NHTC 8-K
Natural Health Trends Corp (NHTC)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Emerging growth company
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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.
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The
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(d)
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Exhibits.
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| 99.1 | Press Release of Natural Health Trends Corp. dated May 3, 2023 | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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NATURAL HEALTH TRENDS CORP.
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By:
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/s/ Timothy S. Davidson
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Timothy S. Davidson
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Senior Vice President and Chief Financial Officer
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Exhibit 99.1
Natural Health Trends Reports First Quarter 2023 Financial Results
| – | First year-over-year increase in net sales since the third quarter of 2021 and the second since the third quarter of 2018 | |
| – | Hong Kong net sales increased 10% compared to the first quarter of 2022 | |
| – | Fourth consecutive quarter of positive net income | |
| – | Declared a quarter cash dividend of $0.20 per share |
HONG KONG – May 3, 2023 – 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 March 31, 2023.
First Quarter 2023 Financial Highlights
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Revenue of $11.9 million increased 3% compared to $11.5 million in the first quarter of 2022. |
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Operating loss was $394,000 compared to $383,000 in the first quarter of 2022. |
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Net income was $257,000, or $0.02 per diluted share, compared to net loss of $105,000, or $0.01 per diluted share, in the first quarter of 2022. |
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The number of Active Members1 was down slightly to 38,330 at March 31, 2023 compared to 38,660 at December 31, 2022, and decreased 14% compared to 44,490 at March 31, 2022. |
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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. |
Management Commentary
“Despite the end of the Zero-Covid policies last December, our experience is that consumers have been slow and gradual to participate in the reopening. In this more positive environment, we are encouraged that our Hong Kong business has shown good progress as revenue increased 3% year-over-year, the first year-over-year increase since the third quarter of 2021 and the second increase since the third quarter of 2018,” commented Chris Sharng, President of Natural Health Trends Corp.
Mr. Sharng continued, “If the current trend of an improving operating environment continues, we are hopeful that our business can benefit from the prospect that people are more willing to meet, gather and travel, all important activities to how we facilitate our business development.”
Balance Sheet and Cash Flow
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Net cash used in operating activities was $696,000 in the first quarter of 2023, compared to net cash used in operating activities of $2.3 million in the first quarter of 2022. |
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Total cash and cash equivalents were $66.6 million at March 31, 2023, down from $69.7 million at December 31, 2022. |
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On May 1, 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 May 26, 2023 to stockholders of record as of May 16, 2023. |
First Quarter 2023 Financial Results Conference Call
Management will host a conference call to discuss the first quarter 2023 financial results today, Wednesday, May 3, 2023 at 11:30 a.m. Eastern Time. The conference call details are as follows:
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Date: |
Wednesday, May 3, 2023 |
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Time: |
11:30 a.m. Eastern Time / 8:30 a.m. Pacific Time |
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Dial-in: |
1-877-407-0789 (Domestic) 1-201-689-8562 (International) |
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Conference ID: |
13737199 |
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Webcast: |
https://viavid.webcasts.com/starthere.jsp?ei=1605531&tp_key=86671cf781 |
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 May 3, 2023 through 11:59 p.m. Eastern Time on May 10, 2023 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13737199.
