Full Press Release Details
Natural Health Trends Reports Strong Fourth Quarter and Full Year 2015 Financial Results
LOS ANGELES - February 2, 2016 - 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, 2015.
Fourth Quarter 2015 Financial Highlights
Full Year 2015 Financial Highlights
Management Commentary
"2015 was a record year for Natural Health Trends and we are very pleased with all we have accomplished," commented Chris Sharng, President of Natural Health Trends Corp. "The triple-digit increase in revenue and net income over 2014 was driven by impressive growth in our active member base as well as the ongoing development of our leadership programs, product development initiatives and successful execution of our marketing programs and member services. 2016 marks NHT Global's 15th anniversary and our committed leadership's enthusiasm for our products and opportunity are at an all-time high."
Mr. Sharng continued, "In light of the recent short selling campaign which sought to damage our brand, reputation and shareholder value, we are diligently working to defend our Company. Nevertheless, it provides a great opportunity to allocate our capital towards repurchasing our shares which our Board of Directors strongly believes is an attractive investment. Their authorization of an additional $55 million for repurchases underscores their confidence. Separately, we are in regular contact with Chinese officials at several government agencies. While we take our disclosure obligations very seriously, we do not intend to make any additional comments regarding this matter unless and until there are additional material developments to disclose."
Balance Sheet and Cash Flow
Fourth Quarter and Full Year 2015 Financial Results Conference Call
Management will host a conference call to discuss the fourth quarter and full year 2015 financial results today, Tuesday, February 2, 2016 at 4:30 p.m. Eastern Time. The conference call details are as follows:
| Date: | Tuesday, February 2, 2016 |
| Time: | 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time |
| Dial-in: | 1-877-407-0789 (Domestic) 1-201-689-8562 (International) |
| Conference ID: | 13627796 |
| Webcast: | http://public.viavid.com/index.php?id=117686 |
For those unable to participate during the live broadcast, a replay of the call will also be available from 7:30 p.m. Eastern Time on February 2, 2016 through 11:59 p.m. Eastern Time on February 16, 2016 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing the replay pin number: 13627796.
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, North America, 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 6, 2015 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.
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
| December 31, 2015 | December 31, 2014 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 104,914 | $ | 44,816 | |||
| Accounts receivable | 57 | 107 | |||||
| Inventories, net | 10,455 | 3,760 | |||||
| Other current assets | 2,286 | 930 | |||||
| Total current assets | 117,712 | 49,613 | |||||
| Property and equipment, net | 894 | 476 | |||||
| Goodwill | 1,764 | 1,764 | |||||
| Restricted cash | 3,166 | 315 | |||||
| Other assets | 616 | 372 | |||||
| Total assets | $ | 124,152 | $ | 52,540 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 2,862 | $ | 2,232 | |||
| Income taxes payable | 379 | 268 | |||||
| Accrued commissions | 19,634 | 8,853 | |||||
| Other accrued expenses | 16,703 | 6,743 | |||||
| Deferred revenue | 4,011 | 2,687 | |||||
| Deferred tax liability | 60 | 65 | |||||
| Amounts held in eWallets | 16,414 | 2,064 | |||||
| Other current liabilities | 1,510 | 1,513 | |||||
| Total current liabilities | 61,573 | 24,425 | |||||
| Long-term incentive | 5,770 | 1,665 | |||||
| Total liabilities | 67,343 | 26,090 | |||||
| Commitments and contingencies | |||||||
| Stockholders' equity: | |||||||
| Preferred stock | - | - | |||||
| Common stock | 13 | 13 | |||||
| Additional paid-in capital | 85,963 | 85,750 | |||||
