Operating Leverage Drives Margin Expansion on Increased Revenues;
Further Dividend Increase
DALLAS, March 3, 2015 (GLOBE NEWSWIRE) -- Natural Health Trends Corp. (Nasdaq: NHTC ), a leading direct selling company that markets premium quality personal care, wellness and "quality of life" products under the NHT Global brand , today announced financial results for the quarter and twelve month periods ended December 31, 2014.
Fourth Quarter Financial Highlights
- Total revenues increased 85% to $35.4 million, compared to $19.1 million in the fourth quarter last year.
- Operating income was $6.1 million, up 266% compared to $1.7 million in the fourth quarter last year.
- Net income was $5.8 million, or $0.45 per diluted share, compared to $1.6 million, or $0.14 per diluted share, in the fourth quarter last year.
Full Year Financial Highlights
- Total revenues were $124.6 million, up 137% compared to $52.5 million last year.
- Operating income was $20.8 million, up 393% compared to $4.2 million last year.
- Net income was $20.4 million, or $1.61 per diluted share, compared to net income of $4.1 million, or $0.36 per diluted share last year.
Subsequent to December 31, 2014, the Company completed the requirements necessary to list its shares of common stock on the Nasdaq Capital Market. Trading on the Nasdaq Capital Market began on Tuesday, February 17, 2015.
"We capped off 2014 with another strong quarter, and delivered triple-digit sales growth, solid margin expansion and a more than four-fold increase in earnings per share for the year," commented Chris Sharng, President of Natural Health Trends Corp. "Clearly, our marketing strategy has been effective in driving strong top- and bottom-line growth. We have been keen to develop and extend our product line while providing the necessary infrastructure, including leadership development, training and competitive incentives, to attract and retain talented distributors and leverage existing operations to increase our margins."
"We recently concluded a successful event in Macau where 3,000 attended our Success Forum designed to recognize superior performance and serve as a platform for new product introductions. Our leaders are motivated and optimistic," continued Mr. Sharng. "Our momentum is strong going into the new year."
Dividend
On February 27, 2015, the Board of Directors declared a cash dividend of $0.02 per share on outstanding common stock, payable in cash on March 27, 2015 to stockholders of record on March 17, 2015.
Shareholder Conference Call
Management will conduct a conference call to discuss its fourth quarter and full year financial results. Details of the call are as follows:
- Date: Wednesday, March 4, 2015
- Time: 10 a.m. ET/9 a.m. CT/7 a.m. PT
- Dial-in number: 1-888-438-5535 (domestic) 1-719-325-2281 (international)
- Webcast link: http://public.viavid.com/index.php?id=113412
A replay will be available from 1 p.m. ET on March 4, through 11:59 p.m. ET on March 11 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing replay pin number 3877280.
About Natural Health Trends Corp.
Natural Health Trends Corp. 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, wellness and "quality of life" products under the NHT Global brand. Additional information can be found on the company's website, www.naturalhealthtrendscorp.com .
Forward Looking Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption "Risk Factors" in our Annual Report on Form 10-K filed on March 7, 2014, with the Securities and Exchange Commission. We assume no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
-- Tables follow --
| NATURAL HEALTH TRENDS CORP. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In Thousands) | ||
| December 31, | ||
| 2013 | 2014 | |
| (Unaudited) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $14,550 | $44,816 |
| Accounts receivable | 134 | 107 |
| Inventories, net | 1,828 | 3,760 |
| Other current assets | 658 | 930 |
| Total current assets | 17,170 | 49,613 |
| Property and equipment, net | 265 | 476 |
| Goodwill | 1,764 | 1,764 |
| Restricted cash | 328 | 315 |
| Other assets | 300 | 372 |
| Total assets | $19,827 | $52,540 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $3,058 | $2,232 |
| Income taxes payable | 25 | 268 |
