• Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2017

    Source: Nasdaq GlobeNewswire / 27 Mar 2018 07:00:27   America/New_York

    CHESTERFIELD, Mo., March 27, 2018 (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 2017.

    Fourth-Quarter Results

    Reliv reported net sales of $9.9 million for the fourth quarter of 2017, compared with net sales of $10.6 million for the fourth quarter of 2016. U.S. net sales decreased by 8.5 percent for the quarter compared with the same quarter in 2016.  Net sales outside of the United States increased by 0.6 percent in the fourth quarter of 2017 compared to the prior-year quarter.

    Reliv reported a net loss of $382,000, or loss of $0.21 per diluted share, for the fourth quarter of 2017 compared with a net income of $272,000, or earnings of $0.15 per diluted share, for the fourth quarter of 2016.   Income from operations for the fourth quarter of 2017 was $141,000 compared to $275,000 in the same period in 2016.  The impact to operations from the decrease in fourth quarter 2017 net sales was partially offset by a reduction in selling, general and administrative (“SGA”) expenses.  SGA expenses decreased to $4.1 million in the fourth quarter of 2017 compared to $4.3 million in the fourth quarter of 2016.  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 $41.8 million for 2017 compared with net sales of $45.5 million in 2016. U.S. net sales decreased to $32.5 million from $35.6 million, a decline of 8.8 percent.

    Net sales in Reliv’s foreign markets for 2017 decreased 6.1 percent compared with net sales for 2016, with 3.4 percent of the decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar in certain markets.   The decline in net sales in Europe represented a significant portion of the decrease in foreign sales.  Net sales in Europe declined by 16.6 percent in 2017 compared to the prior year, with 4.3 percent of the decline due to the impact of foreign currency fluctuation.  Sales in Asia increased by 39.7 percent in 2017 compared to the prior year.

    The net loss for 2017 was $697,000 (loss per diluted share of $0.38) compared to a net loss of $625,000 (loss per diluted share of $0.34) in 2016.  The loss from operations for 2017 was $183,000 compared to a loss from operations of $812,000 in 2016.  SGA expenses were $17.9 million versus $20.2 million in 2016, as the continuing effect of a cost reduction program implemented in mid-2016 helped offset the impact of the sales decline.  Income tax expense for 2017 was $545,000 compared to $9,000 in 2016, primarily the result of the deferred tax adjustments discussed in the fourth-quarter results.

    “While our results from operations improved in 2017 when compared to 2016, we remain focused on growing sales through new product and business development by providing additional tools and support with programs to attract new distributors and customers,” said Ryan A. Montgomery, President.

    “In mid-April, we are introducing an additional whey-based version of our flagship NOW product.  This new version is in response to consumer trends and offers an alternative to those that prefer a whey protein based product,” commented Montgomery.

    Other distributor/customer recruitment programs include continued free ground shipping for new distributors reaching the Quick Start and Master Affiliate business levels, an additional 10 percent discount on autoship orders placed by Preferred Customers, and a free product credit to distributors for enrolling three new Preferred Customers with a minimum order amount.

    Additionally, a new mobile app is in development for launch in April that will allow distributors to perform most of their key sales and recruiting functions via a smartphone or tablet, including enrollment of new distributors and customers, placing orders and tracking downline organizational activity.

    “Lastly, our Fit3TM  program continues to grow in popularity throughout the Reliv distributor base.  It’s not just about the Fit3 products, it’s also a fitness and lifestyle transformation,” stated Montgomery.

    Reliv had cash and cash equivalents of $3.3 million as of December 31, 2017, compared to $3.6 million as of December 31, 2016.  Net cash used in operating activities was $157,000 in 2017 compared to $1.5 million of cash generated from operations in the prior-year period.

    As of December 31, 2017, Reliv had 33,620 Distributors and Preferred Customers – a decrease of 12.6 percent from December 31, 2016 – of which 3,910 are Master Affiliate level and above.  The number of Master Affiliates decreased by 26.5 percent compared to the year-ago total.  Master Affiliate is the level at which Distributors are eligible to earn generation royalties.  With the formal introduction of the Preferred Customer program in the United States and Canada in February 2016, Reliv now includes Preferred Customers as part of Active Distributor statistics.

    About Reliv International, Inc.

    Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address essential nutrition, fitness and weight loss 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 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.

    --FINANCIAL HIGHLIGHTS FOLLOW –

    Reliv International, Inc. and Subsidiaries     
          
    Condensed Consolidated Balance Sheets     
      December 31  December 31    
      2017  2016    
     (Unaudited) (Audited)    
    Assets     
    Current Assets:     
    Cash and cash equivalents$3,272,788 $3,606,817    
    Accounts receivable, less allowances of     
    $26,300 in 2017 and $26,700 in 2016 29,760  126,113    
    Accounts and note due from employees and distributors 138,497  139,931    
    Inventories 4,555,485  4,487,830    
    Other current assets 399,154  571,377    
          
    Total current assets 8,395,684  8,932,068    
          
    Other assets 7,003,073  7,679,357    
    Net property, plant and equipment 5,677,239  5,854,302    
          
