CHESTERFIELD, Mo., July 30, 2008 (PRIME NEWSWIRE) -- Reliv International, Inc. (Nasdaq:RELV), a nutrition and direct selling company, today reported net sales for the second quarter of $24.0 million, compared to net sales of $26.3 million in the second quarter last year.
Net income for the second quarter equaled $569,000 or $0.04 per diluted share, compared to net income of $823,000 or $0.05 per diluted share in the second quarter of 2007.
For the six months ended June 30, net sales equaled $52.2 million compared to $61.3 million in the first six months of 2007. Net income was $2.1 million in the first half of 2008, or $0.13 per diluted share, compared to $3.4 million or $0.21 per diluted share for the same period last year.
The company also announced a restructuring of its European operations and a related one-time charge of $110,000 after taxes. Excluding the one-time charge, second-quarter 2008 earnings would have been $679,000, but earnings per share would have remained at $0.04.
Under the restructuring, Reliv's corporate office in Germany is closing, though the existing distribution center will continue to serve distributors in Germany and other European countries. Except for the distribution center, all other European operations now are being run out of Reliv's United Kingdom office. Reliv expects the restructuring to achieve operating efficiencies moving forward. Distributors will still be able to build their businesses in each of the countries where Reliv currently operates.
As of June 30, 2008, Reliv's distributor base totaled approximately 69,450, nearly equal to the number of distributors a year earlier.
Net sales in the United States equaled $20.4 million in the second quarter compared to net sales of $23.3 million in the second quarter of 2007. International net sales (sales outside of the United States) rose 16.6 percent in the second quarter to $3.5 million. Reliv's Malaysia/Singapore region had the strongest gain among all Reliv markets in the quarter.
"On a positive note, our sales gains outside of the U.S., particularly in Asia, are a bright spot for Reliv," said Robert L. Montgomery, president, chairman and chief executive officer. "Asian sales gains have reduced operating losses by approximately 90 percent in that region compared to the first half of last year, and we expect consolidation in Europe to improve results in that region.
"But our key focus is turning around U.S. sales," Montgomery said. "With that in mind, Reliv will announce new programs at our International Conference in August and in the following months related to products, retention and incentives that we expect to boost sales and recruiting," he added.
Selling, general and administrative (SG&A) costs in this year's second quarter were down compared to the SG&A expenses in the year-ago quarter. As a percentage of sales, however, SG&A increased to 40.0 percent vs. 38.8 percent in the second quarter of 2007.
Reliv had $11.9 million in cash, cash equivalents and short-term investments as of June 30. Reliv reported cash from operations for the first half of 2008 of $2.2 million. During the second quarter, Reliv repurchased 211,700 shares of its common stock.
Reliv announced a price increase across much of its U.S. product line to take effect Friday, Aug. 1. The increases were driven by rising ingredient and freight costs, and they range from 6 to 12 percent, depending on the product.
"I believe that the plans in place for the second half of 2008 offer Reliv a very good opportunity to return to top- and bottom-line growth," Montgomery said. "The basics of our business remain in place: Reliv makes nutrition simple. Our products may help foster wellness through preventative means and can play a role in supporting the weight management efforts undertaken by millions of people. In addition, we offer distributors an outstanding business opportunity," he added.
Reliv will host a conference call to discuss second-quarter earnings with investors at 1:00 p.m. Eastern Daylight Time on July 30. The dial-in number for investors is 888-680-0869. The participant passcode is 19464079. To register, please call in 15 minutes prior to start of the call. A replay of this call will be available for one week by telephone from 3:00 p.m. Eastern by calling 888-286-8010 and using the passcode 61697735. A live web cast of this call will be available through the Investor Relations section of Reliv's Web site, http://www.reliv.com/US/EN/Conference%20Calls%20Presentations.html. An online archive of the broadcast will be available on Reliv's Web site in the Investor Relations section 24 hours after the call concludes.
About Reliv
Reliv International, Inc., based in suburban St. Louis, Mo., is a developer, manufacturer and marketer of a proprietary line of nutritional supplements addressing essential daily nutrition, sports nutrition, weight management and nutraceuticals. Reliv sells its products through an international network marketing system of approximately 69,450 independent distributors. Additional information about Reliv International, Inc. can be obtained on the Web at www.reliv.com.
