– | Total orders taken were roughly flat despite stronger | |
– | Cash flows from operations before tax installment payment was positive, an improvement from the first quarter | |
– | Declared a quarterly cash dividend of |
Second Quarter 2023 Financial Highlights
- Revenue of $10.5 million decreased 21% compared to
$13.4 million in the second quarter of 2022. The decrease in revenue was primarily due to the changes in deferred revenue in the two respective quarters. Deferred revenue increased $1.2 million in the second quarter of 2023 but decreased$1.4 million in the same quarter last year, accounting for$2.6 million of the$2.8 million revenue variance. - Operating loss was $743,000 compared to operating income of
$215,000 in the second quarter of 2022. - Net loss was
$219,000 , or$0 .02 per diluted share, compared to net income of$183,000 , or$0 .02 per diluted share, in the second quarter of 2022. - The number of Active Members1 was down 4% to 36,730 at June 30, 2023 compared to 38,330 at
March 31, 2023 , and decreased 15% compared to 43,020 atJune 30, 2022 .
1
Year-to-Date 2023 Financial Highlights
- Revenue of
$22.4 million decreased 10% compared to$24 .9 million in the first six months of 2022. The revenue decrease was primarily due to the changes in deferred revenue in the two respective six-month periods. Deferred revenue increased$1.3 million in 2023 but decreased $1.8 million in the same period a year ago, resulting in a$3.1 million revenue variance. - Operating loss was $1.1 million compared to
$168,000 in the first six months of 2022. - Net income was
$38,000 , or breakeven per diluted share, compared to$78,000 , or$0 .01 per diluted share, in the first six months of 2022.
Management Commentary
“Despite tepid consumer sentiment in post zero-Covid China, we were able to generate orders roughly comparable to a year ago as orders in
Balance Sheet and Cash Flow
- Net cash used in operating activities was
$3.3 million in the first six months of 2023 compared to$3 .5 million in the first six months of 2022. Before tax installment payments, the liability of which arises from the 2017 U.S. Tax Cuts and Jobs Act (the “Act Act”), cash used in operating activities was$307,000 in the first six months 2023, versus$1.9 million in the comparable period a year ago. Of the total Tax Act liability of$20.2 million ,$11.1 million has been paid to date. - Total cash and cash equivalents were
$61 .6 million atJune 30, 2023 , down from$66 .6 million atMarch 31, 2023 . - On
July 31, 2023 , 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 August 25, 2023 to stockholders of record as ofAugust 15, 2023 .
Second Quarter 2023 Financial Results Conference Call
Management will host a conference call to discuss the second quarter 2023 financial results today, Wednesday, August 2, 2023 at 11:30 a.m. Eastern Time. The conference call details are as follows:
Date: | |
Time: | |
Dial-in: | 1-877-407-0789 (Domestic) 1-201-689-8562 (International) |
Conference ID: | 13739190 |
Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1618885&tp_key=88a2fd9f8e |
For those unable to participate during the live broadcast, a replay of the call will also be available from
About
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 3, 2023 with the
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 61,567 | $ | 69,667 | ||||
Inventories | 4,715 | 4,525 | ||||||
Other current assets | 3,665 | 3,359 | ||||||
Total current assets | 69,947 | 77,551 | ||||||
Property and equipment, net | 311 | 394 | ||||||
Operating lease right-of-use assets | 3,601 | 3,992 | ||||||
Restricted cash | 38 | 79 | ||||||
Deferred tax asset | 273 | 195 | ||||||
Other assets | 646 | 606 | ||||||
Total assets | $ | 74,816 | $ | 82,817 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 725 | $ | 810 | ||||
Income taxes payable | 3,939 | 2,972 | ||||||
Accrued commissions | 2,562 | 2,943 | ||||||
Other accrued expenses | 1,235 | 1,181 | ||||||
Deferred revenue | 6,851 | 5,597 | ||||||
