Reliv International Reports Third-Quarter Financial Results for 2019
CHESTERFIELD, Mo., Nov. 14, 2019 /PRNewswire/ -- Reliv International, Inc. (NASDAQ:RELV), a marketer of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2019.
Reliv reported net sales of $9.1 million for the third quarter of 2019 compared with net sales of $8.3 million in the third quarter of 2018. Net sales in the United States increased by $344,000 in the third quarter of 2019, which represented a 5.3% increase in net sales when compared to the prior-year quarter. Net sales in the United States were favorably impacted by the launch of the RLV line of hemp-extract products near the end of the second quarter of 2019.
Net sales in Reliv's foreign markets increased by $468,000, or 25.5%, in the third quarter of 2019 compared with the prior-year quarter. Net sales in Asia and Mexico increased by 93.3% and 21.9%, respectively, in the third quarter of 2019, offset by decreases in all other regions. Net sales in Reliv's foreign markets increased by 26.4% during the third quarter of 2019 when the impact of foreign currency fluctuation is removed.
Reliv reported a net loss for the third quarter of 2019 of $166,000 (loss per diluted share of $0.09) compared to a net loss of $542,000 (loss per diluted share of $0.29) in the third quarter of 2018. The loss from operations for the third quarter of 2019 was $85,000 compared to a loss from operations of $532,000 in the same period in 2018. Results from operations improved as the result of the increase in net sales and gross margin, coupled with a slight reduction in selling, general and administrative ("SGA") expenses in the quarter. SGA expenses decreased by $49,000 in the third quarter of 2019 to $3.80 million compared to $3.85 million in the prior-year quarter.
Net sales for the first nine months of 2019 were $26.9 million, which represents a 0.4% increase from the same period in 2018. Net sales in the United States decreased by 3.2% and net sales in Reliv's foreign markets increased by 11.8% in the first nine months of 2019 compared with the same period last year. Net sales in Reliv's foreign markets increased by 14.6% during the first nine months of 2019 when the impact of foreign currency fluctuation is removed.
Reliv reported net income of $70,000, or $0.04 per diluted share in the first nine months of 2019, compared to a net loss of $1.8 million or $0.95 per diluted share in the same period of 2018.
Reliv had cash and cash equivalents of $2.5 million as of September 30, 2019, compared to $2.0 million as of December 31, 2018. Net cash provided by operating activities was $27,000 in the first nine months of 2019.
As of September 30, 2019, Reliv had 34,000 active distributors and preferred customers – an increase of 11.3% from September 30, 2018 – of which 3,140 are Master Affiliate level and above. The number of preferred customers included in the active distributor and preferred customer count increased to 8,090 as of September 30, 2019 from 4,840 as of the prior year. This increase is primarily driven by the growth in the Philippines. The number of Master Affiliates decreased by 3.4% compared to the prior year total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.
As previously mentioned, Reliv formally introduced its RLV line of hemp-extract products late in the second quarter of 2019. Initially, the RLV line includes three liquid tinctures and one balm. All of the RLV products are derived from organically-grown, non-GMO hemp. Sales from the RLV product line represented 10.2% of net sales in the United States in the third quarter of 2019.
"We are excited about the addition of the RLV line into the Reliv product family," commented Ryan A. Montgomery, Chief Executive Officer. "Not only is it providing a spark in U.S. sales, it has created excitement in the entire Reliv business leading to a growth in new distributors and customers for all of the Reliv products. Additional products in the RLV line are in development for introduction within the next year."