| Accumulated deficit | (9,647 | ) | (54,799 | ) | |||
| Accumulated other comprehensive (loss) income | (101 | ) | 62 | ||||
| Treasury stock, at cost | (19,419 | ) | (4,576 | ) | |||
| Total stockholders' equity | 56,809 | 26,450 | |||||
| Total liabilities and stockholders' equity | $ | 124,152 | $ | 52,540 |
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| Net sales | $ | 73,656 | $ | 35,406 | $ | 264,860 | $ | 124,590 | |||||||
| Cost of sales | 15,073 | 7,464 | 54,098 | 26,981 | |||||||||||
| Gross profit | 58,583 | 27,942 | 210,762 | 97,609 | |||||||||||
| Operating expenses: | |||||||||||||||
| Commissions expense | 33,155 | 16,607 | 126,598 | 56,997 | |||||||||||
| Selling, general and administrative expenses | 11,453 | 5,233 | 36,024 | 19,687 | |||||||||||
| Depreciation and amortization | 82 | 33 | 263 | 105 | |||||||||||
| Total operating expenses | 44,690 | 21,873 | 162,885 | 76,789 | |||||||||||
| Income from operations | 13,893 | 6,069 | 47,877 | 20,820 | |||||||||||
| Other income (expense), net | 28 | (145 | ) | (84 | ) | (184 | ) | ||||||||
| Income before income taxes | 13,921 | 5,924 | 47,793 | 20,636 | |||||||||||
| Income tax provision | 222 | 122 | 552 | 266 | |||||||||||
| Net income | 13,699 | 5,802 | 47,241 | 20,370 | |||||||||||
| Preferred stock dividends | - | (1 | ) | - | (10 | ) | |||||||||
| Net income available to common stockholders | $ | 13,699 | $ | 5,801 | $ | 47,241 | $ | 20,360 | |||||||
| Income per common share: | |||||||||||||||
| Basic | $ | 1.13 | $ | 0.46 | $ | 3.84 | $ | 1.67 | |||||||
| Diluted | $ | 1.13 | $ | 0.45 | $ | 3.82 | $ | 1.61 | |||||||
| Weighted-average number of common shares outstanding: | |||||||||||||||
| Basic | 12,118 | 12,692 | 12,302 | 12,131 | |||||||||||
| Diluted | 12,159 | 12,780 | 12,372 | 12,600 | |||||||||||
| Cash dividends declared per share: | |||||||||||||||
| Common | $ | 0.050 | $ | 0.010 | $ | 0.140 | $ | 0.030 | |||||||
| Series A preferred stock | $ | - | $ | 0.032 | $ | - | $ | 0.894 |
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||||||
| 2015 | 2014 | ||||||
| (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income | $ | 47,241 | $ | 20,370 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 263 | 105 | |||||
| Stock-based compensation | 86 | 49 | |||||
| Cumulative translation adjustment realized in net income | (82 | ) | - | ||||
| Deferred income taxes | (15 | ) | (43 | ) | |||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | 41 | - | |||||
| Inventories, net | (6,762 | ) | (2,029 | ) | |||
| Other current assets | (1,066 | ) | (501 | ) | |||
| Other assets | (267 | ) | (85 | ) | |||
| Accounts payable | 637 | (822 | ) | ||||
| Income taxes payable | (115 | ) | 243 | ||||
| Accrued commissions | 10,840 | 5,077 | |||||
| Other accrued expenses | 10,714 | 3,706 | |||||
| Deferred revenue | 1,331 | 147 | |||||
| Amounts held in eWallets | 14,350 | 2,065 | |||||
| Other current liabilities | 25 | 666 | |||||
| Long-term incentive | 4,105 | 1,665 | |||||
| Net cash provided by operating activities | 81,326 | 30,613 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchases of property and equipment, net | (710 | ) | (339 | ) | |||
| Increase in restricted cash | (3,028 | ) | - | ||||
| Net cash used in investing activities | (3,738 | ) | (339 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Proceeds from exercise of warrants | 309 | 4,948 | |||||
| Repurchase of common stock | (16,071 | ) | (4,661 | ) | |||
| Dividends paid | (1,709 | ) | (476 | ) | |||
| Net cash used in financing activities | (17,471 | ) | (189 | ) | |||
| Effect of exchange rates on cash and cash equivalents | (19 | ) | 181 | ||||
| Net increase in cash and cash equivalents | 60,098 | 30,266 | |||||
| CASH AND CASH EQUIVALENTS, beginning of period | 44,816 | 14,550 | |||||
| CASH AND CASH EQUIVALENTS, end of period | $ | 104,914 | $ | 44,816 | |||
| NON-CASH FINANCING ACTIVITY: | |||||||
| Conversion of preferred stock | $ | - | $ | 111 | |||
| Issuance of treasury stock | 666 | - |