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Natural Health Trends Corp (NHTC) SEC Filing 8-K Material Event for the period ending Wednesday, February 9, 2022

Natural Health Trends Corp

CIK: 912061 Ticker: NHTC

Exhibit 99.1

 

Natural Health Trends Reports Fourth Quarter and Full Year 2021 Financial Results

 

– Fourth quarter revenue of $16.1 million increased 13% compared to the third quarter of 2021 

– Seventh consecutive quarter of positive operating income and net income

– Generated positive cash flow from operations in the fourth quarter and full year of 2021

– Declared a quarterly cash dividend of $0.20 per share 

 

HONG KONG – February 9, 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 fourth quarter and full year ended December 31, 2021.

 

Fourth Quarter 2021 Financial Highlights

 

 

Revenue of $16.1 million increased 13% compared to $14.3 million in the third quarter of 2021 and decreased 3% compared to $16.6 million in the fourth quarter of 2020. 

 

Operating income was $487,000 compared to $479,000 in the third quarter of 2021 and $1.3 million in the fourth quarter of 2020.

 

Net income was $232,000, or $0.02 per diluted share, compared to $471,000, or $0.04 per diluted share, in the third quarter of 2021 and $747,000, or $0.07 per diluted share, in the fourth quarter of 2020.

 

The number of Active Members1 were down slightly to 45,760 at December 31, 2021, compared to 45,950 at September 30, 2021, and decreased 12% compared to 52,230 at December 31, 2020.

 

 

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 2021 Financial Highlights

 

 

Revenue of $60.0 million decreased 3% compared to $62.1 million in 2020.

 

Operating income was $1.6 million compared to $669,000 in 2020.

 

Net income was $1.1 million, or $0.09 per diluted share, compared to $843,000, or $0.07 per diluted share, in 2020.

 

Management Commentary

 

“We were pleased to report fourth quarter revenue of $16.1 million, an increase of 13% over the third quarter of 2021,” commented Chris Sharng, President of Natural Health Trends Corp. “The top-line improvement reflected double-digit growth in order volume given our increased ability to adapt to the ever-changing macroeconomic environment resulting from the pandemic. The increase in order volume resulted in our deferred revenue balance growing by $2.5 million from September 30 to December 31, 2021. Additionally, we reported our seventh consecutive quarter of positive operating income and net income.”

 

Mr. Sharng continued, “As we look ahead into 2022, the effects of the COVID-19 pandemic, and the associated government-mandated restrictions and lockdowns, will likely continue to present headwinds to our business. However, we believe we can continue to support our order volume due to the unwavering hard work and dedication of our employees, leaders and members, coupled with our ability to quickly respond and adapt to changing market conditions. We are guardedly optimistic we will benefit from a gradual resumption of in-person member events and activities going forward.”

 

 

1

 

Balance Sheet and Cash Flow

 

 

Net cash provided by operating activities was $1.0 million in 2021 compared to $1.9 million in 2020.

 

Total cash and cash equivalents were $83.8 million as of December 31, 2021, down from $92.4 million as of December 31, 2020. 

 

On February 7, 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 March 4, 2022 to stockholders of record as of February 22, 2022.

 

The Company expects to issue its 2021 audited financial results in late February with its Annual Report on Form 10-K to be filed with the United States Securities and Exchange Commission. These financial results are preliminary and the accompanying financial statements have not been audited or have not yet been reviewed by the Company’s independent accountants. Significant updates and revisions may be required before the release of the Company’s 2021 audited financial results.

 

Fourth Quarter and Full Year 2021 Financial Results Conference Call

 

Management will host a conference call to discuss the fourth quarter and full year 2021 financial results today, Wednesday, February 9, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:

 

Date:

Wednesday, February 9, 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:

13726094

Webcast:

https://viavid.webcasts.com/starthere.jsp?ei=1522631&tp_key=580f9875a9

 

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 February 9, 2022 through 11:59 p.m. Eastern Time on February 23, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number:  13726094.

 

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 26, 2021 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.

