Natural Health Trends Reports Fourth Quarter and Full Year 2022 Financial Results
02/08/2023 - 09:00 AM
– Fourth quarter revenue of $12.5 million increased 7% compared to the third quarter of 2022 – Generated positive operating income, net income and cash flow from operations in the fourth quarter – Declared a quarterly cash dividend of $0.20 per share
HONG KONG, Feb. 08, 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 fourth quarter and full year ended December 31, 2022.
Fourth Quarter 2022 Financial Highlights
Revenue of $12.5 million increased 7% compared to $11.7 million in the third quarter of 2022 and decreased 22% compared to $16.1 million in the fourth quarter of 2021. Operating income was $43,000 compared to operating loss of $145,000 in the third quarter of 2022 and operating income of $487,000 million in the fourth quarter of 2021. Net income was $188,000 , or $0.02 per diluted share, compared to $47,000 , or breakeven per diluted share, in the third quarter of 2022 and $232,000 , or $0.02 per diluted share, in the fourth quarter of 2021. The number of Active Members1 were down 6% to 38,660 at December 31, 2022, compared to 41,170 at September 30, 2022, and decreased 12% compared to 45,760 at December 31, 2021. 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.
Full Year 2022 Financial Highlights
Revenue of $49.1 million decreased 18% compared to $60.0 million in 2021. Operating loss was $270,000 compared to operating income of $1.6 million in 2021. Net income was $313,000 , or $0.03 per diluted share, compared to $1.1 million , or $0.09 per diluted share, in 2021. Management Commentary
“During most of the 4th quarter, much of the urban Chinese population was still under some forms of restrictions. In this difficult operating environment, we focused on protecting our margin by diligently controlling costs and exercising discipline in marketing and product mix, while still managing to increase revenue sequentially compared to the third quarter. The result of our effort was positive operating and net income for the fourth quarter, as well as cash from operations,” commented Chris Sharng, President of Natural Health Trends Corp.
Mr. Sharng continued, “With the ending of the “Zero-Covid” policy, we are hopeful that our members can conduct more in-person meetings while we support more events and incentive trips. We wish to thank all of our hard-working members, old and new, who have endured the past few years and demonstrated strong commitment to our products and our business.”
Balance Sheet and Cash Flow
Net cash provided by operating activities was $938,000 in the fourth quarter of 2022, compared to $1.6 million in the fourth quarter of 2021. Net cash used in operating activities was $4.9 million in 2022, compared to net cash provided by operating activities of $1.0 million in 2021. Total cash and cash equivalents were $69.7 million as of December 31, 2022, down from $83.8 million as of December 31, 2021. On February 6, 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 March 3, 2023 to stockholders of record as of February 21, 2023. The Company expects to issue its 2022 audited financial results in late February with its Annual Report on Form 10-K to be filed with the United States Securities and Exchange Commission. These financial results are preliminary and the accompanying financial statements have not been audited or have not yet been reviewed by the Company’s independent accountants. Significant updates and revisions may be required before the release of the Company’s 2022 audited financial results.
Fourth Quarter and Full Year 2022 Financial Results Conference Call
Management will host a conference call to discuss the fourth quarter and full year 2022 financial results today, Wednesday, February 8, 2023 at 11:30 a.m. Eastern Time. The conference call details are as follows:
Date: Wednesday, February 8, 2023 Time: 11:30 a.m. Eastern Time / 8:30 a.m. Pacific Time Dial-in: 1-877-407-0789 (Domestic) Conference ID: 13735133 Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1590879&tp_key=3af4576222
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 February 8, 2023 through 11:59 p.m. Eastern Time on February 22, 2023 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13735133.
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 25, 2022 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)
December 31, 2022 2021 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 69,667 $ 83,843 Inventories 4,525 5,257 Other current assets 3,359 4,369 Total current assets 77,551 93,469 Property and equipment, net 394 463 Operating lease right-of-use assets 3,992 3,021 Restricted cash 79 522 Deferred tax asset 195 309 Other assets 606 571 Total assets $ 82,817 $ 98,355 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 810 $ 761 Income taxes payable 2,972 1,345 Accrued commissions 2,943 3,636 Other accrued expenses 1,181 1,933 Deferred revenue 5,597 8,536 Amounts held in eWallets 4,895 6,341 Operating lease liabilities 1,135 1,239 Other current liabilities 905 865 Total current liabilities 20,438 24,656 Income taxes payable 9,098 12,130 Deferred tax liability 141 153 Operating lease liabilities 2,989 1,928 Total liabilities 32,666 38,867 Stockholders’ equity: Preferred stock — — Common stock 13 13 Additional paid-in capital 86,102 86,102 Accumulated deficit (9,056 ) (231 ) Accumulated other comprehensive loss (1,004 ) (492 ) Treasury stock, at cost (25,904 ) (25,904 ) Total stockholders’ equity 50,151 59,488 Total liabilities and stockholders’ equity $ 82,817 $ 98,355
NATURAL HEALTH TRENDS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 (Unaudited) (Unaudited) Net sales $ 12,512 $ 16,108 $ 49,134 $ 60,005 Cost of sales 3,263 4,153 12,661 15,010 Gross profit 9,249 11,955 36,473 44,995 Operating expenses: Commissions expense 5,377 7,110 20,747 25,578 Selling, general and administrative expenses 3,829 4,358 15,996 17,846 Total operating expenses 9,206 11,468 36,743 43,424 Income (loss) from operations 43 487 (270 ) 1,571 Other income (expense), net 400 31 872 (61 ) Income before income taxes 443 518 602 1,510 Income tax provision 255 286 289 425 Net income $ 188 $ 232 $ 313 $ 1,085 Net income per common share: Basic $ 0.02 $ 0.02 $ 0.03 $ 0.10 Diluted $ 0.02 $ 0.02 $ 0.03 $ 0.09 Weighted-average number of common shares outstanding: Basic 11,423 11,159 11,362 11,017 Diluted 11,423 11,423 11,423 11,423
NATURAL HEALTH TRENDS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Year Ended December 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: (Unaudited) Net income $ 313 $ 1,085 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 204 299 Noncash lease expense 1,172 1,163 Deferred income taxes 90 362 Changes in assets and liabilities: Inventories 680 (1,547 ) Other current assets 992 (803 ) Other assets (67 ) 68 Accounts payable 52 182 Income taxes payable (1,404 ) (1,753 ) Accrued commissions (654 ) 212 Other accrued expenses (732 ) 20 Deferred revenue (2,901 ) 5,482 Amounts held in eWallets (1,432 ) (2,122 ) Operating lease liabilities (1,220 ) (1,237 ) Other current liabilities 55 (395 ) Net cash provided by (used in) operating activities (4,852 ) 1,016 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (143 ) (225 ) Net cash used in investing activities (143 ) (225 ) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid (9,138 ) (9,138 ) Net cash used in financing activities (9,138 ) (9,138 ) Effect of exchange rates on cash, cash equivalents and restricted cash (486 ) (180 ) Net decrease in cash, cash equivalents and restricted cash (14,619 ) (8,527 ) CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 84,365 92,892 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 69,746 $ 84,365 SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION: Right-of-use assets obtained in exchange for operating lease liabilities $ 2,234 $ 472
CONTACT:
Scott Davidson