In international operations, sales and distributor activity in the Philippines continues to grow at a tremendous rate. "We are very excited with our continued growth in the Philippines, fueled by another outstanding increase in the number of new distributors and preferred customers," noted Montgomery. Net sales in the Philippines grew by 94.5% in local currency in the third quarter of 2019, compared to the prior-year quarter, as the active distributor and preferred customer and Master Affiliate counts across all of the Asia markets increased by 110% and 56%, respectively. "We are supporting the growth in the Philippines, both through marketing initiatives and improvements in operations, and we have taken steps to channel that excitement into other markets in our Asia-Pacific region," said Montgomery. Effective October 1, 2019, Reliv modified its distributor compensation plan in its Australia/New Zealand and Malaysia markets to create a larger maximum purchasing discount for its distributors and a higher commission rate to those distributors who are directly responsible for generating new business.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address core nutrition, targeted solutions and overall wellness through its line of RLV hemp extracts. 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 13 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.
For more information, contact:
Steve Albright
Chief Financial Officer
(636) 733-1305
--FINANCIAL HIGHLIGHTS FOLLOW –
Reliv International, Inc. and Subsidiaries |
|||||
Condensed Consolidated Balance Sheets |
|||||
September 30 |
December 31 |
||||
2019 |
2018 |
||||
(Unaudited) |
(Audited) |
||||
Assets |
|||||
Current Assets: |
|||||
Cash and cash equivalents |
$2,540,779 |
$1,989,974 |
|||
Accounts receivable, less allowances of |
|||||
$5,000 in 2019 and 2018 |
249,318 |
400,759 |
|||
Notes & accounts receivables & deposits - related parties |
1,121,104 |
151,222 |
|||
Inventories |
2,347,804 |
2,954,947 |
|||
Assets held for sale |
- |
2,124,939 |
|||
Other current assets |
927,445 |
464,165 |
|||
Total current assets |
7,186,450 |
8,086,006 |
|||
Notes & accounts receivables - related parties |
2,481,563 |
1,282,072 |
|||
Other assets |
2,658,293 |
2,287,237 |
|||
Net property, plant and equipment |
4,513,915 |
4,698,550 |
|||
Total Assets |
$16,840,221 |
$16,353,865 |
|||
Liabilities and Stockholders' Equity |
|||||
Accounts payable, accruals & other current liabilities |
$4,554,269 |
$3,915,390 |
|||
Revolving line of credit |
500,000 |
- |
|||
Other noncurrent liabilities |
235,905 |
445,611 |
|||
Stockholders' equity |
11,550,047 |
11,992,864 |
|||
Total Liabilities and Stockholders' Equity |
$16,840,221 |
$16,353,865 |
|||
Consolidated Statements of Operations |
|||||
Three months ended September 30 |
Nine months ended September 30 |
||||
2019 |
2018 |
2019 |
2018 |
||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
||
Product sales |
$8,395,941 |
$7,817,526 |
$24,809,979 |
$25,129,503 |
|
Freight income |
521,192 |
519,519 |
1,521,014 |
1,670,522 |
|
Other revenue |
231,732 |
- |
564,389 |
- |
|
Net Sales |
9,148,865 |
8,337,045 |
26,895,382 |
26,800,025 |
|
Costs and expenses: |
|||||
Cost of goods sold |
2,497,993 |
2,383,942 |
7,200,716 |
7,089,958 |
|
Distributor royalties and commissions |
2,939,187 |
2,639,863 |
8,721,852 |
