EX-99.1 2 ex_121208.htm EXHIBIT 99.1 ex_121208.htm

Exhibit 99.1

NEWS RELEASE

 

For more information, contact:

 

Steve Albright

Chief Financial Officer                    

(636) 733-1305                         

 

FOR IMMEDIATE DISTRIBUTION

 

Reliv International Reports Second-Quarter Financial Results for 2018

 

CHESTERFIELD, MO, August 10, 2018 – Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2018.

 

Reliv reported net sales of $8.5 million for the second quarter of 2018 compared with net sales of $10.0 million in the second quarter of 2017. Net sales in the United States decreased to $6.3 million in the second quarter of 2018, which represented a 15.0 percent decline in net sales when compared to the prior-year quarter. Net sales in Reliv’s foreign markets decreased 17.0 percent in the second quarter of 2018 compared with the prior-year quarter. Net sales in Europe and Asia decreased by 21.2 percent and 10.5 percent, respectively, in the second quarter of 2018, along with decreases in all other regions except for Mexico.

 

Reliv reported a net loss for the second quarter of 2018 of $978,000 (loss per diluted share of $0.53) compared to a net loss of $520,000 (loss per diluted share of $0.28) in the second quarter of 2017. The loss from operations for the second quarter of 2018 was $940,000 compared to a loss from operations of $508,000 in the same period in 2017. Results from operations were primarily impacted by the decline in net sales and gross margin, partially offset by a reduction in selling, general and administrative (“SGA”) expenses in the quarter. SGA expenses decreased to $4.2 million in the second quarter of 2018 compared to $4.6 million in the prior-year quarter.

 

Net sales for the first six months of 2018 were $18.5 million, which represents a 19.0 percent decrease from the same period in 2017. Net sales in the United States decreased by 20.9 percent and net sales in Reliv’s foreign markets decreased by 12.2 percent in the first half of 2018 compared with the first half of last year. Net sales in Reliv’s foreign markets decreased by 15.7 percent during the first half of 2018 when the impact of foreign currency fluctuation is removed.

 

Reliv reported a net loss of $1.2 million, or $0.66 per diluted share in the first six months of 2018, compared to net income of $4,000 or $0.00 per diluted share in the same period of 2017.

 

Reliv had cash and cash equivalents of $2.8 million as of June 30, 2018, compared to $3.3 million as of December 31, 2017. Net cash used in operating activities was $256,000 in the first six months of 2018. In July 2018, Reliv elected to redeem the cash surrender value of a company-owned life insurance policy with a redemption value of $3.1 million and used the proceeds to pay in full the remaining balance of its term loan and revolving loan balances totaling $2.9 million. As a result, Reliv has no outstanding bank debt at this time.

 

 
 

 

As of June 30, 2018, Reliv had 31,140 distributors and preferred customers – a decrease of 11.3 percent from June 30, 2017 – of which 3,200 are Master Affiliate level and above. The number of Master Affiliates decreased by 14.2 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.

 

“We continue the work of revitalizing sales in the United States and other markets around the Reliv world,” said Ryan A. Montgomery, Chief Executive Officer. “The results of the second quarter are not indicative of the process that’s underway. We have a number of initiatives in progress that we believe will lead to better results for the remainder of 2018 and forward.”

 

“These initiatives include further product development, technology enhancements, refocus of distributor incentives, and streamlining our international operations,” Montgomery reported.

 

Specific initiatives include:

 

 

●

Reliv Now® with Whey was launched in May 2018 and other product innovations and enhancements are in process.
 

●

Mobile app launch in spring 2018 with new features based on distributor input coming in near future, and a new corporate website is scheduled for rollout at our upcoming fall distributor conference in Orlando where the company will celebrate 30 years in business.
 

●

Reviewing distributor and leadership incentives with the aim to reward building new business.
 

●

In our Asia-Pacific region, we have consolidated nearly all administrative functions into our office in the Philippines, allowing the closure of our Indonesia office.

 

Reliv announced a number of executive level changes in recent weeks, highlighted by the announcement of Ryan Montgomery as Chief Executive Officer of the company. “As we approach our 30th anniversary, I am proud to lead this company into its next chapter and beyond.”

 

About Reliv International, Inc.

 

Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address core nutrition and targeted solutions. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, a soy peptide that works at the epigenetic level to promote optimal health. The company sells its products through an international network marketing system of independent distributors in 14 countries. Learn more about Reliv at reliv.com, or on Facebook, Twitter or Instagram.

 

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, reliv.com.

 

--FINANCIAL HIGHLIGHTS FOLLOW –

 

 
 

 

Reliv International, Inc. and Subsidiaries
 

Condensed Consolidated Balance Sheets
   

June 30

    

December 31

                  
   

2018

    

2017

                  
   

(Unaudited)

    

(Audited)

                  

Assets

                         

Current Assets:

                                

Cash and cash equivalents

   $ 2,764,088     $ 3,272,788           

Accounts receivable, less allowances of $25,000 in 2018 and $26,300 in 2017

     213,975       29,760                  

Accounts and note due from employees and distributors

     136,142       138,497           

Inventories

     4,105,201       4,555,485                  

Cash surrender value of life insurance

     3,067,360       -           

Other current assets

     661,751       399,154                  
                          

Total current assets

     10,948,517       8,395,684                  
                          

Other assets

     3,743,908       3,916,551                  

Cash surrender value of life insurance

     -       3,086,522           

Net property, plant and equipment

     5,441,346       5,677,239                  
                          

Total Assets

   $ 20,133,771     $ 21,075,996                  
                          

Liabilities and Stockholders' Equity

                                
                          

