- Revenue increased 83% year-over-year to $74.3 million
- Net income of $11.3 million or $0.95 per diluted share
- Increased quarterly dividend by 20% to $0.06 per share
- Repurchased $18.3 million of common stock during the quarter
LOS ANGELES, April 27, 2016 (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, 2016.
First Quarter 2016 Financial Highlights
- Total revenue increased 83% to $74.3 million, compared to $40.7 million in the first quarter of 2015.
- Revenue from the Company’s Hong Kong operations, which represented 92% of total revenue, increased 83% to $68.2 million, compared to $37.3 million in the first quarter of 2015.
- Revenue outside of Hong Kong increased 84% to $6.1 million, compared to $3.4 million in the first quarter of 2015.
- Operating income increased 102% to $14.0 million, compared to $6.9 million in the first quarter of 2015.
- Net income was $11.3 million, or $0.95 per diluted share, compared to $6.7 million, or $0.54 per diluted share, in the first quarter of 2015.
- Additional income tax provision of $2.4 million was recognized in the first quarter of 2016 for the expected partial repatriation of overseas profits, resulting in an overall effective tax rate of 19%. Net income, excluding the impact of the additional tax charge, would have been $13.6 million, or $1.15 per diluted share.
- The number of Active Members1 increased 10% to 119,800 at March 31, 2016, compared to 109,360 at December 31, 2015 and 62,010 at March 31, 2015.
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 positive momentum continued with a strong start to 2016,” commented Chris Sharng, President of Natural Health Trends Corp. “The double-digit increase in revenue growth for the quarter was driven by our emphasis on leadership programs, product development and promotional incentives. We believe that these strategies will help drive sustainable growth in our active member base which now consists of 119,800 and growing.”
Mr. Sharng further commented, “During the first quarter, we experienced strong consumer demand for our products. We were pleased to announce that we recently received the United States Department of Agriculture Organic Certification for our top-selling product, Premium Noni JuiceTM. Furthermore, we launched a new product, StemRenuTM, only available to NHT Global through an exclusive licensing arrangement, as well as AquaPur, our new water purifier product in China.”
Balance Sheet and Cash Flow
- At March 31, 2016, cash and cash equivalents totaled $99.6 million, compared to $104.9 million at December 31, 2015.
- Net cash provided by operating activities in the first quarter of 2016 was $13.8 million, compared to $16.6 million in the first quarter of 2015.
- On April 21, 2016, the Company’s Board of Directors declared a quarterly cash dividend of $0.06 per share on outstanding common stock, a 20% increase over the prior quarter dividend, which will be payable on May 20, 2016 to stockholders of record as of May 10, 2016.
- During the three months ended March 31, 2016, the Company repurchased an additional $18.3 million of its common stock under its existing $70.0 million stock repurchase program. At March 31, 2016, approximately $41.7 million remained available for repurchase.
First Quarter 2016 Financial Results Conference Call
Management will host a conference call to discuss the first quarter 2016 financial results today, Wednesday, April 27, 2016 at 11:30 a.m. Eastern Time. The conference call details are as follows:
| Date: | Wednesday, April 27, 2016 | ||||
| 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: | 13632555 | ||||
| Webcast: | http://public.viavid.com/index.php?id=118679 | ||||
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 April 27, 2016 through 11:59 p.m. Eastern Time on May 11, 2016 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing the replay pin number: 13632555.
