• Natural Health Trends Reports Fourth Quarter and Full Year 2023 Financial Results

    Source: Nasdaq GlobeNewswire / 07 Feb 2024 09:00:00   America/New_York

    – Fourth quarter revenue of $10.9 million increased 3% compared to the third quarter of 2023 
    – Cash flows from operations improved $2.0 million year-over-year before tax installment payments
    – Declared a quarterly cash dividend of $0.20 per share 

    HONG KONG, Feb. 07, 2024 (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 fourth quarter and full year ended December 31, 2023.

    Fourth Quarter 2023 Financial Highlights

    •  Revenue of $10.9 million increased 3% compared to $10.6 million in the third quarter of 2023 and decreased 13% compared to $12.5 million in the fourth quarter of 2022. 
    •  Operating loss was $242,000 compared to operating loss of $292,000 in the third quarter of 2023 and operating income of $43,000 in the fourth quarter of 2022.
    •  Net income was $358,000, or $0.03 per diluted share, compared to $172,000, or $0.02 per diluted share, in the third quarter of 2023 and $188,000, or $0.02 per diluted share, in the fourth quarter of 2022.
    •  The number of Active Members1 were down 6% to 32,410 at December 31, 2023, compared to 34,660 at September 30, 2023, and decreased 16% compared to 38,660 at December 31, 2022.
       
    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.
       

    Full Year 2023 Financial Highlights

     Revenue of $43.9 million decreased 11% compared to $49.1 million in 2022.
     Operating loss was $1.7 million, compared to $270,000 in 2022.
     Net income was $568,000, or $0.05 per diluted share, compared to $313,000, or $0.03 per diluted share, in 2022.
       

    Management Commentary

    “We managed to achieve a sequential increase in orders despite tepid consumer sentiment in China and price increases in several markets in the quarter. We believe the increased frequency and size of in-person activities contributed to the uptick. We plan to sponsor more such events in the coming months to continue improving the effectiveness of our market campaigns,” commented Chris Sharng, President of Natural Health Trends Corp.

    Mr. Sharng continued, “Though under pressure from lingering inflation and stronger dollar, we succeeded in protecting margin and controlling costs. With more emphasis on training in the coming year, we believe we are well positioned to benefit from further volume boost.”

    Balance Sheet and Cash Flow

     Net cash used in operating activities was $69,000 in the fourth quarter of 2023, compared net cash provided by operating activities of $938,000 in the fourth quarter of 2022. Net cash used in operating activities was $4.3 million in 2023, compared to $4.9 million in 2022. Before tax installment payments, the liability of which arises from the 2017 U.S. Tax Cuts and Jobs Act (the “Act Act”), cash used in operating activities was $1.2 million in 2023, versus $3.2 million a year ago. Of the total Tax Act liability of $20.2 million, $11.2 million has been paid to date.
     Total cash and cash equivalents were $56.2 million as of December 31, 2023, down from $69.7 million as of December 31, 2022. 
     On February 5, 2024, 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 March 1, 2024 to stockholders of record as of February 20, 2024.
       

    The Company expects to issue its 2023 audited financial results in late February with its Annual Report on Form 10-K to be filed with the United States Securities and Exchange Commission. These financial results are preliminary and the accompanying financial statements have not been audited or have not yet been reviewed by the Company’s independent accountants. Significant updates and revisions may be required before the release of the Company’s 2023 audited financial results.

    Fourth Quarter and Full Year 2023 Financial Results Conference Call

    Management will host a conference call to discuss the fourth quarter and full year 2023 financial results today, Wednesday, February 7, 2024 at 11:30 a.m. Eastern Time. The conference call details are as follows:

    Date:Wednesday, February 7, 2024
    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:13743993
    Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1653011&tp_key=5a8602f7ee
      

    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 February 7, 2024 through 11:59 p.m. Eastern Time on February 14, 2024 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number:  13743993.