Accounts payable and accrued expenses

   $ 4,076,694     $ 3,212,634                  

Current portion of long-term debt

     2,855,861       3,045,421           

Other noncurrent liabilities

     458,750       453,354                  

Stockholders' equity

     12,742,466       14,364,587           
                                 

Total Liabilities and Stockholders' Equity

   $ 20,133,771     $ 21,075,996           

 

 

Consolidated Statements of Operations

   

Three months ended June 30

    

Six months ended June 30

  
   

2018

    

2017

    

2018

    

2017

  
   

(Unaudited)

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

  

Product sales

   $ 7,920,596     $ 9,258,809     $ 17,311,977     $ 21,093,925  

Handling & freight income

     539,145       747,819       1,151,003       1,690,485  
                                 

Net Sales

     8,459,741       10,006,628       18,462,980       22,784,410  
                                 

Costs and expenses:

                                

Cost of products sold

     2,356,274       2,328,452       4,706,016       5,163,977  

Distributor royalties and commissions

     2,827,357       3,554,773       6,219,102       8,053,326  

Selling, general and administrative

     4,215,641       4,631,860       8,701,536       9,558,139  
                                 

Total Costs and Expenses

     9,399,272       10,515,085       19,626,654       22,775,442  
                                 

Income (loss) from operations

     (939,531 )     (508,457 )     (1,163,674 )     8,968  
                                 

Other income (expense):

                                

Interest income

     23,547       25,827       47,499       51,353  

Interest expense

     (45,222 )     (27,448 )     (76,787 )     (52,289 )

Other income

     6,252       12,413       16,703       45,096  
                                 

Income (loss) before income taxes

     (954,954 )     (497,665 )     (1,176,259 )     53,128  

Provision for income taxes

     23,000       22,000       40,000       49,000  
                                 

Net income (loss)

   $ (977,954 )   $ (519,665 )   $ (1,216,259 )   $ 4,128  
                                 
                                 

Earnings (loss) per common share - Basic

   $ (0.53 )   $ (0.28 )   $ (0.66 )   $ 0.00  

Weighted average shares

     1,845,000       1,845,000       1,845,000       1,845,000  
                                 

Earnings (loss) per common share - Diluted

   $ (0.53 )   $ (0.28 )   $ (0.66 )   $ 0.00  

Weighted average shares

     1,845,000       1,845,000       1,845,000       1,846,000  

  

 
 

 

Reliv International, Inc. and Subsidiaries

 

Net sales by Market

                                                

(in thousands)

  

Three months ended June 30,

    

Change from

  
   

2018

    

2017

    

prior year

  
   

Amount

    

% of Net

Sales

    

Amount

    

% of Net

Sales

    

Amount

    

%

  
                                                 

United States

   $ 6,336       74.9 %   $ 7,450       74.4 %   $ (1,114 )     -15.0 %

Australia/New Zealand

     178       2.1 %     227       2.3 %     (49 )     -21.6 %

Canada

     162       1.9 %     217       2.2 %     (55 )     -25.3 %

Mexico

     112       1.3 %     89       0.9 %     23       25.8 %

Europe

     1,031       12.2 %     1,308       13.1 %     (277 )     -21.2 %

Asia

     641       7.6 %     716       7.1 %     (75 )     -10.5 %
                                                 

Consolidated Total

   $ 8,460       100.0 %   $ 10,007       100.0 %   $ (1,547 )     -15.5 %

 

 

Net sales by Market

(in thousands)
    Six months ended June 30,     Change from  
   

2018

    

2017

    

prior year

  
   

Amount

    

% of Net

Sales

    

Amount

    

% of Net

Sales

    

Amount

    

%

  
                                                 

United States

   $ 14,006       75.9 %   $ 17,709       77.7 %   $ (3,703 )     -20.9 %

Australia/New Zealand

     410       2.2 %     486       2.1 %     (76 )     -15.6 %

Canada

     404       2.2 %     481       2.1 %     (77 )     -16.0 %

Mexico

     220       1.2 %     247       1.1 %     (27 )     -10.9 %

Europe

     2,195       11.9 %     2,508       11.0 %     (313 )     -12.5 %

Asia

     1,228       6.6 %     1,353       6.0 %     (125 )     -9.2 %
                                                 

Consolidated Total

   $ 18,463       100.0 %   $ 22,784       100.0 %   $ (4,321 )     -19.0 %

 

 

The following table sets forth, as of June 30, 2018 and 2017, the number of our Active Distributors/Preferred Customers 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 Affiliate groups in their downline organization. Preferred Customers represent approximately 4,760 and 4,960 of the Active Distributor count as of June 30, 2018 and 2017, respectively.

 

 

 

Active Distributors/Preferred Customers and Master Affiliates and Above by Market

                  
                                                 
                                                 
   

As of 6/30/2018

    

As of 6/30/2017

    

Change in %

  
   

Active

Distributors

and Preferred

Customers

    

Master

Affiliates and

Above

    

Active

Distributors

and Preferred

Customers

    

Master

Affiliates and

Above

    

Active

Distributors

and Preferred

Customers

    

Master

Affiliates and

Above

  
                                                 
                                                 

United States

     21,060       2,270       24,670       2,690       -14.6 %     -15.6 %

Australia/New Zealand

     1,030       80       1,240       110       -16.9 %     -27.3 %

Canada

     580       80       740       90       -21.6 %     -11.1 %

Mexico

     780       70       770       60       1.3 %     16.7 %

Europe

     3,290       380       4,130       430       -20.3 %     -11.6 %

Asia

     4,400       320       3,560       350       23.6 %     -8.6 %
                                                 

Consolidated Total

     31,140       3,200       35,110       3,730       -11.3 %     -14.2 %