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, North America, 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 March 4, 2016 with the Securities and Exchange Commission. 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) | ||||||||||||||
| March 31, 2016 | December 31, 2015 | |||||||||||||
| (Unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 99,631 | $ | 104,914 | ||||||||||
| Accounts receivable | 88 | 57 | ||||||||||||
| Inventories, net | 10,269 | 10,455 | ||||||||||||
| Other current assets | 2,324 | 2,286 | ||||||||||||
| Total current assets | 112,312 | 117,712 | ||||||||||||
| Property and equipment, net | 1,050 | 894 | ||||||||||||
| Goodwill | 1,764 | 1,764 | ||||||||||||
| Restricted cash | 3,189 | 3,166 | ||||||||||||
| Other assets | 621 | 616 | ||||||||||||
| Total assets | $ | 118,936 | $ | 124,152 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 2,019 | $ | 2,862 | ||||||||||
| Income taxes payable | 3,002 | 379 | ||||||||||||
| Accrued commissions | 16,714 | 19,634 | ||||||||||||
| Other accrued expenses | 17,644 | 16,703 | ||||||||||||
| Deferred revenue | 6,469 | 4,011 | ||||||||||||
| Deferred tax liability | 60 | 60 | ||||||||||||
| Amounts held in eWallets | 16,691 | 16,414 | ||||||||||||
| Other current liabilities | 1,359 | 1,510 | ||||||||||||
| Total current liabilities | 63,958 | 61,573 | ||||||||||||
| Long-term incentive | 5,650 | 5,770 | ||||||||||||
| Total liabilities | 69,608 | 67,343 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Stockholders’ equity: | ||||||||||||||
| Preferred stock | — | — | ||||||||||||
| Common stock | 13 | 13 | ||||||||||||
| Additional paid-in capital | 86,037 | 85,963 | ||||||||||||
| Retained earnings (accumulated deficit) | 1,057 | (9,647 | ) | |||||||||||
| Accumulated other comprehensive loss | (41 | ) | (101 | ) | ||||||||||
| Treasury stock, at cost | (37,738 | ) | (19,419 | ) | ||||||||||
| Total stockholders’ equity | 49,328 | 56,809 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 118,936 | $ | 124,152 | ||||||||||
| NATURAL HEALTH TRENDS CORP. | |||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
| (In thousands, except per share data) | |||||||
| Three Months Ended March 31, | |||||||
| 2016 | 2015 | ||||||
| Net sales | $ | 74,346 | $ | 40,709 | |||
| Cost of sales | 14,280 | 8,930 | |||||
| Gross profit | 60,066 | 31,779 | |||||
| Operating expenses: | |||||||
| Commissions expense | 35,086 | 18,397 | |||||
| Selling, general and administrative expenses | 10,904 | 6,423 | |||||
| Depreciation and amortization | 89 | 41 | |||||
| Total operating expenses | 46,079 | 24,861 | |||||
| Income from operations | 13,987 | 6,918 | |||||
| Other expense, net | (24 | ) | (109 | ) | |||
| Income before income taxes | 13,963 | 6,809 | |||||
| Income tax provision | 2,683 | 71 | |||||
| Net income | $ | 11,280 | $ | 6,738 | |||
| Income per common share: | |||||||
| Basic | $ | 0.96 | $ | 0.54 | |||
| Diluted | $ | 0.95 | $ | 0.54 | |||
| Weighted-average number of common shares outstanding: | |||||||
| Basic | 11,773 | 12,453 | |||||
| Diluted | 11,817 | 12,548 | |||||
| Cash dividends declared per common share | $ | 0.05 | $ | 0.02 | |||
| NATURAL HEALTH TRENDS CORP. | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
| (In thousands) | |||||||
| Three Months Ended March 31, | |||||||
| 2016 | 2015 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income | $ | 11,280 | $ | 6,738 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 89 | 41 | |||||
| Stock-based compensation | 74 | 15 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (29 | ) | (69 | ) | |||
| Inventories, net | 189 | (1,101 | ) | ||||
| Other current assets | (16 | ) | (259 | ) | |||
| Other assets | 5 | (221 | ) | ||||
| Accounts payable | (840 | ) | 352 | ||||
| Income taxes payable | 2,620 | (59 | ) | ||||
| Accrued commissions | (2,923 | ) | (1,419 | ) | |||
| Other accrued expenses | 925 | 1,808 | |||||
| Deferred revenue | 2,445 | 7,683 | |||||
| Amounts held in eWallets | 280 | 2,897 | |||||
| Other current liabilities | (157 | ) | 212 | ||||
| Long-term incentive | (120 | ) | (62 | ) | |||
| Net cash provided by operating activities | 13,822 | 16,556 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchases of property and equipment, net | (240 | ) | (266 | ) | |||
| Net cash used in investing activities | (240 | ) | (266 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Repurchase of common stock | (18,319 | ) | (1,082 | ) | |||
| Dividends paid | (576 | ) | (250 | ) | |||
| Net cash used in financing activities | (18,895 | ) | (1,332 | ) | |||
| Effect of exchange rates on cash and cash equivalents | 30 | 92 | |||||
| Net (decrease) increase in cash and cash equivalents | (5,283 | ) | 15,050 | ||||
| CASH AND CASH EQUIVALENTS, beginning of period | 104,914 | 44,816 | |||||
| CASH AND CASH EQUIVALENTS, end of period | $ | 99,631 | $ | 59,866 | |||
| NON-CASH FINANCING ACTIVITY: | |||||||
| Issuance of treasury stock | $ | — | $ | 666 | |||