Revenue of $23.2 Million, up 168%; $0.26 in Diluted EPS
Second Dividend is Declared
DALLAS, May 7, 2014 (GLOBE NEWSWIRE) -- Natural Health Trends Corp. (OTCQB: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 record financial results for the quarter ended March 31, 2014.
First Quarter Financial Highlights
- Total revenues were $23.2 million, up 168% compared to $8.7 million in the first quarter last year and up 21% sequentially compared to $19.1 million for the fourth quarter last year. This was the fifth consecutive sequential quarterly increase in revenues.
- Operating income was $3.1 million, up 968% compared to $292,000 last year, and up 88% sequentially from $1.7 million for the fourth quarter last year.
- Net income was $3.1 million, or $0.26 per diluted share, compared to $283,000, or $0.03 per diluted share, last year and $1.6 million, or $0.14 per diluted share, for the fourth quarter last year.
- Cash and cash equivalents increased to $23.3 million as of March 31, 2014 from $14.6 million at December 31, 2013.
"The strong momentum we built in 2013 continued into the first quarter," commented Chris Sharng, President of Natural Health Trends Corp. "Net sales in Hong Kong increased 237% and sales in Taiwan increased 12% compared to the first quarter of last year, demonstrating the strong organization we have built in these two important geographies. We continue to expand our gross profitability, grow our operating income and expand our free cash flow, helping to support our prospect for long-term growth."
"Our focus is on sustaining this momentum and continuing to drive improved results," added Mr. Sharng. "All of the critical business drivers that we built: leader support, promotional plans, training, product development, member services and commissions plan are working effectively. We expect 2014 will be an exceptional year for Natural Health Trends, its members, customers and shareholders."
Dividend
Yesterday the Board of Directors declared its second consecutive quarterly dividend. The declared dividend included a cash dividend of $0.0196 per share on outstanding Series A preferred stock, which represents the accrued unpaid dividends through the declaration date, and a cash dividend of $0.005 per share on common stock outstanding, totaling aggregate dividends of $60,000, payable in cash on June 4, 2014 to stockholders of record on May 27, 2014.
Shareholder Conference Call
Management will conduct a conference call to discuss its first quarter financial results. Details of the call are as follows:
- Date: Wednesday, May 7, 2014
- Time: 4:30 p.m. ET/3:30 p.m. CT
- Dial-in number: 1-877-941-1428 (domestic) 1-480-629-9665 (international)
- Webcast link: http://public.viavid.com/index.php?id=108979
A replay will be available from 7:30 p.m. ET on May 7 through 11:59 p.m. ET on May 14, by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing replay pin number 4681425.
About Natural Health Trends Corp.
Natural Health Trends Corp. 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, wellness and "quality of life" products under the NHT Global brand. Additional information can be found on the company's website, www.naturalhealthtrendscorp.com.
Forward Looking Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption "Risk Factors" in our Annual Report on Form 10-K filed on March 7, 2014, with the Securities and Exchange Commission. We assume no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
-- Tables follow --
| NATURAL HEALTH TRENDS CORP. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In Thousands, Except Share Data) | ||
|
December 31, 2013 |
March 31, 2014 |
|
| (Unaudited) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 14,550 | $ 23,334 |
| Accounts receivable | 134 | 168 |
| Inventories, net | 1,828 | 3,323 |
| Other current assets | 658 | 1,742 |
| Total current assets | 17,170 | 28,567 |
| Property and equipment, net | 265 | 294 |
| Goodwill | 1,764 | 1,764 |
| Restricted cash | 328 | 323 |
| Other assets | 300 | 296 |
| Total assets | $ 19,827 | $ 31,244 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 3,058 | $ 4,438 |
| Income taxes payable | 25 | 53 |
| Accrued distributor commissions | 3,962 | 3,957 |
| Other accrued expenses | 3,146 | 4,321 |
| Deferred revenue | 2,569 | 7,881 |
| Deferred tax liability | 108 | 108 |
| Other current liabilities | 882 | 923 |
| Total current liabilities | 13,750 | 21,681 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Preferred stock | 111 | 93 |
| Common stock | 11 | 12 |
| Additional paid-in capital | 80,655 | 81,272 |
| Accumulated deficit | (74,619) | (71,706) |
| Accumulated other comprehensive loss: | ||
| Foreign currency translation adjustments | (81) | (108) |
| Total stockholders' equity | 6,077 | 9,563 |
| Total liabilities and stockholders' equity | $ 19,827 | $ 31,244 |
| NATURAL HEALTH TRENDS CORP. | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||
| (In Thousands, Except Per Share Data) | ||
| Three Months Ended March 31, | ||
| 2013 | 2014 | |
| Net sales | $ 8,651 | $ 23,162 |
| Cost of sales | 2,228 | 5,252 |
| Gross profit | 6,423 | 17,910 |
| Operating expenses: | ||
| Distributor commissions | 3,674 | 10,423 |
| Selling, general and administrative expenses | 2,445 | 4,347 |
| Depreciation and amortization | 12 | 21 |
| Total operating expenses | 6,131 | 14,791 |
| Income from operations | 292 | 3,119 |
| Other income (expense), net | 7 | (9) |
| Income before income taxes | 299 | 3,110 |
| Income tax provision | 12 | 39 |
| Net income | 287 | 3,071 |
| Preferred stock dividends | (4) | (4) |
| Net income available to common stockholders | $ 283 | $ 3,067 |
| Income per common share: | ||
| Basic | $ 0.03 | $ 0.27 |
| Diluted | $ 0.03 | $ 0.26 |
| Weighted-average number of common shares outstanding: | ||
| Basic | 11,069 | 11,361 |
| Diluted | 11,248 | 11,673 |
| Cash dividends declared per share: | ||
| Common | $ – | $ 0.005 |
| Series A preferred stock | $ – | $ 0.815 |
| NATURAL HEALTH TRENDS CORP. | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||
| (In Thousands) | ||
| Three Months Ended March 31, | ||
| 2013 | 2014 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net income | $ 287 | $ 3,071 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 12 | 21 |
| Stock-based compensation | 30 | 25 |
| Changes in assets and liabilities: | ||
| Accounts receivable | (59) | (39) |
| Inventories, net | (28) | (1,527) |
| Other current assets | 232 | (1,105) |
| Other assets | (2) | – |
| Accounts payable | 428 | 1,381 |
| Income taxes payable | 12 | 28 |
| Accrued distributor commissions | 215 | 21 |
| Other accrued expenses | (279) | 1,040 |
| Deferred revenue | 304 | 5,320 |
| Other current liabilities | (134) | 47 |
| Net cash provided by operating activities | 1,018 | 8,283 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchases of property and equipment, net | (14) | (63) |
| Net cash used in investing activities | (14) | (63) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Proceeds from exercise of warrants | – | 598 |
| Repurchase of common stock | (12) | (24) |
| Net cash provided by (used in) financing activities | (12) | 574 |
| Effect of exchange rates on cash and cash equivalents | (26) | (10) |
| Net increase in cash and cash equivalents | 966 | 8,784 |
| CASH AND CASH EQUIVALENTS, beginning of period | 4,207 | 14,550 |
| CASH AND CASH EQUIVALENTS, end of period | $ 5,173 | $ 23,334 |
| NON-CASH FINANCING ACTIVITY: | ||
| Conversion of preferred stock | $ – | $ 18 |
| Cash dividends declared, but not yet paid | – | 158 |