EX-99 2 v351517_ex99.htm EX-99

Exhibit 99

NEWS RELEASE

 

For more information, contact:

 

Steve Albright

Chief Financial Officer

(636) 733-1305

 

FOR IMMEDIATE DISTRIBUTION

 

Reliv International Reports Second-Quarter Financial Results

 

CHESTERFIELD, MO, August 1, 2013 – Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2013.

 

Net sales for the quarter were $15.4 million, an 8.1 percent decrease from the second quarter last year. Net U.S. sales totaled $11.8 million, down from second-quarter 2012 net sales of $12.9 million. Net sales outside of the United States declined 6.3 percent in the second quarter of 2013 compared to the prior-year quarter as net sales declined by 46.5 percent in Asia, offset by sales increases of 12.6 percent in Europe and 9.2 percent in Australia/New Zealand.

 

The net loss for the second quarter of 2013 was ($214,000) or ($0.02) per diluted share, compared to net income of $103,000 or $0.01 per diluted share in the 2012 second quarter.

 

Net sales in Europe increased to $1.96 million in the second quarter of 2013 compared to $1.74 in the prior-year second quarter. “Europe continues to lead all overseas areas in growth as Reliv added France as our 16th market in May,” said Robert L. Montgomery, chairman and chief executive officer of Reliv. “We anticipate continued growth and are investing in our leadership and resources in Europe.”

 

Australia/New Zealand increased net sales to $524,000 in the second quarter of 2013 compared to $480,000 in the same quarter in 2012. “We introduced a new pricing structure and a preferred customer program in this region in an effort to spur growth,” Montgomery said. “We implemented similar initiatives in Asia, including new leadership in senior management positions, and I believe these initiatives will lead to a positive turnaround in these markets as well.”

 

Overall, the reduction in profitability is due to the decline in worldwide sales. Selling, general and administrative expenses increased in 2013 due to a long-term performance-based compensation agreement with Reliv’s European managers that began accruing in the fourth quarter of 2012. Reliv recorded expense of $156,000 in the current quarter and $201,000 for the year-to-date related to the agreement. In addition, unfavorable foreign currency exchange rate fluctuations totaled $68,000 in the quarter due to a strengthening U.S. dollar.

 

In July 2013, Reliv entered into a license agreement with Soy Labs, LLC to secure exclusive rights to certain intellectual property related to lunasin, a dietary ingredient that promotes optimal health at the epigenetic level. The license covers an issued patent and several patent applications related to lunasin and soy-related peptides, proprietary information, and manufacturing processes of Soy Labs, LLC.

 

1
 

“Part of our long-term sales and marketing strategy worldwide is to position Reliv to benefit from the growing popularity of epigenetics,” Montgomery said. “The science of epigenetics is now hitting mainstream media and we believe nutritional epigenetics will soon follow. Our license of the intellectual property related to the commercialization of lunasin positions Reliv as industry leader in this emerging field of study.”

 

“Our LunaRich product line, which optimizes lunasin levels, has energized our distributor force and shown significant potential for sales growth,” he added. “Reliv Now® with LunaRich has become our top seller, comprising 18.4 percent of net sales in the United States in the second quarter 2013, while LunaRich X™, launched in January 2013, accounted for 8.5 percent of second quarter 2013 net sales in the United States. For the first time Reliv now controls an ingredient in its entirety, from the proprietary extraction process to the patented mechanisms of action within the body. I believe this places Reliv in a unique position in the industry and provides an opportunity for growth.”

 

Net sales for the first six months of 2013 were $34.3 million, which represents a 6.1 percent decrease from the same period in 2012. Reliv’s international net sales declined 6.0 percent in the first half of 2013 compared with the first half of last year. In the United States, net sales declined 6.2 percent.

Reliv reported a net loss of ($19,000), or ($0.00) per diluted share in the first six months of 2013, compared to net income of $635,000 or $0.05 per diluted share in the same period of 2012.

 

Reliv’s total distributor count was 53,390 as of June 30, 2013 – a decrease of 9.9 percent from the same date in 2012 – of which 5,910 are Master Affiliate level and above. The number of Master Affiliates decreased by 7.9 percent compared to the year ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.

 

Reliv had cash and cash equivalents of $4.26 million as of June 30, 2013, a decrease of $1.25 million over the same date last year.

 

About Reliv International, Inc.
Reliv International, Inc., 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 16 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 –

 

 

2
 

 

Reliv International, Inc. and Subsidiaries               
ADD TWO               
                
Condensed Consolidated Balance Sheets               
   June 30  December 31            
   2013  2012            
   (Unaudited)             
Assets                    
Current Assets:                    
Cash and cash equivalents  $4,255,963   $5,801,042             
Accounts receivable, less allowances of                    
$32,000 in 2013 and $35,700 in 2012  172,899   247,087             
Accounts and notes due from employees and distributors  141,372   109,346             
Inventories  5,582,010   5,262,916             
Other current assets  1,770,872   1,070,301             
                     
