Reliv International Reports Second-Quarter Financial Results

Marketwired

CHESTERFIELD, MO--(Marketwired - July 31, 2014) - Reliv International, Inc. (RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2014.

Net sales for the quarter were $14.5 million, a 6.2 percent decrease from the second quarter last year. Net U.S. sales totaled $10.8 million, down from second-quarter 2013 net sales of $11.8 million. Net sales outside of the United States increased 1.8 percent in the second quarter of 2014 compared to the prior-year quarter, buoyed by a sales increase of 14.5 percent in Europe.

The net loss for the second quarter of 2014 was $289,000 or $0.02 per diluted share, compared to a net loss of $214,000 or $0.02 per diluted share in the 2013 second quarter. The loss from operations for the second quarter of 2014 was $475,000 compared to a loss of $222,000 in the same quarter of 2013.

Net sales in Europe increased to $2.24 million in the second quarter of 2014 compared to $1.96 million in the prior-year second quarter. "Europe continues to lead all markets in growth," said Robert L. Montgomery, chairman and chief executive officer of Reliv. "The second quarter of 2014 marked Reliv Europe's 19th consecutive quarter of increased net sales when compared to the prior-year quarter. Sales in Reliv Europe made up 15.5% of total Reliv sales in the second quarter. We anticipate continued growth and are taking steps to build on this momentum."

"In the United States, Reliv lowered the sales volume needed to qualify for higher distributor profit levels as a promotion in the fall of 2013 and made those reduced qualification levels permanent starting in 2014," said Montgomery. "We believe in the long term that this change will make the Reliv business opportunity more accessible to new people and facilitate distributor advancement. In the short term, the change has not yet increased the number of new distributors to make up for the reduced volume qualification requirements. We have developed strategies and are actively pursuing others to expand our distributor base."

"One of these strategies is the LunaRich® Super Pack, launched at the end of the first quarter of this year. The Super Pack leverages both our new qualification level structure and our exclusive rights to LunaRich technology to create an efficient new way for distributors to quickly move product," Montgomery said. "The Super Pack includes a four-month supply of our two most popular products, Reliv Now® and LunaRich X™, and offers an immediate 25% discount on the retail price of the Super Pack for those who sign up as distributors. Ordering additional Super Packs provides additional discount incentives. We believe the Super Pack provides a clear focus for current distributors and simplifies getting people started with Reliv."

Reliv introduced a new online business success training program for distributors on May 31. "The training program walks distributors through every step in the business-building process, from identifying prospects to getting new distributors started," Montgomery said. "Short videos featuring Reliv's top leaders provide instruction and direct viewers to Reliv's most popular sales tools. Our new webinar series, launched in July, complements the business training with monthly updates on the latest promotions, events and other Reliv news. The training program and webinar series represent a new level of online engagement for distributors and a new means for Reliv to communicate and install sales initiatives. We believe this will lead to increased business activity in the months to come."

"Our strategic initiative to upgrade web-based technology continues, with a focus on enhancing our distributors' online presence and facilitating new online sales opportunities. This will be a key step of a series of technology upgrades we believe will help fuel sales growth in the months and years ahead," Montgomery said.

Net sales for the first six months of 2014 were $28.9 million, which represents a 15.6 percent decrease from the same period in 2013. Reliv's international net sales increased 1.2 percent in the first half of 2014 compared with the first half of last year. In the United States, net sales declined 20.2 percent.

Reliv reported a net loss of $440,000, or $0.03 per diluted share in the first six months of 2014, compared to net loss of $19,000 or $0.00 per diluted share in the same period of 2013.

Reliv's total distributor count was 50,700 as of June 30, 2014 -- a decrease of 5.0 percent from the same date in 2013 -- of which 6,920 are Master Affiliate level and above, an increase of 17.1 percent. Master Affiliate is the level at which distributors are eligible to earn generation royalties.

Reliv had cash and cash equivalents of $4.93 million as of June 30, 2014. This amount compares to $6.66 million as of December 31, 2013 and $4.26 million as of this date last year.

About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition along with premium skincare products. Reliv supplements address essential nutrition, weight loss, athletic performance, digestive health, women's health, anti-aging and healthy energy. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, the peptide behind many of soy's health benefits. The company sells its products through an international network marketing system of independent distributors in 15 countries. Learn more about Reliv at www.reliv.com, or on Facebook, Twitter or YouTube.

Statements made in this news release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" or similar expressions. Factors that could cause actual results to differ are identified in the public filings made by Reliv with the Securities and Exchange Commission. More information on factors that could affect Reliv's business and financial results are included in its public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available on the Company's web site, www.reliv.com.

- FINANCIAL HIGHLIGHTS FOLLOW -

Reliv International, Inc. and Subsidiaries
             
Condensed Consolidated Balance Sheets
 
   June 30,
2014
 December 31,
2013
     
   (Unaudited)         
Assets            
Current Assets:            
 Cash and cash equivalents  $4,929,321  $6,656,798      
 Accounts receivable, less allowances of $29,100 in 2014 and $31,800 in 2013   
170,827
  
148,630
     
     
 Accounts and note due from employees and distributors  141,345  129,852      
 Inventories  5,351,760  5,214,690      
 Other current assets  1,528,073  1,006,099      
             
Total current assets  12,121,326  13,156,069      
             
Other assets  4,990,754  4,511,360      
Intangible assets, net  3,060,839  3,195,903      
Net property, plant and equipment  6,517,160  6,735,419      
             
