Reliv International Reports First-Quarter Financial Results for 2018
May 11 2018 - 7:00AM
Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional
supplements that promote optimal health, today reported its
financial results for the first quarter of 2018.
First-Quarter Results
Reliv reported net sales of $10.0 million for the first quarter
of 2018 compared with net sales of $12.8 million in the first
quarter of 2017. Net sales in the United States decreased to
$7.7 million in the first quarter of 2018, which represented a 25.2
percent decline in net sales when compared to the prior-year
quarter. In the first quarter of 2017, Reliv launched the
Fit3 line of products in the United States. Net sales in
Reliv’s foreign markets decreased 7.4 percent in the first quarter
of 2018 compared with the prior-year first quarter. Net sales
in Europe and Asia decreased by 3.0 and 7.8 percent, respectively,
in the first quarter of 2018, along with decreases in other
regions.
Reliv reported a net loss for the first quarter of 2018 of
$238,000 (loss per diluted share of $0.13) compared to net income
of $524,000 (income per diluted share of $0.28) in the first
quarter of 2017. The loss from operations for the first
quarter of 2018 was $224,000 compared to income from operations of
$517,000 in the same period in 2017. Results from operations
were primarily impacted by the decline in net sales and gross
margin, partially offset by a reduction in selling, general and
administrative (“SGA”) expenses in the quarter. SGA expenses
decreased from $4.9 million in the first quarter of 2017 to $4.5
million in the first quarter of 2018.
“Our sales comparisons for the first quarter of 2018 were a
challenge compared to the prior year that included the launch of
the Fit3 line,” said Ryan A. Montgomery, President. “Clearly,
we have work to do in revitalizing the sales in the United States
and in other markets around the Reliv world. That work has
been underway, highlighted by some key announcements at our Reliv
Live event in Anaheim.”
At its regional spring distributor conference in Anaheim, Reliv
unveiled its newest technology and tools designed to give Reliv
independent distributors an edge. First, the company launched the
Reliv Mobile App, which gives distributors a fast and easy way to
recruit and run their business on the go. A whole host of new video
content is featured in the app to assist distributors in sharing
the Reliv product line and business opportunity. In addition, the
company revealed its newest business opportunity presentation – a
more engaging, concise and video-centric model designed to give
distributors an easier way to present the Reliv opportunity and
product line.
Also, Reliv formally introduced its newest core nutrition
product – Reliv Now® with Whey. Formulated using the same optimal
blend of vitamins, minerals and herbs of Reliv Now® with Soy, this
newest product gives consumers an additional protein source to make
Reliv more competitive with its offerings in the marketplace.
Distributors now have a simplified approach to product positioning
with Step 1: Core Nutrition and Step 2: Customizing nutrition with
Targeted Solutions.
Reliv is continuing additional distributor/customer recruitment
programs such as free ground shipping for new distributors reaching
the Quick Start and Master Affiliate business levels, a 20 percent
discount on autoship orders placed by Preferred Customers, and its
product credit incentive, “3 & Free”, to distributors for
having three new Preferred Customers with a minimum order
amount.
“These initiatives, along with other coming programs and
promotions, will be the springboard of our growth strategy for
2018,” commented Montgomery.
Reliv had cash and cash equivalents of $3.7 million as of March
31, 2018, compared to $3.3 million as of December 31, 2017.
Net cash generated from operating activities was $500,000 in the
first quarter of 2018.
As of March 31, 2018, Reliv had 32,100 distributors and
preferred customers – a decrease of 13.9 percent from March 31,
2017 – of which 3,140 are Master Affiliate level and above.
The number of Master Affiliates decreased by 12.5 percent
compared to the year-ago total. Master Affiliate is the level
at which distributors are eligible to earn generation
royalties.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces
nutritional supplements that promote optimal nutrition. Reliv
supplements address core nutrition and targeted
solutions. 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 15 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.
