• Natural Health Trends Reports Third Quarter 2022 Financial Results

    Source: Nasdaq GlobeNewswire / 02 Nov 2022 08:00:01   America/Chicago

    • More COVID restrictions and lockdowns in China adversely impacted our business
    • Strong cost control helped protect earnings
    • Declared a quarterly cash dividend of $0.20 per share

    HONG KONG, Nov. 02, 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 quarter ended September 30, 2022.

    Third Quarter 2022 Financial Highlights

    • Revenue of $11.7 million decreased 12% compared to $13.4 million in the second quarter of 2022 and decreased 18% compared to $14.3 million in the third quarter of 2021.

    • Operating loss was $145,000 compared to operating income of $215,000 in the second quarter of 2022 and operating income of $479,000 in the third quarter of 2021.

    • Net income was $47,000, or breakeven per diluted share, compared to net income of $183,000, or $0.02 per diluted share, in the second quarter of 2022 and net income of $471,000, or $0.04 per diluted share, in the third quarter of 2021.

    • The number of Active Members1 decreased 4% to 41,170 at September 30, 2022 compared to 43,020 at June 30, 2022, and decreased 10% compared to 45,950 at September 30, 2021.
     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 2022 Financial Highlights

    • Revenue of $36.6 million decreased 17% compared to $43.9 million in the first nine months of 2021.

    • Operating loss was $313,000 compared to operating income of $1.1 million in the first nine months of 2021.

    • Net income was $125,000, or $0.01 per diluted share, compared to $853,000, or $0.07 per diluted share, in the first nine months of 2021.

    Management Commentary

    “Our third quarter results were adversely impacted by extended and ongoing COVID-related measures in China,” commented Chris Sharng, President of Natural Health Trends Corp. “Despite the unpredictable environment our members must navigate through, they continue to work hard to share our superior health, wellness and beauty products and we continue to support them with new reward programs, virtual events, promotions and cautiously planned and executed incentive trips and trainings.”

    Mr. Sharng continued, “We recently kicked off digital initiatives to improve our customer acquisition, member onboarding and overall shopping experience. We believe this online focus will be a key driver for future growth and enhanced productivity, in support of shareholder value.”

    Balance Sheet and Cash Flow

    • Net cash used in operating activities was $5.8 million in the first nine months of 2022, compared to $557,000 in the first nine months of 2021.
    • Total cash and cash equivalents were $70.7 million at September 30, 2022, down from $75.6 million at June 30, 2022.
    • On October 31, 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 November 25, 2022 to stockholders of record as of November 15, 2022.

    Third Quarter 2022 Financial Results Conference Call

    Management will host a conference call to discuss the third quarter 2022 financial results today, Wednesday, November 2, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:

    Date:Wednesday, November 2, 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:13733927
    Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1578822&tp_key=4c5656bb68

    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 2, 2022 through 11:59 p.m. Eastern Time on November 16, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13733927.

    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.

    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
    investor.relations@nhtglobal.com


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

      September 30,
    2022    		  December 31,
    2021    		 
      (Unaudited)     
    ASSETS        
    Current assets:        
    Cash and cash equivalents $70,663  $83,843 
    Inventories  4,989   5,257 
    Other current assets  3,360   4,369 
    Total current assets  79,012   93,469 
    Property and equipment, net  425   463 
    Operating lease right-of-use assets  4,243   3,021 
    Restricted cash  69   522 
    Deferred tax asset  293   309 
    Other assets  553   571 
    Total assets $84,595  $98,355 
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable $983  $761 
    Income taxes payable  2,995   1,345 
    Accrued commissions  2,524   3,636 
    Other accrued expenses  1,321   1,933 
    Deferred revenue  5,254   8,536 
    Amounts held in eWallets  5,151   6,341 
    Operating lease liabilities  1,165   1,239 
    Other current liabilities  846   865 
    Total current liabilities  20,239   24,656 
    Income taxes payable  9,098   12,130 
    Deferred tax liability  152   153 
    Operating lease liabilities  3,197   1,928 
    Total liabilities  32,686   38,867 
    Stockholders’ equity:        
    Preferred stock  —   — 
    Common stock  13   13 
    Additional paid-in capital  86,102   86,102 
    Accumulated deficit  (6,961)  (231)
    Accumulated other comprehensive loss  (1,341)  (492)
    Treasury stock, at cost  (25,904)  (25,904)
    Total stockholders’ equity  51,909   59,488 
    Total liabilities and stockholders’ equity $84,595  $98,355 



    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,    		 
      2022  2021  2022  2021 
    Net sales $11,716  $14,276  $36,622  $43,897 
    Cost of sales  3,098   3,668   9,398   10,857 
    Gross profit  8,618   10,608   27,224   33,040 
    Operating expenses:                
    Commissions expense  4,863   6,027   15,370   18,468 
    Selling, general and administrative expenses  3,900   4,102   12,167   13,488 
    Total operating expenses  8,763   10,129   27,537   31,956 
    Income (loss) from operations  (145)  479   (313)  1,084 
    Other income (expense), net  187   (53)  472   (92)
    Income before income taxes  42   426   159   992 
    Income tax provision (benefit)  (5)  (45)  34   139 
    Net income $47  $471  $125  $853 
    Net income per common share:                
    Basic $0.00  $0.04  $0.01  $0.08 
    Diluted $0.00  $0.04  $0.01  $0.07 
    Weighted average common shares outstanding:                
    Basic  11,423   11,063   11,341   10,969 
    Diluted  11,423   11,423   11,423   11,423 



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

      Nine Months Ended September 30, 
      2022  2021 
    CASH FLOWS FROM OPERATING ACTIVITIES:        
    Net income $125  $853 
    Adjustments to reconcile net income to net cash used in operating activities:        
    Depreciation and amortization  156   237 
    Noncash lease expense  889   895 
    Deferred income taxes  (2)  66 
    Changes in assets and liabilities:        
    Inventories  140   (675)
    Other current assets  1,000   (823)
    Other assets  (44)  65 
    Accounts payable  228   300 
    Income taxes payable  (1,382)  (1,253)
    Accrued commissions  (1,055)  29 
    Other accrued expenses  (540)  (157)
    Deferred revenue  (3,209)  2,973 
    Amounts held in eWallets  (1,150)  (1,716)
    Operating lease liabilities  (950)  (935)
    Other current liabilities  4   (416)
    Net cash used in operating activities  (5,790)  (557)
    CASH FLOWS FROM INVESTING ACTIVITIES:        
    Purchases of property and equipment  (130)  (165)
    Net cash used in investing activities  (130)  (165)
    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  (858)  (151)
    Net decrease in cash, cash equivalents and restricted cash  (13,633)  (7,728)
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period  84,365   92,892 
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $70,732  $85,164 
    SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:        
    Right-of-use assets obtained in exchange for operating lease liabilities $2,218  $516 


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