Reliv International Reports Second-Quarter Financial Results
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E-mailCHESTERFIELD, MO -- (Marketwired) -- 08/14/15 -- Reliv International, Inc. (NASDAQ: RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2015.
Net sales for the quarter were $12.4 million, a 14.0 percent decrease from the second quarter last year. Net U.S. sales totaled $9.6 million, down from $10.8 million in the second quarter of 2014. Net sales outside of the United States decreased 22.1 percent in the second quarter of 2015 compared to the prior-year quarter. Foreign currency fluctuation accounted for 8.7 percent of the net sales decline outside of the United States. Net sales in Europe declined 30.7 percent in the second quarter of 2015 compared to the prior-year quarter, with foreign currency fluctuation accounting for 6.8 percent of the decline.
The net loss for the second quarter of 2015 was $846,000 or $0.07 per diluted share, compared to a net loss of $289,000 or $0.02 per diluted share in the 2014 second quarter. The loss from operations for the second quarter of 2015 was $1.12 million compared to a loss of $475,000 in the same quarter of 2014.
Net sales for the first six months of 2015 were $27.3 million, which represents a 5.7 percent decrease from the same period in 2014. In the United States, net sales declined 2.0 percent. Reliv's international net sales decreased 16.5 percent in the first half of 2015 compared with the first half of last year, with 8.3 percent of the decline due to foreign currency fluctuation.
Reliv reported a net loss of $730,000, or $0.06 per diluted share in the first six months of 2015, compared to net loss of $440,000 or $0.03 per diluted share in the same period of 2014.
The loss from operations in the second quarter of 2015 was primarily due to the previously mentioned decrease in net sales. However, there were two charges impacting the second quarter results that will not impact results going forward. In Mexico, operating costs in the second quarter of 2015 were negatively impacted by a newly implemented value added tax ("VAT"). The implementation of this new VAT has impacted many nutritional supplement companies in Mexico. As part of a decree issued by the Mexico treasury department, Reliv entered into an amnesty program during the second quarter of 2015 resulting in an overall VAT implementation pre-tax charge of approximately $130,000.
In Europe, we concluded a long-term performance-based incentive compensation agreement with our senior managers in the region during the second quarter of 2015. We recognized $165,000 in compensation expense during the second quarter of 2015 related to this agreement. This compares to compensation expense recognized under this agreement of $145,000 during the second quarter of 2014.
For the six-month period ended June 30, 2015, Reliv used $108,000 in cash in operating activities. This compares to cash used in operating activities of $1.21 million for the six-month period ended June 30, 2014. Reliv had cash and cash equivalents of $4.50 million as of June 30, 2015. This amount compares to $4.99 million as of December 31, 2014 and $4.93 million as of this date last year.
"While these results are less favorable than we hoped, we have launched new initiatives to implement the training and rewards necessary to turn our sales in a positive direction," said Robert L. Montgomery, Chairman and Chief Executive Officer. "We have conducted an evaluation process within the company and among our distributor field and have decided to focus messaging and training on simplified and specific steps for our distributors to build a successful business. Early adopters are experiencing business success," he added.
In May 2015, Reliv launched mobile-ready personal websites for Reliv distributors. "Not only do these sites allow distributors to tell the Reliv story through engaging content and videos, they offer a whole new way to speed up business," Montgomery said. "For the first time distributors have their own online shopping carts and new distributor sign-up. And since the sites are mobile-ready, distributors can give presentations and complete transactions on the spot -- anytime, anywhere. In June 2015, their first full month in operation, personal websites accounted for nearly 40% of all new customer sign-ups. We see this as a positive start to a promising growth opportunity."
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition along with premium skincare products. Reliv supplements address essential nutrition, weight loss, athletic performance, digestive health, women's health, anti-aging and healthy energy. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, the peptide behind many of soy's health benefits. The company sells its products through an international network marketing system of independent distributors in 15 countries. Learn more about Reliv at www.reliv.com, or on Facebook, Twitter or YouTube.
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, www.reliv.com.
