• Reliv International Reports Third-Quarter Financial Results for 2017

    Source: Nasdaq GlobeNewswire / 10 Nov 2017 07:00:26   America/New_York

    CHESTERFIELD, Mo., Nov. 10, 2017 (GLOBE NEWSWIRE) -- Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2017.

    Reliv reported net sales of $9.1 million for the third quarter of 2017 compared with net sales of $10.8 million in the third quarter of 2016.  Net sales in the United States decreased to $7.1 million in the third quarter of 2017 compared to $8.6 million in the prior-year quarter. Net sales in Reliv’s foreign markets decreased 9.8 percent in the third quarter of 2017 compared with the prior-year third quarter.  An increase of 32.8 percent in net sales in Asia in the third quarter of 2017 was offset by a decline of 23.6 percent in net sales in Europe, along with decreases in other regions.

    Reliv reported a net loss for the third quarter of 2017 of $319,000 (loss per diluted share of $0.17) compared to net income of $134,000 (income per diluted share of $0.07) in the third quarter of 2016.  The loss from operations for the third quarter of 2017 was $334,000 compared to income from operations of $34,000 in the same period in 2016.  The impact to operations from the decrease in third quarter 2017 net sales was partially offset by a reduction in selling, general and administrative (“SGA”) expenses.  SGA expenses decreased to $4.3 million in the third quarter of 2017 compared to $4.7 million in the third quarter of 2016. 

    Net sales for the first nine months of 2017 were $31.9 million, which represents an 8.7 percent decrease from the same period in 2016.  Net sales in the United States decreased by 8.8 percent and net sales in Reliv’s foreign markets decreased by 8.1 percent in the first nine months of 2017 compared with the same period of last year.   When the impact of foreign currency fluctuation is removed, net sales in Reliv’s foreign markets decreased by 2.6 percent during the first nine months of 2017 as the result of a stronger U.S. dollar on a year-to-date basis in 2017 in most of our markets.

    Reliv reported a net loss of $315,000, or $0.17 per diluted share in the first nine months of 2017, compared to a net loss of $897,000 or $0.49 per diluted share in the same period of 2016.  The loss from operations for the first nine months of 2017 was $325,000 compared to a loss from operations of $1.1 million in the same period in 2016.  SGA expenses were reduced to $13.8 million for the first nine months of 2017 compared to $15.9 million in the same period in 2016.  The reduction in 2017 SGA expenses is the result of the continuing impact of a cost reduction program that took place in mid-2016.

    Reliv continues to build on the “Fit for Life” theme of our International Distributor Conference held in August.   In order to fuel the momentum that has generated with its Fit3TM program, Reliv has launched a 90-day Fit for Life Challenge from October through December in which participants have a chance to win a trip for two to St. Louis for a Fit3 weekend retreat.

    In addition to the product focus on Fit3, Reliv continues to improve its processes and tools related to building the customer and distributor ranks.   “We are simplifying our every approach and process to speed up activity in the field.  Reliv is focused on three things:  Recruiting, Onboarding and Retention,” said Ryan Montgomery, President.  “To grow, we must improve our customer and distributor enrollment totals.  From now through December, recruiting new customers and business builders is the number one focus and we’ve added a trip incentive for those who reach preset recruiting and volume goals.   Upon enrollment, it is critical the new recruit is onboarded in an effective manner to give them the knowledge, tools and training necessary to be successful as a new distributor.  From there, we strive to be leaders in customer and distributor retention, which derives from individual results with our products and business opportunity.”

    In order to support activity on the local level, corporate and distributor leaders are conducting numerous special events throughout the U.S. during the trip challenge.  To help meet the trip qualifications, the company has introduced free ground shipping for distributors attaining the Quick Start and Master Affiliate levels of business for a limited time. 

    Reliv had cash and cash equivalents of $2.5 million as of September 30, 2017, compared to $3.6 million as of December 31, 2016.  Net cash used in operating activities was $593,000 in the first nine months of 2017.

    As of September 30, 2017, Reliv had 34,490 distributors and preferred customers – a decrease of 14.7 percent from September 30, 2016 – of which 3,810 are Master Affiliate level and above.  The number of Master Affiliates decreased by 28.4 percent compared to the year-ago total.  Master Affiliate is the level at which distributors are eligible to earn generation royalties. The decrease in the number of Master Affiliates in the U.S. and Canada was due in part to the increase in the business volume requirement for distributors to reach the Master Affiliate level.  This change was effective February 1, 2016 as part of our revised compensation plan strategy and affected Master Affiliate requalifications during the first quarter of 2017.

