• Natural Health Trends Reports Fourth Quarter and Full Year 2021 Financial Results

    Source: Nasdaq GlobeNewswire / 09 Feb 2022 08:00:01   America/Chicago

    • Fourth quarter revenue of $16.1 million increased 13% compared to the third quarter of 2021 
    • Seventh consecutive quarter of positive operating income and net income
    • Generated positive cash flow from operations in the fourth quarter and full year of 2021
    • Declared a quarterly cash dividend of $0.20 per share 

    HONG KONG, Feb. 09, 2022 (GLOBE NEWSWIRE) -- 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 fourth quarter and full year ended December 31, 2021.

    Fourth Quarter 2021 Financial Highlights

    • Revenue of $16.1 million increased 13% compared to $14.3 million in the third quarter of 2021 and decreased 3% compared to $16.6 million in the fourth quarter of 2020. 
    • Operating income was $487,000 compared to $479,000 in the third quarter of 2021 and $1.3 million in the fourth quarter of 2020.
    • Net income was $232,000, or $0.02 per diluted share, compared to $471,000, or $0.04 per diluted share, in the third quarter of 2021 and $747,000, or $0.07 per diluted share, in the fourth quarter of 2020.
    • The number of Active Members1 were down slightly to 45,760 at December 31, 2021, compared to 45,950 at September 30, 2021, and decreased 12% compared to 52,230 at December 31, 2020.

    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.

    Full Year 2021 Financial Highlights

    • Revenue of $60.0 million decreased 3% compared to $62.1 million in 2020.
    • Operating income was $1.6 million compared to $669,000 in 2020.
    • Net income was $1.1 million, or $0.09 per diluted share, compared to $843,000, or $0.07 per diluted share, in 2020.

    Management Commentary

    “We were pleased to report fourth quarter revenue of $16.1 million, an increase of 13% over the third quarter of 2021,” commented Chris Sharng, President of Natural Health Trends Corp. “The top-line improvement reflected double-digit growth in order volume given our increased ability to adapt to the ever-changing macroeconomic environment resulting from the pandemic. The increase in order volume resulted in our deferred revenue balance growing by $2.5 million from September 30 to December 31, 2021. Additionally, we reported our seventh consecutive quarter of positive operating income and net income.”

    Mr. Sharng continued, “As we look ahead into 2022, the effects of the COVID-19 pandemic, and the associated government-mandated restrictions and lockdowns, will likely continue to present headwinds to our business. However, we believe we can continue to support our order volume due to the unwavering hard work and dedication of our employees, leaders and members, coupled with our ability to quickly respond and adapt to changing market conditions. We are guardedly optimistic we will benefit from a gradual resumption of in-person member events and activities going forward.”

    Balance Sheet and Cash Flow

    • Net cash provided by operating activities was $1.0 million in 2021 compared to $1.9 million in 2020.
    • Total cash and cash equivalents were $83.8 million as of December 31, 2021, down from $92.4 million as of December 31, 2020. 
    • On February 7, 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 March 4, 2022 to stockholders of record as of February 22, 2022.

    The Company expects to issue its 2021 audited financial results in late February with its Annual Report on Form 10-K to be filed with the United States Securities and Exchange Commission. These financial results are preliminary and the accompanying financial statements have not been audited or have not yet been reviewed by the Company’s independent accountants. Significant updates and revisions may be required before the release of the Company’s 2021 audited financial results.

    Fourth Quarter and Full Year 2021 Financial Results Conference Call

    Management will host a conference call to discuss the fourth quarter and full year 2021 financial results today, Wednesday, February 9, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:

    Date:Wednesday, February 9, 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:13726094
    Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1522631&tp_key=580f9875a9 

    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 February 9, 2022 through 11:59 p.m. Eastern Time on February 23, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number:  13726094.

    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 26, 2021 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.

