Natural Health Trends Reports First Quarter 2018 Financial Results

  • Second sequential quarterly increase in net sales

  • Declared special dividend of $20.0 million, or $1.76 per share

  • Increased quarterly dividend 8% to $0.14 per share

LOS ANGELES, May 02, 2018 (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 first quarter ended March 31, 2018.

First Quarter 2018 Financial Highlights

  • Total revenue of $52.4 million decreased 13% compared to $59.9 million in the first quarter of 2017 and increased 14% compared to $46.1 million in the fourth quarter of 2017.   

    -- Revenue from the Company’s Hong Kong operations, which represented 91% of total revenue, was $47.6 million, a decrease of 13% compared to $54.6 million in the first quarter of 2017, and an increase of 20% compared to $39.6 million in the fourth quarter of 2017.

    -- Revenue outside of Hong Kong of $4.7 million decreased 11% compared to $5.3 million in the first quarter of 2017 and decreased 28% compared to $6.5 million in the fourth quarter of 2017.

  • Operating income was $10.0 million compared to $13.0 million in the first quarter of 2017 and $8.7 million in the fourth quarter of 2017.

  • Net income was $8.8 million, or $0.78 per diluted share, compared to net income of $10.4 million, or $0.93 per diluted share, in the first quarter of 2017.

  • The number of Active Members1 decreased 1% to 95,040 at March 31, 2018, compared to 95,670 at December 31, 2017, and decreased 16% compared to 113,710 at March 31, 2017.

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.

Management Commentary

“Our momentum in the back half of 2017 carried into 2018 with our total revenue increasing 14% over the prior quarter, marking our second consecutive quarter of sales growth,” commented Chris Sharng, President of Natural Health Trends Corp. “Our improved top-line performance is a direct result of the enhancements made to our commission plan to better incentivize up-and-coming members and ease rank advancement, along with our effective marketing programs. We also held our international Ambassador Academy in Hong Kong, which attracted over 5,500 people. The orders generated by promotions directly related to the event exceeded those of the last three years.”

Mr. Sharng further commented, “With our revenue for the quarter improved, 2018 is off to a good start. Our leaders remain energized and enthusiastic and we look forward to more productive incentive trips and targeted training programs this year to drive further progress and growth.”

Balance Sheet and Cash Flow

  • Net cash provided by operating activities was $11.1 million, compared to $13.8 million in the first quarter of 2017.

  • On April 17, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.14, which represents an 8% increase over the prior quarter dividend, as well as a special cash dividend of $1.76 per share on outstanding common stock. The dividends will be payable on May 25, 2018 to stockholders of record as of May 15, 2018.

First Quarter 2018 Financial Results Conference Call

Management will host a conference call to discuss the first quarter 2018 financial results today, Wednesday, May 2, 2018 at 11:30 a.m. Eastern Time. The conference call details are as follows:

Date:Wednesday, May 2, 2018
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:13678508

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 2, 2018 through 11:59 p.m. Eastern Time on May 16, 2018 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13678508.

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

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 March 27, 2018 with the Securities and Exchange Commission.  The Company assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

(In thousands)
 March 31, 2018 December 31, 2017
Current assets:   
Cash and cash equivalents$145,095  $135,311 
Inventories7,944  8,398 
Other current assets6,021  7,534 
Total current assets159,060  151,243 
Property and equipment, net1,040  1,149 
Goodwill1,764  1,764 
Restricted cash3,279  3,167 
Deferred tax asset1,435  1,435 
Other assets809  796 
Total assets$167,387  $159,554 
Current liabilities:   
Accounts payable$2,669  $1,751 
Income taxes payable42  309 
Accrued commissions10,027  11,170 
Other accrued expenses8,549  7,605 
Deferred revenue4,112  4,455 
Amounts held in eWallets14,623  15,152 
Other current liabilities1,756  1,479 
Total current liabilities41,778  41,921 
Income taxes payable19,052  19,052 
Deferred tax liability55  56 
Long-term incentive7,596  7,904 
Total liabilities68,481  68,933 
Commitments and contingencies   
Stockholders’ equity:   
Preferred stock   
Common stock13  13 
Additional paid-in capital86,415  86,683 
Retained earnings52,253  44,908 
Accumulated other comprehensive loss(27) (413)
Treasury stock, at cost(39,748) (40,570)
Total stockholders’ equity98,906  90,621 
Total liabilities and stockholders’ equity$167,387  $159,554 

(In thousands, except per share data)
 Three Months Ended March 31,
 2018 2017
Net sales$52,367  $59,874 
Cost of sales10,221  11,245 
Gross profit42,146  48,629 
Operating expenses:   
Commissions expense22,980  25,965 
Selling, general and administrative expenses9,122  9,672 
Total operating expenses32,102  35,637 
Income from operations10,044  12,992 
Other income, net163  156 
Income before income taxes10,207  13,148 
Income tax provision1,383  2,723 
Net income$8,824  $10,425 
Net income per common share:   
Basic$0.78  $0.93 
Diluted$0.78  $0.93 
Weighted-average number of common shares outstanding:   
Basic11,286  11,229 
Diluted11,288  11,251 
Cash dividends declared per common share$0.13  $0.44 

(In thousands)
 Three Months Ended March 31,
 2018 2017
Net income$8,824  $10,425 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization131  136 
Stock-based compensation  9 
Cumulative translation adjustment realized in net income  (258)
Changes in assets and liabilities:   
Inventories473  2,091 
Other current assets1,548  1,419 
Other assets(5) (62)
Accounts payable920  (61)
Income taxes payable(275) 1,798 
Accrued commissions(1,119) (428)
Other accrued expenses1,483  (1,555)
Deferred revenue(333) (647)
Amounts held in eWallets(466) 1,138 
Other current liabilities272  314 
Long-term incentive(308) (508)
Net cash provided by operating activities11,145  13,811 
Purchases of property and equipment(17) (72)
Net cash used in investing activities(17) (72)
Dividends paid(1,479) (4,981)
Net cash used in financing activities(1,479) (4,981)
Effect of exchange rates on cash, cash equivalents and restricted cash247  22 
Net increase in cash, cash equivalents and restricted cash9,896  8,780 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period138,478  128,884 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$148,374  $137,664 
Issuance of treasury stock for employee awards, net554  1,393 


Company Contact:
Scott Davidson
Senior Vice President and Chief Financial Officer
Natural Health Trends Corp.
Tel: 310-541-0888

Investor Contact:
ADDO Investor Relations
Tel: 310-829-5400

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