Total current assets  11,923,116   12,490,692             
                     
Other assets  4,450,630   4,212,442             
Intangible assets, net  1,366,630   1,443,635             
Net property, plant and equipment  6,875,143   7,111,772             
                     
Total Assets  $24,615,519   $25,258,541             
                     
Liabilities and Stockholders' Equity                    
                     
Total current liabilities  $6,363,528   $6,614,631             
Long-term debt, less current maturities  2,194,129   2,401,312             
Other non-current liabilities  796,162   660,728             
Stockholders' equity  15,261,700   15,581,870             
                     
Total Liabilities and Stockholders' Equity  $24,615,519   $25,258,541             
                     

        
Consolidated Statements of Operations       
   Three months ended June 30    Six months ended June 30  
   2013    2012    2013    2012  
   (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)  
Product sales  $14,165,463   $14,894,640   $31,054,921   $32,509,480 
Handling & freight income  1,259,945   1,886,064   3,227,751   4,014,868 
                 
Net Sales  15,425,408   16,780,704   34,282,672   36,524,348 
                 
Costs and expenses:                
  Cost of products sold  3,057,940   3,220,860   6,961,798   7,121,441 
  Distributor royalties and commissions  5,617,245   6,319,613   12,620,448   13,774,773 
  Selling, general and administrative  6,972,599   7,021,658   14,488,088   14,495,904 
                 
Total Costs and Expenses  15,647,784   16,562,131   34,070,334   35,392,118 
                 
Income (loss) from operations  (222,376)  218,573   212,338   1,132,230 
                 
Other income (expense):                
Interest income  38,668   40,863   75,832   50,177 
Interest expense  (18,493)  (31,295)  (35,995)  (62,214)
Other income (expense)  (64,544)  (38,564)  (91,119)  (61,232)
                 
Income (loss) before income taxes  (266,745)  189,577   161,056   1,058,961 
Provision (benefit) for income taxes  (53,000)  87,000   180,000   424,000 
                 
Net Income (loss)  ($213,745)  $102,577   ($18,944)  $634,961 
                 
                 
Earnings (loss) per common share - Basic  ($0.02)  $0.01   ($0.00)  $0.05 
Weighted average shares  12,616,000   12,507,000   12,617,000   12,499,000 
                 
Earnings (loss) per common share - Diluted  ($0.02)  $0.01   ($0.00)  $0.05 
Weighted average shares  12,708,000   12,678,000   12,707,000   12,658,000 
                 
Cash dividends declared per common share  $0.02   $0.02   $0.02   $0.02 

 

 
 

 

 

Reliv International, Inc. and Subsidiaries                
ADD THREE                        
                         
Net sales by Market            
(in thousands)                        
   Three months ended June 30,   Change From 
   2013   2012   Prior Year 
   Amount   % of Net Sales   Amount   % of Net Sales   Amount   % 
                         
United States  $11,828    76.7%  $12,943    77.1%  $(1,115)   -8.6%
Australia/New Zealand   524    3.4%   480    2.9%   44    9.2%
Canada   372    2.4%   439    2.6%   (67)   -15.3%
Mexico   256    1.7%   271    1.6%   (15)   -5.5%
Europe   1,960    12.7%   1,741    10.4%   219    12.6%
Asia   485    3.1%   907    5.4%   (422)   -46.5%
                               
Consolidated total  $15,425    100.0%  $16,781    100.0%  $(1,356)   -8.1%

 

                         
                         
Net sales by Market                        
(in thousands)                        
   Six months ended June 30,   Change From 
   2013   2012   Prior Year 
   Amount   % of Net Sales   Amount   % of Net Sales   Amount   % 
                         
United States  $26,938    78.6%  $28,713    78.6%  $(1,775)   -6.2%
Australia/New Zealand   973    2.8%   1,020    2.8%   (47)   -4.6%
Canada   926    2.7%   989    2.7%   (63)   -6.4%
Mexico   534    1.6%   558    1.6%   (24)   -4.3%
Europe   3,979    11.6%   3,335    9.1%   644    19.3%
Asia   933    2.7%   1,909    5.2%   (976)   -51.1%
                               
Consolidated total  $34,283    100.0%  $36,524    100.0%  $(2,241)   -6.1%

 

 

The following table sets forth, as of June 30, 2013 and 2012, 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.
                 
                 

 

Active Distributors and Master Affiliates and above by Market        

 

                         
   As of 6/30/2013   As of 6/30/2012   Change in % 
   Total    Active Distributors   Master Affiliates and Above   Total    Active Distributors   Master Affiliates and Above   Total     Active Distributors   Master Affiliates and Above 
                               
United States   38,860    4,180    42,080    4,790    -7.7%   -12.7%
Australia/New Zealand   1,570    200    1,940    130    -19.1%   53.8%
Canada   1,260    180    1,320    200    -4.5%   -10.0%
Mexico   1,150    130    1,800    150    -36.1%   -13.3%
Europe   6,490    780    6,020    600    7.8%   30.0%
Asia   4,060    440    6,070    550    -33.1%   -20.0%
                               
Consolidated total   53,390    5,910    59,230    6,420    -9.9%   -7.9%
                               
              ** 30 **