    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 March 3, 2023 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) 
     
        
      December 31, 
      2023  2022 
      (Unaudited)  
    ASSETS        
    Current assets:        
    Cash and cash equivalents $56,178  $69,667 
    Inventories  4,293   4,525 
    Other current assets  3,758   3,359 
    Total current assets  64,229   77,551 
    Property and equipment, net  266   394 
    Operating lease right-of-use assets  3,319   3,992 
    Restricted cash  39   79 
    Deferred tax asset  369   195 
    Other assets  869   606 
    Total assets $69,091  $82,817 
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable $990  $810 
    Income taxes payable  3,716   2,972 
    Accrued commissions  2,067   2,943 
    Other accrued expenses  1,170   1,181 
    Deferred revenue  6,166   5,597 
    Amounts held in eWallets  3,945   4,895 
    Operating lease liabilities  1,146   1,135 
    Other current liabilities  784   905 
    Total current liabilities  19,984   20,438 
    Income taxes payable  5,054   9,098 
    Deferred tax liability  135   141 
    Operating lease liabilities  2,318   2,989 
    Total liabilities  27,491   32,666 
    Stockholders’ equity:        
    Preferred stock      
    Common stock  13   13 
    Additional paid-in capital  84,695   86,102 
    Accumulated deficit  (17,703)  (9,056)
    Accumulated other comprehensive loss  (1,069)  (1,004)
    Treasury stock, at cost  (24,336)  (25,904)
    Total stockholders’ equity  41,600   50,151 
    Total liabilities and stockholders’ equity $69,091  $82,817 
             


    NATURAL HEALTH TRENDS CORP. 
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)
     
           
      Three Months Ended
    December 31,
      Year Ended December 31, 
      2023  2022  2023  2022 
      (Unaudited)  (Unaudited)     
    Net sales $10,937  $12,512  $43,924  $49,134 
    Cost of sales  2,789   3,263   11,175   12,661 
    Gross profit  8,148   9,249   32,749   36,473 
    Operating expenses:                
    Commissions expense  4,553   5,377   18,414   20,747 
    Selling, general and administrative expenses  3,837   3,829   16,006   15,996 
    Total operating expenses  8,390   9,206   34,420   36,743 
    Income (loss) from operations  (242)  43   (1,671)  (270)
    Other income, net  708   400   2,416   872 
    Income before income taxes  466   443   745   602 
    Income tax provision  108   255   177   289 
    Net income $358  $188  $568  $313 
    Net income per common share:                
    Basic $0.03  $0.02  $0.05  $0.03 
    Diluted $0.03  $0.02  $0.05  $0.03 
    Weighted-average number of common shares outstanding:                
    Basic  11,448   11,423   11,436   11,362 
    Diluted  11,461   11,423   11,456   11,423 
                     



    NATURAL HEALTH TRENDS CORP.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
     
        
      Year Ended December 31, 
      2023  2022 
    CASH FLOWS FROM OPERATING ACTIVITIES:  (Unaudited)     
    Net income $568  $313 
    Adjustments to reconcile net income to net cash used in operating activities:        
    Depreciation and amortization  164   204 
    Share-based compensation  161    
    Noncash lease expense  1,109   1,172 
    Deferred income taxes  (178)  90 
    Changes in assets and liabilities:        
    Inventories  228   680 
    Other current assets  (452)  992 
    Other assets  (270)  (67)
    Accounts payable  181   52 
    Income taxes payable  (3,299)  (1,404)
    Accrued commissions  (866)  (654)
    Other accrued expenses  (4)  (732)
    Deferred revenue  565   (2,901)
    Amounts held in eWallets  (947)  (1,432)
    Operating lease liabilities  (1,119)  (1,220)
    Other current liabilities  (119)  55 
    Net cash used in operating activities  (4,278)  (4,852)
    CASH FLOWS FROM INVESTING ACTIVITIES:        
    Purchases of property and equipment  (46)  (143)
    Net cash used in investing activities  (46)  (143)
    CASH FLOWS FROM FINANCING ACTIVITIES:        
    Dividends paid  (9,215)  (9,138)
    Net cash used in financing activities  (9,215)  (9,138)
    Effect of exchange rates on cash, cash equivalents and restricted cash  10   (486)
    Net decrease in cash, cash equivalents and restricted cash  (13,529)  (14,619)
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period  69,746   84,365 
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $56,217  $69,746 
    SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:        
    Right-of-use assets obtained in exchange for operating lease liabilities $147  $2,234 
             

    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


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