• Natural Health Trends Reports Fourth Quarter and Full Year 2022 Financial Results

    Source: Nasdaq GlobeNewswire / 08 Feb 2023 08:00:01   America/Chicago

    – 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)
    1-201-689-8562 (International)
    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
    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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