• Natural Health Trends Reports Second Quarter 2021 Financial Results

    Source: Nasdaq GlobeNewswire / 04 Aug 2021 08:00:00   America/Chicago

    • Fifth consecutive quarter of positive operating income and net income
    • Strong balance sheet with ample liquidity and $88.1 million in cash and cash equivalents
    • Third consecutive quarter of positive cash flow from operations
    • Declared a quarterly cash dividend of $0.20 per share

    HONG KONG, Aug. 04, 2021 (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 quarter ended June 30, 2021.

    Second Quarter 2021 Financial Highlights

    • Revenue of $16.2 million increased 20% compared to $13.5 million in the first quarter of 2021 and decreased 2% compared to $16.4 million in the second quarter of 2020.
    • Operating income was $385,000 compared to $220,000 in the first quarter of 2021 and $183,000 in the second quarter of 2020.
    • Net income was $229,000, or $0.02 per diluted share, compared to $153,000, or $0.01 per diluted share, in the first quarter of 2021 and $34,000, or break-even per diluted share, in the second quarter of 2020.
    • The number of Active Members1 decreased 5% to 46,860 at June 30, 2021 compared to 49,420 at March 31, 2021, and decreased 14% compared to 54,370 at June 30, 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.

    Year-to-Date 2021 Financial Highlights 

    • Revenue of $29.6 million decreased 6% compared to $31.4 million in the first six months of 2020.
    • Operating income was $605,000 compared to operating loss of $1.3 million in the first six months of 2020.
    • Net income was $382,000, or $0.03 per diluted share, compared to a net loss of $539,000, or $0.05 per diluted share, in the first six months of 2020.

    Management Commentary

    “We were pleased with our second quarter financial performance which reflected sequential growth despite ongoing macroeconomic challenges,” commented Chris Sharng, President of Natural Health Trends Corp. “Revenue of $16.2 million increased 20% compared to the first quarter of 2021 driven by multiple in-person events and roadshows which are helping to rejuvenate momentum in our core markets.  Partially offsetting our growth were sporadic outbreaks hampering meeting turnout and global supply chain constraints lengthening lead times, which contributed to a $1.5 million increase in our deferred revenue balance from March to June.”

    Mr. Sharng continued, “We are still navigating through the complexities associated with the COVID-19 pandemic around the world and the occasional pockets of outbreaks that occur in Asia. Aside from these challenges, we reported our fifth consecutive quarter of positive operating income and net income, in addition to our third consecutive quarter of positive cash flow generation. Looking ahead, we remain cautiously optimistic that the continued easing of pandemic-related restrictions will be positive development for our business.”

    Balance Sheet and Cash Flow

    • Net cash provided by operating activities was $548,000 in the first six months of 2021, compared to cash used of $1.0 million in the first six months of 2020.
    • Total cash and cash equivalents were $88.1 million at June 30, 2021, down slightly from $90.2 million at March 31, 2021.
    • On August 2, 2021, 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 27, 2021 to stockholders of record as of August 17, 2021.

    Second Quarter 2021 Financial Results Conference Call

    Management will host a conference call to discuss the second quarter 2021 financial results today, Wednesday, August 4, 2021 at 11:30 a.m. Eastern Time. The conference call details are as follows:

    Date:Wednesday, August 4, 2021
    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:13721247
    Webcast:http://public.viavid.com/index.php?id=145583 

    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 4, 2021 through 11:59 p.m. Eastern Time on August 18, 2021 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13721247.

    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.


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

     June 30, 2021  December 31, 2020 
     (Unaudited)     
    ASSETS       
    Current assets:       
    Cash and cash equivalents$88,114  $92,367 
    Inventories 3,706   3,779 
    Other current assets 3,707   3,595 
    Total current assets 95,527   99,741 
    Property and equipment, net 528   539 
    Operating lease right-of-use assets 3,540   3,745 
    Restricted cash 523   525 
    Deferred tax asset 702   731 
    Other assets 586   661 
    Total assets$101,406  $105,942 
    LIABILITIES AND STOCKHOLDERS’ EQUITY       
    Current liabilities:       
    Accounts payable$1,027  $580 
    Income taxes payable 1,721   1,481 
    Accrued commissions 3,425   3,496 
    Other accrued expenses 1,853   1,922 
    Deferred revenue 5,713   3,091 
    Amounts held in eWallets 7,305   8,503 
    Operating lease liabilities 1,219   1,163 
    Other current liabilities 877   1,270 
    Total current liabilities 23,140   21,506 
    Income taxes payable 12,130   13,748 
    Deferred tax liability 216   216 
    Operating lease liabilities 2,488   2,775 
    Total liabilities 37,974   38,245 
    Stockholders’ equity:       
    Preferred stock —   — 
    Common stock 13   13 
    Additional paid-in capital 86,102   86,102 
    Retained earnings 3,634   7,822 
    Accumulated other comprehensive loss (413)  (336)
    Treasury stock, at cost (25,904)  (25,904)
    Total stockholders’ equity 63,432   67,697 
    Total liabilities and stockholders’ equity$101,406  $105,942 


    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, 
     2021  2020  2021  2020 
    Net sales$16,152  $16,404  $29,621  $31,352 
    Cost of sales 3,934   4,817   7,189   9,331 
    Gross profit 12,218   11,587   22,432   22,021 
    Operating expenses:               
    Commissions expense 6,927   7,113   12,441   13,716 
    Selling, general and administrative expenses 4,906   4,291   9,386   9,570 
    Total operating expenses 11,833   11,404   21,827   23,286 
    Income (loss) from operations 385   183   605   (1,265)
    Other income (expense), net (59)  125   (39)  218 
    Income (loss) before income taxes 326   308   566   (1,047)
    Income tax provision (benefit) 97   274   184   (508)
    Net income (loss)$229  $34  $382  $(539)
    Net income (loss) per common share:               
    Basic$0.02  $0.00  $0.03  $(0.05)
    Diluted$0.02  $0.00  $0.03  $(0.05)
    Weighted average common shares outstanding:               
    Basic 10,968   10,580   10,921   10,532 
    Diluted 11,424   11,424   11,424   10,532 


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

     Six Months Ended June 30, 
     2021  2020 
    CASH FLOWS FROM OPERATING ACTIVITIES:       
    Net income (loss)$382  $(539)
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:       
    Depreciation and amortization 156   202 
    Noncash lease expense 594   834 
    Deferred income taxes 24   870 
    Changes in assets and liabilities:       
    Inventories 53   2,314 
    Other current assets (117)  845 
    Other assets 65   82 
    Accounts payable 446   402 
    Income taxes payable (1,376)  (1,723)
    Accrued commissions (37)  212 
    Other accrued expenses (66)  (617)
    Deferred revenue 2,629   (1,872)
    Amounts held in eWallets (1,186)  (1,560)
    Operating lease liabilities (629)  (811)
    Other current liabilities (390)  343 
    Net cash provided by (used in) operating activities 548   (1,018)
    CASH FLOWS FROM INVESTING ACTIVITIES:       
    Purchases of property and equipment (147)  (68)
    Net cash used in investing activities (147)  (68)
    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 (86)  (50)
    Net decrease in cash, cash equivalents and restricted cash (4,255)  (5,706)
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 92,892   99,425 
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$88,637  $93,719 
    SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:       
    Right-of-use assets obtained in exchange for operating lease liabilities$400  $1,081 

    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 


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