EX-99 2 v056167_ex-99.htm
EXHIBIT 99
NEWS RELEASE

FOR FURTHER INFORMATION, CONTACT:
   
Steven D. Albright
Fred A. Nielson
Chief Financial Officer
Investor Relations
(636) 733-1305
(636) 733-1314

RELIV INTERNATIONAL, INC. REPORTS INCREASES
IN NET SALES AND NET INCOME IN THE THIRD QUARTER

FOR IMMEDIATE RELEASE

CHESTERFIELD, Mo., Nov. 1, 2006 - Reliv International, Inc. (NASDAQ:RELV), a developer, manufacturer and marketer of proprietary nutritional supplements, today reported a 4.3 percent increase in net sales and an 8.1 percent increase in net income for the third quarter of 2006 compared to the same period last year.

Net sales were $29.8 million for the third quarter, compared to $28.6 million in the year-ago quarter. Net income rose to $1.80 million or $0.11 diluted earnings per share, compared to net income of $1.67 million or $0.10 diluted earnings per share in the third quarter of 2005.

Through the first nine months of 2006, net sales were $88.8 million, up 3.2 percent over net sales of $86.1 million during the same period last year. Net income was $5.87 million or $0.35 diluted earnings per share, compared to $5.71 million or $0.35 diluted earnings per share in the same period in 2005.

“We said we expected to return to growth in net sales and net income after the second quarter, and we’re pleased we accomplished that objective,” said Robert L. Montgomery, chairman, president and chief executive officer. “Our goal is to return to double-digit growth,” he added.

“A key to stronger growth will be increases in numbers of new distributors. We are starting to see results from our ‘Mega Bonus’ program, which is designed to award those that are moving volume through their organizations by sponsoring new distributors and bringing in new customers,” Montgomery said.

“The number of distributors was up slightly compared with the second quarter of 2006. In fact, the third quarter represented the best quarter of the year for signups of new distributors, companywide and in the United States,” Montgomery said. “Factors in that growth included the Mega Bonus program and momentum from our International Conference, held in July,” he added.

To continue building momentum, in October Reliv held a successful regional leadership conference for distributors in Chicago and is scheduled to hold another distributor conference in Santa Clara, Calif., this month.
 
 
-- MORE --
 
Reliv Third-Quarter Results
ADD ONE

For the second quarter in a row, the company’s international markets continued to move in the right direction. Sales were up 9.6 percent compared to the third quarter of 2005, and Reliv reported sales growth in five of its seven international regions.

Australia/New Zealand, which reported a 44 percent increase in the third quarter 2006, and the United Kingdom/Ireland, which recorded a 35 percent rise, led the international growth.

“The decision to invest more senior management time in international markets continues to pay off,” Montgomery said. “We’re optimistic that we’ll continue to see improvements in international operations.”

Montgomery added, “We are well positioned in the wellness and the network marketing industries, both of which are growing. We offer distributors an outstanding business opportunity combined with a disciplined system proven to help distributors build their businesses. In addition, Reliv makes nutrition simple with proprietary products that are effective, easy to use and affordable,” he said.

Reliv will host a conference call to discuss the third-quarter 2006 earnings with investors at 1:00 p.m. Eastern Time on Nov. 1, 2006. The dial-in number for investors is 800-659-1942. The participant passcode is 35128817. To register, please call in 15 minutes prior to start of the call. A replay of this call will be available for one week by telephone from 3:00 p.m. Eastern by calling 888-286-8010 and using the passcode 98970052. A live web cast of this call will be available through the Investor Relations section of Reliv’s Web site, http://www.reliv.com/us/investor. An online archive of the broadcast will be available on Reliv’s Web site in the Investor Relations section 24 hours after the call concludes.

Reliv International, Inc., based in suburban St. Louis, Mo., develops, manufactures and markets a proprietary line of nutritional supplements addressing basic nutrition, specific wellness needs, weight management and sports nutrition. Reliv sells its products through an international network marketing system of approximately 65,000 independent distributors. Reliv International's common stock trades on NASDAQ under the symbol RELV. Additional information about Reliv International, Inc. can be obtained on the Web at www.reliv.com.

Statements made in this 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 Reliv’s web site, www.reliv.com.
 
