|
|
||
|
Date of Report (Date of earliest event reported)
|
||
|
|
|
|
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
Emerging growth company
|
|
☐
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
|
The
|
|
(d)
|
Exhibits.
|
||
| 99.1 | Press Release of Natural Health Trends Corp. dated November 2, 2022 | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
|
|
NATURAL HEALTH TRENDS CORP.
|
||
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Timothy S. Davidson
|
|
|
|
|
Timothy S. Davidson
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
Exhibit 99.1
Natural Health Trends Reports Third Quarter 2022 Financial Results
| – | More COVID restrictions and lockdowns in China adversely impacted our business |
|
– |
Strong cost control helped protect earnings |
|
| – | Declared a quarterly cash dividend of $0.20 per share |
HONG KONG – November 2, 2022 – 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 quarter ended September 30, 2022.
Third Quarter 2022 Financial Highlights
|
• |
Revenue of $11.7 million decreased 12% compared to $13.4 million in the second quarter of 2022 and decreased 18% compared to $14.3 million in the third quarter of 2021. |
|
• |
Operating loss was $145,000 compared to operating income of $215,000 in the second quarter of 2022 and operating income of $479,000 in the third quarter of 2021. |
|
• |
Net income was $47,000, or breakeven per diluted share, compared to net income of $183,000, or $0.02 per diluted share, in the second quarter of 2022 and net income of $471,000, or $0.04 per diluted share, in the third quarter of 2021. |
|
• |
The number of Active Members1 decreased 4% to 41,170 at September 30, 2022 compared to 43,020 at June 30, 2022, and decreased 10% compared to 45,950 at September 30, 2021. |
|
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. |
Year-to-Date 2022 Financial Highlights
|
• |
Revenue of $36.6 million decreased 17% compared to $43.9 million in the first nine months of 2021. |
|
• |
Operating loss was $313,000 compared to operating income of $1.1 million in the first nine months of 2021. |
|
• |
Net income was $125,000, or $0.01 per diluted share, compared to $853,000, or $0.07 per diluted share, in the first nine months of 2021. |
Management Commentary
“Our third quarter results were adversely impacted by extended and ongoing COVID-related measures in China,” commented Chris Sharng, President of Natural Health Trends Corp. “Despite the unpredictable environment our members must navigate through, they continue to work hard to share our superior health, wellness and beauty products and we continue to support them with new reward programs, virtual events, promotions and cautiously planned and executed incentive trips and trainings.”
Mr. Sharng continued, “We recently kicked off digital initiatives to improve our customer acquisition, member onboarding and overall shopping experience. We believe this online focus will be a key driver for future growth and enhanced productivity, in support of shareholder value.”
Balance Sheet and Cash Flow
|
• |
Net cash used in operating activities was $5.8 million in the first nine months of 2022, compared to $557,000 in the first nine months of 2021. |
|
• |
Total cash and cash equivalents were $70.7 million at September 30, 2022, down from $75.6 million at June 30, 2022. |
|
• |
On October 31, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 on each share of common stock outstanding. The dividend will be payable on November 25, 2022 to stockholders of record as of November 15, 2022. |
Third Quarter 2022 Financial Results Conference Call
Management will host a conference call to discuss the third quarter 2022 financial results today, Wednesday, November 2, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:
|
Date: |
Wednesday, November 2, 2022 |
|
Time: |
11:30 a.m. Eastern Time / 8:30 a.m. Pacific Time |
|
Dial-in: |
1-877-407-0789 (Domestic) 1-201-689-8562 (International) |
|
Conference ID: |
13733927 |
|
Webcast: |
https://viavid.webcasts.com/starthere.jsp?ei=1578822&tp_key=4c5656bb68 |
For those unable to participate during the live broadcast, a replay of the call will also be available from 2:30 p.m. Eastern Time on November 2, 2022 through 11:59 p.m. Eastern Time on November 16, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13733927.
