(2,156 |
) |
|
|
(3,527 |
) |
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH, beginning of period |
|
|
92,892 |
|
|
|
99,425 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH, end of period |
|
$ |
90,736 |
|
|
$ |
95,898 |
|
SUPPLEMENTAL DISCLOSURES OF OTHER
CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Right-of-use assets obtained in exchange for operating lease
liabilities |
|
$ |
400 |
|
|
$ |
194 |
|
|
|
|
|
|
|
|
|
|
CONTACTS:
Company Contact: Scott DavidsonSenior Vice
President and Chief Financial OfficerNatural Health Trends Corp.Tel
(Hong Kong): +852-3107-0800Tel (U.S.):
310-541-0888scott.davidson@nhtglobal.com
Investor Contact:ADDO Investor RelationsTel:
310-829-5400investor.relations@nhtglobal.com
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