-- FINANCIAL HIGHLIGHTS FOLLOW --
Reliv International, Inc. and Subsidiaries
ADD TWO
 
Condensed Consolidated Balance Sheets
 
   
September 30
  
December 31
          
   
2006
  
2005
          
   
(Unaudited)
              
Assets
                  
Current Assets:
                  
Cash and cash equivalents
  
$
13,160,538
  
$
5,653,594
              
Short-term investments
    
5,000,000
   
—
              
Accounts and notes receivable, less allowances of
                          
$6,200 in 2006 and $39,700 in 2005
    
786,385
   
775,623
             
Accounts due from employees and distributors
    
99,371
   
152,760
             
Inventories
                          
Finished goods
    
2,409,785
   
3,569,449
             
Raw materials
    
1,308,449
   
1,441,107
             
Sales aids and promotional materials
    
765,529
    
573,900
             
Total inventories
    
4,483,763
   
5,584,456
             
                           
Refundable income taxes
    
389,192
   
—
              
Prepaid expenses and other current assets
    
1,047,671
   
1,240,138
             
Deferred income taxes
    
438,430
    
452,430
             
Total current assets
    
25,405,350
   
13,859,001
             
                           
Other assets
    
2,549,590
   
1,626,330
             
Accounts due from employees and distributors
    
381,870
   
355,651
             
                           
Net property, plant and equipment
    
9,606,695
    
10,140,441
             
Total Assets
  
$
37,943,505
   
$
25,981,423
              
                           
Liabilities and Stockholders' Equity
                          
                           
Total current liabilities
  
$
9,261,426
  
$
9,895,260
              
Total non-current liabilities
    
961,648
   
3,521,335
             
Stockholders' equity
    
27,720,431
    
12,564,828
             
Total Liabilities and Stockholders' Equity
  
$
37,943,505
   
$
25,981,423
              
                           
Consolidated Statements of Income
                      
 
Three months ended
September 30
  
Nine months ended
September 30
 
     
2006
    
2005
   
2006
    
2005
 
   
(Unaudited)
    
(Unaudited)
 
  
(Unaudited)
 
  
(Unaudited)
 
Product sales
  
$
26,779,859
  
$
25,657,349
  
$
79,812,178
  
$
77,416,348
  
Handling & freight income
    
2,999,544
    
2,898,083
   
9,011,644
    
8,664,267
 
                           
Net Sales
    
29,779,403
   
28,555,432
   
88,823,822
   
86,080,615
 
                           
Costs and expenses:
                          
Cost of products sold
    
4,951,293
   
4,873,785
   
14,756,297
   
14,528,561
 
Distributor royalties and commissions
    
11,923,943
   
11,416,814
   
35,707,259
   
34,507,541
 
Selling, general and administrative
    
10,211,813
    
9,466,159
   
29,163,430
    
27,619,467
 
Total Costs and Expenses
    
27,087,049
    
25,756,758
   
79,626,986
    
76,655,569
 
                           
Income from operations
    
2,692,354
   
2,798,674
   
9,196,836
   
9,425,046
 
                           
Other income (expense):
                          
Interest income
    
197,998
   
40,647
   
480,120
   
190,183
 
Interest expense
    
(1,961
)
  
(59,776
)
  
(47,428
)
  
(262,443
)
Other income (expense)
    
83,720
     
(75,109
)
  
182,239
    
(26,187
)
                           
Income before income taxes
    
2,972,111
   
2,704,436
   
9,811,767
   
9,326,599
 
Provision for income taxes
    
1,168,000
    
1,036,000
   
3,937,000
    
3,616,000
 
Net Income
  
$
1,804,111
   
$
1,668,436
  
$
5,874,767
   
$
5,710,599
  
                           
Earnings per common share - Basic
  
$
0.11
   
$
0.11
  
$
0.36
   
$
0.36
  
Weighted average shares
   
16,919,000
    
15,539,000
   
16,390,000
    
15,988,000
 
                           
Earnings per common share - Diluted
  
$
0.11
   
$
0.10
  
$
0.35
   
$
0.35
  
Weighted average shares
   
17,050,000
    
15,978,000
   
16,712,000
    
16,551,000
 
                           
Cash dividends declared per common share
  
$
—
   
$
—
  
$
0.050
   
$
0.035
  
 
 
