0000912061-16-000015.txt : 20160202 0000912061-16-000015.hdr.sgml : 20160202 20160202160331 ACCESSION NUMBER: 0000912061-16-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20160202 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160202 DATE AS OF CHANGE: 20160202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATURAL HEALTH TRENDS CORP CENTRAL INDEX KEY: 0000912061 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190] IRS NUMBER: 592705336 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36849 FILM NUMBER: 161380865 BUSINESS ADDRESS: STREET 1: 609 DEEP VALLEY DRIVE STREET 2: SUITE 395 (EAST BUILDING) CITY: ROLLING HILLS ESTATES STATE: CA ZIP: 90274 BUSINESS PHONE: 310-541-0888 MAIL ADDRESS: STREET 1: 609 DEEP VALLEY DRIVE STREET 2: SUITE 395 (EAST BUILDING) CITY: ROLLING HILLS ESTATES STATE: CA ZIP: 90274 8-K 1 nhtc20160202.htm 8-K 8-K


UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
 
 
February 2, 2016
 
Date of Report (Date of earliest event reported)
 
NATURAL HEALTH TRENDS CORP.
(Exact name of registrant as specified in its charter)
 
Delaware
001-36849
59-2705336
(State or other jurisdiction of incorporation)        
(Commission File Number)  
(IRS Employer Identification No.)
 
 
 
609 Deep Valley Drive, Suite 395, Rolling Hills Estates, California 90274
(Address of principal executive offices, including zip code)
 
 
 
(310) 541-0888
(Registrant’s telephone number, including area code)
 


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02 Results of Operations and Financial Condition.
 
On February 2, 2016, Natural Health Trends Corp. issued an earnings release announcing its results for the quarter and year ended December 31, 2015. The press release is attached hereto as exhibit 99.1.
 
Item 9.01 Financial Statements and Exhibits.
 
(d)
Exhibits.
99.1       Press Release of Natural Health Trends Corp. dated February 2, 2016
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: February 2, 2016
 
NATURAL HEALTH TRENDS CORP.
 
 
 
 
 
 
 
By:
/s/ Timothy S. Davidson                                                     
 
 
Timothy S. Davidson
 
 
Senior Vice President and Chief Financial Officer



 EX-99.1 2 ex99-1.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1

Natural Health Trends Reports Strong Fourth Quarter and Full Year 2015 Financial Results

•
Fourth quarter revenue increased 108% year-over-year to $73.7 million
•
Fourth quarter net income of $13.7 million or $1.13 per diluted share
•
Record full year revenue increased 113% year-over-year to $264.9 million
•
Record full year net income of $47.2 million or $3.82 per diluted share


LOS ANGELES – February 2, 2016 – Natural Health Trends Corp. (NASDAQ: NHTC), a leading direct-selling and e-commerce company that markets premium quality personal care, wellness and "quality of life" products under the NHT Global brand, today announced its financial results for the fourth quarter and full year ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights

•
Total revenue increased 108% to $73.7 million, compared to $35.4 million in the fourth quarter of 2014.

◦
Revenue from the Company’s Hong Kong operations, which represented 92% of total revenue, increased 120% to $67.7 million, compared to $30.7 million in the fourth quarter of 2014.

◦
Revenue outside of Hong Kong increased 27% to $5.9 million, compared to $4.7 million in the fourth quarter of 2014.

•
Operating income increased 129% to $13.9 million, compared to $6.1 million in the fourth quarter of 2014.

•
Net income available to common stockholders was $13.7 million, or $1.13 per diluted share, compared to $5.8 million, or $0.45 per diluted share, in the fourth quarter of 2014.

•
The number of Active Members1 increased 15% to 109,360 at December 31, 2015, compared to 94,700 at September 30, 2015.

1 
Natural Health Trends defines Active Members as those that have placed at least one product order with the Company during the preceding twelve month period.

Full Year 2015 Financial Highlights

•
Total revenue increased 113% to $264.9 million, compared to $124.6 million for the full year of 2014.

•
Operating income increased 130% to $47.9 million, compared to $20.8 million for the full year of 2014.

•
Net income available to common stockholders was $47.2 million, or $3.82 per diluted share, compared to $20.4 million, or $1.61 per diluted share, for the full year of 2014.