Condensed Consolidated Balance Sheets
June 30 December 31
2008 2007
------------------------
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $10,352,319 $11,694,699
Short-term investments 1,521,111 398,592
Accounts and notes receivable, less
allowances of $8,600 in 2008 and $8,300
in 2007 443,045 811,634
Accounts due from employees and
distributors 238,842 204,705
Inventories 6,887,501 6,179,238
Other current assets 2,159,857 1,798,932
------------------------
Total current assets 21,602,675 21,087,800
Other assets 3,032,874 2,999,903
Accounts due from employees and
distributors 231,544 319,883
Net property, plant and equipment 9,128,400 9,199,185
------------------------
Total Assets $33,995,493 $33,606,771
========================
Liabilities and Stockholders' Equity
Total current liabilities $ 8,825,433 $ 8,574,257
Total non-current liabilities 1,156,335 1,227,313
Stockholders' equity 24,013,725 23,805,201
------------------------
Total Liabilities and Stockholders' Equity $33,995,493 $33,606,771
========================
Consolidated Statements of Income
------------------------ ------------------------
Three months ended Six months ended
June 30 June 30
2008 2007 2008 2007
------------------------ ------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Product sales $21,295,574 $23,550,919 $46,492,752 $54,948,885
Handling & freight
income 2,664,136 2,773,618 5,738,344 6,339,296
------------------------ ------------------------
Net Sales 23,959,710 26,324,537 52,231,096 61,288,181
Costs and expenses:
Cost of products
sold 4,110,910 4,398,940 8,945,436 10,460,332
Distributor
royalties and
commissions 9,422,481 10,602,827 20,544,853 24,531,390
Selling,
general and
administrative 9,589,478 10,199,831 19,521,277 21,229,680
------------------------ ------------------------
Total Costs and
Expenses 23,122,869 25,201,598 49,011,566 56,221,402
------------------------ ------------------------
Income from
operations 836,841 1,122,939 3,219,530 5,066,779
Other income
(expense):
Interest income 100,691 163,514 235,564 376,116
Interest expense (9,981) (447) (10,394) (573)
Other income
(expense) 17,523 98,305 (17,589) 195,238
------------------------ ------------------------
Income before income
taxes 945,074 1,384,311 3,427,111 5,637,560
Provision for income
taxes 376,000 561,000 1,332,000 2,194,000
------------------------ ------------------------
Net Income $ 569,074 $ 823,311 $ 2,095,111 $ 3,443,560
======================== ========================
Earnings per common
share - Basic $ 0.04 $ 0.05 $ 0.13 $ 0.21
======================== ========================
Weighted average
shares 15,821,000 16,135,000 15,847,000 16,282,000
======================== ========================
Earnings per common
share - Diluted $ 0.04 $ 0.05 $ 0.13 $ 0.21
======================== ========================
Weighted average
shares 15,821,000 16,308,000 15,847,000 16,453,000
======================== ========================
Cash dividends
declared per
common share $ 0.05 $ 0.05 $ 0.05 $ 0.05
======================== ========================
The following tables summarize net sales by geographic market
ranked by the date we began operations in each market.
Net sales by Market
(in thousands)
Three months ended June 30, Change From
2008 2007 Prior Year
Amount % of sales Amount % of sales Amount %
------------------ ------------------ ----------------
United States 20,435 85.3% 23,303 88.5% (2,868) -12.3%
Australia/New
Zealand 682 2.8% 722 2.7% (40) -5.5%
Canada 436 1.8% 378 1.4% 58 15.3%
Mexico 481 2.0% 393 1.5% 88 22.4%
United Kingdom/
Ireland 270 1.1% 252 1.0% 18 7.1%
Philippines 695 2.9% 671 2.6% 24 3.6%
Malaysia/
Singapore 850 3.6% 424 1.6% 426 100.5%
Germany 111 0.5% 182 0.7% (71) -39.0%
---------------- ---------------- ----------------
Consolidated
Total 23,960 100.0% 26,325 100.0% (2,365) -9.0%
================ ================ ================
Net sales by Market
(in thousands)
Six months ended June 30, Change From
2008 2007 Prior Year
Amount % of sales Amount % of sales Amount %
------------------ ------------------ ----------------
United States 45,120 86.4% 55,206 90.1% (10,086) -18.3%
Australia/New
Zealand 1,428 2.7% 1,375 2.3% 53 3.9%
Canada 897 1.7% 818 1.3% 79 9.7%
Mexico 880 1.7% 804 1.3% 76 9.5%
United Kingdom/
Ireland 557 1.1% 539 0.9% 18 3.3%
Philippines 1,509 2.9% 1,299 2.1% 210 16.2%
Malaysia/
Singapore 1,492 2.8% 754 1.2% 738 97.9%
Germany 348 0.7% 493 0.8% (145) -29.4%
---------------- ---------------- ----------------
Consolidated
Total 52,231 100.0% 61,288 100.0% (9,057) -14.8%
================ ================ ================
The following table sets forth, as of June 30, 2008 and 2007, the
number of our active distributors and Master Affiliates and above.
The total number of active distributors includes Master Affiliates
and above. We define an active distributor as one that enrolls as a
distributor or renews its distributorship during the prior twelve
months. Master Affiliates and above are distributors that have
attained the highest level of discount and are eligible for royalties
generated by Master Affiliates and above in their downline
organization. Growth in the number of active distributors and Master
Affiliates and above is a key factor in continuing the growth of our
business.
Active Distributors and Master Affiliates and above by Market
As of 6/30/2008 As of 6/30/2007 Change in %
Master Master Master
Active Affili- Active Affili- Active Affili-
Distri- ates and Distri- ates and Distri- ates and
butors Above butors Above butors Above
---------------- ---------------- -----------------
United States 55,070 10,080 56,930 13,200 -3.3% -23.6%
Australia/New
Zealand 2,420 220 2,510 280 -3.6% -21.4%
Canada 1,230 150 1,130 150 8.8% 0.0%
Mexico 1,540 220 1,300 190 18.5% 15.8%
United Kingdom/
Ireland 750 90 830 130 -9.6% -30.8%
Philippines 4,900 430 3,990 300 22.8% 43.3%
Malaysia/
Singapore 3,040 490 2,260 290 34.5% 69.0%
Germany 500 80 520 150 -3.8% -46.7%
---------------- ---------------- ----------------
Consolidated
Total 69,450 11,760 69,470 14,690 0.0% -19.9%
================ ================ ================