EX-99 2 v418198_ex99.htm EXHIBIT 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 14, 2015 – Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2015.

 

Net sales for the quarter were $12.4 million, a 14.0 percent decrease from the second quarter last year. Net U.S. sales totaled $9.6 million, down from $10.8 million in the second quarter of 2014. Net sales outside of the United States decreased 22.1 percent in the second quarter of 2015 compared to the prior-year quarter. Foreign currency fluctuation accounted for 8.7 percent of the net sales decline outside of the United States. Net sales in Europe declined 30.7 percent in the second quarter of 2015 compared to the prior-year quarter, with foreign currency fluctuation accounting for 6.8 percent of the decline.

 

The net loss for the second quarter of 2015 was $846,000 or $0.07 per diluted share, compared to a net loss of $289,000 or $0.02 per diluted share in the 2014 second quarter. The loss from operations for the second quarter of 2015 was $1.12 million compared to a loss of $475,000 in the same quarter of 2014.

 

Net sales for the first six months of 2015 were $27.3 million, which represents a 5.7 percent decrease from the same period in 2014. In the United States, net sales declined 2.0 percent. Reliv’s international net sales decreased 16.5 percent in the first half of 2015 compared with the first half of last year, with 8.3 percent of the decline due to foreign currency fluctuation.

 

Reliv reported a net loss of $730,000, or $0.06 per diluted share in the first six months of 2015, compared to net loss of $440,000 or $0.03 per diluted share in the same period of 2014.

 

The loss from operations in the second quarter of 2015 was primarily due to the previously mentioned decrease in net sales.  However, there were two charges impacting the second quarter results that will not impact results going forward. In Mexico, operating costs in the second quarter of 2015 were negatively impacted by a newly implemented value added tax (“VAT”).  The implementation of this new VAT has impacted many nutritional supplement companies in Mexico.  As part of a decree issued by the Mexico treasury department, Reliv entered into an amnesty program during the second quarter of 2015 resulting in an overall VAT implementation pre-tax charge of approximately $130,000.

 

 

 

 

 

In Europe, we concluded a long-term performance-based incentive compensation agreement with our senior managers in the region during the second quarter of 2015. We recognized $165,000 in compensation expense during the second quarter of 2015 related to this agreement. This compares to compensation expense recognized under this agreement of $145,000 during the second quarter of 2014.

 

For the six-month period ended June 30, 2015, Reliv used $108,000 in cash in operating activities. This compares to cash used in operating activities of $1.21 million for the six-month period ended June 30, 2014. Reliv had cash and cash equivalents of $4.50 million as of June 30, 2015. This amount compares to $4.99 million as of December 31, 2014 and $4.93 million as of this date last year.

 

“While these results are less favorable than we hoped, we have launched new initiatives to implement the training and rewards necessary to turn our sales in a positive direction,” said Robert L. Montgomery, Chairman and Chief Executive Officer. “We have conducted an evaluation process within the company and among our distributor field and have decided to focus messaging and training on simplified and specific steps for our distributors to build a successful business. Early adopters are experiencing business success,” he added.

 

In May 2015, Reliv launched mobile-ready personal websites for Reliv distributors. “Not only do these sites allow distributors to tell the Reliv story through engaging content and videos, they offer a whole new way to speed up business,” Montgomery said. “For the first time distributors have their own online shopping carts and new distributor sign-up. And since the sites are mobile-ready, distributors can give presentations and complete transactions on the spot — anytime, anywhere. In June 2015, their first full month in operation, personal websites accounted for nearly 40% of all new customer sign-ups. We see this as a positive start to a promising growth opportunity.”

 

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.

 

 

 

 

 

Reliv International, Inc. and Subsidiaries

 

Condensed Consolidated Balance Sheets

 

   June 30   December 31         
   2015   2014         
   (Unaudited)             
Assets                    
Current Assets:                    
Cash and cash equivalents  $4,497,299   $4,989,392         
Accounts receivable, less allowances of $25,500 in 2015 and $26,300 in 2014   56,485    265,530           
Accounts and note due from employees and distributors   141,089    121,208           
Inventories   5,469,510    5,177,465           
Other current assets   1,347,537    979,615           
                     
Total current assets   11,511,920    11,533,210           
                     
Other assets   5,502,820    5,462,855           
Intangible assets, net   2,790,711    2,925,775           
Net property, plant and equipment   6,721,789    6,925,970           
                     
