• Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2018

    Source: Nasdaq GlobeNewswire / 29 Mar 2019 11:00:03   Europe/London

    CHESTERFIELD, Mo., March 29, 2019 (GLOBE NEWSWIRE) -- Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the fourth quarter and full year of 2018.

    Fourth-Quarter Results

    Reliv reported net sales of $9.3 million for the fourth quarter of 2018, compared with net sales of $9.9 million for the fourth quarter of 2017. U.S. net sales decreased by 6.7 percent for the quarter compared with the same quarter in 2017.   Net sales outside of the United States decreased by 4.6 percent in the fourth quarter of 2018 compared to the prior-year quarter.  Net sales in Asia and Mexico were up 35.5 percent and 35.1 percent, respectively, in the fourth quarter; however, sales in Europe decreased by 17.7 percent.

    Reliv reported a net loss of $145,000, or loss of $0.08 per diluted share, for the fourth quarter of 2018 compared with a net loss of $382,000, or a loss of $0.21 per diluted share, for the fourth quarter of 2017.   The loss from operations for the fourth quarter of 2018 was $169,000 compared to income from operations of $141,000 in the same period in 2017.  Income tax expense was $517,000 for the fourth quarter of 2017 primarily the result of non-cash adjustments to our deferred tax assets, including a $509,000 valuation allowance recorded against the value of net operating loss carryforwards in our European subsidiary.

    Full-Year Results

    Reliv reported net sales of $36.1 million for 2018 compared with net sales of $41.8 million in 2017. U.S. net sales decreased to $27.7 million from $32.5 million, a decline of 14.8 percent.

    Net sales in Reliv’s foreign markets for 2018 decreased 9.4 percent compared with net sales for 2017.   The decline in net sales in Europe represented a significant portion of the decrease in foreign sales.  Net sales in Europe declined by 13.2 percent in 2018 compared to the prior year.  Net sales in Asia increased by 3.8 percent in 2018 compared to the prior year.

    The net loss for 2018 was $1.9 million (loss per diluted share of $1.03) compared to a net loss of $697,000 (loss per diluted share of $0.38) in 2017.  The loss from operations for 2018 was $1.9 million compared to a loss from operations of $183,000 in 2017.  Selling, general, and administrative expenses were $16.5 million versus $17.9 million in 2017.  Income tax expense for 2018 was $98,000 compared to $545,000 in 2017, with the 2017 income tax expense primarily the result of the deferred tax adjustments made in the fourth quarter of 2017.

    “We continue the work from 2018 to grow sales through improved business development support to our distributors coupled with incentive programs that reward those that develop new business,” said Ryan A. Montgomery, Chief Executive Officer.

    Business development support includes the development of web-based training for onboarding new distributors and regular updates to online tools such as the corporate website, replicating websites for distributor, and the mobile app.  “We also have incentives and promotions in place to reward ‘new business volume’ development throughout much of 2019, culminating in an incentive trip later this fall,” Montgomery commented.   “In addition to the new business development tools and support, we continue to focus on building a loyal and repeat customer base.  Free shipping incentives for Preferred Customers recurring orders have led to increased sponsoring at the customer level,” added Montgomery.

    “From a product development perspective, we are pursuing exciting concepts and new developments to be announced throughout 2019.”

    Another feature recently added to the Reliv compensation plan is to pay wholesale profit to distributors on a weekly basis. “This puts a portion of the rewards of our compensation plan back into a distributor’s pocket quicker, which can have a positive impact on the success of a distributor and improve retention,” said Montgomery.

    In international operations, Montgomery noted the growth in the Philippines and Mexico, especially in the latter half of 2018.  “We are very pleased with the results in these markets, and we will provide them with the resources needed to continue that trend.”

    Reliv had cash and cash equivalents of $2.0 million as of December 31, 2018, compared to $3.3 million as of December 31, 2017.  Net cash used in operating activities was $1.2 million in 2018 compared to $157,000 of cash used in operations in the prior-year period.

    As of December 31, 2018, Reliv had 30,370 Distributors and Preferred Customers – a decrease of 9.7 percent from December 31, 2017 – of which 3,370 are Master Affiliate level and above.  The number of Master Affiliates decreased by 13.8 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 14 countries. Learn more about Reliv at reliv.com, or on FacebookTwitter 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.

