• Natural Health Trends Reports Second Quarter 2022 Financial Results

    Source: Nasdaq GlobeNewswire / 03 Aug 2022 09:00:01   America/New_York

    • COVID restrictions and lockdowns in China continue to impact our business
    • Generated positive operating income and net income despite challenges
    • Declared a quarterly cash dividend of $0.20 per share

    HONG KONG, Aug. 03, 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 June 30, 2022.

    Second Quarter 2022 Financial Highlights

    • Revenue of $13.4 million increased 16% compared to $11.5 million in the first quarter of 2022 and decreased 17% compared to $16.2 million in the second quarter of 2021.

    • Operating income was $215,000 compared to operating loss of $383,000 in the first quarter of 2022 and operating income of $385,000 in the second quarter of 2021.

    • Net income was $183,000, or $0.02 per diluted share, compared to net loss of $105,000, or $0.01 per diluted share, in the first quarter of 2022 and net income of $229,000, or $0.02 per diluted share, in the second quarter of 2021.

    • The number of Active Members1 decreased 3% to 43,020 at June 30, 2022 compared to 44,490 at March 31, 2022, and decreased 8% compared to 46,860 at June 30, 2021.

    1 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.

    Year-to-Date 2022 Financial Highlights

    • Revenue of $24.9 million decreased 16% compared to $29.6 million in the first six months of 2021.

    • Operating loss was $168,000 compared to operating income of $605,000 in the first six months of 2021.

    • Net income was $78,000, or $0.01 per diluted share, compared to $382,000, or $0.03 per diluted share, in the first six months of 2021.

    Management Commentary

    “We continued to face significant and unpredictable COVID-related disruptions in the second quarter as lockdowns and social restrictions, along with supply chain bottlenecks, persisted in Greater China,” commented Chris Sharng, President of Natural Health Trends Corp. “Despite not being able to host any larger in-person activities, we finished the quarter strong with a well-attended virtual event and our members' positive response to promotional incentives. In June, working closely with our leaders, we rolled out a new virtual training system that incorporates company-sponsored product training and member-led business, motivational and leadership training to better support the ongoing development and engagement of members in the Greater China market.” 

    Mr. Sharng continued, “We are encouraged about the growth in the European market that emanated from our Swedish team after hosting a successful face-to-face event in April. In other markets outside of Greater China we supported our members both online and in-person through virtual events, incentive trips and local sales initiatives aimed at driving member and customer growth. We remain committed to the fundamentals of our business and to implementing strategies for future growth with the objective of returning value to our shareholders.”

    Balance Sheet and Cash Flow

    • Net cash used in operating activities was $3.5 million in the first six months of 2022, compared to net cash provided by operating activities of $548,000 in the first six months of 2021.

    • Total cash and cash equivalents were $75.6 million at June 30, 2022, down from $79.4 million at March 31, 2022.

    • On August 1, 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 August 26, 2022 to stockholders of record as of August 16, 2022.

    Second Quarter 2022 Financial Results Conference Call

    Management will host a conference call to discuss the second quarter 2022 financial results today, Wednesday, August 3, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:

    Date:Wednesday, August 3, 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:13730852
    Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1556559&tp_key=8061062de2
      

    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 August 3, 2022 through 11:59 p.m. Eastern Time on August 17, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13730852.

    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.

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

      June 30, 2022  December 31, 2021 
      (Unaudited)     
    ASSETS        
    Current assets:        
    Cash and cash equivalents $75,633  $83,843 
    Inventories  5,193   5,257 
    Other current assets  3,408   4,369 
    Total current assets  84,234   93,469 
    Property and equipment, net  430   463 
    Operating lease right-of-use assets  2,460   3,021 
    Restricted cash  78   522 
    Deferred tax asset  289   309 
    Other assets  541   571 
    Total assets $88,032  $98,355 
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable $758  $761 
    Income taxes payable  2,987   1,345 
    Accrued commissions  3,096   3,636 
    Other accrued expenses  1,789   1,933 
    Deferred revenue  6,692   8,536 
    Amounts held in eWallets  5,441   6,341 
    Operating lease liabilities  1,131   1,239 
    Other current liabilities  850   865 
    Total current liabilities  22,744   24,656 
    Income taxes payable  9,098   12,130 
    Deferred tax liability  153   153 
    Operating lease liabilities  1,489   1,928 
    Total liabilities  33,484   38,867 
    Stockholders’ equity:        
    Preferred stock      
    Common stock  13   13 
    Additional paid-in capital  86,102   86,102 
    Accumulated deficit  (4,723)  (231)
    Accumulated other comprehensive loss  (940)  (492)
    Treasury stock, at cost  (25,904)  (25,904)
    Total stockholders’ equity  54,548   59,488 
    Total liabilities and stockholders’ equity $88,032  $98,355 
             

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

      Three Months Ended June 30,  Six Months Ended June 30, 
      2022  2021  2022  2021 
    Net sales $13,360  $16,152  $24,906  $29,621 
    Cost of sales  3,392   3,934   6,300   7,189 
    Gross profit  9,968   12,218   18,606   22,432 
    Operating expenses:                
    Commissions expense  5,767   6,927   10,507   12,441 
    Selling, general and administrative expenses  3,986   4,906   8,267   9,386 
    Total operating expenses  9,753   11,833   18,774   21,827 
    Income (loss) from operations  215   385   (168)  605 
    Other income (expense), net  175   (59)  285   (39)
    Income before income taxes  390   326   117   566 
    Income tax provision  207   97   39   184 
    Net income $183  $229  $78  $382 
    Net income per common share:                
    Basic $0.02  $0.02  $0.01  $0.03 
    Diluted $0.02  $0.02  $0.01  $0.03 
    Weighted average common shares outstanding:                
    Basic  11,346   10,968   11,300   10,921 
    Diluted  11,424   11,424   11,424   11,424 
                     

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

      Six Months Ended June 30, 
      2022  2021 
    CASH FLOWS FROM OPERATING ACTIVITIES:        
    Net income $78  $382 
    Adjustments to reconcile net income to net cash provided by (used in) operating activities:        
    Depreciation and amortization  106   156 
    Noncash lease expense  599   594 
    Deferred income taxes  12   24 
    Changes in assets and liabilities:        
    Inventories  7   53 
    Other current assets  1,002   (117)
    Other assets  1   65 
    Accounts payable  2   446 
    Income taxes payable  (1,390)  (1,376)
    Accrued commissions  (531)  (37)
    Other accrued expenses  (132)  (66)
    Deferred revenue  (1,788)  2,629 
    Amounts held in eWallets  (862)  (1,186)
    Operating lease liabilities  (600)  (629)
    Other current liabilities  (4)  (390)
    Net cash provided by (used in) operating activities  (3,500)  548 
    CASH FLOWS FROM INVESTING ACTIVITIES:        
    Purchases of property and equipment  (78)  (147)
    Net cash used in investing activities  (78)  (147)
    CASH FLOWS FROM FINANCING ACTIVITIES:        
    Dividends paid  (4,570)  (4,570)
    Net cash used in financing activities  (4,570)  (4,570)
    Effect of exchange rates on cash, cash equivalents and restricted cash  (506)  (86)
    Net decrease in cash, cash equivalents and restricted cash  (8,654)  (4,255)
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period  84,365   92,892 
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $75,711  $88,637 
    SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:        
    Right-of-use assets obtained in exchange for operating lease liabilities $77  $400 
             

    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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