Total Assets  $26,690,079  $27,598,751      
             
Liabilities and Stockholders' Equity            
             
Total current liabilities  $7,019,286  $6,649,345      
Long-term debt, less current maturities  3,488,876  3,781,607      
Other non-current liabilities  427,136  1,037,327      
Stockholders' equity  15,754,781  16,130,472      
             
Total Liabilities and Stockholders' Equity  $26,690,079  $27,598,751      
             
             
Consolidated Statements of Operations            
   Three months
ended June 30
 Six months
ended June 30
   2014  2013  2014  2013
   (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
Product sales  $13,355,370  $14,165,463  $26,661,151  $31,054,921
Handling & freight income  1,120,209  1,259,945  2,279,316  3,227,751
             
Net Sales  14,475,579  15,425,408  28,940,467  34,282,672
             
Costs and expenses:            
 Cost of products sold  3,000,412  3,057,940  5,887,262  6,961,798
 Distributor royalties and commissions  5,232,967  5,617,245  10,440,254  12,620,448
 Selling, general and administrative  6,716,826  6,972,599  13,257,693  14,488,088
             
Total Costs and Expenses  14,950,205  15,647,784  29,585,209  34,070,334
             
Income (loss) from operations  (474,626)  (222,376)  (644,742)  212,338
             
Other income (expense):            
Interest income  32,148  38,668  68,272  75,832
Interest expense  (25,367)  (18,493)  (49,635)  (35,995)
Other income (expense)  31,079  (64,544)  6,389  (91,119)
             
Income (loss) before income taxes  (436,766)  (266,745)  (619,716)  161,056
Provision (benefit) for income taxes  (148,000)  (53,000)  (180,000)  180,000
             
Net Loss  ($288,766)  ($213,745)  ($439,716)  ($18,944)
             
             
Loss per common share - Basic  ($0.02)  ($0.02)  ($0.03)  $0.00
Weighted average shares  12,666,000  12,616,000  12,666,000  12,617,000
             
Loss per common share - Diluted  ($0.02)  ($0.02)  ($0.03)  $0.00
Weighted average shares  12,666,000  12,616,000  12,666,000  12,617,000
             
Cash dividends declared per common share  $0.00  $0.02  $0.00  $0.02
             
             
Reliv International, Inc. and Subsidiaries
                        
Net sales by Market
(in thousands)                       
  Three months ended June 30,  Change From 
   2014
  2013
  Prior Year
 
   Amount  % of Net
Sales
  Amount  % of Net
Sales
  Amount   %  
                        
United States  $10,815  74.7 % $11,828  76.7 % $ (1,013 ) -8.6 %
Australia/New Zealand  429  3.0 % 524  3.4 % (95 ) -18.1 %
Canada  357  2.5 % 372  2.4 % (15 ) -4.0 %
Mexico  190  1.3 % 256  1.7 % (66 ) -25.8 %
Europe  2,244  15.5 % 1,960  12.7 % 284   14.5 %
Asia  441  3.0 % 485  3.1 % (44 ) -9.1 %
                        
Consolidated total  $14,476  100.0 % $15,425  100.0 % $(949 ) -6.2 %
                        
                        
Net sales by Market                       
(in thousands)                       
   Six months ended June 30,   Change From  
   2014
  2013
  Prior Year
 
   Amount  % of Net
Sales
  Amount  % of Net
Sales
  Amount   %  
                        
United States  $21,507  74.3 % $26,938  78.6 % $(5,431 ) -20.2 %
Australia/New Zealand  861  3.0 % 973  2.8 % (112 ) -11.5 %
Canada  647  2.2 % 926  2.7 % (279 ) -30.1 %
Mexico  415  1.4 % 534  1.6 % (119 ) -22.3 %
Europe  4,573  15.8 % 3,979  11.6 % 594   14.9 %
Asia  937  3.3 % 933  2.7 % 4   0.4 %
                        
Consolidated total  $28,940  100.0 % $34,283  100.0 % $(5,343 ) -15.6 %
                        
The following table sets forth, as of June 30, 2014 and 2013, the number of our active distributors and Master Affiliates and above. The total number of active distributors includes Master Affiliates and above. We define an active distributor as one that enrolls as a distributor or renews his or her distributorship during the prior twelve months. Master Affiliates and above are distributors that have attained the highest level of discount and are eligible for royalties generated by Master Affiliates and above in their downline organization. For the June 30, 2014 data, the active distributor count for Europe includes our preferred customers in France. This program began in mid-2013 and the Europe active distributor count as of 6/30/14 includes 2,630 preferred customers. 
 
Active Distributors and Master Affiliates and above by Market
                  
  As of 6/30/2014  As of 6/30/2013  Change in %
  Total
Active
Distri-
butors
 Master
Affiliates
and
Above
 Total
Active
Distri-
butors
 Master
Affiliates
and
Above
 Total
Active
Distri-
butors
 Master
Affiliates
and
Above
                  
United States 36,440  5,170  38,860  4,180  -6.2%  23.7%
Australia/New Zealand 1,300  150  1,570  200  -17.2%  -25.0%
Canada 1,270  250  1,260  180  0.8%  38.9%
Mexico 1,130  140  1,150  130  -1.7%  7.7%
Europe 8,190  880  6,490  780  26.2%  12.8%
Asia 2,370  330  4,060  440  -41.6%  -25.0%
                  
Consolidated total 50,700  6,920  53,390  5,910  -5.0%  17.1%
                  
Contact:
For more information, contact:

Steve Albright 
Chief Financial Officer 
(636) 733-1305 
View Comments (0)