– Hong Kong and China COVID restrictions impacted our logistics
– Continued sales momentum in Japan and Southeast Asia
– Declared a quarterly cash dividend of $0.20 per share
HONG KONG, May 04, 2022 (GLOBE NEWSWIRE) — Natural Health Trends Corp. (NASDAQ: NHTC), a leading direct selling and e-commerce company that markets premium personal care, wellness and “quality of life” products under the NHT Global brand, today announced its financial results for the quarter ended March 31, 2022.
First Quarter 2022 Financial Highlights
- Revenue of $11.5 million was down 14% from $13.5 million in the first quarter of 2021.
- The operating loss was $383,000 compared to an operating profit of $220,000 in the first quarter of 2021.
- Net loss was $105,000, or $0.01 per diluted share, compared to net earnings of $153,000, or $0.01 per diluted share, in the first quarter of 2021.
- The number of active members1 decreased by 3% to 44,490 as of March 31, 2022 compared to 45,760 as of December 31, 2021, and decreased by 10% compared to 49,420 as of March 31, 2021.
| 1 | Natural Health Trends defines active members as those who have placed at least one product order with the company during the previous twelve month period. |
Management commentary
“The first quarter was challenging due to a significant increase in government-imposed COVID-19 restrictions and lockdowns affecting Hong Kong and China, particularly Shenzhen, immediately following the Chinese New Year holiday. The additional measures disrupted supply chains, created uncertainty in order delivery, and prohibited us from hosting in-person events in China and Macau. Although much of mainland China’s population was under some form of lockdown during the quarter, our leaders remain committed to finding and implementing innovative ways to conduct business as our people continue to adapt to the evolving needs of our global business,” said Chris Sharng, president of Natural Health Trends Corp.
Mr. Sharng continued, “We are encouraged by continued growth in Japan and Southeast Asia and continue to prepare for expansion and diversification in Latin America. We recently successfully hosted virtual events for members in the North America, Peru, Japan, India and CIS markets, as well as an in-person event for members in Europe. We are thrilled with the enthusiasm and participation in adopting our products and marketing programs as they bring our health, wellness and beauty products to customers around the world.
Balance sheet and cash flow
- Net cash used in operating activities was $2.3 million in the first quarter of 2022, compared to net cash provided by operating activities of $414,000 in the first quarter of 2021.
- Total cash and cash equivalents was $79.4 million as of March 31, 2022, down from $83.8 million as of December 31, 2021.
- On May 2, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 on each outstanding common share. The dividend will be payable on May 27, 2022 to shareholders of record on May 17, 2022.
First Quarter 2022 Financial Results Conference Call
Management will host a conference call to discuss the first quarter 2022 financial results today, Wednesday, May 4, 2022 at 11:30 a.m. Eastern Time. The details of the conference call are as follows:
| Date: | Wednesday, May 4, 2022 |
| Weather: | 11:30 a.m. Eastern / 8:30 a.m. Pacific Time |
| Compose: | 1-877-407-0789 (domestic) 1-201-689-8562 (international) |
| Conference ID: | 13727755 |
| Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1534881&tp_key=6bc04f960d |
For those unable to participate in the live stream, a replay of the call will also be available from 2:30 p.m. Eastern Time on May 4, 2022 to 11:59 p.m. May 2022 by calling 1-844-512. -2921 (domestic) and 1-412-317-6671 (international) and referring to the replay PIN: 13727755.
About Natural Health Trends Corp.
Natural Health Trends Corp. (NASDAQ: NHTC) is an international direct selling and e-commerce company operating through its subsidiaries in Asia, the Americas and Europe. The company markets premium personal care products under the NHT Global brand. Additional information is available on the Company’s website at www.naturalhealthtrendscorp.com.
Forward-looking statements
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 — The forward-looking statements contained in this press release are not guarantees of future performance. These forward-looking statements are subject to risks and uncertainties that could cause the Company’s actual results to differ materially from those anticipated. These risks and uncertainties include the risks and uncertainties detailed under the heading “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 undertakes no obligation to update the forward-looking information contained in this press release or with respect to the announcements described herein.
NATURAL BODY HEALTH TRENDS.