    CONTACTS:

    Company Contact:
    Scott Davidson
    Senior Vice President and Chief Financial Officer
    Natural Health Trends Corp.
    Tel (Hong Kong): +852-3107-0800
    Tel (U.S.): 310-541-0888
    scott.davidson@nhtglobal.com 
             
    Investor Contact:
    ADDO Investor Relations
    Tel: 310-829-5400
    investor.relations@nhtglobal.com 

    3

    NATURAL HEALTH TRENDS CORP.
    CONSOLIDATED BALANCE SHEETS
    (In thousands, except share data) 

     December 31, 
     2021  2020 
     (Unaudited)  
    ASSETS       
    Current assets:       
    Cash and cash equivalents$83,843  $92,367 
    Inventories 5,257   3,779 
    Other current assets 4,369   3,595 
    Total current assets 93,469   99,741 
    Property and equipment, net 463   539 
    Operating lease right-of-use assets 3,021   3,745 
    Restricted cash 522   525 
    Deferred tax asset 309   731 
    Other assets 571   661 
    Total assets$98,355  $105,942 
    LIABILITIES AND STOCKHOLDERS’ EQUITY       
    Current liabilities:       
    Accounts payable$761  $580 
    Income taxes payable 1,345   1,481 
    Accrued commissions 3,636   3,496 
    Other accrued expenses 1,933   1,922 
    Deferred revenue 8,536   3,091 
    Amounts held in eWallets 6,341   8,503 
    Operating lease liabilities 1,239   1,163 
    Other current liabilities 865   1,270 
    Total current liabilities 24,656   21,506 
    Income taxes payable 12,130   13,748 
    Deferred tax liability 153   216 
    Operating lease liabilities 1,928   2,775 
    Total liabilities 38,867   38,245 
    Stockholders’ equity:       
    Preferred stock —   — 
    Common stock 13   13 
    Additional paid-in capital 86,102   86,102 
    Retained earnings (accumulated deficit) (231)  7,822 
    Accumulated other comprehensive loss (492)  (336)
    Treasury stock, at cost (25,904)  (25,904)
    Total stockholders’ equity 59,488   67,697 
    Total liabilities and stockholders’ equity$98,355  $105,942 


    NATURAL HEALTH TRENDS CORP. 
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)

     Three Months Ended
    December 31,    		  Year Ended December 31, 
     2021  2020  2021  2020 
     (Unaudited)  (Unaudited)     
    Net sales$16,108  $16,595  $60,005  $62,071 
    Cost of sales 4,153   4,024   15,010   16,990 
    Gross profit 11,955   12,571   44,995   45,081 
    Operating expenses:               
    Commissions expense 7,110   6,868   25,578   26,204 
    Selling, general and administrative expenses 4,358   4,437   17,846   18,208 
    Total operating expenses 11,468   11,305   43,424   44,412 
    Income from operations 487   1,266   1,571   669 
    Other income (expense), net 31   218   (61)  821 
    Income before income taxes 518   1,484   1,510   1,490 
    Income tax provision 286   737   425   647 
    Net income$232  $747  $1,085  $843 
    Net income per common share:               
    Basic$0.02  $0.07  $0.10  $0.08 
    Diluted$0.02  $0.07  $0.09  $0.07 
    Weighted-average number of common shares outstanding:               
    Basic 11,159   10,777   11,017   10,630 
    Diluted 11,424   11,424   11,424   11,424 

    5

    NATURAL HEALTH TRENDS CORP.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)

     Year Ended December 31, 
     2021  2020 
    CASH FLOWS FROM OPERATING ACTIVITIES: (Unaudited)     
    Net income$1,085  $843 
    Adjustments to reconcile net income to net cash provided by operating activities:       
    Depreciation and amortization 299   410 
    Noncash lease expense 1,163   1,532 
    Deferred income taxes 362   1,339 
    Changes in assets and liabilities:       
    Inventories (1,547)  2,700 
    Other current assets (803)  2,322 
    Other assets 68   181 
    Accounts payable 182   (102)
    Income taxes payable (1,753)  (311)
    Accrued commissions 212   566 
    Other accrued expenses 20   (471)
    Deferred revenue 5,482   (1,433)
    Amounts held in eWallets (2,122)  (4,491)
    Operating lease liabilities (1,237)  (1,427)
    Other current liabilities (395)  227 
    Net cash provided by operating activities 1,016   1,885 
    CASH FLOWS FROM INVESTING ACTIVITIES:       
    Purchases of property and equipment (225)  (211)
    Net cash used in investing activities (225)  (211)
    CASH FLOWS FROM FINANCING ACTIVITIES:       
    Dividends paid (9,138)  (9,138)
    Net cash used in financing activities (9,138)  (9,138)
    Effect of exchange rates on cash, cash equivalents and restricted cash (180)  931 
    Net decrease in cash, cash equivalents and restricted cash (8,527)  (6,533)
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 92,892   99,425 
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$84,365  $92,892 
    SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:       
    Right-of-use assets obtained in exchange for operating lease liabilities$472  $2,747 

     


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