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, the Americas, 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 February 25, 2022 with the Securities and Exchange Commission (SEC), as well as in subsequent reports filed this year with the SEC. The Company assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
CONTACT:
Scott Davidson
Senior Vice President and Chief Financial Officer
Natural Health Trends Corp.
Tel (Hong Kong): +852-3107-0800
Tel (U.S.): 310-541-0888
investor.relations@nhtglobal.com
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
|
September 30, 2022 |
December 31, 2021 |
|||||||
|
(Unaudited) |
||||||||
|
ASSETS |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ | 70,663 | $ | 83,843 | ||||
|
Inventories |
4,989 | 5,257 | ||||||
|
Other current assets |
3,360 | 4,369 | ||||||
|
Total current assets |
79,012 | 93,469 | ||||||
|
Property and equipment, net |
425 | 463 | ||||||
|
Operating lease right-of-use assets |
4,243 | 3,021 | ||||||
|
Restricted cash |
69 | 522 | ||||||
|
Deferred tax asset |
293 | 309 | ||||||
|
Other assets |
553 | 571 | ||||||
|
Total assets |
$ | 84,595 | $ | 98,355 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
|
Current liabilities: |
||||||||
|
Accounts payable |
$ | 983 | $ | 761 | ||||
|
Income taxes payable |
2,995 | 1,345 | ||||||
|
Accrued commissions |
2,524 | 3,636 | ||||||
|
Other accrued expenses |
1,321 | 1,933 | ||||||
|
Deferred revenue |
5,254 | 8,536 | ||||||
|
Amounts held in eWallets |
5,151 | 6,341 | ||||||
|
Operating lease liabilities |
1,165 | 1,239 | ||||||
|
Other current liabilities |
846 | 865 | ||||||
|
Total current liabilities |
20,239 | 24,656 | ||||||
|
Income taxes payable |
9,098 | 12,130 | ||||||
|
Deferred tax liability |
152 | 153 | ||||||
|
Operating lease liabilities |
3,197 | 1,928 | ||||||
|
Total liabilities |
32,686 | 38,867 | ||||||
|
Stockholders’ equity: |
||||||||
|
Preferred stock |
— | — | ||||||
|
Common stock |
13 | 13 | ||||||
|
Additional paid-in capital |
86,102 | 86,102 | ||||||
|
Accumulated deficit |
(6,961 | ) | (231 | ) | ||||
|
Accumulated other comprehensive loss |
(1,341 | ) | (492 | ) | ||||
|
Treasury stock, at cost |
(25,904 | ) | (25,904 | ) | ||||
|
Total stockholders’ equity |
51,909 | 59,488 | ||||||
|
Total liabilities and stockholders’ equity |
$ | 84,595 | $ | 98,355 | ||||
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
|||||||||||||
|
Net sales |
$ | 11,716 | $ | 14,276 | $ | 36,622 | $ | 43,897 | ||||||||
|
Cost of sales |
3,098 | 3,668 | 9,398 | 10,857 | ||||||||||||
|
Gross profit |
8,618 | 10,608 | 27,224 | 33,040 | ||||||||||||
|
Operating expenses: |
||||||||||||||||
|
Commissions expense |
4,863 | 6,027 | 15,370 | 18,468 | ||||||||||||
|
Selling, general and administrative expenses |
3,900 | 4,102 | 12,167 | 13,488 | ||||||||||||
|
Total operating expenses |
8,763 | 10,129 | 27,537 | 31,956 | ||||||||||||
|
Income (loss) from operations |
(145 | ) | 479 | (313 | ) | 1,084 | ||||||||||
|
Other income (expense), net |
187 | (53 | ) | 472 | (92 | ) | ||||||||||
|
Income before income taxes |
42 | 426 | 159 | 992 | ||||||||||||
|
Income tax provision (benefit) |
(5 | ) | (45 | ) | 34 | 139 | ||||||||||
|
Net income |
$ | 47 | $ | 471 | $ | 125 | $ | 853 | ||||||||
|
Net income per common share: |
