• Reliv International Reports Second-Quarter Financial Results for 2018

    Source: Nasdaq GlobeNewswire / 10 Aug 2018 07:00:30   America/New_York

    CHESTERFIELD, Mo., Aug. 10, 2018 (GLOBE NEWSWIRE) -- Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2018.

    Reliv reported net sales of $8.5 million for the second quarter of 2018 compared with net sales of $10.0 million in the second quarter of 2017. Net sales in the United States decreased to $6.3 million in the second quarter of 2018, which represented a 15.0 percent decline in net sales when compared to the prior-year quarter.  Net sales in Reliv’s foreign markets decreased 17.0 percent in the second quarter of 2018 compared with the prior-year quarter.  Net sales in Europe and Asia decreased by 21.2 percent and 10.5 percent, respectively, in the second quarter of 2018, along with decreases in all other regions except for Mexico.

    Reliv reported a net loss for the second quarter of 2018 of $978,000 (loss per diluted share of $0.53) compared to a net loss of $520,000 (loss per diluted share of $0.28) in the second quarter of 2017. The loss from operations for the second quarter of 2018 was $940,000 compared to a loss from operations of $508,000 in the same period in 2017.  Results from operations were primarily impacted by the decline in net sales and gross margin, partially offset by a reduction in selling, general and administrative (“SGA”) expenses in the quarter.  SGA expenses decreased to $4.2 million in the second quarter of 2018 compared to $4.6 million in the prior-year quarter.

    Net sales for the first six months of 2018 were $18.5 million, which represents a 19.0 percent decrease from the same period in 2017.  Net sales in the United States decreased by 20.9 percent and net sales in Reliv’s foreign markets decreased by 12.2 percent in the first half of 2018 compared with the first half of last year.  Net sales in Reliv’s foreign markets decreased by 15.7 percent during the first half of 2018 when the impact of foreign currency fluctuation is removed.

    Reliv reported a net loss of $1.2 million, or $0.66 per diluted share in the first six months of 2018, compared to net income of $4,000 or $0.00 per diluted share in the same period of 2017.

    Reliv had cash and cash equivalents of $2.8 million as of June 30, 2018, compared to $3.3 million as of December 31, 2017.  Net cash used in operating activities was $256,000 in the first six months of 2018.  In July 2018, Reliv elected to redeem the cash surrender value of a company-owned life insurance policy with a redemption value of $3.1 million and used the proceeds to pay in full the remaining balance of its term loan and revolving loan balances totaling $2.9 million.  As a result, Reliv has no outstanding bank debt at this time.

    As of June 30, 2018, Reliv had 31,140 distributors and preferred customers – a decrease of 11.3 percent from June 30, 2017 – of which 3,200 are Master Affiliate level and above.  The number of Master Affiliates decreased by 14.2 percent compared to the year-ago total.  Master Affiliate is the level at which distributors are eligible to earn generation royalties.

    “We continue the work of revitalizing sales in the United States and other markets around the Reliv world,” said Ryan A. Montgomery, Chief Executive Officer.  “The results of the second quarter are not indicative of the process that’s underway.  We have a number of initiatives in progress that we believe will lead to better results for the remainder of 2018 and forward.”

    “These initiatives include further product development, technology enhancements, refocus of distributor incentives, and streamlining our international operations,” Montgomery reported. 

    Specific initiatives include:

    • Reliv Now® with Whey was launched in May 2018 and other product innovations and enhancements are in process.
    • Mobile app launch in spring 2018 with new features based on distributor input coming in near future, and a new corporate website is scheduled for rollout at our upcoming fall distributor conference in Orlando where the company will celebrate 30 years in business. 
    • Reviewing distributor and leadership incentives with the aim to reward building new business.
    • In our Asia-Pacific region, we have consolidated nearly all administrative functions into our office in the Philippines, allowing the closure of our Indonesia office. 

    Reliv announced a number of executive level changes in recent weeks, highlighted by the announcement of Ryan Montgomery as Chief Executive Officer of the company.  “As we approach our 30th anniversary, I am proud to lead this company into its next chapter and beyond.”

    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.

    --FINANCIAL HIGHLIGHTS FOLLOW – 

    Reliv International, Inc. and Subsidiaries     
          
    Condensed Consolidated Balance Sheets     
     June 30December 31   
      2018 2017   
     (Unaudited)(Audited)   
    Assets     
    Current Assets:     
    Cash and cash equivalents$2,764,088 $3,272,788    
    Accounts receivable, less allowances of     
    $25,000 in 2018 and $26,300 in 2017 213,975  29,760    
    Accounts and note due from employees and distributors 136,142  138,497    
    Inventories 4,105,201  4,555,485    
    Cash surrender value of life insurance 3,067,360  -    
    Other current assets 661,751  399,154    
          