CONSOLIDATED RESULTS
(In thousands, except shared data)
| March 31, 2022 | December 31, 2021 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 79,382 | $ | 83,843 | |||
| Inventories | 4,860 | 5,257 | |||||
| Other current assets | 4,674 | 4,369 | |||||
| Total current assets | 88,916 | 93,469 | |||||
| Property and equipment, net | 450 | 463 | |||||
| Operating lease right-of-use assets | 2,708 | 3,021 | |||||
| Restricted cash | 82 | 522 | |||||
| Deferred tax asset | 318 | 309 | |||||
| other assets | 568 | 571 | |||||
| Total assets | $ | 93,042 | $ | 98,355 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 824 | $ | 761 | |||
| Taxes payable on income | 1,397 | 1,345 | |||||
| Commissions earned | 2,512 | 3,636 | |||||
| Other accrued charges | 1,332 | 1,933 | |||||
| Deferred revenue | 8,049 | 8,536 | |||||
| Amounts held in electronic wallets | 6,055 | 6,341 | |||||
| Operating lease debts | 1,174 | 1,239 | |||||
| Other current liabilities | 855 | 865 | |||||
| Total current liabilities | 22,198 | 24,656 | |||||
| Taxes payable on income | 12,130 | 12,130 | |||||
| Deferred tax liability | 153 | 153 | |||||
| Operating lease debts | 1,691 | 1,928 | |||||
| Total responsibilities | 36,172 | 38,867 | |||||
| Equity: | |||||||
| Favorite stock | — | — | |||||
| Ordinary actions | 13 | 13 | |||||
| Premium | 86 102 | 86 102 | |||||
| Accumulated deficit | (2,621 | ) | (231 | ) | |||
| Accumulated other comprehensive income | (720 | ) | (492 | ) | |||
| Treasury shares, at cost | (25,904 | ) | (25,904 | ) | |||
| Full shareholder equity | 56,870 | 59,488 | |||||
| Total Liabilities and Equity | $ | 93,042 | $ | 98,355 | |||
NATURAL BODY HEALTH TRENDS.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
| Quarter ended March 31 | |||||||
| 2022 | 2021 | ||||||
| Net sales | $ | 11,546 | $ | 13,469 | |||
| Cost of sales | 2,908 | 3,255 | |||||
| Gross profit | 8,638 | 10,214 | |||||
| Operating costs : | |||||||
| Commission fees | 4,740 | 5,514 | |||||
| Selling, general and administrative expenses | 4,281 | 4,480 | |||||
| Total operating expenses | 9,021 | 9,994 | |||||
| Operating income (loss) | (383 | ) | 220 | ||||
| Other income, net | 110 | 20 | |||||
| Profit (loss) before income taxes | (273 | ) | 240 | ||||
| Provision for income tax (benefit) | (168 | ) | 87 | ||||
| Net profit (loss) | $ | (105 | ) | $ | 153 | ||
| Net earnings (loss) per common share: | |||||||
| Basic | $ | (0.01 | ) | $ | 0.01 | ||
| Diluted | $ | (0.01 | ) | $ | 0.01 | ||
| Weighted average common shares outstanding: | |||||||
| Basic | 11,254 | 10,874 | |||||
| Diluted | 11,254 | 11,424 | |||||
NATURAL BODY HEALTH TRENDS.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
| Quarter ended March 31 | |||||||
| 2022 | 2021 | ||||||
| CASH FLOW FROM OPERATING ACTIVITIES: | |||||||
| Net profit (loss) | $ | (105 | ) | $ | 153 | ||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 53 | 79 | |||||
| Non-cash rental charges | 302 | 294 | |||||
| Deferred taxes | (9 | ) | 9 | ||||
| Changes in assets and liabilities: | |||||||
| Inventories | 350 | 123 | |||||
| Other current assets | (332 | ) | 195 | ||||
| other assets | (3 | ) | 2 | ||||
| Accounts payable | 64 | 176 | |||||
| Taxes payable on income | 53 | 67 | |||||
| Commissions earned | (1,129 | ) | (344 | ) | |||
| Other accrued charges | (592 | ) | (245 | ) | |||
| Deferred revenue | (447 | ) | 1,093 | ||||
| Amounts held in electronic wallets | (253 | ) | (727 | ) | |||
| Operating lease debts | (296 | ) | (322 | ) | |||
| Other current liabilities | (4 | ) | (139 | ) | |||
| Net cash provided by (used in) operating activities | (2,348 | ) | 414 | ||||
| CASH FLOW FROM INVESTING ACTIVITIES: | |||||||
| Purchases of goods and equipment | (40 | ) | (63 | ) | |||
| Net cash used in investing activities | (40 | ) | (63 | ) | |||
| CASH FLOW FROM FINANCING ACTIVITIES: | |||||||
| Dividends paid | (2,285 | ) | (2,285 | ) | |||
| Net cash used in financing activities | (2,285 | ) | (2,285 | ) | |||
| Effect of exchange rates on cash, cash equivalents and restricted cash | (228 | ) | (222 | ) | |||
| Net decrease in cash, cash equivalents and restricted cash | (4,901 | ) | (2,156 | ) | |||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 84,365 | 92,892 | |||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ | 79,464 | $ | 90,736 | |||
| ADDITIONAL INFORMATION ON OTHER CASH FLOW INFORMATION: | |||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | — | $ | 400 | |||
CONTACT:
Scott Davidson
Senior Vice President and Chief Financial Officer
Natural Health Trends Corp.
Tel (Hong Kong): +852-3107-0800
Tel (US): 310-541-0888
[email protected]