--FINANCIAL HIGHLIGHTS FOLLOW
–
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Reliv
International, Inc. and Subsidiaries |
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Condensed
Consolidated Balance Sheets |
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March 31 |
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December 31 |
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2018 |
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2017 |
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(Unaudited) |
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(Audited) |
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Assets |
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Current Assets: |
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Cash and
cash equivalents |
$ |
3,676,840 |
|
$ |
3,272,788 |
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Accounts
receivable, less allowances of |
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$25,400
in 2018 and $26,300 in 2017 |
|
137,843 |
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29,760 |
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Accounts
and note due from employees and distributors |
|
136,726 |
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|
138,497 |
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Inventories |
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4,177,253 |
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4,555,485 |
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Other
current assets |
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715,957 |
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399,154 |
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Total
current assets |
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8,844,619 |
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8,395,684 |
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Other assets |
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6,929,172 |
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7,003,073 |
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Net property, plant and
equipment |
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5,547,851 |
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5,677,239 |
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Total Assets |
$ |
21,321,642 |
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$ |
21,075,996 |
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Liabilities and
Stockholders' Equity |
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Accounts payable and
accrued expenses |
$ |
4,134,391 |
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$ |
3,212,634 |
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Current portion of
long-term debt |
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2,937,101 |
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3,045,421 |
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Other noncurrent
liabilities |
|
458,674 |
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453,354 |
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Stockholders'
equity |
|
13,791,476 |
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14,364,587 |
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Total Liabilities and
Stockholders' Equity |
$ |
21,321,642 |
|
$ |
21,075,996 |
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Consolidated
Statements of Operations |
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Three months ended March 31 |
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2018 |
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2017 |
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(Unaudited) |
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(Unaudited) |
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Product sales |
$ |
9,391,381 |
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$ |
11,835,116 |
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Handling & freight
income |
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611,858 |
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942,666 |
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Net Sales |
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10,003,239 |
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12,777,782 |
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Costs and
expenses: |
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Cost of products
sold |
|
2,349,742 |
|
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2,835,525 |
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Distributor
royalties and commissions |
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3,391,745 |
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4,498,553 |
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Selling, general
and administrative |
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4,485,895 |
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4,926,279 |
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Total Costs and
Expenses |
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10,227,382 |
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12,260,357 |
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Income (loss) from
operations |
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(224,143 |
) |
|
517,425 |
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Other income
(expense): |
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Interest
income |
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23,952 |
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25,526 |
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Interest
expense |
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(31,565 |
) |
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(24,841 |
) |
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Other
income |
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10,451 |
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32,683 |
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Income (loss) before
income taxes |
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(221,305 |
) |
|
550,793 |
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Provision for income
taxes |
|
17,000 |
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|
27,000 |
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Net income (loss) |
$ |
(238,305 |
) |
$ |
523,793 |
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Earnings (loss) per
common share - Basic |
$ |
(0.13 |
) |
$ |
0.28 |
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Weighted average
shares |
|
1,845,000 |
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1,845,000 |
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Earnings (loss) per
common share - Diluted |
$ |
(0.13 |
) |
$ |
0.28 |
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Weighted average
shares |
|
1,845,000 |
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|
1,846,000 |
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Reliv International, Inc. and Subsidiaries |
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Net sales by Market |
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(in thousands) |
Three months ended March 31, |
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Change from |
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2018 |
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2017 |
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prior year |
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|
Amount |
% of NetSales |
|
Amount |
% of NetSales |
|
Amount |
% |
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United States |
$ |
7,670 |
76.7 |
% |
|
$ |
10,259 |
80.3 |
% |
|
$ |
(2,589 |
) |
-25.2 |
% |
|
Australia/New
Zealand |
|
232 |
2.3 |
% |
|
|
260 |
2.0 |
% |
|
|
(28 |
) |
-10.8 |
% |
|
Canada |
|
242 |
2.4 |
% |
|
|
264 |
2.1 |
% |
|
|
(22 |
) |
-8.3 |
% |
|
Mexico |
|
107 |
1.1 |
% |
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|
157 |
1.2 |
% |
|
|
(50 |
) |
-31.8 |
% |
|
Europe |
|
1,165 |
11.6 |
% |
|
|
1,201 |
9.4 |
% |
|
|
(36 |
) |
-3.0 |
% |
|
Asia |
|
587 |
5.9 |
% |
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|
637 |
5.0 |
% |
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(50 |
) |
-7.8 |
% |
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Consolidated Total |
$ |
10,003 |
100.0 |
% |
|
$ |
12,778 |
100.0 |
% |
|
$ |
(2,775 |
) |
-21.7 |
% |
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The following table sets forth, as of March 31, 2018 and 2017,
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 4,780 and 5,200 of the
Active Distributor count as of March 31, 2018 and 2017,
respectively. |
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Active Distributors/Preferred Customers and Master
Affiliates and Above by Market |
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As of 3/31/2018 |
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As of 3/31/2017 |
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Change in % |
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ActiveDistributorsand
PreferredCustomers |
MasterAffiliates andAbove |
|
ActiveDistributorsand
PreferredCustomers |
MasterAffiliates andAbove |
|
ActiveDistributorsand
PreferredCustomers |
MasterAffiliates andAbove |
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|
United States |
|
21,800 |
2,240 |
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26,110 |
2,610 |
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-16.5 |
% |
-14.2 |
% |
|
Australia/New
Zealand |
|
1,070 |
80 |
|
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|
1,440 |
110 |
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|
-25.7 |
% |
-27.3 |
% |
|
Canada |
|
630 |
80 |
|
|
|
780 |
90 |
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|
-19.2 |
% |
-11.1 |
% |
|
Mexico |
|
660 |
60 |
|
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|
880 |
60 |
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|
-25.0 |
% |
0.0 |
% |
|
Europe |
|
3,630 |
350 |
|
|
|
4,620 |
410 |
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|
-21.4 |
% |
-14.6 |
% |
|
Asia |
|
4,310 |
330 |
|
|
|
3,450 |
310 |
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|
24.9 |
% |
6.5 |
% |
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Consolidated Total |
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32,100 |
3,140 |
|
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|
37,280 |
3,590 |
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|
-13.9 |
% |
-12.5 |
% |
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For more information, contact:
Steve AlbrightChief Financial Officer(636) 733-1305
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