CHESTERFIELD, MO --(Marketwired - May 12, 2017) - Reliv International, Inc. (
First-Quarter Results
Reliv reported net sales of $12.8 million for the first quarter of 2017 compared with net sales of $13.0 million in the first quarter of 2016. Net sales in the United States remained level at $10.3 million in the first quarter of 2017 when compared to the prior-year quarter. Net sales in Reliv's foreign markets decreased 9.5 percent in the first quarter of 2017 compared with the prior-year first quarter with 8.0 percent of the decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar. An increase of 39.1 percent in net sales in Asia in the first quarter of 2017 was offset by a decline of 22.8 percent in net sales in Europe, along with decreases in other regions. The impact of foreign currency fluctuation was 12.0 percent of the net sales decline in Europe in the first quarter of 2017.
Reliv reported net income for the first quarter of 2017 of $524,000 (earnings per diluted share of $0.28) compared to a net loss of $44,000 (loss per diluted share of $0.02) in the first quarter of 2016. The loss per diluted share for the first quarter of 2016 has been adjusted for the one-for-seven reverse stock split that took effect on October 4, 2016. Income from operations for the first quarter of 2017 was $517,000 compared to a loss from operations of $181,000 in the same period in 2016. Income from operations improved primarily due to the result of a reduction in selling, general and administrative ("SGA") expenses which decreased from $5.6 million in the first quarter of 2016 to $4.9 million in the first quarter of 2017. The reduction in 2017 SGA expenses is the result of the continuing impact of a cost reduction program that took place in mid-2016.
On February 1, 2017, Reliv formally announced the launch of Fit3™, a new fitness and weight loss program created to help people get real fitness and weight loss results. The Fit3 program consists of three principal components: nutrition coaching, exercise coaching, and three new Fit3 formulas: Active, Burn and Purify. Active combines a three-protein blend of whey, casein and non-GMO soy with additional ingredients to support weight loss, athletic performance and energy. Burn further promotes weight loss when combined with healthy eating and exercise through a targeted fat-burning formula. Purify completes the trio as a probiotic, liver cleanse and metabolic supporter. Fit3 program net sales represented 10.1 percent of U.S. net sales in the first quarter of 2017.
"Reliv is a wellness company and with weight management being a critical element of an individual's wellness, we believe we offer a real and achievable solution through our Fit3 program," said Dr. Carl Hastings, Chief Scientific Officer. "Fit3 is our comprehensive solution to promote a healthy weight, improve athletic performance and help people create and maintain a fit lifestyle."
"Fit3 ushers in a new era for Reliv," said Ryan Montgomery, President. "Fit3 is much more than a set of extraordinary nutritional products; it is a multi-faceted lifestyle program and support system. With more than two-thirds of the U.S. population overweight, the Fit3 opportunity is clear."
Reliv had cash and cash equivalents of $3.8 million as of March 31, 2017, compared to $3.6 million as of December 31, 2016 and $3.9 million as of March 31, 2016. Net cash generated from operating activities was $530,000 in the first quarter of 2017.
As of March 31, 2017, Reliv had 37,280 distributors and preferred customers -- a decrease of 17.2 percent from March 31, 2016 -- of which 3,590 are Master Affiliate level and above. The number of Master Affiliates decreased by 32.3 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties. The decrease in the number of Master Affiliates in the U.S. and Canada was due in part to the increase in the business volume requirement for distributors to reach the Master Affiliate level. This change was effective February 1, 2016 as part of our revised compensation plan strategy and affected Master Affiliate requalifications during the first quarter of 2017.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address essential nutrition, fitness and weight loss and targeted solutions. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, a soy peptide that works at the epigenetic level to promote optimal health. The company sells its products through an international network marketing system of independent distributors in 15 countries. Learn more about Reliv at reliv.com , or on Facebook , Twitter or Instagram.
Statements made in this news release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" or similar expressions. Factors that could cause actual results to differ are identified in the public filings made by Reliv with the Securities and Exchange Commission. More information on factors that could affect Reliv's business and financial results are included in its public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available on the Company's web site, reliv.com .