    Total current assets 10,948,517  8,395,684    
          
    Other assets 3,743,908  3,916,551    
    Cash surrender value of life insurance -  3,086,522    
    Net property, plant and equipment 5,441,346  5,677,239    
          
    Total Assets$20,133,771 $21,075,996    
          
    Liabilities and Stockholders' Equity     
          
    Accounts payable and accrued expenses$4,076,694 $3,212,634    
    Current portion of long-term debt 2,855,861  3,045,421    
    Other noncurrent liabilities 458,750  453,354    
    Stockholders' equity 12,742,466  14,364,587    
          
    Total Liabilities and Stockholders' Equity$20,133,771 $21,075,996    
          
          
    Consolidated Statements of Operations     
     Three months ended June 30 Six months ended June 30
      2018
     2017
      2018
     2017
     (Unaudited)(Unaudited) (Unaudited)(Unaudited)
    Product sales$7,920,596 $9,258,809  $17,311,977 $21,093,925 
    Handling & freight income 539,145  747,819   1,151,003  1,690,485 
          
    Net Sales 8,459,741  10,006,628   18,462,980  22,784,410 
          
    Costs and expenses:     
    Cost of products sold 2,356,274  2,328,452   4,706,016  5,163,977 
    Distributor royalties and commissions 2,827,357  3,554,773   6,219,102  8,053,326 
    Selling, general and administrative 4,215,641  4,631,860   8,701,536  9,558,139 
          
    Total Costs and Expenses 9,399,272  10,515,085   19,626,654  22,775,442 
          
    Income (loss) from operations (939,531) (508,457)  (1,163,674) 8,968 
          
    Other income (expense):     
    Interest income 23,547  25,827   47,499  51,353 
    Interest expense (45,222) (27,448)  (76,787) (52,289)
    Other income 6,252  12,413   16,703  45,096 
          
    Income (loss) before income taxes (954,954) (497,665)  (1,176,259) 53,128 
    Provision for income taxes 23,000  22,000   40,000  49,000 
          
    Net income (loss)($977,954)($519,665) ($1,216,259)$4,128 
          
          
    Earnings (loss) per common share - Basic($0.53)($0.28) ($0.66)$0.00 
    Weighted average shares 1,845,000  1,845,000   1,845,000  1,845,000 
          
    Earnings (loss) per common share - Diluted($0.53)($0.28) ($0.66)$0.00 
    Weighted average shares 1,845,000  1,845,000   1,845,000  1,846,000 
          
          

      

    Reliv International, Inc. and Subsidiaries       
              
    Net sales by Market     
    (in thousands)Three months ended June 30, Change from 
      2018   2017  prior year 
     Amount% of Net Sales Amount% of Net Sales Amount% 
       
    United States$  6,33674.9% $  7,45074.4% $  (1,114)-15.0% 
    Australia/New Zealand   1782.1%    2272.3%    (49)-21.6% 
    Canada   1621.9%    2172.2%    (55)-25.3% 
    Mexico   1121.3%    890.9%    23 25.8% 
    Europe   1,03112.2%    1,30813.1%    (277)-21.2% 
    Asia   6417.6%    7167.1%    (75)-10.5% 
              
    Consolidated Total$  8,460100.0% $  10,007100.0% $  (1,547)-15.5% 
              
              
    Net sales by Market     
    (in thousands)Six months ended June 30, Change from 
      2018   2017  prior year 
     Amount% of Net Sales Amount% of Net Sales Amount% 
       
    United States$  14,00675.9% $  17,70977.7% $  (3,703)-20.9% 
    Australia/New Zealand   4102.2%    4862.1%    (76)-15.6% 
    Canada   4042.2%    4812.1%    (77)-16.0% 
    Mexico   2201.2%    2471.1%    (27)-10.9% 
    Europe   2,19511.9%    2,50811.0%    (313)-12.5% 
    Asia   1,2286.6%    1,3536.0%    (125)-9.2% 
              
    Consolidated Total$  18,463100.0% $  22,784100.0% $  (4,321)-19.0% 
              
     
    The following table sets forth, as of June 30, 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 4,760 and 4,960 of the Active Distributor count as of June 30, 2018 and 2017, respectively.  
              
              
    Active Distributors/Preferred Customers and Master Affiliates and Above by Market 
     
     As of 6/30/2018 As of 6/30/2017 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 States 21,0602,270   24,6702,690   -14.6%-15.6% 
    Australia/New Zealand 1,03080   1,240110   -16.9%-27.3% 
    Canada 58080   74090   -21.6%-11.1% 
    Mexico 78070   77060   1.3%16.7% 
    Europe 3,290380   4,130430   -20.3%-11.6% 
    Asia 4,400320   3,560350   23.6%-8.6% 
              
    Consolidated Total 31,1403,200   35,1103,730   -11.3%-14.2% 
     

    For more information, contact:

    Steve Albright                                                         
    Chief Financial Officer                                  
    (636) 733-1305

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