• Natural Health Trends Reports First Quarter 2022 Financial Results

    Source: Nasdaq GlobeNewswire / 04 May 2022 08:00:01   America/Chicago

    - Hong Kong and China COVID restrictions impacted our logistics
    - Sales momentum in Japan and Southeast Asia continued  
    - Declared a quarterly cash dividend of $0.20 per share

    HONG KONG, May 04, 2022 (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, 2022.

    First Quarter 2022 Financial Highlights

    • Revenue of $11.5 million decreased 14% compared to $13.5 million in the first quarter of 2021.

    • Operating loss was $383,000 compared to operating income of $220,000 in the first quarter of 2021.

    • Net loss was $105,000, or $0.01 per diluted share, compared to net income of $153,000, or $0.01 per diluted share, in the first quarter of 2021.

    • The number of Active Members1 decreased 3% to 44,490 at March 31, 2022 compared to 45,760 at December 31, 2021, and decreased 10% compared to 49,420 at March 31, 2021.
    1Natural 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

    “The first quarter was challenging due to a significant increase in COVID-19 government-mandated restrictions and lockdowns impacting Hong Kong and China, especially Shenzhen, immediately following the Chinese New Year holiday. The additional measures disrupted supply chains, created order delivery uncertainty, and prohibited us from holding in-person member events in China and Macau. Even though much of the Mainland Chinese population was under some forms of lockdown during the quarter, our leaders remain committed to finding and implementing innovative ways to conduct business as our staff continues to adjust to the ever-changing needs of our global business,” said Chris Sharng, President of Natural Health Trends Corp.

    Mr. Sharng continued, “We are encouraged by the sustained growth in Japan and Southeast Asia and continue to ready ourselves for expansion and diversification in Latin America. We recently conducted successful virtual events for members in North America, Peru, Japan, India and CIS markets and an in-person event for members in Europe. We are pleased with the enthusiasm and participation to embrace our products and marketing programs as they bring our health, wellness and beauty products to customers around the world.”

    Balance Sheet and Cash Flow

    • Net cash used in operating activities was $2.3 million in the first quarter of 2022, compared to net cash provided by operating activities of $414,000 in the first quarter of 2021.
    • Total cash and cash equivalents were $79.4 million at March 31, 2022, down from $83.8 million at December 31, 2021.
    • On May 2, 2022, 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 27, 2022 to stockholders of record as of May 17, 2022.

    First Quarter 2022 Financial Results Conference Call

    Management will host a conference call to discuss the first quarter 2022 financial results today, Wednesday, May 4, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:

    Date:Wednesday, May 4, 2022
    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:13727755
    Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1534881&tp_key=6bc04f960d

    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 4, 2022 through 11:59 p.m. Eastern Time on May 18, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13727755.

    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) 

     March 31, 2022  December 31, 2021 
     (Unaudited)     
    ASSETS       
    Current assets:       
    Cash and cash equivalents$79,382  $83,843 
    Inventories 4,860   5,257 
    Other current assets 4,674   4,369 
    Total current assets 88,916   93,469 
    Property and equipment, net 450   463 
    Operating lease right-of-use assets 2,708   3,021 
    Restricted cash 82   522 
    Deferred tax asset 318   309 
    Other assets 568   571 
    Total assets$93,042  $98,355 
    LIABILITIES AND STOCKHOLDERS’ EQUITY       
    Current liabilities:       
    Accounts payable$824  $761 
    Income taxes payable 1,397   1,345 
    Accrued commissions 2,512   3,636 
    Other accrued expenses 1,332   1,933 
    Deferred revenue 8,049   8,536 
    Amounts held in eWallets 6,055   6,341 
    Operating lease liabilities 1,174   1,239 
    Other current liabilities 855   865 
    Total current liabilities 22,198   24,656 
    Income taxes payable 12,130   12,130 
    Deferred tax liability 153   153 
    Operating lease liabilities 1,691   1,928 
    Total liabilities 36,172   38,867 
    Stockholders’ equity:       
    Preferred stock —   — 
    Common stock 13   13 
    Additional paid-in capital 86,102   86,102 
    Accumulated deficit (2,621)  (231)
    Accumulated other comprehensive loss (720)  (492)
    Treasury stock, at cost (25,904)  (25,904)
    Total stockholders’ equity 56,870   59,488 
    Total liabilities and stockholders’ equity$93,042  $98,355 
     

    NATURAL HEALTH TRENDS CORP. 
    CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
    (In thousands, except per share data)

     Three Months Ended March 31, 
     2022  2021 
    Net sales$11,546  $13,469 
    Cost of sales 2,908   3,255 
    Gross profit 8,638   10,214 
    Operating expenses:       
    Commissions expense 4,740   5,514 
    Selling, general and administrative expenses 4,281   4,480 
    Total operating expenses 9,021   9,994 
    Income (loss) from operations (383)  220 
    Other income, net 110   20 
    Income (loss) before income taxes (273)  240 
    Income tax provision (benefit) (168)  87 
    Net income (loss)$(105) $153 
    Net income (loss) per common share:       
    Basic$(0.01) $0.01 
    Diluted$(0.01) $0.01 
    Weighted average common shares outstanding:       
    Basic 11,254   10,874 
    Diluted 11,254   11,424 
     

    NATURAL HEALTH TRENDS CORP.
    CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
    (In thousands)

     Three Months Ended March 31, 
     2022  2021 
    CASH FLOWS FROM OPERATING ACTIVITIES:       
    Net income (loss)$(105) $153 
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:       
    Depreciation and amortization 53   79 
    Noncash lease expense 302   294 
    Deferred income taxes (9)  9 
    Changes in assets and liabilities:       
    Inventories 350   123 
    Other current assets (332)  195 
    Other assets (3)  2 
    Accounts payable 64   176 
    Income taxes payable 53   67 
    Accrued commissions (1,129)  (344)
    Other accrued expenses (592)  (245)
    Deferred revenue (447)  1,093 
    Amounts held in eWallets (253)  (727)
    Operating lease liabilities (296)  (322)
    Other current liabilities (4)  (139)
    Net cash provided by (used in) operating activities (2,348)  414 
    CASH FLOWS FROM INVESTING ACTIVITIES:       
    Purchases of property and equipment (40)  (63)
    Net cash used in investing activities (40)  (63)
    CASH FLOWS FROM FINANCING ACTIVITIES:       
    Dividends paid (2,285)  (2,285)
    Net cash used in financing activities (2,285)  (2,285)
    Effect of exchange rates on cash, cash equivalents and restricted cash (228)  (222)
    Net decrease in cash, cash equivalents and restricted cash (4,901)  (2,156)
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 84,365   92,892 
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$79,464  $90,736 
    SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:       
    Right-of-use assets obtained in exchange for operating lease liabilities$—  $400 

    CONTACT:

    Scott Davidson
    Senior Vice President and Chief Financial Officer
    Natural Health Trends Corp.
    Tel (Hong Kong): +852-3107-0800
    Tel (U.S.): 310-541-0888
    investor.relations@nhtglobal.com


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