EX-99.1 2 ex_128959.htm EXHIBIT 99.1 ex_128959.htm

Exhibit 99.1

 

 

NEWS RELEASE

 

 

For more information, contact:

 

Steve Albright

Chief Financial Officer                    

(636) 733-1305                         

 

FOR IMMEDIATE DISTRIBUTION

 

Reliv International Reports Third-Quarter Financial Results for 2018

 

CHESTERFIELD, MO, November 9, 2018 – Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2018.

 

Reliv reported net sales of $8.3 million for the third quarter of 2018 compared with net sales of $9.1 million in the third quarter of 2017. Net sales in the United States decreased by $583,000 in the third quarter of 2018, which represented an 8.2 percent decline in net sales when compared to the prior-year quarter. Net sales in Reliv’s foreign markets decreased by $149,000, or 7.5 percent, in the third quarter of 2018 compared with the prior-year quarter. Net sales in Asia and Mexico increased by 4.8 percent and 21.9 percent, respectively, in the third quarter of 2018, offset by decreases in all other regions. Net sales in Reliv’s foreign markets decreased by 3.3 percent during the third quarter of 2018 when the impact of foreign currency fluctuation is removed.

 

Reliv reported a net loss for the third quarter of 2018 of $542,000 (loss per diluted share of $0.29) compared to a net loss of $319,000 (loss per diluted share of $0.17) in the third quarter of 2017. The loss from operations for the third quarter of 2018 was $532,000 compared to a loss from operations of $334,000 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 $3.8 million in the third quarter of 2018 compared to $4.3 million in the prior-year quarter.

 

Net sales for the first nine months of 2018 were $26.8 million, which represents a 15.9 percent decrease from the same period in 2017. Net sales in the United States decreased by 17.3 percent and net sales in Reliv’s foreign markets decreased by 10.9 percent in the first nine months of 2018 compared with the same period last year. Net sales in Reliv’s foreign markets decreased by 12.2 percent during the first nine months of 2018 when the impact of foreign currency fluctuation is removed.

 

Reliv reported a net loss of $1.8 million, or $0.95 per diluted share in the first nine months of 2018, compared to a net loss of $315,000 or $0.17 per diluted share in the same period of 2017.

 

Reliv celebrated its 30th anniversary at its distributor conference last month in Orlando. Among the presentations at the conference, the company introduced a new corporate website, which includes a new Distributor Resource Center that gives distributors easy and quick access to key training and sales tools. “These online capabilities are important to our future growth,” stated Ryan A. Montgomery, Chief Executive Officer.  “The world has changed in 30 years, and so has the industry, especially the last 5-10 years.  As we continue to build on the core foundation of our Reliv business, the key to our future growth will be a blend of online and offline methods that continue to build personal relationships and using technology to reach new people.  Success will happen for those that embrace traditional and new methods.”

 

 

 

 

In its international operations, Reliv has engaged Gabriela Moreno as a sales consultant in Mexico, and Reliv has also added Jo Ann Sy as the sales manager in its Philippines market. “These appointments confirm our commitment to our foreign operations,” said Mr. Montgomery. “These individuals will be key in accelerating the growth in each of the markets, and we look forward to their contributions to Reliv.”

 

Additional initiatives include:

 

 

Reliv held a Girlfriends’ Getaway weekend event in Dayton, OH in August. This event provided an introduction to the Reliv brand and the Fit3 platform to a large group of new customers and prospective customers in the region. Similar events are already in the works for 2019.

 

As a follow up to our launch of Reliv Now® with Whey in the spring of 2018, Reliv is launching ProVantage with Whey in the EU market. This provides a product with an alternative protein source to our second-largest market.

 

Reliv had cash and cash equivalents of $2.4 million as of September 30, 2018, compared to $3.3 million as of December 31, 2017. Net cash used in operating activities was $850,000 in the first nine months of 2018.

 

As of September 30, 2018, Reliv had 30,550 distributors and preferred customers – a decrease of 11.4 percent from September 30, 2017 – of which 3,250 are Master Affiliate level and above. The number of Master Affiliates decreased by 14.7 percent compared to the prior year total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.

 

 

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 FacebookTwitter 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

 

   

September 30

   

December 31

 
   

2018

   

2017

 
   

(Unaudited)

   

(Audited)

 

Assets

               

Current Assets:

               

Cash and cash equivalents

  $ 2,372,837     $ 3,272,788  

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

    326,572       29,760  

Accounts and note due from employees and distributors

    140,562       138,497  

Inventories

    4,477,787       4,555,485  

Other current assets

    597,097       399,154  
                 

Total current assets

    7,914,855       8,395,684  
                 

Other assets

    3,718,778       3,916,551  

Cash surrender value of life insurance

    -       3,086,522  

Net property, plant and equipment

    5,332,691       5,677,239  
                 

Total Assets

  $ 16,966,324     $ 21,075,996  
                 

Liabilities and Stockholders' Equity

               
                 