    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     
     September 30December 31   
      2017  2016    
     (Unaudited)    
    Assets     
    Current Assets:     
    Cash and cash equivalents$2,465,411 $3,606,817    
    Accounts receivable, less allowances of     
    $25,800 in 2017 and $26,700 in 2016 33,705  126,113    
    Accounts and note due from employees and distributors 138,684  139,931    
    Inventories 4,877,594  4,487,830    
    Other current assets 548,705  571,377    
          
    Total current assets 8,064,099  8,932,068    
          
    Other assets 7,592,582  7,679,357    
    Net property, plant and equipment 5,797,867  5,854,302    
          
    Total Assets$21,454,548 $22,465,727    
          
    Liabilities and Stockholders' Equity     
          
    Accounts payable and accrued expenses$3,636,669 $4,234,305    
    Current portion of long-term debt 2,626,661  389,096    
    Long-term debt - noncurrent   -   2,518,341    
    Other noncurrent liabilities 432,389  409,813    
    Stockholders' equity 14,758,829  14,914,172    
          
    Total Liabilities and Stockholders' Equity$21,454,548 $22,465,727    
          
          
    Consolidated Statements of Operations     
     Three months ended September 30  Nine months ended September 30 
      2017  2016   2017  2016 
     (Unaudited)(Unaudited) (Unaudited)(Unaudited)
    Product sales$8,385,999 $9,972,547  $29,479,924 $32,181,585 
    Handling & freight income 683,324  812,868   2,373,809  2,693,602 
          
    Net Sales 9,069,323  10,785,415   31,853,733  34,875,187 
          
    Costs and expenses:     
      Cost of products sold 1,949,670  2,214,633   7,113,647  7,729,508 
      Distributor royalties and commissions 3,199,596  3,799,791   11,252,922  12,345,171 
      Selling, general and administrative 4,253,675  4,737,305   13,811,814  15,887,901 
          
    Total Costs and Expenses 9,402,941  10,751,729   32,178,383  35,962,580 
          
    Income (loss) from operations (333,618) 33,686   (324,650) (1,087,393)
          
    Other income (expense):     
    Interest income 25,277  26,199   76,630  80,689 
    Interest expense (27,183) (28,982)  (79,472) (82,161)
    Other income (expense) (4,579) 41,575   40,517  226,519 
          
    Income (loss) before income taxes (340,103) 72,478   (286,975) (862,346)
    Provision (benefit) for income taxes (21,000) (62,000)  28,000  35,000 
          
    Net income (loss)($319,103)$134,478  ($314,975)($897,346)
          
          
    Earnings (loss) per common share - Basic($0.17)$0.07  ($0.17)($0.49)
    Weighted average shares  1,845,000  1,846,000   1,845,000  1,846,000 
          
    Earnings (loss) per common share - Diluted($0.17)$0.07  ($0.17)($0.49)
    Weighted average shares  1,845,000  1,846,000   1,845,000  1,846,000 
          
          


    Reliv International, Inc. and Subsidiaries       
              
    Net sales by Market     
    (in thousands)Three months ended September 30, Change from 
      2017   2016  prior year 
     Amount% of Net Sales Amount% of Net Sales Amount% 
       
    United States$  7,08278.1% $  8,58179.6% $  (1,499)-17.5% 
    Australia/New Zealand   2242.5%    2422.2%    (18)-7.4% 
    Canada   2002.2%    2502.3%    (50)-20.0% 
    Mexico   1051.2%    1191.1%    (14)-11.8% 
    Europe   8919.8%    1,16610.8%    (275)-23.6% 
    Asia   5676.2%    4274.0%    140 32.8% 
              
    Consolidated Total$  9,069100.0% $  10,785100.0% $  (1,716)-15.9% 
              
              
    Net sales by Market         
    (in thousands)Nine months ended September 30, Change from 
      2017   2016  prior year 
     Amount% of Net Sales Amount% of Net Sales Amount% 
     
    United States$  24,79177.8% $  27,19178.0% $  (2,400)-8.8% 
    Australia/New Zealand   7112.2%    8252.4%    (114)-13.8% 
    Canada   6812.2%    7992.3%    (118)-14.8% 
    Mexico   3521.1%    4191.2%    (67)-16.0% 
    Europe   3,39910.7%    4,34412.4%    (945)-21.8% 
    Asia   1,9206.0%    1,2973.7%    623 48.0% 
              
    Consolidated Total$  31,854100.0% $  34,875100.0% $  (3,021)-8.7% 
              
     
    The following table sets forth, as of September 30, 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 5,010 and 4,720 of the Active Distributor count as of September 30, 2017 and 2016, respectively. 
              
              
    Active Distributors/Preferred Customers and Master Affiliates and Above by Market 
     
     As of 9/30/2017 As of 9/30/2016 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 23,8602,750   28,7004,110   -16.9%-33.1% 
    Australia/New Zealand 1,180110   1,580130   -25.3%-15.4% 
    Canada 71080   890140   -20.2%-42.9% 
    Mexico 73060   1,01090   -27.7%-33.3% 
    Europe 3,940440   5,230520   -24.7%-15.4% 
    Asia 4,070370   3,040330   33.9%12.1% 
              
    Consolidated Total 34,4903,810   40,4505,320   -14.7%-28.4% 
     

    For more information, contact:

    Steve Albright                                                      
    Chief Financial Officer                                
    (636) 733-1305

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