• Natural Health Trends Reports Third Quarter 2021 Financial Results

    Source: Nasdaq GlobeNewswire / 03 Nov 2021 09:00:02   America/New_York

    –Sixth consecutive quarter of positive operating income and net income
    –Strong balance sheet with ample liquidity
    –Achieved strong sales momentum in Peru, Japan and India
    –Declared a quarterly cash dividend of $0.20 per share

    HONG KONG, Nov. 03, 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 September 30, 2021.

    Third Quarter 2021 Financial Highlights

    • Revenue of  $14.3 million decreased 12% compared to $16.2 million in the second quarter of 2021 and increased 1% compared to $14.1 million in the third quarter of 2020.
    • Operating income of $479,000 increased 24% compared to $385,000 in the second quarter of 2021 and decreased 28% compared to $668,000 in the third quarter of 2020.
    • Net income was $471,000, or $0.04 per diluted share, compared to $229,000, or $0.02 per diluted share, in the second quarter of 2021 and $635,000, or $0.06 per diluted share, in the third quarter of 2020.
    • The number of Active Members1 decreased 2% to 45,950 at September 30, 2021 compared to 46,860 at June 30, 2021, and decreased 14% compared to 53,300 at September 30, 2020.
     1Natural 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 $43.9 million decreased 3% compared to $45.5 million in the first nine months of 2020.
    • Operating income was $1.1 million compared to an operating loss of $597,000 in the first nine months of 2020.
    • Net income was $853,000, or $0.07 per diluted share, compared to net income of $96,000, or $0.01 per diluted share, in the first nine months of 2020.

    Management Commentary

    “During the third quarter our leaders continued to face challenges in conducting their business following renewed government-mandated restrictions and shutdowns amid scattered outbreaks in COVID-19 cases. The quarter marked the first quarter since the beginning of the pandemic we were unable to sponsor any in-person member events in China, Macau or Hong Kong and we had to abruptly cancel a previously scheduled event in September. Despite these difficult circumstances, we still managed to deliver revenue and order volume growth year-over-year, and our sixth consecutive quarter of positive operating income and net income,” commented Chris Sharng, President of Natural Health Trends Corp. “Revenue of $14.3 million increased 1% compared to the third quarter of 2020 driven by strength in Peru, Japan and India, which all experienced strong top-line growth year-over-year.”

    Mr. Sharng continued, “Further, we are pleased to announce the SEC has closed its investigation and the IRS has completed its tax audit. We fully cooperated with the SEC and IRS throughout their respective review processes and we are pleased to put these matters behind us.” Mr. Sharng concluded, “As we continue to navigate the evolving operating environment resulting from the COVID-19 pandemic, we remain highly focused on the fundamentals of our business including supporting our members, maintaining our strong financial discipline, and operating our business efficiently.”

    Balance Sheet and Cash Flow

    • Net cash used in operating activities was $557,000 in the first nine months of 2021, compared to net cash used of $1.5 million in the first nine months of 2020.
    • Total cash and cash equivalents were $84.6 million at September 30, 2021, down slightly from $88.1 million at June 30, 2021.
    • On November 1, 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 November 26, 2021 to stockholders of record as of November 16, 2021.

    Third Quarter 2021 Financial Results Conference Call

    Management will host a conference call to discuss the third quarter 2021 financial results today, Wednesday, November 3, 2021 at 11:30 a.m. Eastern Time. The conference call details are as follows:

    Date:Wednesday, November 3, 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:13723871
    Webcast:http://public.viavid.com/index.php?id=146859

    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 November 3, 2021 through 11:59 p.m. Eastern Time on November 17, 2021 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13723871.