Accounts payable and accrued expenses

  $ 4,239,689     $ 3,212,634  

Current portion of long-term debt

    -       3,045,421  

Other noncurrent liabilities

    518,180       453,354  

Stockholders' equity

    12,208,455       14,364,587  
                 

Total Liabilities and Stockholders' Equity

  $ 16,966,324     $ 21,075,996  

 

 

Consolidated Statements of Operations

 

   

Three months ended September 30

   

Nine months ended September 30

 
   

2018

   

2017

   

2018

   

2017

 
   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

 

Product sales

  $ 7,817,526     $ 8,385,999     $ 25,129,503     $ 29,479,924  

Handling & freight income

    519,519       683,324       1,670,522       2,373,809  
                                 

Net Sales

    8,337,045       9,069,323       26,800,025       31,853,733  
                                 

Costs and expenses:

                               

Cost of products sold

    2,383,942       1,949,670       7,089,958       7,113,647  

Distributor royalties and commissions

    2,639,863       3,199,596       8,858,965       11,252,922  

Selling, general and administrative

    3,845,304       4,253,675       12,546,840       13,811,814  
                                 

Total Costs and Expenses

    8,869,109       9,402,941       28,495,763       32,178,383  
                                 

Loss from operations

    (532,064 )     (333,618 )     (1,695,738 )     (324,650 )
                                 

Other income (expense):

                               

Interest income

    22,633       25,277       70,132       76,630  

Interest expense

    (16,408 )     (27,183 )     (93,195 )     (79,472 )

Other income (expense)

    (8,462 )     (4,579 )     8,241       40,517  
                                 

Loss before income taxes

    (534,301 )     (340,103 )     (1,710,560 )     (286,975 )

Provision (benefit) for income taxes

    8,000       (21,000 )     48,000       28,000  
                                 

Net loss

  $ (542,301 )   $ (319,103 )   $ (1,758,560 )   $ (314,975 )
                                 
                                 

Loss per common share - Basic

  $ (0.29 )   $ (0.17 )   $ (0.95 )   $ (0.17 )

Weighted average shares

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

Loss per common share - Diluted

  $ (0.29 )   $ (0.17 )   $ (0.95 )   $ (0.17 )

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 September 30,

   

Change from

 
   

2018

   

2017

   

prior year

 
   

Amount

   

% of Net

Sales

   

Amount

   

% of Net

Sales

   

Amount

   

%

 
                                                 

United States

  $ 6,499       78.0 %   $ 7,082       78.1 %   $ (583 )     -8.2 %

Australia/New Zealand

    156       1.9 %     224       2.5 %     (68 )     -30.4 %

Canada

    153       1.8 %     200       2.2 %     (47 )     -23.5 %

Mexico

    128       1.5 %     105       1.2 %     23       21.9 %

Europe

    807       9.7 %     891       9.8 %     (84 )     -9.4 %

Asia

    594       7.1 %     567       6.2 %     27       4.8 %
                                                 

Consolidated Total

  $ 8,337       100.0 %   $ 9,069       100.0 %   $ (732 )     -8.1 %

 

 

Net sales by Market

                                               

(in thousands)

 

Nine months ended September 30,

   

Change from

 
   

2018

   

2017

   

prior year

 
   

Amount

   

% of Net Sales

   

Amount

   

% of Net Sales

   

Amount

   

%

 
                                                 

United States

  $ 20,505       76.5 %   $ 24,791       77.8 %   $ (4,286 )     -17.3 %

Australia/New Zealand

    565       2.1 %     711       2.2 %     (146 )     -20.5 %

Canada

    557       2.1 %     681       2.2 %     (124 )     -18.2 %

Mexico

    348       1.3 %     352       1.1 %     (4 )     -1.1 %

Europe

    3,002       11.2 %     3,399       10.7 %     (397 )     -11.7 %

Asia

    1,823       6.8 %     1,920       6.0 %     (97 )     -5.1 %
                                                 

Consolidated Total

  $ 26,800       100.0 %   $ 31,854       100.0 %   $ (5,054 )     -15.9 %

 

The following table sets forth, as of September 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 4,840 and 5,010 of the Active Distributor count as of September 30, 2018 and 2017, respectively.

 

 

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

 

   

As of 9/30/2018

   

As of 9/30/2017

   

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

    20,390       2,290       23,860       2,750       -14.5 %     -16.7 %

Australia/New Zealand

    1,010       80       1,180       110       -14.4 %     -27.3 %

Canada

    570       80       710       80       -19.7 %     0.0 %

Mexico

    850       80       730       60       16.4 %     33.3 %

Europe

    3,210       380       3,940       440       -18.5 %     -13.6 %

Asia

    4,520       340       4,070       370       11.1 %     -8.1 %
                                                 

Consolidated Total

    30,550       3,250       34,490       3,810       -11.4 %     -14.7 %