Natural Health Trends Reports Second Quarter 2022 Financial Results
August 03 2022 - 8:00AM
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 June 30, 2022.
Second Quarter 2022 Financial
Highlights
- Revenue of $13.4 million increased 16% compared to $11.5
million in the first quarter of 2022 and decreased 17% compared to
$16.2 million in the second quarter of 2021.
- Operating income was $215,000 compared to operating loss of
$383,000 in the first quarter of 2022 and operating income of
$385,000 in the second quarter of 2021.
- Net income was $183,000, or $0.02 per diluted share, compared
to net loss of $105,000, or $0.01 per diluted share, in the first
quarter of 2022 and net income of $229,000, or $0.02 per diluted
share, in the second quarter of 2021.
- The number of Active Members1 decreased 3% to 43,020 at June
30, 2022 compared to 44,490 at March 31, 2022, and decreased 8%
compared to 46,860 at June 30, 2021.
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.
Year-to-Date 2022 Financial Highlights
- Revenue of $24.9 million decreased 16% compared to $29.6
million in the first six months of 2021.
- Operating loss was $168,000 compared to operating income of
$605,000 in the first six months of 2021.
- Net income was $78,000, or $0.01 per diluted share, compared to
$382,000, or $0.03 per diluted share, in the first six months of
2021.
Management Commentary
“We continued to face significant and unpredictable
COVID-related disruptions in the second quarter as lockdowns
and social restrictions, along with supply chain bottlenecks,
persisted in Greater China,” commented Chris Sharng, President
of Natural Health Trends Corp. “Despite not being able to host
any larger in-person activities, we finished the quarter
strong with a well-attended virtual event and our members' positive
response to promotional incentives. In June, working closely with
our leaders, we rolled out a new virtual training system that
incorporates company-sponsored product training and member-led
business, motivational and leadership training to better support
the ongoing development and engagement of members in the Greater
China market.”
Mr. Sharng continued, “We are encouraged about the growth in the
European market that emanated from our Swedish team after hosting a
successful face-to-face event in April. In other markets outside of
Greater China we supported our members both online and
in-person through virtual events, incentive trips and local
sales initiatives aimed at driving member and customer growth. We
remain committed to the fundamentals of our business and to
implementing strategies for future growth with the objective of
returning value to our shareholders.”
Balance Sheet and Cash Flow
- Net cash used in operating activities was $3.5 million in the
first six months of 2022, compared to net cash provided by
operating activities of $548,000 in the first six months of
2021.
- Total cash and cash equivalents were $75.6 million at June 30,
2022, down from $79.4 million at March 31, 2022.
- On August 1, 2022, 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 August 26, 2022 to
stockholders of record as of August 16, 2022.
Second Quarter 2022 Financial Results Conference
Call
Management will host a conference call to discuss
the second quarter 2022 financial results today,
Wednesday, August 3, 2022 at 11:30 a.m. Eastern Time. The
conference call details are as follows:
Date: |
Wednesday, August 3, 2022 |
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: |
13730852 |
Webcast: |
https://viavid.webcasts.com/starthere.jsp?ei=1556559&tp_key=8061062de2 |
|
|
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 August 3, 2022 through 11:59 p.m. Eastern Time on
August 17, 2022 by dialing 1-844-512-2921 (domestic) and
1-412-317-6671 (international) and referencing the replay pin
number: 13730852.
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 25, 2022 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)
|
|
June 30, 2022 |
|
|
December 31, 2021 |
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
75,633 |
|
|
$ |
83,843 |
|
Inventories |
|
|
5,193 |
|
|
|
5,257 |
|
Other current assets |
|
|
3,408 |
|
|
|
4,369 |
|
Total current assets |
|
|
84,234 |
|
|
|
93,469 |
|
Property and equipment,
net |
|
|
430 |
|
|
|
463 |
|
Operating lease right-of-use
assets |
|
|
2,460 |
|
|
|
3,021 |
|
Restricted cash |
|
|
78 |
|
|
|
522 |
|
Deferred tax asset |
|
|
289 |
|
|
|
309 |
|
Other assets |
|
|
541 |
|
|
|
571 |
|
Total assets |
|
$ |
88,032 |
|
|
$ |
98,355 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
758 |
|
|
$ |
761 |
|
Income taxes payable |
|
|
2,987 |
|
|
|
1,345 |
|
Accrued commissions |
|
|
3,096 |
|
|
|
3,636 |
|
Other accrued expenses |