    Total Assets$21,075,996 $22,465,727    
          
    Liabilities and Stockholders' Equity     
          
    Accounts payable and accrued expenses$3,212,634 $4,234,305    
    Current portion of long-term debt 3,045,421  389,096    
    Long-term debt - noncurrent -  2,518,341    
    Other noncurrent liabilities 453,354  409,813    
    Stockholders' equity 14,364,587  14,914,172    
          
    Total Liabilities and Stockholders' Equity$21,075,996 $22,465,727    
          
          
    Consolidated Statements of Operations     
      Three months ended December 31  Year ended December 31 
      2017  2016   2017  2016 
     (Unaudited) (Unaudited)  (Unaudited) (Audited) 
    Product sales$9,271,433 $9,823,376  $38,751,357 $42,004,961 
    Handling & freight income 663,616  814,273   3,037,425  3,507,875 
          
    Net Sales 9,935,049  10,637,649   41,788,782  45,512,836 
          
    Costs and expenses:     
    Cost of products sold 2,287,759  2,294,513   9,401,406  10,024,021 
    Distributor royalties and commissions 3,432,631  3,749,861   14,685,553  16,095,032 
    Selling, general and administrative 4,073,412  4,317,861   17,885,226  20,205,762 
          
    Total Costs and Expenses 9,793,802  10,362,235   41,972,185  46,324,815 
          
    Income (loss) from operations 141,247  275,414   (183,403) (811,979)
          
    Other income (expense):     
    Interest income 25,271  26,317   101,901  107,006 
    Interest expense (29,782) (24,521)  (109,254) (106,682)
    Other income (expense) (1,673) (30,919)  38,844  195,600 
          
    Income (loss) before income taxes 135,063  246,291   (151,912) (616,055)
    Provision (benefit) for income taxes 517,000  (26,000)  545,000  9,000 
          
    Net income (loss)$(381,937)$272,291  $(696,912)$(625,055)
          
          
    Earnings (loss) per common share - Basic$(0.21)$0.15  $(0.38)$(0.34)
    Weighted average shares 1,845,000  1,845,000   1,845,000  1,845,000 
          
    Earnings (loss) per common share - Diluted$(0.21)$0.15  $(0.38)$(0.34)
    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 
     2017
     2016
     prior year 
     Amount% of Net
    Sales
     Amount% of Net
    Sales
     Amount% 
              
    United States$7,68377.3% $8,40079.0% $(717)-8.5% 
    Australia/New Zealand 2122.1%  2542.4%  (42)-16.5% 
    Canada 2342.4%  2662.5%  (32)-12.0% 
    Mexico 940.9%  1111.0%  (17)-15.3% 
    Europe 1,17911.9%  1,14710.8%  32 2.8% 
    Asia 5335.4%  4604.3%  73 15.9% 
              
    Consolidated Total$9,935100.0% $10,638100.0% $(703)-6.6% 
              
              
    Net sales by Market         
    (in thousands)Year ended December 31, Change from 
     2017
     2016
     prior year 
     Amount% of Net
    Sales
     Amount% of Net
    Sales
     Amount% 
              
    United States$32,47577.7% $35,59278.2% $(3,117)-8.8% 
    Australia/New Zealand 9232.2%  1,0792.4%  (156)-14.5% 
    Canada 9152.2%  1,0652.3%  (150)-14.1% 
    Mexico 4451.0%  5301.2%  (85)-16.0% 
    Europe 4,57811.0%  5,49112.0%  (913)-16.6% 
    Asia 2,4535.9%  1,7563.9%  697 39.7% 
              
    Consolidated Total$41,789100.0% $45,513100.0% $(3,724)-8.2% 
              
              
    The following table sets forth, as of December 31, 2017 and 2016, 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.  In February 2016, we introduced a formal Preferred Customer program in the United States and Canada.  As a result, we are including Preferred Customers as part of our Active Distributor count.  Preferred Customer programs were previously in place in Europe and other foreign markets.  Preferred Customers represent approximately 4,990 and 5,050 of the Active Distributor count as of December 31, 2017 and 2016, respectively. 
              
              
    Active Distributors/Preferred Customers and Master Affiliates and Above by Market
           
              
     As of 12/31/2017 As of 12/31/2016 Change in % 
     Active
    Distributors
    and Preferred
    Customers
    Master
    Affiliates and
    Above
     Active
    Distributors
    and Preferred
    Customers
    Master
    Affiliates and
    Above
     Active
    Distributors
    and Preferred
    Customers
    Master
    Affiliates and
    Above
     
        
              
    United States 23,0502,820   27,2204,080   -15.3%-30.9% 
    Australia/New Zealand 1,100110   1,530130   -28.1%-15.4% 
    Canada 66090   840150   -21.4%-40.0% 
    Mexico 71060   94090   -24.5%-33.3% 
    Europe 3,800450   4,860530   -21.8%-15.1% 
    Asia 4,300380   3,090340   39.2%11.8% 
              
    Consolidated Total 33,6203,910   38,4805,320   -12.6%-26.5% 
              

    For more information, contact:

    Steve Albright                                                       
    Chief Financial Officer                                
    (636) 733-1305 

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