Reliv International Reports First-Quarter Financial Results for 2018
Source: Nasdaq GlobeNewswire / 11 May 2018 07:00:20 America/New_York
CHESTERFIELD, Mo., May 11, 2018 (GLOBE NEWSWIRE) -- Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the first quarter of 2018.
Reliv reported net sales of $10.0 million for the first quarter of 2018 compared with net sales of $12.8 million in the first quarter of 2017. Net sales in the United States decreased to $7.7 million in the first quarter of 2018, which represented a 25.2 percent decline in net sales when compared to the prior-year quarter. In the first quarter of 2017, Reliv launched the Fit3 line of products in the United States. Net sales in Reliv’s foreign markets decreased 7.4 percent in the first quarter of 2018 compared with the prior-year first quarter. Net sales in Europe and Asia decreased by 3.0 and 7.8 percent, respectively, in the first quarter of 2018, along with decreases in other regions.
Reliv reported a net loss for the first quarter of 2018 of $238,000 (loss per diluted share of $0.13) compared to net income of $524,000 (income per diluted share of $0.28) in the first quarter of 2017. The loss from operations for the first quarter of 2018 was $224,000 compared to income from operations of $517,000 in the same period in 2017. Results from operations were primarily impacted by the decline in net sales and gross margin, partially offset by a reduction in selling, general and administrative (“SGA”) expenses in the quarter. SGA expenses decreased from $4.9 million in the first quarter of 2017 to $4.5 million in the first quarter of 2018.
“Our sales comparisons for the first quarter of 2018 were a challenge compared to the prior year that included the launch of the Fit3 line,” said Ryan A. Montgomery, President. “Clearly, we have work to do in revitalizing the sales in the United States and in other markets around the Reliv world. That work has been underway, highlighted by some key announcements at our Reliv Live event in Anaheim.”
At its regional spring distributor conference in Anaheim, Reliv unveiled its newest technology and tools designed to give Reliv independent distributors an edge. First, the company launched the Reliv Mobile App, which gives distributors a fast and easy way to recruit and run their business on the go. A whole host of new video content is featured in the app to assist distributors in sharing the Reliv product line and business opportunity. In addition, the company revealed its newest business opportunity presentation – a more engaging, concise and video-centric model designed to give distributors an easier way to present the Reliv opportunity and product line.
Also, Reliv formally introduced its newest core nutrition product – Reliv Now® with Whey. Formulated using the same optimal blend of vitamins, minerals and herbs of Reliv Now® with Soy, this newest product gives consumers an additional protein source to make Reliv more competitive with its offerings in the marketplace. Distributors now have a simplified approach to product positioning with Step 1: Core Nutrition and Step 2: Customizing nutrition with Targeted Solutions.
Reliv is continuing additional distributor/customer recruitment programs such as free ground shipping for new distributors reaching the Quick Start and Master Affiliate business levels, a 20 percent discount on autoship orders placed by Preferred Customers, and its product credit incentive, “3 & Free”, to distributors for having three new Preferred Customers with a minimum order amount.
“These initiatives, along with other coming programs and promotions, will be the springboard of our growth strategy for 2018,” commented Montgomery.
Reliv had cash and cash equivalents of $3.7 million as of March 31, 2018, compared to $3.3 million as of December 31, 2017. Net cash generated from operating activities was $500,000 in the first quarter of 2018.
As of March 31, 2018, Reliv had 32,100 distributors and preferred customers – a decrease of 13.9 percent from March 31, 2017 – of which 3,140 are Master Affiliate level and above. The number of Master Affiliates decreased by 12.5 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address core nutrition and targeted solutions. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, a soy peptide that works at the epigenetic level to promote optimal health. The company sells its products through an international network marketing system of independent distributors in 15 countries. Learn more about Reliv at reliv.com, or on Facebook, Twitter or Instagram.
Statements made in this news release that are not historical facts are “forward-looking” statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or similar expressions. Factors that could cause actual results to differ are identified in the public filings made by Reliv with the Securities and Exchange Commission. More information on factors that could affect Reliv’s business and financial results are included in its public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available on the Company’s web site, reliv.com.