1


Management Commentary

“2015 was a record year for Natural Health Trends and we are very pleased with all we have accomplished,” commented Chris Sharng, President of Natural Health Trends Corp. “The triple-digit increase in revenue and net income over 2014 was driven by impressive growth in our active member base as well as the ongoing development of our leadership programs, product development initiatives and successful execution of our marketing programs and member services. 2016 marks NHT Global's 15th anniversary and our committed leadership's enthusiasm for our products and opportunity are at an all-time high.”

Mr. Sharng continued, “In light of the recent short selling campaign which sought to damage our brand, reputation and shareholder value, we are diligently working to defend our Company. Nevertheless, it provides a great opportunity to allocate our capital towards repurchasing our shares which our Board of Directors strongly believes is an attractive investment. Their authorization of an additional $55 million for repurchases underscores their confidence. Separately, we are in regular contact with Chinese officials at several government agencies. While we take our disclosure obligations very seriously, we do not intend to make any additional comments regarding this matter unless and until there are additional material developments to disclose.”

Balance Sheet and Cash Flow

•
At December 31, 2015, cash and cash equivalents totaled $104.9 million, compared to $94.6 million at September 30, 2015.

•
Net cash provided by operating activities in the fourth quarter of 2015 was $16.1 million, compared to $9.7 million in the fourth quarter of 2014. For the full year of 2015, net cash provided by operating activities was $81.3 million, compared to $30.6 million for the full year of 2014.

•
During the three months ended December 31, 2015, the Company repurchased a total of $5.0 million of its common stock under its stock repurchase program. On January 13, 2016, the Company announced that its Board of Directors authorized an increase in the stock repurchase program from $15.0 million to $70.0 million. The Company expects to continue executing against the $70.0 million stock repurchase program and anticipates it will begin repurchasing soon. Since November 2014, the Company has repurchased 906,882 shares of common stock at a cost of $20.6 million.


2


Fourth Quarter and Full Year 2015 Financial Results Conference Call

Management will host a conference call to discuss the fourth quarter and full year 2015 financial results today, Tuesday, February 2, 2016 at 4:30 p.m. Eastern Time. The conference call details are as follows:
Date:
Tuesday, February 2, 2016
Time:
4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time
Dial-in:
1-877-407-0789 (Domestic)
1-201-689-8562 (International)
Conference ID:
13627796
Webcast:
http://public.viavid.com/index.php?id=117686

For those unable to participate during the live broadcast, a replay of the call will also be available from 7:30 p.m. Eastern Time on February 2, 2016 through 11:59 p.m. Eastern Time on February 16, 2016 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing the replay pin number: 13627796.

About Natural Health Trends Corp.

Natural Health Trends Corp. (NASDAQ: NHTC) is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, North America, and Europe. The Company markets premium quality personal care products under the NHT Global brand. Additional information can be found on the Company's website at www.naturalhealthtrendscorp.com.

Forward-Looking Statements

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this press release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause the Company’s actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption "Risk Factors" in Natural Health Trends Corp.’s Annual Report on Form 10-K filed on March 6, 2015 with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

CONTACTS:

Company Contact:
Scott Davidson
Senior Vice President and Chief Financial Officer
Natural Health Trends Corp.
Tel: 310-541-0888
scott.davidson@nhtglobal.com
         
Investors:
Addo Communications
Tel: 310-829-5400
investor.relations@nhtglobal.com

3


NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
December 31, 2015
 
December 31, 2014
 
(Unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
104,914

 
$
44,816

Accounts receivable
57

 
107

Inventories, net
10,455

 
3,760

Other current assets
2,286

 
930

Total current assets
117,712

 
49,613

Property and equipment, net
894

 
476

Goodwill
1,764

 
1,764

Restricted cash
3,166

 
315

Other assets
616

 
372

Total assets
$
124,152

 
$
52,540

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
2,862

 
$
2,232

Income taxes payable
379

 
268

Accrued commissions
19,634

 
8,853

Other accrued expenses
16,703

 
6,743

Deferred revenue
4,011

 
2,687

Deferred tax liability
60

 
65

Amounts held in eWallets
16,414

 
2,064

Other current liabilities
1,510

 
1,513

Total current liabilities
61,573

 
24,425

Long-term incentive
5,770

 
1,665

Total liabilities
67,343

 
26,090

Commitments and contingencies
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock
—