Reliv International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
June 30 December 31
2015 2014
-------------------------
(Unaudited)
Assets
Current Assets:
Cash and cash
equivalents $4,497,299 $4,989,392
Accounts receivable,
less allowances of
$25,500 in 2015 and
$26,300 in 2014 56,485 265,530
Accounts and note due
from employees and
distributors 141,089 121,208
Inventories 5,469,510 5,177,465
Other current assets 1,347,537 979,615
-------------------------
Total current assets 11,511,920 11,533,210
Other assets 5,502,820 5,462,855
Intangible assets, net 2,790,711 2,925,775
Net property, plant and
equipment 6,721,789 6,925,970
-------------------------
Total Assets $26,527,240 $26,847,810
=========================
Liabilities and
Stockholders' Equity
Accounts payable and
accrued expenses $5,294,187 $5,187,057
Current portion of
long-term debt 3,794,019 697,423
Long-term debt -
noncurrent 647,444 3,547,267
Other noncurrent
liabilities 446,023 418,785
Stockholders' equity 16,345,567 16,997,278
-------------------------
Total Liabilities and
Stockholders' Equity $26,527,240 $26,847,810
=========================
Consolidated Statements
of Operations
------------------------- -------------------------
Three months ended June
30 Six months ended June 30
2015 2014 2015 2014
------------------------- -------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Product sales $11,442,990 $13,355,370 $25,151,113 $26,661,151
Handling & freight
income 1,002,361 1,120,209 2,128,601 2,279,316
------------------------- -------------------------
Net Sales 12,445,351 14,475,579 27,279,714 28,940,467
Costs and expenses:
Cost of products sold 2,647,755 3,000,412 5,642,704 5,887,262
Distributor royalties
and commissions 4,459,577 5,232,967 9,740,324 10,440,254
Selling, general and
administrative 6,454,992 6,716,826 12,584,941 13,257,693
------------------------- -------------------------
Total Costs and
Expenses 13,562,324 14,950,205 27,967,969 29,585,209
------------------------- -------------------------
Loss from operations (1,116,973) (474,626) (688,255) (644,742)
Other income (expense):
Interest income 30,073 32,148 60,455 68,272
Interest expense (26,749) (25,367) (50,688) (49,635)
Other income (expense) 15,653 31,079 (155,061) 6,389
------------------------- -------------------------
Loss before income
taxes (1,097,996) (436,766) (833,549) (619,716)
Benefit from income
taxes (252,000) (148,000) (104,000) (180,000)
------------------------- -------------------------
Net loss ($845,996) ($288,766) ($729,549) ($439,716)
========================= =========================
Loss per common share -
Basic ($0.07) ($0.02) ($0.06) ($0.03)
========================= =========================
Weighted average shares 12,819,000 12,666,000 12,819,000 12,666,000
========================= =========================
Loss per common share -
Diluted ($0.07) ($0.02) ($0.06) ($0.03)
========================= =========================
Weighted average shares 12,819,000 12,666,000 12,819,000 12,666,000
========================= =========================
Cash dividends declared
per common share - - - -
========================= =========================
Reliv International, Inc. and Subsidiaries
Net sales by Market
(in thousands)
Three months ended June 30, Change From
2015 2014 Prior Year
% of % of
Net Net
Amount Sales Amount Sales Amount %
--------------- --------------- ----------------
United States $ 9,591 77.1% $10,815 74.7% $(1,224) -11.3%
Australia/New Zealand 329 2.6% 429 3.0% (100) -23.3%
Canada 335 2.7% 357 2.5% (22) -6.2%
Mexico 234 1.9% 190 1.3% 44 23.2%
Europe 1,554 12.5% 2,244 15.5% (690) -30.7%
Asia 402 3.2% 441 3.0% (39) -8.8%
--------------- --------------- ----------------
Consolidated total $12,445 100.0% $14,476 100.0% $(2,031) -14.0%
=============== =============== ================
Net sales by Market
(in thousands)
Change From
Six months ended June 30, Prior Year
2015 2014
% of % of
Net Net
Amount Sales Amount Sales Amount %
--------------- --------------- ----------------
United States $21,071 77.2% $21,507 74.3% $ (436) -2.0%
Australia/New Zealand 701 2.6% 861 3.0% (160) -18.6%
Canada 768 2.8% 647 2.2% 121 18.7%
Mexico 431 1.6% 415 1.4% 16 3.9%
Europe 3,348 12.3% 4,573 15.8% (1,225) -26.8%
Asia 961 3.5% 937 3.3% 24 2.6%
--------------- --------------- ----------------
Consolidated total $27,280 100.0% $28,940 100.0% $(1,660) -5.7%
=============== =============== ================
The following table sets forth, as of June 30, 2015 and 2014, the number of
our active distributors 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 Affiliates and above in
their downline organization. The active distributor count for Europe
includes our preferred customers in France. This program began in mid-2013
and the Europe active distributor count as of June 30, 2015 and 2014
includes France preferred customers of 3,218 and 2,630, respectively.
Active Distributors and Master Affiliates and above by Market
As of As of
6/30/2015 6/30/2014 Change in %
Total Master Total Master Total Master
Active Affil- Active Affil- Active Affil-
Distr- iates Distr- iates Distr- iates
ibuto- and ibuto- and ibuto- and
rs Above rs Above rs Above
United States 33,760 4,330 36,440 5,170 -7.4% -16.2%
Australia/New Zealand 1,230 130 1,300 150 -5.4% -13.3%
Canada 1,250 220 1,270 250 -1.6% -12.0%
Mexico 1,220 100 1,130 140 8.0% -28.6%
Europe 6,810 650 8,190 880 -16.8% -26.1%
Asia 2,300 270 2,370 330 -3.0% -18.2%
--------------- --------------- ----------------
Consolidated total 46,570 5,700 50,700 6,920 -8.1% -17.6%
=============== =============== ================
For more information, contact:Steve Albright Chief Financial Officer (636) 733-1305
Source: Reliv International, Inc.
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