Natural Health Trends Reports First Quarter 2023 Financial Results
05/03/2023 - 09:00 AM
– First year-over-year increase in net sales since the third quarter of 2021 and the second since the third quarter of 2018 – Hong Kong net sales increased 10% compared to the first quarter of 2022 – Fourth consecutive quarter of positive net income – Declared a quarter cash dividend of $0.20 per share
HONG KONG, May 03, 2023 (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, 2023.
First Quarter 2023 Financial Highlights
Revenue of $11.9 million increased 3% compared to $11.5 million in the first quarter of 2022. Operating loss was $394,000 compared to $383,000 in the first quarter of 2022. Net income was $257,000 , or $0.02 per diluted share, compared to net loss of $105,000 , or $0.01 per diluted share, in the first quarter of 2022. The number of Active Members1 was down slightly to 38,330 at March 31, 2023 compared to 38,660 at December 31, 2022, and decreased 14% compared to 44,490 at March 31, 2022. 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
“Despite the end of the Zero-Covid policies last December, our experience is that consumers have been slow and gradual to participate in the reopening. In this more positive environment, we are encouraged that our Hong Kong business has shown good progress as revenue increased 3% year-over-year, the first year-over-year increase since the third quarter of 2021 and the second increase since the third quarter of 2018,” commented Chris Sharng, President of Natural Health Trends Corp.
Mr. Sharng continued, “If the current trend of an improving operating environment continues, we are hopeful that our business can benefit from the prospect that people are more willing to meet, gather and travel, all important activities to how we facilitate our business development.”
Balance Sheet and Cash Flow
Net cash used in operating activities was $696,000 in the first quarter of 2023, compared to net cash used in operating activities of $2.3 million in the first quarter of 2022. Total cash and cash equivalents were $66.6 million at March 31, 2023, down from $69.7 million at December 31, 2022. On May 1, 2023, 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 26, 2023 to stockholders of record as of May 16, 2023. First Quarter 2023 Financial Results Conference Call
Management will host a conference call to discuss the first quarter 2023 financial results today, Wednesday, May 3, 2023 at 11:30 a.m. Eastern Time. The conference call details are as follows:
Date: Wednesday, May 3, 2023 Time: 11:30 a.m. Eastern Time / 8:30 a.m. Pacific Time Dial-in: 1-877-407-0789 (Domestic) Conference ID: 13737199 Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1605531&tp_key=86671cf781
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 3, 2023 through 11:59 p.m. Eastern Time on May 10, 2023 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13737199.
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 March 3, 2023 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, 2023 December 31, 2022 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 66,610 $ 69,667 Inventories 4,982 4,525 Other current assets 3,420 3,359 Total current assets 75,012 77,551 Property and equipment, net 354 394 Operating lease right-of-use assets 3,909 3,992 Restricted cash 38 79 Deferred tax asset 253 195 Other assets 616 606 Total assets $ 80,182 $ 82,817 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,147 $ 810 Income taxes payable 3,012 2,972 Accrued commissions 2,470 2,943 Other accrued expenses 1,105 1,181 Deferred revenue 5,617 5,597 Amounts held in eWallets 4,657 4,895 Operating lease liabilities 1,158 1,135 Other current liabilities 859 905 Total current liabilities 20,025 20,438 Income taxes payable 9,098 9,098 Deferred tax liability 140 141 Operating lease liabilities 2,869 2,989 Total liabilities 32,132 32,666 Stockholders’ equity: Preferred stock — — Common stock 13 13 Additional paid-in capital 84,519 86,102 Accumulated deficit (11,103 ) (9,056 ) Accumulated other comprehensive loss (1,104 ) (1,004 ) Treasury stock, at cost (24,275 ) (25,904 ) Total stockholders’ equity 48,050 50,151 Total liabilities and stockholders’ equity $ 80,182 $ 82,817
NATURAL HEALTH TRENDS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share data)
Three Months Ended March 31, 2023 2022 Net sales $ 11,861 $ 11,546 Cost of sales 3,031 2,908 Gross profit 8,830 8,638 Operating expenses: Commissions expense 4,992 4,740 Selling, general and administrative expenses 4,232 4,281 Total operating expenses 9,224 9,021 Loss from operations (394 ) (383 ) Other income, net 681 110 Income (loss) before income taxes 287 (273 ) Income tax provision (benefit) 30 (168 ) Net income (loss) $ 257 $ (105 ) Net income (loss) per common share: Basic $ 0.02 $ (0.01 ) Diluted $ 0.02 $ (0.01 ) Weighted average common shares outstanding: Basic 11,424 11,254 Diluted 11,428 11,254
NATURAL HEALTH TRENDS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)
Three Months Ended March 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 257 $ (105 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 46 53 Share-based compensation 46 — Noncash lease expense 280 302 Deferred income taxes (57 ) (9 ) Changes in assets and liabilities: Inventories (490 ) 350 Other current assets (78 ) (332 ) Other assets (18 ) (3 ) Accounts payable 338 64 Income taxes payable 40 53 Accrued commissions (465 ) (1,129 ) Other accrued expenses (76 ) (592 ) Deferred revenue 43 (447 ) Amounts held in eWallets (215 ) (253 ) Operating lease liabilities (301 ) (296 ) Other current liabilities (46 ) (4 ) Net cash used in operating activities (696 ) (2,348 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (7 ) (40 ) Net cash used in investing activities (7 ) (40 ) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid (2,304 ) (2,285 ) Net cash used in financing activities (2,304 ) (2,285 ) Effect of exchange rates on cash, cash equivalents and restricted cash (91 ) (228 ) Net decrease in cash, cash equivalents and restricted cash (3,098 ) (4,901 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 69,746 84,365 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 66,648 $ 79,464 SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Right-of-use assets obtained in exchange for operating lease liabilities $ (78 ) $ —
CONTACT:
Scott Davidson