Amounts held in eWallets | 4,335 | 4,895 | ||||||
Operating lease liabilities | 1,054 | 1,135 | ||||||
Other current liabilities | 837 | 905 | ||||||
Total current liabilities | 21,538 | 20,438 | ||||||
Income taxes payable | 5,054 | 9,098 | ||||||
Deferred tax liability | 140 | 141 | ||||||
Operating lease liabilities | 2,659 | 2,989 | ||||||
Total liabilities | 29,391 | 32,666 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | — | — | ||||||
Common stock | 13 | 13 | ||||||
Additional paid-in capital | 84,558 | 86,102 | ||||||
Accumulated deficit | (13,626 | ) | (9,056 | ) | ||||
Accumulated other comprehensive loss | (1,245 | ) | (1,004 | ) | ||||
(24,275 | ) | (25,904 | ) | |||||
Total stockholders’ equity | 45,425 | 50,151 | ||||||
Total liabilities and stockholders’ equity | $ | 74,816 | $ | 82,817 |
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net sales | $ | 10,511 | $ | 13,360 | $ | 22,372 | $ | 24,906 | ||||||||
Cost of sales | 2,666 | 3,392 | 5,697 | 6,300 | ||||||||||||
Gross profit | 7,845 | 9,968 | 16,675 | 18,606 | ||||||||||||
Operating expenses: | ||||||||||||||||
Commissions expense | 4,508 | 5,767 | 9,500 | 10,507 | ||||||||||||
Selling, general and administrative expenses | 4,080 | 3,986 | 8,312 | 8,267 | ||||||||||||
Total operating expenses | 8,588 | 9,753 | 17,812 | 18,774 | ||||||||||||
Income (loss) from operations | (743 | ) | 215 | (1,137 | ) | (168 | ) | |||||||||
Other income, net | 442 | 175 | 1,123 | 285 | ||||||||||||
Income (loss) before income taxes | (301 | ) | 390 | (14 | ) | 117 | ||||||||||
Income tax provision (benefit) | (82 | ) | 207 | (52 | ) | 39 | ||||||||||
Net income (loss) | $ | (219 | ) | $ | 183 | $ | 38 | $ | 78 | |||||||
Net income (loss) per common share: | ||||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.02 | $ | 0.00 | $ | 0.01 | |||||||
Diluted | $ | (0.02 | ) | $ | 0.02 | $ | 0.00 | $ | 0.01 | |||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 11,432 | 11,346 | 11,428 | 11,300 | ||||||||||||
Diluted | 11,432 | 11,424 | 11,439 | 11,424 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Six Months Ended | ||||||||
2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 38 | $ | 78 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Depreciation and amortization | 91 | 106 | ||||||
Share-based compensation | 85 | — | ||||||
Noncash lease expense | 564 | 599 | ||||||
Deferred income taxes | (82 | ) | 12 | |||||
Changes in assets and liabilities: | ||||||||
Inventories | (228 | ) | 7 | |||||
Other current assets | (362 | ) | 1,002 | |||||
Other assets | (52 | ) | 1 | |||||
Accounts payable | (82 | ) | 2 | |||||
Income taxes payable | (3,076 | ) | (1,390 | ) | ||||
Accrued commissions | (374 | ) | (531 | ) | ||||
Other accrued expenses | 68 | (132 | ) | |||||
Deferred revenue | 1,270 | (1,788 | ) | |||||
Amounts held in eWallets | (541 | ) | (862 | ) | ||||
Operating lease liabilities | (595 | ) | (600 | ) | ||||
Other current liabilities | (64 | ) | (4 | ) | ||||
Net cash used in operating activities | (3,340 | ) | (3,500 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (14 | ) | (78 | ) | ||||
Net cash used in investing activities | (14 | ) | (78 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Dividends paid | (4,608 | ) | (4,570 | ) | ||||
Net cash used in financing activities | (4,608 | ) | (4,570 | ) | ||||
Effect of exchange rates on cash, cash equivalents and restricted cash | (179 | ) | (506 | ) | ||||
Net decrease in cash, cash equivalents and restricted cash | (8,141 | ) | (8,654 | ) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 69,746 | 84,365 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ | 61,605 | $ | 75,711 | ||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Right-of-use assets obtained in exchange for operating lease liabilities | $ | (125 | ) | $ | 77 |
CONTACT:
Senior Vice President and Chief Financial Officer
Tel (
Tel (
investor.relations@nhtglobal.com
Source:
2023 GlobeNewswire, Inc., source