Natural Health Trends Reports Fourth Quarter and Full Year 2022 Financial Results
– 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) |
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