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 March 3, 2023 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
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
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March 31, 2023 |
December 31, 2022 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 66,610 | $ | 69,667 | ||||
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Inventories |
4,982 | 4,525 | ||||||
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Other current assets |
3,420 | 3,359 | ||||||
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Total current assets |
75,012 | 77,551 | ||||||
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Property and equipment, net |
354 | 394 | ||||||
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Operating lease right-of-use assets |
3,909 | 3,992 | ||||||
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Restricted cash |
38 | 79 | ||||||
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Deferred tax asset |
253 | 195 | ||||||
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Other assets |
616 | 606 | ||||||
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Total assets |
$ | 80,182 | $ | 82,817 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
$ | 1,147 | $ | 810 | ||||
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Income taxes payable |
3,012 | 2,972 | ||||||
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Accrued commissions |
2,470 | 2,943 | ||||||
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Other accrued expenses |
1,105 | 1,181 | ||||||
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Deferred revenue |
5,617 | 5,597 | ||||||
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Amounts held in eWallets |
4,657 | 4,895 | ||||||
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Operating lease liabilities |
1,158 | 1,135 | ||||||
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Other current liabilities |
859 | 905 | ||||||
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Total current liabilities |
20,025 | 20,438 | ||||||
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Income taxes payable |
9,098 | 9,098 | ||||||
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Deferred tax liability |
140 | 141 | ||||||
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Operating lease liabilities |
2,869 | 2,989 | ||||||
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Total liabilities |
32,132 | 32,666 | ||||||
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Stockholders’ equity: |
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Preferred stock |
— | — | ||||||
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Common stock |
13 | 13 | ||||||
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Additional paid-in capital |
84,519 | 86,102 | ||||||
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Accumulated deficit |
(11,103 | ) | (9,056 | ) | ||||
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Accumulated other comprehensive loss |
(1,104 | ) | (1,004 | ) | ||||
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Treasury stock, at cost |
(24,275 | ) | (25,904 | ) | ||||
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Total stockholders’ equity |
48,050 | 50,151 | ||||||
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Total liabilities and stockholders’ equity |
$ | 80,182 | $ | 82,817 | ||||
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
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Three Months Ended March 31, |
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2023 |
2022 |
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Net sales |
$ | 11,861 | $ | 11,546 | ||||
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Cost of sales |
3,031 | 2,908 | ||||||
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Gross profit |
8,830 | 8,638 | ||||||
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Operating expenses: |
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Commissions expense |
4,992 | 4,740 | ||||||
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Selling, general and administrative expenses |
4,232 | 4,281 | ||||||
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Total operating expenses |
9,224 | 9,021 | ||||||
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Loss from operations |
(394 | ) | (383 | ) | ||||
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Other income, net |
681 | 110 | ||||||
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Income (loss) before income taxes |
287 | (273 | ) | |||||
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Income tax provision (benefit) |
30 | (168 | ) | |||||
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Net income (loss) |
$ | 257 | $ | (105 | ) | |||
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Net income (loss) per common share: |
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Basic |
$ | 0.02 | $ | (0.01 | ) | |||
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Diluted |
$ | 0.02 | $ | (0.01 | ) | |||
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Weighted average common shares outstanding: |
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Basic |
11,424 | 11,254 | ||||||
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Diluted |
11,428 | 11,254 | ||||||
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
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Three Months Ended March 31, |
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2023 |
2022 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) |
$ | 257 | $ | (105 | ) | |||
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Adjustments to reconcile net income (loss) to net cash used in operating activities: |
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Depreciation and amortization |
46 | 53 | ||||||
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Share-based compensation |
46 | — | ||||||
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Noncash lease expense |
280 | 302 | ||||||
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Deferred income taxes |
(57 | ) | (9 | ) | ||||
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Changes in assets and liabilities: |
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Inventories |
(490 | ) | 350 | |||||
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Other current assets |
(78 | ) | (332 | ) | ||||
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Other assets |
(18 | ) | (3 | ) | ||||
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Accounts payable |
338 | 64 | ||||||
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Income taxes payable |
40 | 53 | ||||||
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Accrued commissions |
(465 | ) | (1,129 | ) | ||||
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Other accrued expenses |
(76 | ) | (592 | ) | ||||
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Deferred revenue |
43 | (447 | ) | |||||
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Amounts held in eWallets |
(215 | ) | (253 | ) | ||||
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Operating lease liabilities |
(301 | ) | (296 | ) | ||||
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Other current liabilities |
(46 | ) | (4 | ) | ||||
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Net cash used in operating activities |
(696 | ) | (2,348 | ) | ||||
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of property and equipment |
(7 | ) | (40 | ) | ||||
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Net cash used in investing activities |
(7 | ) | (40 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Dividends paid |
(2,304 | ) | (2,285 | ) | ||||
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Net cash used in financing activities |
(2,304 | ) | (2,285 | ) | ||||
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Effect of exchange rates on cash, cash equivalents and restricted cash |
(91 | ) | (228 | ) | ||||
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Net decrease in cash, cash equivalents and restricted cash |
(3,098 | ) | (4,901 | ) | ||||
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CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period |
69,746 | 84,365 | ||||||
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CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period |
$ | 66,648 | $ | 79,464 | ||||
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SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES: |
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Right-of-use assets obtained in exchange for operating lease liabilities |
$ | (78 | ) | $ | — | |||