8,858,965 |
|
Selling, general and administrative |
3,796,276 |
3,845,304 |
11,224,748 |
12,546,840 |
|
Total Costs and Expenses |
9,233,456 |
8,869,109 |
27,147,316 |
28,495,763 |
|
Loss from operations |
(84,591) |
(532,064) |
(251,934) |
(1,695,738) |
|
Other income (expense): |
|||||
Interest income |
41,548 |
22,633 |
137,028 |
70,132 |
|
Interest expense |
(24,250) |
(16,408) |
(39,737) |
(93,195) |
|
Other income (expense) |
(12,564) |
(1,658) |
(13,224) |
12,207 |
|
Gain (loss) on sale of fixed assets |
- |
(6,804) |
434,549 |
(3,966) |
|
Income (loss) before income taxes |
(79,857) |
(534,301) |
266,682 |
(1,710,560) |
|
Provision for income taxes |
86,000 |
8,000 |
197,000 |
48,000 |
|
Net income (loss) |
($165,857) |
($542,301) |
$69,682 |
($1,758,560) |
|
Earnings (loss) per common share - Basic |
($0.09) |
($0.29) |
$0.04 |
($0.95) |
|
Weighted average shares |
1,746,000 |
1,845,000 |
1,746,000 |
1,845,000 |
|
Earnings (loss) per common share - Diluted |
($0.09) |
($0.29) |
$0.04 |
($0.95) |
|
Weighted average shares |
1,746,000 |
1,845,000 |
1,746,000 |
1,845,000 |
|
Reliv International, Inc. and Subsidiaries |
||||||||
Net sales by Market |
||||||||
(in thousands) |
Three months ended September 30, |
Change from |
||||||
2019 |
2018 |
prior year |
||||||
Amount |
% of Net |
Amount |
% of Net |
Amount |
% |
|||
United States |
$ 6,843 |
74.8% |
$ 6,499 |
78.0% |
$ 344 |
5.3% |
||
Australia/New Zealand |
135 |
1.5% |
156 |
1.9% |
(21) |
-13.5% |
||
Canada |
140 |
1.5% |
153 |
1.8% |
(13) |
-8.5% |
||
Mexico |
156 |
1.7% |
128 |
1.5% |
28 |
21.9% |
||
Europe |
727 |
7.9% |
807 |
9.7% |
(80) |
-9.9% |
||
Asia |
1,148 |
12.6% |
594 |
7.1% |
554 |
93.3% |
||
Consolidated Total |
$ 9,149 |
100.0% |
$ 8,337 |
100.0% |
$ 812 |
9.7% |
||
Net sales by Market |
||||||||
(in thousands) |
Nine months ended September 30, |
Change from |
||||||
2019 |
2018 |
prior year |
||||||
Amount |
% of Net |
Amount |
% of Net |
Amount |
% |
|||
United States |
$ 19,859 |
73.8% |
$ 20,505 |
76.5% |
$ (646) |
-3.2% |
||
Australia/New Zealand |
445 |
1.6% |
565 |
2.1% |
(120) |
-21.2% |
||
Canada |
479 |
1.8% |
557 |
2.1% |
(78) |
-14.0% |
||
Mexico |
444 |
1.7% |
348 |
1.3% |
96 |
27.6% |
||
Europe |
2,422 |
9.0% |
3,002 |
11.2% |
(580) |
-19.3% |
||
Asia |
3,246 |
12.1% |
1,823 |
6.8% |
1,423 |
78.1% |
||
Consolidated Total |
$ 26,895 |
100.0% |
$ 26,800 |
100.0% |
$ 95 |
0.4% |
||
The following table sets forth, as of September 30, 2019 and 2018, 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 8,090 and 4,840 of the Active Distributor count as of September 30, 2019 and 2018, respectively. |
||||||||
Active Distributors/Preferred Customers and Master Affiliates and Above by Market |
||||||||
As of 9/30/2019 |
As of 9/30/2018 |
Change in % |
||||||
Active |
Master |
Active |
Master |
Active |
Master |
|||
United States |
19,350 |
2,070 |
20,390 |
2,290 |
-5.1% |
-9.6% |
||
Australia/New Zealand |
890 |
70 |
1,010 |
80 |
-11.9% |
-12.5% |
||
Canada |
530 |
70 |
570 |
80 |
-7.0% |
-12.5% |
||
Mexico |
1,280 |
90 |
850 |
80 |
50.6% |
12.5% |
||
Europe |
2,440 |
310 |
3,210 |
380 |
-24.0% |
-18.4% |
||
Asia |
9,510 |
530 |
4,520 |
340 |
110.4% |
55.9% |
||
Consolidated Total |
34,000 |
3,140 |
30,550 |
3,250 |
11.3% |
-3.4% |
||
SOURCE Reliv International
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