The following excerpt is from the company's SEC filing.
Strong balance sheet with ample liquidity and $95 million in cash and cash equivalents
Declared a quarterly cash dividend of $0.20 per share
Expect to realize $8 million in annualized cost savings in 2020
HONG KONG – May 6, 2020 – 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, 2020.
2020 Financial Highlights
Revenue of $14.9 millio n decreased 23% compared to $19.3 million in the first quarter of 2019.
Operating loss was $1.4 million compared to a loss of $2.7 million in the first quarter of 2019.
Net loss was $573,000, or $0.05 per diluted share, compared to a net loss of $1.9 million, or $0.17 per diluted share, in the first quarter of 2019.
The number of Active Members
decreased 2% to 56,490 at March 31, 2020 compared to 57,410 at December 31, 2019, and decreased 35% compared to 87,340 at March 31, 2019.
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.
“First and foremost, our thoughts are with all of those around the world who have been impacted by the coronavirus,” commented Chris Sharng, President of Natural Health Trends Corp. “I am pleased that we have continued to run our operations efficiently with the health and safety of our employees, members and customers guiding our decisions as our top priority. The impact of the pandemic followed the already difficult operating conditions we experienced throughout 2019. While we could have never foreseen the impact COVID-19 would have on the global economy, we focused our efforts in 2019 on preparing our business to adapt to new realities following China’s 100-day campaign and have been applying key learnings from our experience to support our affected markets. To that end, we started implementing aggressive cost reduction measures beginning in the second half of 2019 which were partially offset by additional spending during the first quarter in direct response to COVID-19 and the governments’ measures to control the spread of the virus. As a result of the net effect of these actions, we narrowed the scope of our first quarter operating loss and decline in cash flow from operations despite the fact that our main markets were under severe lockdown for most of first quarter of 2020.”
Mr. Sharng concluded, “We have ample liquidity with $95 million in cash and cash equivalents and zero debt. Further, our highly variable cost structure allows us the flexibility to adapt in-line with order volume. As previously announced, we put a program in place to position us for increased operating efficiencies in several areas including reducing headcount and promotional spending. As a result, we now expect to realize annualized cost savings of approximately $8 million in 2020. I feel confident our employees and members will work together through these unprecedented times with our support and that we will emerge from this downturn even stronger than before.”
Balance Sheet and Cash Flow
Net cash used in operating activities was $990,000 in the first quarter of 2020, compared to $11.3 million in the first quarter of 2019.
Total cash and cash equivalents were $95.4 million at March 31, 2020, down slightly from $96.0 million at December 31, 2019.
On May 4, 2020, 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 29, 2020 to stockholders of record as of May 19, 2020.
First Quarter 2020 Financial Results Conference Call
Management will host a conference call to discuss the first quarter 2020 financial results today, Wednesday, May 6, 2020 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
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 6, 2020 through 11:59 p.m. Eastern Time on May 20, 2020 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13700943.
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.
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 9, 2020 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.
Senior Vice President and Chief Financial Officer
Tel (Hong Kong): +852-3107-0800
Tel (U.S.): 310-541-0888
ADDO Investor Relations
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31, 2020
Cash and cash equivalents
Other current assets
Total current assets
Property and equipment, net
Operating lease right-of-use assets
Deferred tax asset
LIABILITIES AND STOCKHOLDERS’ EQUITY
Other accrued expenses
Amounts held in eWallets
Operating lease liabilities
Other current liabilities
Total current liabilities
Income taxes payable
Deferred tax liability
Additional paid-in capital
Accumulated other comprehensive loss
Treasury stock, at cost
Total stockholders’ equity
Total liabilities and stockholders’ equity
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
Three Months Ended March 31,
Cost of sales
Selling, general and administrative expenses
Total operating expenses
Loss from operations
Other income, net
Loss before income taxes
Income tax benefit
Net loss per common share – basic and diluted
Weighted-average common shares outstanding – basic and diluted
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
Noncash lease expense
Deferred income taxes
Changes in assets and liabilities:
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash used in financing activities
Effect of exchange rates on cash, cash equivalents and restricted cash
Net decrease in cash, cash equivalents and restricted cash
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
Issuance of treasury stock for employee awards, net
Right-of-use assets obtained in exchange for operating lease liabilities
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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