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Natural Health Trends Reports First Quarter 2024 Financial Results

Natural Health Trends Corp.
Natural Health Trends Corp.
  • For the first time in six years, first quarter orders exceeded the preceding fourth quarter's, up 11%. Compared to a year ago, orders were up 1%.

  • Reported positive cash flows from operations during the quarter, first time in five quarters

  • Declared a quarterly cash dividend of $0.20 per share

HONG KONG, May 01, 2024 (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, 2024.

First Quarter 2024 Financial Highlights

  • Revenue of $11.0 million decreased 8% compared to $11.9 million in the first quarter of 2023. The decrease was entirely due to changes in the differences in deferred revenue between the two periods. Deferred revenue increased $1.0 million in the first quarter this year and remained flat in the comparable period last year.

  • Operating loss was $365,000 compared to $394,000 in the first quarter of 2023.

  • Net income was $188,000, or $0.02 per diluted share, compared to $257,000, or $0.02 per diluted share, in the first quarter of 2023.

  • The number of Active Members1 was down 2% to 31,620 at March 31, 2024 compared to 32,410 at December 31, 2023, and decreased 18% compared to 38,330 at March 31, 2023.

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1 Natural 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

“Our financial results reflect a $1.0 million increase in deferred revenue which resulted in a revenue decrease when compared to the same period last year. We anticipate the gradual recognition of this deferred revenue in the coming months as we fulfill orders to our customers. Worth highlighting is that this period marks the first time in six years we accomplished a sequential increase in orders taken during the first quarter. Additionally, we achieved positive cash flows from operations, underscoring the underlying strength of our business model and strong balance sheet,” commented Chris Sharng, President of Natural Health Trends Corp.

Mr. Sharng continued, “While guardedly optimistic about the start to the Year of the Dragon, we think these results are indicative of the effectiveness of our current programs. We continue to focus on innovation, customer satisfaction, supporting our leaders and their development, and improving operational efficiency as we navigate our forward progress.”

Balance Sheet and Cash Flow

  • Net cash provided by operating activities was $549,000 in the first three months of 2024 compared to net cash used in operating activities of $696,000 in the first three months of 2023.

  • Total cash, cash equivalents and marketable securities were $54.4 million at March 31, 2024, down from $56.2 million at December 31, 2023.

  • On April 29, 2024, 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 24, 2024 to stockholders of record as of May 14, 2024.

First Quarter 2024 Financial Results Conference Call

Management will host a conference call to discuss the first quarter 2024 financial results today, Wednesday, May 1, 2024 at 11:30 a.m. Eastern Time. The conference call details are as follows:

Date:

Wednesday, May 1, 2024

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:

13745331

Webcast:

https://viavid.webcasts.com/starthere.jsp?ei=1662841&tp_key=a0bd3854bf

 

 

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 1, 2024 through 11:59 p.m. Eastern Time on May 8, 2024 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13745331.

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 February 28, 2024 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, 2024

 

 

December 31, 2023

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

25,825

 

 

$

56,178

 

Marketable securities

 

 

28,608

 

 

 

 

Inventories

 

 

4,899

 

 

 

4,293

 

Other current assets

 

 

3,401

 

 

 

3,758

 

Total current assets

 

 

62,733

 

 

 

64,229

 

Property and equipment, net

 

 

241

 

 

 

266

 

Operating lease right-of-use assets

 

 

3,272

 

 

 

3,319

 

Restricted cash

 

 

37

 

 

 

39

 

Deferred tax asset

 

 

397

 

 

 

369

 

Other assets

 

 

959

 

 

 

869

 

Total assets

 

$

67,639

 

 

$

69,091

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

749

 

 

$

990

 

Income taxes payable

 

 

3,758

 

 

 

3,716

 

Accrued commissions

 

 

2,262

 

 

 

2,067

 

Other accrued expenses

 

 

1,357

 

 

 

1,170

 

Deferred revenue

 

 

7,174

 

 

 

6,166

 

Amounts held in eWallets

 

 

3,727

 

 

 

3,945

 

Operating lease liabilities

 

 

1,199

 

 

 

1,146

 

Other current liabilities

 

 

636

 

 

 

784

 

Total current liabilities

 

 

20,862

 

 

 

19,984

 

Income taxes payable

 

 

5,054

 

 

 

5,054

 

Deferred tax liability

 

 

134

 

 

 

135

 

Operating lease liabilities

 

 

2,219

 

 

 

2,318

 

Total liabilities

 

 

28,269

 

 

 

27,491

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

13

 

 

 

13

 

Additional paid-in capital

 

 

84,732

 

 

 

84,695

 

Accumulated deficit

 

 

(19,818

)

 

 

(17,703

)

Accumulated other comprehensive loss

 

 

(1,221

)

 

 

(1,069

)

Treasury stock, at cost

 

 

(24,336

)

 

 

(24,336

)

Total stockholders’ equity

 

 

39,370

 

 

 

41,600

 

Total liabilities and stockholders’ equity

 

$

67,639

 

 

$

69,091

 


 

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

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Net sales

 

$

10,951

 

 

$

11,861

 

Cost of sales

 

 

2,912

 

 

 

3,031

 

Gross profit

 

 

8,039

 

 

 

8,830

 

Operating expenses:

 

 

 

 

 

 

 

 

Commissions expense

 

 

4,486

 

 

 

4,992

 

Selling, general and administrative expenses

 

 

3,918

 

 

 

4,232

 

Total operating expenses

 

 

8,404

 

 

 

9,224

 

Loss from operations

 

 

(365

)

 

 

(394

)

Other income, net

 

 

563

 

 

 

681

 

Income before income taxes

 

 

198

 

 

 

287

 

Income tax provision

 

 

10

 

 

 

30

 

Net income

 

$

188

 

 

$

257

 

Net income per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

 

$

0.02

 

Diluted

 

$

0.02

 

 

$

0.02

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

11,456

 

 

 

11,424

 

Diluted

 

 

11,474

 

 

 

11,428

 


 

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

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

188

 

 

$

257

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

35

 

 

 

46

 

Share-based compensation

 

 

37

 

 

 

46

 

Noncash lease expense

 

 

272

 

 

 

280

 

Deferred income taxes

 

 

(32

)

 

 

(57

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Inventories

 

 

(640

)

 

 

(490

)

Other current assets

 

 

189

 

 

 

(78

)

Other assets

 

 

(101

)

 

 

(18

)

Accounts payable

 

 

(239

)

 

 

338

 

Income taxes payable

 

 

42

 

 

 

40

 

Accrued commissions

 

 

212

 

 

 

(465

)

Other accrued expenses

 

 

191

 

 

 

(76

)

Deferred revenue

 

 

1,029

 

 

 

43

 

Amounts held in eWallets

 

 

(208

)

 

 

(215

)

Operating lease liabilities

 

 

(284

)

 

 

(301

)

Other current liabilities

 

 

(142

)

 

 

(46

)

Net cash provided by (used in) operating activities

 

 

549

 

 

 

(696

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(11

)

 

 

(7

)

Purchases of marketable securities

 

 

(28,514

)

 

 

 

Net cash used in investing activities

 

 

(28,525

)

 

 

(7

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Dividends paid

 

 

(2,303

)

 

 

(2,304

)

Net cash used in financing activities

 

 

(2,303

)

 

 

(2,304

)

Effect of exchange rates on cash, cash equivalents and restricted cash

 

 

(76

)

 

 

(91

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(30,355

)

 

 

(3,098

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

 

 

56,217

 

 

 

69,746

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

 

$

25,862

 

 

$

66,648

 

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for operating lease liabilities

 

$

251

 

 

$

(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