Total Assets  $26,527,240   $26,847,810           
                     
Liabilities and Stockholders' Equity                    
                     
Accounts payable and accrued expenses  $5,294,187   $5,187,057           
Current portion of long-term debt   3,794,019    697,423           
Long-term debt - noncurrent   647,444    3,547,267           
Other noncurrent liabilities   446,023    418,785           
Stockholders' equity   16,345,567    16,997,278           
                     
Total Liabilities and Stockholders' Equity  $26,527,240   $26,847,810           

 

Consolidated Statements of Operations

 

   Three months ended June 30   Six months ended June 30 
   2015   2014   2015   2014 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
                 
Product sales  $11,442,990   $13,355,370   $25,151,113   $26,661,151 
Handling & freight income   1,002,361    1,120,209    2,128,601    2,279,316 
                     
Net Sales   12,445,351    14,475,579    27,279,714    28,940,467 
                     
Costs and expenses:                    
  Cost of products sold   2,647,755    3,000,412    5,642,704    5,887,262 
  Distributor royalties and commissions   4,459,577    5,232,967    9,740,324    10,440,254 
  Selling, general and administrative   6,454,992    6,716,826    12,584,941    13,257,693 
                     
Total Costs and Expenses   13,562,324    14,950,205    27,967,969    29,585,209 
                     
Loss from operations   (1,116,973)   (474,626)   (688,255)   (644,742)
                     
Other income (expense):                    
Interest income   30,073    32,148    60,455    68,272 
Interest expense   (26,749)   (25,367)   (50,688)   (49,635)
Other income (expense)   15,653    31,079    (155,061)   6,389 
                     
Loss before income taxes   (1,097,996)   (436,766)   (833,549)   (619,716)
Benefit from income taxes   (252,000)   (148,000)   (104,000)   (180,000)
                     
Net loss  ($845,996)  ($288,766)  ($729,549)  ($439,716)
                     
                     
Loss per common share - Basic  ($0.07)  ($0.02)  ($0.06)  ($0.03)
Weighted average shares   12,819,000    12,666,000    12,819,000    12,666,000 
                     
Loss per common share - Diluted  ($0.07)  ($0.02)  ($0.06)  ($0.03)
Weighted average shares   12,819,000    12,666,000    12,819,000    12,666,000 
                     
Cash dividends declared per common share   -    -    -    - 

 

 

 

 

 

Reliv International, Inc. and Subsidiaries

 

Net sales by Market

(in thousands)

 

   Three months ended June 30,   Change From 
   2015   2014   Prior Year 
   Amount   % of Net
Sales
   Amount   % of Net
Sales
   Amount   % 
                         
United States  $9,591    77.1%  $10,815    74.7%  $(1,224)   -11.3%
Australia/New Zealand   329    2.6%   429    3.0%   (100)   -23.3%
Canada   335    2.7%   357    2.5%   (22)   -6.2%
Mexico   234    1.9%   190    1.3%   44    23.2%
Europe   1,554    12.5%   2,244    15.5%   (690)   -30.7%
Asia   402    3.2%   441    3.0%   (39)   -8.8%
                               
Consolidated total  $12,445    100.0%  $14,476    100.0%  $(2,031)   -14.0%

 

Net sales by Market

(in thousands)

 

   Six months ended June 30,   Change From 
   2015   2014   Prior Year 
   Amount   % of Net
Sales
   Amount   % of Net
Sales
   Amount   % 
                         
United States  $21,071    77.2%  $21,507    74.3%  $(436)   -2.0%
Australia/New Zealand   701    2.6%   861    3.0%   (160)   -18.6%
Canada   768    2.8%   647    2.2%   121    18.7%
Mexico   431    1.6%   415    1.4%   16    3.9%
Europe   3,348    12.3%   4,573    15.8%   (1,225)   -26.8%
Asia   961    3.5%   937    3.3%   24    2.6%
                               
Consolidated total  $27,280    100.0%  $28,940    100.0%  $(1,660)   -5.7%

 

The following table sets forth, as of June 30, 2015 and 2014, 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.   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 June 30, 2015 and 2014 includes France preferred customers of 3,218 and 2,630, respectively.  

 

Active Distributors and Master Affiliates and above by Market

 

   As of 6/30/2015   As of 6/30/2014   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   33,760    4,330    36,440    5,170    -7.4%   -16.2%
Australia/New Zealand   1,230    130    1,300    150    -5.4%   -13.3%
Canada   1,250    220    1,270    250    -1.6%   -12.0%
Mexico   1,220    100    1,130    140    8.0%   -28.6%
Europe   6,810    650    8,190    880    -16.8%   -26.1%
Asia   2,300    270    2,370    330    -3.0%   -18.2%
                               
Consolidated total   46,570    5,700    50,700    6,920    -8.1%   -17.6%