 
—

Common stock
13

 
13

Additional paid-in capital
85,963

 
85,750

Accumulated deficit
(9,647
)
 
(54,799
)
Accumulated other comprehensive (loss) income
(101
)
 
62

Treasury stock, at cost
(19,419
)
 
(4,576
)
Total stockholders’ equity
56,809

 
26,450

Total liabilities and stockholders’ equity
$
124,152

 
$
52,540



4


NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
Three Months Ended
December 31,
 
Year Ended
December 31,
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
(Unaudited)
 
(Unaudited)
 
 
Net sales
$
73,656

 
$
35,406

 
$
264,860

 
$
124,590

Cost of sales
15,073

 
7,464

 
54,098

 
26,981

Gross profit
58,583

 
27,942

 
210,762

 
97,609

Operating expenses:
 
 
 
 
 
 
 
Commissions expense
33,155

 
16,607

 
126,598

 
56,997

Selling, general and administrative expenses
11,453

 
5,233

 
36,024

 
19,687

Depreciation and amortization
82

 
33

 
263

 
105

Total operating expenses
44,690

 
21,873

 
162,885

 
76,789

Income from operations
13,893

 
6,069

 
47,877

 
20,820

Other income (expense), net
28

 
(145
)
 
(84
)
 
(184
)
Income before income taxes
13,921

 
5,924

 
47,793

 
20,636

Income tax provision
222

 
122

 
552

 
266

Net income
13,699

 
5,802

 
47,241

 
20,370

Preferred stock dividends
—

 
(1
)
 
—

 
(10
)
Net income available to common stockholders
$
13,699

 
$
5,801

 
$
47,241

 
$
20,360

Income per common share:
 
 
 
 
 
 
 
Basic
$
1.13

 
$
0.46

 
$
3.84

 
$
1.67

Diluted
$
1.13

 
$
0.45

 
$
3.82

 
$
1.61

Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
12,118

 
12,692

 
12,302

 
12,131

Diluted
12,159

 
12,780

 
12,372

 
12,600

Cash dividends declared per share:
 
 
 
 
 
 
 
Common
$
0.050

 
$
0.010

 
$
0.140

 
$
0.030

Series A preferred stock
$
—

 
$
0.032

 
$
—

 
$
0.894



5


NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Year Ended December 31,
 
2015
 
2014
 
(Unaudited)
 
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income
$
47,241

 
$
20,370

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
263

 
105

Stock-based compensation
86

 
49

Cumulative translation adjustment realized in net income
(82
)
 
—

Deferred income taxes
(15
)
 
(43
)
Changes in assets and liabilities:
 
 
 
Accounts receivable
41

 
—

Inventories, net
(6,762
)
 
(2,029
)
Other current assets
(1,066
)
 
(501
)
Other assets
(267
)
 
(85
)
Accounts payable
637

 
(822
)
Income taxes payable
(115
)
 
243

Accrued commissions
10,840

 
5,077

Other accrued expenses
10,714

 
3,706

Deferred revenue
1,331

 
147

Amounts held in eWallets
14,350

 
2,065

Other current liabilities
25

 
666

Long-term incentive
4,105

 
1,665

Net cash provided by operating activities
81,326

 
30,613

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchases of property and equipment, net
(710
)
 
(339
)
Increase in restricted cash
(3,028
)
 
—

Net cash used in investing activities
(3,738
)
 
(339
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from exercise of warrants
309

 
4,948

Repurchase of common stock
(16,071
)
 
(4,661
)
Dividends paid
(1,709
)
 
(476
)
Net cash used in financing activities
(17,471
)
 
(189
)
Effect of exchange rates on cash and cash equivalents
(19
)
 
181

Net increase in cash and cash equivalents
60,098

 
30,266

CASH AND CASH EQUIVALENTS, beginning of period
44,816

 
14,550

CASH AND CASH EQUIVALENTS, end of period
$
104,914

 
$
44,816

NON-CASH FINANCING ACTIVITY:
 
 
 
Conversion of preferred stock
$
—

 
$
111

Issuance of treasury stock
666

 
—


6