    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


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

      September 30,
    2021    		  December 31,
    2020    		 
      (Unaudited)     
    ASSETS        
    Current assets:        
    Cash and cash equivalents $84,640  $92,367 
    Inventories  4,390   3,779 
    Other current assets  4,386   3,595 
    Total current assets  93,416   99,741 
    Property and equipment, net  463   539 
    Operating lease right-of-use assets  3,339   3,745 
    Restricted cash  524   525 
    Deferred tax asset  660   731 
    Other assets  574   661 
    Total assets $98,976  $105,942 
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable $879  $580 
    Income taxes payable  1,844   1,481 
    Accrued commissions  3,441   3,496 
    Other accrued expenses  1,758   1,922 
    Deferred revenue  6,038   3,091 
    Amounts held in eWallets  6,756   8,503 
    Operating lease liabilities  1,304   1,163 
    Other current liabilities  847   1,270 
    Total current liabilities  22,867   21,506 
    Income taxes payable  12,130   13,748 
    Deferred tax liability  215   216 
    Operating lease liabilities  2,209   2,775 
    Total liabilities  37,421   38,245 
    Stockholders’ equity:        
    Preferred stock  —   — 
    Common stock  13   13 
    Additional paid-in capital  86,102   86,102 
    Retained earnings  1,820   7,822 
    Accumulated other comprehensive loss  (476)  (336)
    Treasury stock, at cost  (25,904)  (25,904)
    Total stockholders’ equity  61,555   67,697 
    Total liabilities and stockholders’ equity $98,976  $105,942 


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

      Three Months Ended
    September 30,    		  Nine Months Ended
    September 30,    		 
      2021  2020  2021  2020 
    Net sales $14,276  $14,124  $43,897  $45,476 
    Cost of sales  3,668   3,635   10,857   12,966 
    Gross profit  10,608   10,489   33,040   32,510 
    Operating expenses:                
    Commissions expense  6,027   5,620   18,468   19,336 
    Selling, general and administrative expenses  4,102   4,201   13,488   13,771 
    Total operating expenses  10,129   9,821   31,956   33,107 
    Income (loss) from operations  479   668   1,084   (597)
    Other income (expense), net  (53)  385   (92)  603 
    Income before income taxes  426   1,053   992   6 
    Income tax provision (benefit)  (45)  418   139   (90)
    Net income $471  $635  $853  $96 
    Net income per common share:                
    Basic $0.04  $0.06  $0.08  $0.01 
    Diluted $0.04  $0.06  $0.07  $0.01 
    Weighted average common shares outstanding:                
    Basic  11,063   10,678   10,969   10,581 
    Diluted  11,424   11,424   11,424   11,424 


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

      Nine Months Ended September 30, 
      2021  2020 
    CASH FLOWS FROM OPERATING ACTIVITIES:        
    Net income $853  $96 
    Adjustments to reconcile net income to net cash used in operating activities:        
    Depreciation and amortization  237   301 
    Noncash lease expense  895   1,199 
    Deferred income taxes  66   979 
    Changes in assets and liabilities:        
    Inventories  (675)  2,193 
    Other current assets  (823)  923 
    Other assets  65   120 
    Accounts payable  300   206 
    Income taxes payable  (1,253)  (1,790)
    Accrued commissions  29   136 
    Other accrued expenses  (157)  (598)
    Deferred revenue  2,973   (1,045)
    Amounts held in eWallets  (1,716)  (3,163)
    Operating lease liabilities  (935)  (1,120)
    Other current liabilities  (416)  33 
    Net cash used in operating activities  (557)  (1,530)
    CASH FLOWS FROM INVESTING ACTIVITIES:        
    Purchases of property and equipment  (165)  (147)
    Net cash used in investing activities  (165)  (147)
    CASH FLOWS FROM FINANCING ACTIVITIES:        
    Dividends paid  (6,855)  (6,855)
    Net cash used in financing activities  (6,855)  (6,855)
    Effect of exchange rates on cash, cash equivalents and restricted cash  (151)  413 
    Net decrease in cash, cash equivalents and restricted cash  (7,728)  (8,119)
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period  92,892   99,425 
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $85,164  $91,306 
    SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:        
    Right-of-use assets obtained in exchange for operating lease liabilities $516  $2,724 


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