Natural Health Trends Reports First Quarter 2018 Financial Results

The following excerpt is from the company's SEC filing.

Second sequential quarterly increase in net sales

Declared special dividend of $20.0 million, or $1.76 per share

Increased quarterly dividend 8% to $0.14 per share

LOS ANGELES – May 2, 2018 – 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 first quarter ended

March 31, 2018

Quarter

Financial Highlights

Total revenue of

$52.4 million

de creased

compared to

$59.9 million

in the

quarter of

and increased 14% compared to $46.1 million in the fourth quarter of 2017.

Revenue from the Company’s Hong Kong operations, which represented

of total revenue, was

$47.6 million

, a decrease of

$54.6 million

, and an increase of 20% compared to $39.6 million in the fourth quarter of 2017.

Revenue outside of Hong Kong of

$4.7 million

$5.3 million

and decreased 28% compared to $6.5 million in the fourth quarter of 2017.

Operating income was

$10.0 million

$13.0 million

and $8.7 million in the fourth quarter of 2017.

Net income was

$8.8 million

per diluted share, compared to net income of

$10.4 million

per diluted share, in the

The number of Active Members

95,040

95,670

December 31, 2017

, and decreased

113,710

March 31, 2017

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

“Our momentum in the back half of 2017 carried into 2018 with our total revenue increasing 14% over the prior quarter, marking our second consecutive quarter of sales growth,” commented Chris Sharng, President of Natural Health Trends Corp. “Our improved top-line performance is a direct result of the enhancements made to our commission plan to better incentivize up-and-coming members and ease rank advancement, along with our effective marketing programs. We also held our international Ambassador Academy in Hong Kong, which attracted over 5,500 people. The orders generated by promotions directly related to the event exceeded those of the last three years.”

Mr. Sharng further commented, “With our revenue for the quarter improved, 2018 is off to a good start. Our leaders remain energized and enthusiastic and we look forward to more productive incentive trips and targeted training programs this year to drive further progress and growth.”

Balance Sheet and Cash Flow

Net cash provided by operating activities was $11.1 million, compared to $13.8 million in the

April 17, 2018

, the Company’s Board of Directors declared a quarterly cash dividend of $0.14, which represents an 8% increase over the prior quarter dividend, as well as a special cash dividend of $1.76 per share on outstanding common stock. The dividends will be payable on

May 25, 2018

to stockholders of record as of

May 15, 2018

Quarter 2018 Financial Results Conference Call

Management will host a conference call to discuss the

quarter 2018 financial results today, Wednesday, May 2, 2018 at 11:30 a.m. Eastern Time. The conference call details are as follows:

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:

13678508

Webcast:

http://public.viavid.com/index.php?id=129162

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 2, 2018 through 11:59 p.m. Eastern Time on May 16, 2018 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13678508.

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 March 27, 2018 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.

CONTACTS:

Company Contact:

Scott Davidson

Senior Vice President and Chief Financial Officer

Tel: 310-541-0888

scott.davidson@nhtglobal.com

Investor Contact:

ADDO Investor Relations

Tel: 310-829-5400

investor.relations@nhtglobal.com

NATURAL HEALTH TRENDS CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

145,095

135,311

Inventories

Other current assets

Total current assets

159,060

151,243

Property and equipment, net

Goodwill

Restricted cash

Deferred tax asset

Other assets

Total assets

167,387

159,554

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Income taxes payable

Accrued commissions

10,027

11,170

Other accrued expenses

Deferred revenue

Amounts held in eWallets

14,623

15,152

Other current liabilities

Total current liabilities

41,778

41,921

19,052

Deferred tax liability

Long-term incentive

Total liabilities

68,481

68,933

Commitments and contingencies

Stockholders’ equity:

Preferred stock

Common stock

Additional paid-in capital

86,415

86,683

Retained earnings

52,253

44,908

Accumulated other comprehensive loss

Treasury stock, at cost

(39,748

(40,570

Total stockholders’ equity

98,906

90,621

Total liabilities and stockholders’ equity

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended March 31,

Net sales

52,367

59,874

Cost of sales

10,221

11,245

Gross profit

42,146

48,629

Operating expenses:

Commissions expense

22,980

25,965

Selling, general and administrative expenses

Total operating expenses

32,102

35,637

Income from operations

10,044

12,992

Other income, net

Income before income taxes

10,207

13,148

Income tax provision

10,425

Net income per common share:

Diluted

Weighted-average number of common shares outstanding:

11,286

11,229

11,288

11,251

Cash dividends declared per common share

CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Stock-based compensation

Cumulative translation adjustment realized in net income

Changes in assets and liabilities:

(1,119

(1,555

11,145

13,811

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Dividends paid

(1,479

(4,981

Net cash used in financing activities

Effect of exchange rates on cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

138,478

128,884

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

148,374

137,664

SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:

Issuance of treasury stock for employee awards, net

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever NATURAL HEALTH TRENDS CORP makes a similar move, sign up!

Auto Refresh

Feedback