Reliv International, Inc. and Subsidiaries
ADD THREE
 
Net sales by Market
(in thousands)
 
   
Three months ended September 30,
  
Change From
  
   
2006
  
2005
  
Prior Year
  
   
$
  
% of sales
  
$
  
% of sales
  
Amount
  
%
  
                           
United States
    
26,784
    
89.9
%
  
25,823
    
90.4
%
  
961
   
3.7
%
Australia/New Zealand
    
701
    
2.4
%
  
486
    
1.7
%
  
215
   
44.2
%
Canada
    
414
    
1.4
%
  
383
    
1.3
%
  
31
   
8.1
%
Mexico
    
367
    
1.2
%
  
402
    
1.4
%
  
(35
)
  
-8.7
%
United Kingdom/Ireland
    
323
    
1.1
%
  
240
    
0.8
%
  
83
   
34.6
%
Philippines
    
594
    
2.0
%
  
526
    
1.8
%
  
68
   
12.9
%
Malaysia/Singapore
    
382
    
1.3
%
  
577
    
2.0
%
  
(195
)
  
-33.8
%
Germany
    
214
    
0.7
%
  
118
    
0.4
%
  
96
   
81.4
%
Consolidated Total
    
29,779
    
100.0
%
  
28,555
    
100.0
%
  
1,224
   
4.3
%
 
 
Net sales by Market
(in thousands)
 
   
Nine months ended September 30,
  
Change From
 
 
 
2006
 
2005
 
Prior Year
  
   
$
  
% of sales
  
$
  
% of sales
  
Amount
  
%
  
                           
United States
    
80,376
    
90.5
%
  
77,881
    
90.5
%
  
2,495
   
3.2
%
Australia/New Zealand
    
1,855
    
2.1
%
  
1,567
    
1.8
%
  
288
   
18.4
%
Canada
    
1,234
    
1.4
%
  
1,290
    
1.5
%
  
(56
)
  
-4.3
%
Mexico
    
1,011
    
1.1
%
  
1,237
    
1.4
%
  
(226
)
  
-18.3
%
United Kingdom/Ireland
    
915
    
1.0
%
  
642
    
0.7
%
  
273
   
42.5
%
Philippines
    
1,602
    
1.8
%
  
1,807
    
2.1
%
  
(205
)
  
-11.3
%
Malaysia/Singapore
    
1,297
    
1.5
%
  
1,539
    
1.8
%
  
(242
)
  
-15.7
%
Germany
    
534
    
0.6
%
  
118
    
0.1
%
  
416
   
352.5
%
Consolidated Total
    
88,824
    
100.0
%
  
86,081
    
100.0
%
  
2,743
    
3.2
%
 
The following table sets forth, as of September 30, 2006 and 2005, 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 its 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. Growth in the number of active distributors and Master Affiliates and above is a key factor in continuing the growth of our business.
 
Active Distributors and Master Affiliates and above by Market
 
   
As of 9/30/2006
  
As of 9/30/2005
  
Change in %
  
 
Active Distributors
  
Master Affiliates and Above
  
Active Distributors
  
Master Affiliates and Above
  
Active Distributors
  
Master Affiliates and Above
  
                           
United States
    
52,760
   
15,660
   
51,470
   
14,560
   
2.5
%
  
7.6
%
Australia/New Zealand
    
2,420
   
270
   
2,570
   
240
   
-5.8
%
  
12.5
%
Canada
    
1,170
   
180
   
1,270
   
200
   
-7.9
%
  
-10.0
%
Mexico
    
1,130
   
220
   
4,020
   
380
   
-71.9
%
  
-42.1
%
United Kingdom/Ireland
    
910
   
150
   
640
   
90
   
42.2
%
  
66.7
%
Philippines
    
3,360
   
350
   
4,930
   
520
   
-31.8
%
  
-32.7
%
Malaysia/Singapore
    
2,750
   
380
   
3,430
   
620
   
-19.8
%
  
-38.7
%
Germany
    
320
   
110
   
70
   
30
   
357.1
%
  
266.7
%
Consolidated total
    
64,820
   
17,320
   
68,400
   
16,640
   
-5.2
%
  
4.1
%
 
** 30 **