| Accrued distributor commissions | 3,962 | 8,853 |
| Other accrued expenses | 3,146 | 6,743 |
| Deferred revenue | 2,569 | 2,687 |
| Deferred tax liability | 108 | 65 |
| Amounts held in distributor eWallets | – | 2,064 |
| Other current liabilities | 882 | 1,513 |
| Total current liabilities | 13,750 | 24,425 |
| Long-term incentive | – | 1,665 |
| Total liabilities | 13,750 | 26,090 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Preferred stock | 111 | – |
| Common stock | 11 | 13 |
| Additional paid-in capital | 80,690 | 85,750 |
| Accumulated deficit | (74,619) | (54,799) |
| Accumulated other comprehensive income (loss): | ||
| Foreign currency translation adjustments | (81) | 62 |
| Treasury stock, at cost | (35) | (4,576) |
| Total stockholders' equity | 6,077 | 26,450 |
| Total liabilities and stockholders' equity | $19,827 | $52,540 |
| NATURAL HEALTH TRENDS CORP. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (In Thousands, Except Per Share Data) | ||||
| Three Months Ended December 31, | Year Ended December 31, | |||
| 2013 | 2014 | 2013 | 2014 | |
| (Unaudited) | (Unaudited) | |||
| Net sales | $19,101 | $35,406 | $52,527 | $124,590 |
| Cost of sales | 4,391 | 7,464 | 12,551 | 26,981 |
| Gross profit | 14,710 | 27,942 | 39,976 | 97,609 |
| Operating expenses: | ||||
| Distributor commissions | 9,677 | 16,607 | 24,053 | 56,997 |
| Selling, general and administrative expenses | 3,364 | 5,233 | 11,634 | 19,687 |
| Depreciation and amortization | 13 | 33 | 66 | 105 |
| Total operating expenses | 13,054 | 21,873 | 35,753 | 76,789 |
| Income from operations | 1,656 | 6,069 | 4,223 | 20,820 |
| Other expense, net | (26) | (145) | (32) | (184) |
| Income before income taxes | 1,630 | 5,924 | 4,191 | 20,636 |
| Income tax provision | 53 | 122 | 102 | 266 |
| Net income | 1,577 | 5,802 | 4,089 | 20,370 |
| Preferred stock dividends | (3) | (1) | (15) | (10) |
| Net income available to common stockholders | $1,574 | $5,801 | $4,074 | $20,360 |
| Income per common share: | ||||
| Basic | $0.14 | $0.46 | $0.36 | $1.67 |
| Diluted | $0.14 | $0.45 | $0.36 | $1.61 |
| Weighted-average number of common shares outstanding: | ||||
| Basic | 11,233 | 12,692 | 11,154 | 12,131 |
| Diluted | 11,356 | 12,780 | 11,331 | 12,600 |
| Cash dividends declared per share: | ||||
| Common | $– | $0.010 | $– | $0.030 |
| Series A preferred stock | $– | $0.032 | $– | $0.894 |
| NATURAL HEALTH TRENDS CORP. | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (In Thousands) | ||
| Year Ended December 31, | ||
| 2013 | 2014 | |
| (Unaudited) | ||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net income | $4,089 | $20,370 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 66 | 105 |
| Stock-based compensation | 110 | 49 |
| Deferred income taxes | 16 | (43) |
| Changes in assets and liabilities: | ||
| Accounts receivable | (17) | – |
| Inventories, net | (974) | (2,029) |
| Other current assets | (35) | (501) |
| Other assets | (38) | (85) |
| Accounts payable | 1,673 | (822) |
| Income taxes payable | 16 | 243 |
| Accrued distributor commissions | 2,679 | 5,077 |
| Other accrued expenses | 1,467 | 3,706 |
| Deferred revenue | 1,738 | 147 |
| Amounts held in distributor eWallets | – | 2,065 |
| Other current liabilities | (104) | 666 |
| Long-term incentive | – | 1,665 |
| Net cash provided by operating activities | 10,686 | 30,613 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchases of property and equipment | (210) | (339) |
| Increase in restricted cash | (82) | – |
| Net cash used in investing activities | (292) | (339) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from exercise of warrants | – | 4,948 |
| Repurchase of common stock | (52) | (4,661) |
| Dividends paid | – | (476) |
| Net cash used in financing activities | (52) | (189) |
| Effect of exchange rates on cash and cash equivalents | 1 | 181 |
| Net increase in cash and cash equivalents | 10,343 | 30,266 |
| CASH AND CASH EQUIVALENTS, beginning of period | 4,207 | 14,550 |
| CASH AND CASH EQUIVALENTS, end of period | $14,550 | $44,816 |
Company Contact Scott Davidson Chief Financial Officer Natural Health Trends Corp. Tel: 972-241-4080 Investor Contact Brett Maas Managing Partner Hayden IR Tel: 646-536-7331