|
|
1,789 |
|
|
|
1,933 |
|
Deferred revenue |
|
|
6,692 |
|
|
|
8,536 |
|
Amounts held in eWallets |
|
|
5,441 |
|
|
|
6,341 |
|
Operating lease liabilities |
|
|
1,131 |
|
|
|
1,239 |
|
Other current liabilities |
|
|
850 |
|
|
|
865 |
|
Total current liabilities |
|
|
22,744 |
|
|
|
24,656 |
|
Income taxes payable |
|
|
9,098 |
|
|
|
12,130 |
|
Deferred tax liability |
|
|
153 |
|
|
|
153 |
|
Operating lease
liabilities |
|
|
1,489 |
|
|
|
1,928 |
|
Total liabilities |
|
|
33,484 |
|
|
|
38,867 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock |
|
|
— |
|
|
|
— |
|
Common stock |
|
|
13 |
|
|
|
13 |
|
Additional paid-in capital |
|
|
86,102 |
|
|
|
86,102 |
|
Accumulated deficit |
|
|
(4,723 |
) |
|
|
(231 |
) |
Accumulated other comprehensive loss |
|
|
(940 |
) |
|
|
(492 |
) |
Treasury stock, at cost |
|
|
(25,904 |
) |
|
|
(25,904 |
) |
Total stockholders’
equity |
|
|
54,548 |
|
|
|
59,488 |
|
Total liabilities and
stockholders’ equity |
|
$ |
88,032 |
|
|
$ |
98,355 |
|
|
|
|
|
|
|
|
|
|
NATURAL HEALTH TRENDS
CORP. CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)(In thousands, except per share
data)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net sales |
|
$ |
13,360 |
|
|
$ |
16,152 |
|
|
$ |
24,906 |
|
|
$ |
29,621 |
|
Cost of sales |
|
|
3,392 |
|
|
|
3,934 |
|
|
|
6,300 |
|
|
|
7,189 |
|
Gross profit |
|
|
9,968 |
|
|
|
12,218 |
|
|
|
18,606 |
|
|
|
22,432 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions expense |
|
|
5,767 |
|
|
|
6,927 |
|
|
|
10,507 |
|
|
|
12,441 |
|
Selling, general and administrative expenses |
|
|
3,986 |
|
|
|
4,906 |
|
|
|
8,267 |
|
|
|
9,386 |
|
Total operating expenses |
|
|
9,753 |
|
|
|
11,833 |
|
|
|
18,774 |
|
|
|
21,827 |
|
Income (loss) from
operations |
|
|
215 |
|
|
|
385 |
|
|
|
(168 |
) |
|
|
605 |
|
Other income (expense),
net |
|
|
175 |
|
|
|
(59 |
) |
|
|
285 |
|
|
|
(39 |
) |
Income before income
taxes |
|
|
390 |
|
|
|
326 |
|
|
|
117 |
|
|
|
566 |
|
Income tax provision |
|
|
207 |
|
|
|
97 |
|
|
|
39 |
|
|
|
184 |
|
Net income |
|
$ |
183 |
|
|
$ |
229 |
|
|
$ |
78 |
|
|
$ |
382 |
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.01 |
|
|
$ |
0.03 |
|
Diluted |
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
$ |
0.01 |
|
|
$ |
0.03 |
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
11,346 |
|
|
|
10,968 |
|
|
|
11,300 |
|
|
|
10,921 |
|
Diluted |
|
|
11,424 |
|
|
|
11,424 |
|
|
|
11,424 |
|
|
|
11,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATURAL HEALTH TRENDS
CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(In thousands)
|
|
Six Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
78 |
|
|
$ |
382 |
|
Adjustments to reconcile net
income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
106 |
|
|
|
156 |
|
Noncash lease expense |
|
|
599 |
|
|
|
594 |
|
Deferred income taxes |
|
|
12 |
|
|
|
24 |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Inventories |
|
|
7 |
|
|
|
53 |
|
Other current assets |
|
|
1,002 |
|
|
|
(117 |
) |
Other assets |
|
|
1 |
|
|
|
65 |
|
Accounts payable |
|
|
2 |
|
|
|
446 |
|
Income taxes payable |
|
|
(1,390 |
) |
|
|
(1,376 |
) |
Accrued commissions |
|
|
(531 |
) |
|
|
(37 |
) |
Other accrued expenses |
|
|
(132 |
) |
|
|
(66 |
) |
Deferred revenue |
|
|
(1,788 |
) |
|
|
2,629 |
|
Amounts held in eWallets |
|
|
(862 |
) |
|
|
(1,186 |
) |
Operating lease liabilities |
|
|
(600 |
) |
|
|
(629 |
) |
Other current liabilities |
|
|
(4 |
) |
|
|
(390 |
) |
Net cash provided by (used in)
operating activities |
|
|
(3,500 |
) |
|
|
548 |
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(78 |
) |
|
|
(147 |
) |
Net cash used in investing
activities |
|
|
(78 |
) |
|
|
(147 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Dividends paid |
|
|
(4,570 |
) |
|
|
(4,570 |
) |
Net cash used in financing
activities |
|
|
(4,570 |
) |
|
|
(4,570 |
) |
Effect of exchange rates on
cash, cash equivalents and restricted cash |
|
|
(506 |
) |
|
|
(86 |
) |
Net decrease in cash, cash
equivalents and restricted cash |
|
|
(8,654 |
) |
|
|
(4,255 |
) |
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH, beginning of period |
|
|
84,365 |
|
|
|
92,892 |
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH, end of period |
|
$ |
75,711 |
|
|
$ |
88,637 |
|
SUPPLEMENTAL DISCLOSURES OF
OTHER CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Right-of-use assets obtained in exchange for operating lease
liabilities |
|
$ |
77 |
|
|
$ |
400 |
|
|
|
|
|
|
|
|
|
|
CONTACT:
Scott DavidsonSenior Vice President and Chief Financial
OfficerNatural Health Trends Corp.Tel (Hong Kong):
+852-3107-0800Tel (U.S.):
310-541-0888investor.relations@nhtglobal.com
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