||||||||||||||||
|
Basic |
$ | 0.00 | $ | 0.04 | $ | 0.01 | $ | 0.08 | ||||||||
|
Diluted |
$ | 0.00 | $ | 0.04 | $ | 0.01 | $ | 0.07 | ||||||||
|
Weighted average common shares outstanding: |
||||||||||||||||
|
Basic |
11,423 | 11,063 | 11,341 | 10,969 | ||||||||||||
|
Diluted |
11,423 | 11,423 | 11,423 | 11,423 | ||||||||||||
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
|
Nine Months Ended September 30, |
||||||||
|
2022 |
2021 |
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
|
Net income |
$ | 125 | $ | 853 | ||||
|
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
|
Depreciation and amortization |
156 | 237 | ||||||
|
Noncash lease expense |
889 | 895 | ||||||
|
Deferred income taxes |
(2 | ) | 66 | |||||
|
Changes in assets and liabilities: |
||||||||
|
Inventories |
140 | (675 | ) | |||||
|
Other current assets |
1,000 | (823 | ) | |||||
|
Other assets |
(44 | ) | 65 | |||||
|
Accounts payable |
228 | 300 | ||||||
|
Income taxes payable |
(1,382 | ) | (1,253 | ) | ||||
|
Accrued commissions |
(1,055 | ) | 29 | |||||
|
Other accrued expenses |
(540 | ) | (157 | ) | ||||
|
Deferred revenue |
(3,209 | ) | 2,973 | |||||
|
Amounts held in eWallets |
(1,150 | ) | (1,716 | ) | ||||
|
Operating lease liabilities |
(950 | ) | (935 | ) | ||||
|
Other current liabilities |
4 | (416 | ) | |||||
|
Net cash used in operating activities |
(5,790 | ) | (557 | ) | ||||
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
|
Purchases of property and equipment |
(130 | ) | (165 | ) | ||||
|
Net cash used in investing activities |
(130 | ) | (165 | ) | ||||
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
|
Dividends paid |
(6,855 | ) | (6,855 | ) | ||||
|
Net cash used in financing activities |
(6,855 | ) | (6,855 | ) | ||||
|
Effect of exchange rates on cash, cash equivalents and restricted cash |
(858 | ) | (151 | ) | ||||
|
Net decrease in cash, cash equivalents and restricted cash |
(13,633 | ) | (7,728 | ) | ||||
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period |
84,365 | 92,892 | ||||||
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period |
$ | 70,732 | $ | 85,164 | ||||
|
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION: |
||||||||
|
Right-of-use assets obtained in exchange for operating lease liabilities |
$ | 2,218 | $ | 516 | ||||
Document And Entity Information |
Nov. 02, 2022 |
|---|---|
| Document Information [Line Items] | |
| Entity, Registrant Name | NATURAL HEALTH TRENDS CORP. |
| Document, Type | 8-K |
| Document, Period End Date | Nov. 02, 2022 |
| Entity, Incorporation, State or Country Code | DE |
| Entity, File Number | 001-36849 |
| Entity, Tax Identification Number | 59-2705336 |
| Entity, Address, Address Line One | Units 1205-07, 12F, Mira Place Tower A |
| Entity, Address, Address Line Two | 132 Nathan Road |
| Entity, Address, Address Line Three | Tsimshatsui |
| Entity, Address, City or Town | Kowloon |
| Entity, Address, Country | HK |
| City Area Code | 852 |
| Local Phone Number | 3107-0800 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Entity, Emerging Growth Company | false |
| Title of 12(b) Security | Common Stock |
| Trading Symbol | NHTC |
| Security Exchange Name | NASDAQ |
| Amendment Flag | false |
| Entity, Central Index Key | 0000912061 |