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 4, 2022 | ||
| 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 2022 Financial Results
| – | Hong Kong and China COVID restrictions impacted our logistics |
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Sales momentum in Japan and Southeast Asia continued |
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| – | Declared a quarterly cash dividend of $0.20 per share |
HONG KONG – May 4, 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 March 31, 2022.
First Quarter 2022 Financial Highlights
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Revenue of $11.5 million decreased 14% compared to $13.5 million in the first quarter of 2021. |
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Operating loss was $383,000 compared to operating income of $220,000 in the first quarter of 2021. |
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Net loss was $105,000, or $0.01 per diluted share, compared to net income of $153,000, or $0.01 per diluted share, in the first quarter of 2021. |
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The number of Active Members1 decreased 3% to 44,490 at March 31, 2022 compared to 45,760 at December 31, 2021, and decreased 10% compared to 49,420 at March 31, 2021. |
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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
“The first quarter was challenging due to a significant increase in COVID-19 government-mandated restrictions and lockdowns impacting Hong Kong and China, especially Shenzhen, immediately following the Chinese New Year holiday. The additional measures disrupted supply chains, created order delivery uncertainty, and prohibited us from holding in-person member events in China and Macau. Even though much of the Mainland Chinese population was under some forms of lockdown during the quarter, our leaders remain committed to finding and implementing innovative ways to conduct business as our staff continues to adjust to the ever-changing needs of our global business,” said Chris Sharng, President of Natural Health Trends Corp.
Mr. Sharng continued, “We are encouraged by the sustained growth in Japan and Southeast Asia and continue to ready ourselves for expansion and diversification in Latin America. We recently conducted successful virtual events for members in North America, Peru, Japan, India and CIS markets and an in-person event for members in Europe. We are pleased with the enthusiasm and participation to embrace our products and marketing programs as they bring our health, wellness and beauty products to customers around the world.”
Balance Sheet and Cash Flow
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Net cash used in operating activities was $2.3 million in the first quarter of 2022, compared to net cash provided by operating activities of $414,000 in the first quarter of 2021. |
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Total cash and cash equivalents were $79.4 million at March 31, 2022, down from $83.8 million at December 31, 2021. |
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On May 2, 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 May 27, 2022 to stockholders of record as of May 17, 2022. |
First Quarter 2022 Financial Results Conference Call
Management will host a conference call to discuss the first quarter 2022 financial results today, Wednesday, May 4, 2022 at 11:30 a.m. Eastern Time. The conference call details are as follows:
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Wednesday, May 4, 2022 |
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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: |
13727755 |
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Webcast: |
https://viavid.webcasts.com/starthere.jsp?ei=1534881&tp_key=6bc04f960d |
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 4, 2022 through 11:59 p.m. Eastern Time on May 18, 2022 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13727755.
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
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
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March 31, 2022 |
December 31, 2021 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 79,382 | $ | 83,843 | ||||
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Inventories |
4,860 | 5,257 | ||||||
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Other current assets |
4,674 | 4,369 | ||||||
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Total current assets |
88,916 | 93,469 | ||||||
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Property and equipment, net |
450 | 463 | ||||||
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Operating lease right-of-use assets |
2,708 | 3,021 | ||||||
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Restricted cash |
82 | 522 | ||||||
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Deferred tax asset |
318 | 309 | ||||||
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Other assets |
568 | 571 | ||||||
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Total assets |
$ | 93,042 | $ | 98,355 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
$ | 824 | $ | 761 | ||||
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Income taxes payable |
1,397 | 1,345 | ||||||
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Accrued commissions |
2,512 | 3,636 | ||||||
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Other accrued expenses |
1,332 | 1,933 | ||||||
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Deferred revenue |
8,049 | 8,536 | ||||||
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Amounts held in eWallets |
6,055 | 6,341 | ||||||
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Operating lease liabilities |
1,174 | 1,239 | ||||||
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Other current liabilities |
855 | 865 | ||||||
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Total current liabilities |
22,198 | 24,656 | ||||||
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Income taxes payable |
12,130 | 12,130 | ||||||
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Deferred tax liability |
153 | 153 | ||||||
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Operating lease liabilities |
1,691 | 1,928 | ||||||
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Total liabilities |
36,172 | 38,867 | ||||||
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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 |
86,102 | 86,102 | ||||||
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Accumulated deficit |
(2,621 | ) | (231 | ) | ||||
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Accumulated other comprehensive loss |
(720 | ) | (492 | ) | ||||
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Treasury stock, at cost |
(25,904 | ) | (25,904 | ) | ||||
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Total stockholders’ equity |
56,870 | 59,488 | ||||||
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Total liabilities and stockholders’ equity |
$ | 93,042 | $ | 98,355 | ||||
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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2022 |
2021 |
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Net sales |
$ | 11,546 | $ | 13,469 | ||||
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Cost of sales |
2,908 | 3,255 | ||||||
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Gross profit |
8,638 | 10,214 | ||||||
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Operating expenses: |
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Commissions expense |
4,740 | 5,514 | ||||||
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Selling, general and administrative expenses |
4,281 | 4,480 | ||||||
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Total operating expenses |
9,021 | 9,994 | ||||||
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Income (loss) from operations |
(383 | ) | 220 | |||||
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Other income, net |
110 | 20 | ||||||
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Income (loss) before income taxes |
(273 | ) | 240 | |||||
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Income tax provision (benefit) |
(168 | ) | 87 | |||||
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Net income (loss) |
$ | (105 | ) | $ | 153 | |||
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Net income (loss) per common share: |
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Basic |
$ | (0.01 | ) | $ | 0.01 | |||
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Diluted |
$ | (0.01 | ) | $ | 0.01 | |||
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Weighted average common shares outstanding: |
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Basic |
11,254 | 10,874 | ||||||
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Diluted |
11,254 | 11,424 | ||||||
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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2022 |
2021 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) |
$ | (105 | ) | $ | 153 | |||
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
53 | 79 | ||||||
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Noncash lease expense |
302 | 294 | ||||||
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Deferred income taxes |
(9 | ) | 9 | |||||
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Changes in assets and liabilities: |
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Inventories |
350 | 123 | ||||||
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Other current assets |
(332 | ) | 195 | |||||
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Other assets |
(3 | ) | 2 | |||||
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Accounts payable |
64 | 176 | ||||||
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Income taxes payable |
53 | 67 | ||||||
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Accrued commissions |
(1,129 | ) | (344 | ) | ||||
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Other accrued expenses |
(592 | ) | (245 | ) | ||||
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Deferred revenue |
(447 | ) | 1,093 | |||||
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Amounts held in eWallets |
(253 | ) | (727 | ) | ||||
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Operating lease liabilities |
(296 | ) | (322 | ) | ||||
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Other current liabilities |
(4 | ) | (139 | ) | ||||
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Net cash provided by (used in) operating activities |
(2,348 | ) | 414 | |||||
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of property and equipment |
(40 | ) | (63 | ) | ||||
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Net cash used in investing activities |
(40 | ) | (63 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Dividends paid |
(2,285 | ) | (2,285 | ) | ||||
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Net cash used in financing activities |
(2,285 | ) | (2,285 | ) | ||||
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Effect of exchange rates on cash, cash equivalents and restricted cash |
(228 | ) | (222 | ) | ||||
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Net decrease in cash, cash equivalents and restricted cash |
(4,901 | ) | (2,156 | ) | ||||
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CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period |
84,365 | 92,892 | ||||||
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CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period |
$ | 79,464 | $ | 90,736 | ||||
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SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION: |
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Right-of-use assets obtained in exchange for operating lease liabilities |
$ | — | $ | 400 | ||||