| --FINANCIAL HIGHLIGHTS FOLLOW - |
| Reliv International, Inc. and Subsidiaries | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| March 31 | December 31 | ||||||
| 2017 | 2016 | ||||||
| (Unaudited) | (Audited) | ||||||
| Assets | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $3,829,293 | $3,606,817 | |||||
| Accounts receivable, less allowances of $26,400 in 2017 and $26,700 in 2016 | 268,047 | 126,113 | |||||
| Accounts and note due from employees and distributors | 138,081 | 139,931 | |||||
| Inventories | 4,246,420 | 4,487,830 | |||||
| Other current assets | 896,929 | 571,377 | |||||
| Total current assets | 9,378,770 | 8,932,068 | |||||
| Other assets | 7,627,561 | 7,679,357 | |||||
| Net property, plant and equipment | 5,955,808 | 5,854,302 | |||||
| Total Assets | $22,962,139 | $22,465,727 | |||||
| Liabilities and Stockholders' Equity | |||||||
| Total current liabilities | $4,281,812 | $4,234,305 | |||||
| Current portion of long-term debt | $357,399 | $389,096 | |||||
| Long-term debt, noncurrent | 2,437,101 | 2,518,341 | |||||
| Other noncurrent liabilities | 413,946 | 409,813 | |||||
| Stockholders' equity | 15,471,881 | 14,914,172 | |||||
| Total Liabilities and Stockholders' Equity | $22,962,139 | $22,465,727 | |||||
| Consolidated Statements of Operations | |||||||
| Three months ended March 31 | |||||||
| 2017 | 2016 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Product sales | $11,835,116 | $12,042,561 | |||||
| Handling & freight income | 942,666 | 993,889 | |||||
| Net Sales | 12,777,782 | 13,036,450 | |||||
| Costs and expenses: | |||||||
| Cost of products sold | 2,835,525 | 2,984,104 | |||||
| Distributor royalties and commissions | 4,498,553 | 4,624,375 | |||||
| Selling, general and administrative | 4,926,279 | 5,609,268 | |||||
| Total Costs and Expenses | 12,260,357 | 13,217,747 | |||||
| Income (loss) from operations | 517,425 | (181,297 | ) | ||||
| Other income (expense): | |||||||
| Interest income | 25,526 | 27,357 | |||||
| Interest expense | (24,841 | ) | (26,401 | ) | |||
| Other income | 32,683 | 113,681 | |||||
| Income (loss) before income taxes | 550,793 | (66,660 | ) | ||||
| Provision (benefit) for income taxes | 27,000 | (23,000 | ) | ||||
| Net Income (loss) | $523,793 | ($43,660 | ) | ||||
| Earnings (loss) per common share - Basic | $0.28 | ($0.02 | ) | ||||
| Weighted average shares | 1,845,000 | 1,846,000 | |||||
| Earnings (loss) per common share - Diluted | $0.28 | ($0.02 | ) | ||||
| Weighted average shares | 1,846,000 | 1,846,000 | |||||
| Reliv International, Inc. and Subsidiaries | |||||||||||||||||||
| Net sales by Market | |||||||||||||||||||
| (in thousands) | Three months ended March 31, | Change from | |||||||||||||||||
| (Unaudited) | 2017 | 2016 | prior year | ||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | ||||||||||||||
| United States | $ | 10,259 | 80.3 | % | $ | 10,255 | 78.7 | % | $ | 4 | 0.0 | % | |||||||
| Australia/New Zealand | 260 | 2.0 | % | 298 | 2.3 | % | (38 | ) | -12.8 | % | |||||||||
| Canada | 264 | 2.1 | % | 306 | 2.3 | % | (42 | ) | -13.7 | % | |||||||||
| Mexico | 157 | 1.2 | % | 163 | 1.3 | % | (6 | ) | -3.7 | % | |||||||||
| Europe | 1,201 | 9.4 | % | 1,556 | 11.9 | % | (355 | ) | -22.8 | % | |||||||||
| Asia | 637 | 5.0 | % | 458 | 3.5 | % | 179 | 39.1 | % | ||||||||||
| Consolidated Total | $ | 12,778 | 100.0 | % | $ | 13,036 | 100.0 | % | $ | (258 | ) | -2.0 | % | ||||||
The following table sets forth, as of March 31, 2017 and 2016, the number of our Active Distributors/Preferred Customers and Master Affiliates and above. The total number of active distributors includes Master Affiliates and above. We define an active distributor as one that enrolls as a distributor or renews his or her distributorship during the prior twelve months. Master Affiliates and above are distributors that have attained the highest level of discount and are eligible for royalties generated by Master Affiliate groups in their downline organization. In February 2016, we introduced a formal Preferred Customer program in the United States and Canada. As a result, we are including Preferred Customers as part of our Active Distributor count. Preferred Customer programs were previously in place in Europe and other foreign markets. Preferred Customers represent approximately 5,200 and 4,400 of the Active Distributor count as of March 31, 2017 and 2016, respectively.
| Active Distributors/Preferred Customers and Master Affiliates and above by Market |
| (Unaudited) |
| As of 3/31/2017 | As of 3/31/2016 | Change in % | |||||||||||||||||
| Active Distributors and Preferred Customers | Master Affiliates and Above | Active Distributors and Preferred Customers | Master Affiliates and Above | Active Distributors and Preferred Customers | Master Affiliates and Above | ||||||||||||||
| United States | 26,110 | 2,610 | 31,910 | 4,130 | -18.2 | % | -36.8 | % | |||||||||||
| Australia/New Zealand | 1,440 | 110 | 1,690 | 120 | -14.8 | % | -8.3 | % | |||||||||||
| Canada | 780 | 90 | 1,120 | 170 | -30.4 | % | -47.1 | % | |||||||||||
| Mexico | 880 | 60 | 1,220 | 90 | -27.9 | % | -33.3 | % | |||||||||||
| Europe | 4,620 | 410 | 6,000 | 480 | -23.0 | % | -14.6 | % | |||||||||||
| Asia | 3,450 | 310 | 3,100 | 310 | 11.3 | % | 0.0 | % | |||||||||||
| Consolidated Total | 37,280 | 3,590 | 45,040 | 5,300 | -17.2 | % | -32.3 | % | |||||||||||
For more information, contact: Steve Albright Chief Financial Officer (636) 733-1305
