• Natural Health Trends Reports First Quarter 2023 Financial Results

    Source: Nasdaq GlobeNewswire / 03 May 2023 08:00:01   America/Chicago

     –First year-over-year increase in net sales since the third quarter of 2021 and the second since the third quarter of 2018
     –Hong Kong net sales increased 10% compared to the first quarter of 2022
     –Fourth consecutive quarter of positive net income
     –Declared a quarter cash dividend of $0.20 per share

    HONG KONG, May 03, 2023 (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 March 31, 2023.

    First Quarter 2023 Financial Highlights

    • Revenue of $11.9 million increased 3% compared to $11.5 million in the first quarter of 2022.
    • Operating loss was $394,000 compared to $383,000 in the first quarter of 2022.
    • Net income was $257,000, 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.
    • The number of Active Members1 was down slightly to 38,330 at March 31, 2023 compared to 38,660 at December 31, 2022, and decreased 14% compared to 44,490 at March 31, 2022.
     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.

    Management Commentary

    “Despite the end of the Zero-Covid policies last December, our experience is that consumers have been slow and gradual to participate in the reopening. In this more positive environment, we are encouraged that our Hong Kong business has shown good progress as revenue increased 3% year-over-year, the first year-over-year increase since the third quarter of 2021 and the second increase since the third quarter of 2018,” commented Chris Sharng, President of Natural Health Trends Corp.

    Mr. Sharng continued, “If the current trend of an improving operating environment continues, we are hopeful that our business can benefit from the prospect that people are more willing to meet, gather and travel, all important activities to how we facilitate our business development.”

    Balance Sheet and Cash Flow

    • Net cash used in operating activities was $696,000 in the first quarter of 2023, compared to net cash used in operating activities of $2.3 million in the first quarter of 2022.
    • Total cash and cash equivalents were $66.6 million at March 31, 2023, down from $69.7 million at December 31, 2022.
    • On May 1, 2023, 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 May 26, 2023 to stockholders of record as of May 16, 2023.

    First Quarter 2023 Financial Results Conference Call

    Management will host a conference call to discuss the first quarter 2023 financial results today, Wednesday, May 3, 2023 at 11:30 a.m. Eastern Time. The conference call details are as follows:

    Date:Wednesday, May 3, 2023
    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:13737199
    Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1605531&tp_key=86671cf781

    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 May 3, 2023 through 11:59 p.m. Eastern Time on May 10, 2023 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13737199.

    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) 

      March 31, 2023  December 31, 2022 
      (Unaudited)     
    ASSETS        
    Current assets:        
    Cash and cash equivalents $66,610  $69,667 
    Inventories  4,982   4,525 
    Other current assets  3,420   3,359 
    Total current assets  75,012   77,551 
    Property and equipment, net  354   394 
    Operating lease right-of-use assets  3,909   3,992 
    Restricted cash  38   79 
    Deferred tax asset  253   195 
    Other assets  616   606 
    Total assets $80,182  $82,817 
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable $1,147  $810 
    Income taxes payable  3,012   2,972 
    Accrued commissions  2,470   2,943 
    Other accrued expenses  1,105   1,181 
    Deferred revenue  5,617   5,597 
    Amounts held in eWallets  4,657   4,895 
    Operating lease liabilities  1,158   1,135 
    Other current liabilities  859   905 
    Total current liabilities  20,025   20,438 
    Income taxes payable  9,098   9,098 
    Deferred tax liability  140   141 
    Operating lease liabilities  2,869   2,989 
    Total liabilities  32,132   32,666 
    Stockholders’ equity:        
    Preferred stock  —   — 
    Common stock  13   13 
    Additional paid-in capital  84,519   86,102 
    Accumulated deficit  (11,103)  (9,056)
    Accumulated other comprehensive loss  (1,104)  (1,004)
    Treasury stock, at cost  (24,275)  (25,904)
    Total stockholders’ equity  48,050   50,151 
    Total liabilities and stockholders’ equity $80,182  $82,817 


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

      Three Months Ended March 31, 
      2023  2022 
    Net sales $11,861  $11,546 
    Cost of sales  3,031   2,908 
    Gross profit  8,830   8,638 
    Operating expenses:        
    Commissions expense  4,992   4,740 
    Selling, general and administrative expenses  4,232   4,281 
    Total operating expenses  9,224   9,021 
    Loss from operations  (394)  (383)
    Other income, net  681   110 
    Income (loss) before income taxes  287   (273)
    Income tax provision (benefit)  30   (168)
    Net income (loss) $257  $(105)
    Net income (loss) per common share:        
    Basic $0.02  $(0.01)
    Diluted $0.02  $(0.01)
    Weighted average common shares outstanding:        
    Basic  11,424   11,254 
    Diluted  11,428   11,254 


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

      Three Months Ended March 31, 
      2023  2022 
    CASH FLOWS FROM OPERATING ACTIVITIES:        
    Net income (loss) $257  $(105)
    Adjustments to reconcile net income (loss) to net cash used in operating activities:        
    Depreciation and amortization  46   53 
    Share-based compensation  46   — 
    Noncash lease expense  280   302 
    Deferred income taxes  (57)  (9)
    Changes in assets and liabilities:        
    Inventories  (490)  350 
    Other current assets  (78)  (332)
    Other assets  (18)  (3)
    Accounts payable  338   64 
    Income taxes payable  40   53 
    Accrued commissions  (465)  (1,129)
    Other accrued expenses  (76)  (592)
    Deferred revenue  43   (447)
    Amounts held in eWallets  (215)  (253)
    Operating lease liabilities  (301)  (296)
    Other current liabilities  (46)  (4)
    Net cash used in operating activities  (696)  (2,348)
    CASH FLOWS FROM INVESTING ACTIVITIES:        
    Purchases of property and equipment  (7)  (40)
    Net cash used in investing activities  (7)  (40)
    CASH FLOWS FROM FINANCING ACTIVITIES:        
    Dividends paid  (2,304)  (2,285)
    Net cash used in financing activities  (2,304)  (2,285)
    Effect of exchange rates on cash, cash equivalents and restricted cash  (91)  (228)
    Net decrease in cash, cash equivalents and restricted cash  (3,098)  (4,901)
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period  69,746   84,365 
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $66,648  $79,464 
    SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:        
    Right-of-use assets obtained in exchange for operating lease liabilities $(78) $— 

    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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