--FINANCIAL HIGHLIGHTS FOLLOW –
Reliv International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets March 31 December 31 2018 2017 (Unaudited) (Audited) Assets Current Assets: Cash and cash equivalents $ 3,676,840 $ 3,272,788 Accounts receivable, less allowances of $25,400 in 2018 and $26,300 in 2017 137,843 29,760 Accounts and note due from employees and distributors 136,726 138,497 Inventories 4,177,253 4,555,485 Other current assets 715,957 399,154 Total current assets 8,844,619 8,395,684 Other assets 6,929,172 7,003,073 Net property, plant and equipment 5,547,851 5,677,239 Total Assets $ 21,321,642 $ 21,075,996 Liabilities and Stockholders' Equity Accounts payable and accrued expenses $ 4,134,391 $ 3,212,634 Current portion of long-term debt 2,937,101 3,045,421 Other noncurrent liabilities 458,674 453,354 Stockholders' equity 13,791,476 14,364,587 Total Liabilities and Stockholders' Equity $ 21,321,642 $ 21,075,996 Consolidated Statements of Operations Three months ended March 31 2018 2017 (Unaudited) (Unaudited) Product sales $ 9,391,381 $ 11,835,116 Handling & freight income 611,858 942,666 Net Sales 10,003,239 12,777,782 Costs and expenses: Cost of products sold 2,349,742 2,835,525 Distributor royalties and commissions 3,391,745 4,498,553 Selling, general and administrative 4,485,895 4,926,279 Total Costs and Expenses 10,227,382 12,260,357 Income (loss) from operations (224,143 ) 517,425 Other income (expense): Interest income 23,952 25,526 Interest expense (31,565 ) (24,841 ) Other income 10,451 32,683 Income (loss) before income taxes (221,305 ) 550,793 Provision for income taxes 17,000 27,000 Net income (loss) $ (238,305 ) $ 523,793 Earnings (loss) per common share - Basic $ (0.13 ) $ 0.28 Weighted average shares 1,845,000 1,845,000 Earnings (loss) per common share - Diluted $ (0.13 ) $ 0.28 Weighted average shares 1,845,000 1,846,000 Reliv International, Inc. and Subsidiaries Net sales by Market (in thousands) Three months ended March 31, Change from 2018 2017 prior year Amount % of Net
Amount % of Net
Amount % United States $ 7,670 76.7 % $ 10,259 80.3 % $ (2,589 ) -25.2 % Australia/New Zealand 232 2.3 % 260 2.0 % (28 ) -10.8 % Canada 242 2.4 % 264 2.1 % (22 ) -8.3 % Mexico 107 1.1 % 157 1.2 % (50 ) -31.8 % Europe 1,165 11.6 % 1,201 9.4 % (36 ) -3.0 % Asia 587 5.9 % 637 5.0 % (50 ) -7.8 % Consolidated Total $ 10,003 100.0 % $ 12,778 100.0 % $ (2,775 ) -21.7 % The following table sets forth, as of March 31, 2018 and 2017, the number of our Active Distributors/Preferred Customers and Master Affiliates and above. The total number of active distributors includes Master Affiliates and above. We define an active distributor as one that enrolls as a distributor or renews his or her distributorship during the prior twelve months. Master Affiliates and above are distributors that have attained the highest level of discount and are eligible for royalties generated by Master Affiliate groups in their downline organization. Preferred Customers represent approximately 4,780 and 5,200 of the Active Distributor count as of March 31, 2018 and 2017, respectively. Active Distributors/Preferred Customers and Master Affiliates and Above by Market As of 3/31/2018 As of 3/31/2017 Change in % Active
United States 21,800 2,240 26,110 2,610 -16.5 % -14.2 % Australia/New Zealand 1,070 80 1,440 110 -25.7 % -27.3 % Canada 630 80 780 90 -19.2 % -11.1 % Mexico 660 60 880 60 -25.0 % 0.0 % Europe 3,630 350 4,620 410 -21.4 % -14.6 % Asia 4,310 330 3,450 310 24.9 % 6.5 % Consolidated Total 32,100 3,140 37,280 3,590 -13.9 % -12.5 %
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