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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

Wednesday, May 2, 2018 3 min read
Key Takeaway: Natural Health Trends Reports First Quarter 2018 Financial Results LOS ANGELES - May 2, 2018 - 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 th

Full Press Release Details

Natural Health Trends Reports First Quarter 2018 Financial Results
LOS ANGELES - May 2, 2018 - 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
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
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
Webcast: http://public.viavid.com/index.php?id=129162
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 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 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.
Senior Vice President and Chief Financial Officer
Natural Health Trends Corp.
scott.davidson@nhtglobal.com
ADDO Investor Relations
investor.relations@nhtglobal.com
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
March 31, 2018 December 31, 2017
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 145,095 $ 135,311
Inventories 7,944 8,398
Other current assets 6,021 7,534
Total current assets 159,060 151,243
Property and equipment, net 1,040 1,149
Goodwill 1,764 1,764
Restricted cash 3,279 3,167
Deferred tax asset 1,435 1,435
Other assets 809 796
Total assets $ 167,387 $ 159,554
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,669 $ 1,751
Income taxes payable 42 309
Accrued commissions 10,027 11,170
Other accrued expenses 8,549 7,605
Deferred revenue 4,112 4,455
Amounts held in eWallets 14,623 15,152
Other current liabilities 1,756 1,479
Total current liabilities 41,778 41,921
Income taxes payable 19,052 19,052
Deferred tax liability 55 56
Long-term incentive 7,596 7,904
Total liabilities 68,481 68,933
Commitments and contingencies
Stockholders' equity:
Preferred stock - -
Common stock 13 13
Additional paid-in capital 86,415 86,683
Retained earnings 52,253 44,908
Accumulated other comprehensive loss (27 ) (413 )
Treasury stock, at cost (39,748 ) (40,570 )
Total stockholders' equity 98,906 90,621
Total liabilities and stockholders' equity $ 167,387 $ 159,554
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended March 31,
2018 2017
(Unaudited)
Net sales $ 52,367 $ 59,874
Cost of sales 10,221 11,245
Gross profit 42,146 48,629
Operating expenses:
Commissions expense 22,980 25,965
Selling, general and administrative expenses 9,122 9,672
Total operating expenses 32,102 35,637
Income from operations 10,044 12,992
Other income, net 163 156
Income before income taxes 10,207 13,148
Income tax provision 1,383 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:
Basic 11,286 11,229
Diluted 11,288 11,251
Cash dividends declared per common share $ 0.13 $ 0.44
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
2018 2017
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,824 $ 10,425
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 131 136
Stock-based compensation - 9
Cumulative translation adjustment realized in net income - (258 )
Changes in assets and liabilities:
Inventories 473 2,091
Other current assets 1,548 1,419
Other assets (5 ) (62 )
Accounts payable 920 (61 )
Income taxes payable (275 ) 1,798
Accrued commissions (1,119 ) (428 )
Other accrued expenses 1,483 (1,555 )
Deferred revenue (333 ) (647 )
Amounts held in eWallets (466 ) 1,138
Other current liabilities 272 314
Long-term incentive (308 ) (508 )
Net cash provided by operating activities 11,145 13,811
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (17 ) (72 )
Net cash used in investing activities (17 ) (72 )
CASH FLOWS FROM FINANCING ACTIVITIES:
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 cash 247 22
Net increase in cash, cash equivalents and restricted cash 9,896 8,780
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 138,478 128,884
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 148,374 $ 137,664
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
Issuance of treasury stock for employee awards, net 554 1,393
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Last updated: May 2, 2018