 

2

 

CONTACTS:

 

Company 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

scott.davidson@nhtglobal.com

         

Investor Contact:

ADDO Investor Relations

Tel: 310-829-5400

investor.relations@nhtglobal.com

 

3

 

NATURAL HEALTH TRENDS CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data) 

 

   

December 31,

 
   

2021

   

2020

 
    (Unaudited)    

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 83,843     $ 92,367  

Inventories

    5,257       3,779  

Other current assets

    4,369       3,595  

Total current assets

    93,469       99,741  

Property and equipment, net

    463       539  

Operating lease right-of-use assets

    3,021       3,745  

Restricted cash

    522       525  

Deferred tax asset

    309       731  

Other assets

    571       661  

Total assets

  $ 98,355     $ 105,942  

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

Current liabilities:

               

Accounts payable

  $ 761     $ 580  

Income taxes payable

    1,345       1,481  

Accrued commissions

    3,636       3,496  

Other accrued expenses

    1,933       1,922  

Deferred revenue

    8,536       3,091  

Amounts held in eWallets

    6,341       8,503  

Operating lease liabilities

    1,239       1,163  

Other current liabilities

    865       1,270  

Total current liabilities

    24,656       21,506  

Income taxes payable

    12,130       13,748  

Deferred tax liability

    153       216  

Operating lease liabilities

    1,928       2,775  

Total liabilities

    38,867       38,245  

Stockholders’ equity:

               

Preferred stock

           

Common stock

    13       13  

Additional paid-in capital

    86,102       86,102  

Retained earnings (accumulated deficit)

    (231 )     7,822  

Accumulated other comprehensive loss

    (492 )     (336 )

Treasury stock, at cost

    (25,904 )     (25,904 )

Total stockholders’ equity

    59,488       67,697  

Total liabilities and stockholders’ equity

  $ 98,355     $ 105,942  

 

4

 

NATURAL HEALTH TRENDS CORP. 

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

   

Three Months Ended December 31,

   

Year Ended December 31,

 
   

2021

   

2020

   

2021

   

2020

 
   

(Unaudited)

   

(Unaudited)

         

Net sales

  $ 16,108     $ 16,595     $ 60,005     $ 62,071  

Cost of sales

    4,153       4,024       15,010       16,990  

Gross profit

    11,955       12,571       44,995       45,081  

Operating expenses:

                               

Commissions expense

    7,110       6,868       25,578       26,204  

Selling, general and administrative expenses

    4,358       4,437       17,846       18,208  

Total operating expenses

    11,468       11,305       43,424       44,412  

Income from operations

    487       1,266       1,571       669  

Other income (expense), net

    31       218       (61 )     821  

Income before income taxes

    518       1,484       1,510       1,490  

Income tax provision

    286       737       425       647  

Net income

  $ 232     $ 747     $ 1,085     $ 843  

Net income per common share:

                               

Basic

  $ 0.02     $ 0.07     $ 0.10     $ 0.08  

Diluted

  $ 0.02     $ 0.07     $ 0.09     $ 0.07  

Weighted-average number of common shares outstanding:

                               

Basic

    11,159       10,777       11,017       10,630  

Diluted

    11,424       11,424       11,424       11,424  

 

5

 

NATURAL HEALTH TRENDS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

   

Year Ended December 31,

 
   

2021

   

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

    (Unaudited)          

Net income

  $ 1,085     $ 843  

Adjustments to reconcile net income to net cash provided by operating activities:

               

Depreciation and amortization

    299       410  

Noncash lease expense

    1,163       1,532  

Deferred income taxes

    362       1,339  

Changes in assets and liabilities:

               

Inventories

    (1,547 )     2,700  

Other current assets

    (803 )     2,322  

Other assets

    68       181  

Accounts payable

    182       (102 )

Income taxes payable

    (1,753 )     (311 )

Accrued commissions

    212       566  

Other accrued expenses

    20       (471 )

Deferred revenue

    5,482       (1,433 )

Amounts held in eWallets

    (2,122 )     (4,491 )

Operating lease liabilities

    (1,237 )     (1,427 )

Other current liabilities

    (395 )     227  

Net cash provided by operating activities

    1,016       1,885  

CASH FLOWS FROM INVESTING ACTIVITIES:

               

Purchases of property and equipment

    (225 )     (211 )

Net cash used in investing activities

    (225 )     (211 )

CASH FLOWS FROM FINANCING ACTIVITIES:

               

Dividends paid

    (9,138 )     (9,138 )

Net cash used in financing activities

    (9,138 )     (9,138 )

Effect of exchange rates on cash, cash equivalents and restricted cash

    (180 )     931  

Net decrease in cash, cash equivalents and restricted cash

    (8,527 )     (6,533 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

    92,892       99,425  

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

  $ 84,365     $ 92,892  

SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:

               

Right-of-use assets obtained in exchange for operating lease liabilities

  $ 472     $ 2,747  

 

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Ticker: NHTC
CIK: 912061
Form Type: 8-K Corporate News
Accession Number: 0001437749-22-002810
Submitted to the SEC: Wed Feb 09 2022 9:10:15 AM EST
Accepted by the SEC: Wed Feb 09 2022
Period: Wednesday, February 9, 2022
Industry: Wholesale Miscellaneous Nondurable Goods
Events:
  1. Earnings Release
  2. Financial Exhibit

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