    For more information, contact:

    Steve Albright
    Chief Financial Officer
    (636) 733-1305

    --FINANCIAL HIGHLIGHTS FOLLOW –

    Reliv International, Inc. and Subsidiaries

    Condensed Consolidated Balance Sheets


     December 31December 31
      2018 2017
     (Unaudited)(Audited)
    Assets  
    Current Assets:  
    Cash and cash equivalents$1,989,974$3,272,788
    Accounts receivable, less allowances of $5,000 in 2018 and $26,300 in 2017 400,759 29,760
    Accounts and note due from employees and distributors 151,222 138,497
    Inventories 2,954,947 4,555,485
    Assets held for sale 2,124,939   - 
    Other current assets 464,165 399,154
       
    Total current assets 8,086,006 8,395,684
       
    Other assets 3,569,309 3,916,551
    Cash surrender value of life insurance   -  3,086,522
    Net property, plant and equipment 4,698,550 5,677,239
       
    Total Assets$16,353,865$21,075,996
       
    Liabilities and Stockholders' Equity  
       
    Accounts payable and accrued expenses$3,915,390$3,212,634
    Current portion of long-term debt   -  3,045,421
    Other noncurrent liabilities 445,611 453,354
    Stockholders' equity 11,992,864 14,364,587
       
    Total Liabilities and Stockholders' Equity$16,353,865$21,075,996
         

    Consolidated Statements of Operations

     Three months ended December 31  Year ended December 31 
      2018  2017   2018  2017 
      (Unaudited)  (Unaudited)   (Unaudited)  (Audited) 
    Product sales$8,788,666 $9,271,433  $33,918,169 $38,751,357 
    Handling & freight income 527,050  663,616   2,197,572  3,037,425 
          
    Net Sales 9,315,716  9,935,049   36,115,741  41,788,782 
          
    Costs and expenses:     
    Cost of products sold 2,619,785  2,287,759   9,709,743  9,401,406 
    Distributor royalties and commissions 2,890,639  3,432,631   11,749,604  14,685,553 
    Selling, general and administrative 3,974,045  4,073,412   16,520,885  17,885,226 
          
    Total Costs and Expenses 9,484,469  9,793,802   37,980,232  41,972,185 
          
    Income (loss) from operations (168,753) 141,247   (1,864,491) (183,403)
          
    Other income (expense):     
    Interest income 22,922  25,271   93,054  101,901 
    Interest expense (2,361) (29,782)  (95,556) (109,254)
    Other income (expense) 53,411  (1,673)  61,652  38,844 
          
    Income (loss) before income taxes (94,781) 135,063   (1,805,341) (151,912)
    Provision for income taxes 50,000  517,000   98,000  545,000 
          
    Net loss$(144,781)$(381,937) $(1,903,341)$(696,912)
          
          
    Loss per common share - Basic$(0.08)$(0.21) $(1.03)$(0.38)
    Weighted average shares 1,845,000  1,845,000   1,845,000  1,845,000 
          
    Loss per common share - Diluted$(0.08)$(0.21) $(1.03)$(0.38)
    Weighted average shares 1,845,000  1,845,000   1,845,000  1,845,000 
                  

    Reliv International, Inc. and Subsidiaries

    Net sales by Market    
    (in thousands)Three months ended December 31, Change from
     2018 2017 prior year
     Amount% of Net Sales Amount% of Net Sales Amount%
             
    United States$  7,16876.9% $  7,68377.3% $  (515)-6.7%
    Australia/New Zealand   1671.8%    2122.1%    (45)-21.2%
    Canada   1621.7%    2342.4%    (72)-30.8%
    Mexico   1271.4%    940.9%    33 35.1%
    Europe   97010.4%    1,17911.9%    (209)-17.7%
    Asia   7227.8%    5335.4%    189 35.5%
             
    Consolidated Total$  9,316100.0% $  9,935100.0% $  (619)-6.2%
             
             
    Net sales by Market    
    (in thousands)Year ended December 31, Change from
     2018 2017 prior year
     Amount% of Net Sales Amount% of Net Sales Amount%
             
    United States$  27,67376.6% $  32,47577.7% $  (4,802)-14.8%
    Australia/New Zealand   7322.0%    9232.2%    (191)-20.7%
    Canada   7192.0%    9152.2%    (196)-21.4%
    Mexico   4741.3%    4451.0%    29 6.5%
    Europe   3,97311.0%    4,57811.0%    (605)-13.2%
    Asia   2,5457.1%    2,4535.9%    92 3.8%
             
    Consolidated Total$  36,116100.0% $  41,789100.0% $  (5,673)-13.6%
                    

    The following table sets forth, as of December 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 5,060 and 4,990 of the Active Distributor count as of December 31, 2018 and 2017, respectively.

    Active Distributors/Preferred Customers and Master Affiliates and Above by Market

     As of 12/31/2018  As of 12/31/2017  Change in % 
     Active Distributors and Preferred CustomersMaster Affiliates and Above Active Distributors and Preferred CustomersMaster Affiliates and Above Active Distributors and Preferred CustomersMaster Affiliates and Above
             
    United States19,8102,340 23,0502,820 -14.1%-17.0%
    Australia/New Zealand96090 1,100110 -12.7%-18.2%
    Canada56080 66090 -15.2%-11.1%
    Mexico97090 71060 36.6%50.0%
    Europe2,980390 3,800450 -21.6%-13.3%
    Asia5,090380 4,300380 18.4%0.0%
             
    Consolidated Total30,3703,370 33,6203,910 -9.7%-13.8%
               

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