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Natural Health Trends Reports First Quarter 2024 Financial Results

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Natural Health Trends Corp. (NASDAQ: NHTC) reported positive financial results for the first quarter of 2024, with an 11% increase in orders compared to the previous quarter and a 1% increase compared to the same period last year. The company declared a quarterly cash dividend of $0.20 per share and achieved positive cash flows from operations, highlighting the strength of its business model. However, revenue decreased by 8% due to changes in deferred revenue, and the number of Active Members decreased by 2%.

Natural Health Trends Corp. (NASDAQ: NHTC) ha riportato risultati finanziari positivi per il primo trimestre del 2024, con un aumento dell'11% degli ordini rispetto al trimestre precedente e un incremento dell'1% rispetto allo stesso periodo dell'anno scorso. La società ha annunciato un dividendo trimestrale in contanti di $0,20 per azione e ha registrato flussi di cassa operativi positivi, evidenziando la solidità del suo modello di business. Tuttavia, i ricavi sono diminuiti dell'8% a causa di variazioni nei ricavi differiti e il numero di Membri Attivi è sceso del 2%.
Natural Health Trends Corp. (NASDAQ: NHTC) reportó resultados financieros positivos para el primer trimestre de 2024, con un aumento del 11% en pedidos en comparación con el trimestre anterior y un aumento del 1% en comparación con el mismo período del año pasado. La compañía declaró un dividendo en efectivo trimestral de $0,20 por acción y logró flujos de caja operativos positivos, destacando la fortaleza de su modelo de negocio. Sin embargo, los ingresos disminuyeron un 8% debido a cambios en los ingresos diferidos, y el número de Miembros Activos disminuyó en un 2%.
Natural Health Trends Corp. (나스닥: NHTC)는 2024년 첫 분기에 전 분기 대비 주문량이 11% 증가하고 작년 동기 대비 1% 증가하며 긍정적인 재무 결과를 보고했습니다. 회사는 주당 $0.20의 분기별 현금 배당을 선언하고 운영 현금 흐름이 긍정적임을 달성했습니다, 이는 그들의 비즈니스 모델의 강점을 강조합니다. 그러나 연기된 수익의 변경으로 인해 수익은 8% 감소했으며 활동 회원 수는 2% 감소했습니다.
Natural Health Trends Corp. (NASDAQ : NHTC) a publié des résultats financiers positifs pour le premier trimestre de 2024, avec une augmentation de 11% des commandes par rapport au trimestre précédent et une augmentation de 1% par rapport à la même période l'année dernière. L'entreprise a déclaré un dividende trimestriel en espèces de 0,20 $ par action et a réalisé des flux de trésorerie opérationnels positifs, soulignant la solidité de son modèle économique. Cependant, les revenus ont diminué de 8% en raison de modifications des revenus différés et le nombre de membres actifs a diminué de 2%.
Natural Health Trends Corp. (NASDAQ: NHTC) meldete positive Finanzergebnisse für das erste Quartal 2024 mit einem Anstieg der Bestellungen um 11% im Vergleich zum vorherigen Quartal und einem Anstieg von 1% im Vergleich zum gleichen Zeitraum des Vorjahres. Das Unternehmen erklärte eine vierteljährliche Bardividende von $0,20 pro Aktie und erreichte positive operative Cashflows, was die Stärke seines Geschäftsmodells unterstreicht. Allerdings sanken die Umsätze um 8% aufgrund von Änderungen bei den aufgeschobenen Erträgen und die Anzahl der aktiven Mitglieder verringerte sich um 2%.
Positive
  • 11% increase in orders compared to the previous quarter and a 1% increase compared to the same period last year.

  • Declared a quarterly cash dividend of $0.20 per share.

  • Positive cash flows from operations for the first time in five quarters.

  • Net income of $188,000, or $0.02 per diluted share.

  • Net cash provided by operating activities was $549,000 in the first three months of 2024.

  • Total cash, cash equivalents, and marketable securities were $54.4 million at March 31, 2024.

Negative
  • Revenue decreased by 8% due to changes in deferred revenue.

  • Operating loss of $365,000 and a decrease in Active Members by 2%.

  • Number of Active Members decreased by 18% compared to the same period last year.

Insights

Natural Health Trends Corp's recent financial results suggest a mixed picture. The 11% increase in orders over the previous quarter is noteworthy, suggesting a resurgence in sales momentum which could imply an effective sales strategy or a favorable market response to their products. However, this must be weighed against the 8% year-over-year decline in revenue and the 18% decrease in Active Members, which could be indicative of challenges in market penetration or customer retention. The positive cash flow from operations, after five quarters of negative cash flow, is a positive sign, indicating improved operational efficiency or cost management. The declaration of a $0.20 per share dividend might be perceived as a sign of confidence by the management in the company's financial health, potentially bolstering investor confidence.

The increase in deferred revenue is a double-edged sword. On one hand, it could signal strong future sales that are yet to be recognized, offering investors a hint of potential upcoming revenue. On the other hand, investors might be concerned about the sustainability of this model and whether it can be translated into long-term growth. In the current market environment, where investor sentiment is cautious, transparency and consistent performance are key to maintaining investor trust. The decrease in total cash and cash equivalents may raise concerns about the company's liquidity and its ability to sustain dividends or invest in growth initiatives.
  • For the first time in six years, first quarter orders exceeded the preceding fourth quarter's, up 11%. Compared to a year ago, orders were up 1%.
  • Reported positive cash flows from operations during the quarter, first time in five quarters
  • Declared a quarterly cash dividend of $0.20 per share

HONG KONG, May 01, 2024 (GLOBE NEWSWIRE) -- 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, 2024.

First Quarter 2024 Financial Highlights

  • Revenue of $11.0 million decreased 8% compared to $11.9 million in the first quarter of 2023. The decrease was entirely due to changes in the differences in deferred revenue between the two periods. Deferred revenue increased $1.0 million in the first quarter this year and remained flat in the comparable period last year.
  • Operating loss was $365,000 compared to $394,000 in the first quarter of 2023.
  • Net income was $188,000, or $0.02 per diluted share, compared to $257,000, or $0.02 per diluted share, in the first quarter of 2023.
  • The number of Active Members1 was down 2% to 31,620 at March 31, 2024 compared to 32,410 at December 31, 2023, and decreased 18% compared to 38,330 at March 31, 2023.

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.

Management Commentary

“Our financial results reflect a $1.0 million increase in deferred revenue which resulted in a revenue decrease when compared to the same period last year. We anticipate the gradual recognition of this deferred revenue in the coming months as we fulfill orders to our customers. Worth highlighting is that this period marks the first time in six years we accomplished a sequential increase in orders taken during the first quarter. Additionally, we achieved positive cash flows from operations, underscoring the underlying strength of our business model and strong balance sheet,” commented Chris Sharng, President of Natural Health Trends Corp.

Mr. Sharng continued, “While guardedly optimistic about the start to the Year of the Dragon, we think these results are indicative of the effectiveness of our current programs. We continue to focus on innovation, customer satisfaction, supporting our leaders and their development, and improving operational efficiency as we navigate our forward progress.”

Balance Sheet and Cash Flow

  • Net cash provided by operating activities was $549,000 in the first three months of 2024 compared to net cash used in operating activities of $696,000 in the first three months of 2023.
  • Total cash, cash equivalents and marketable securities were $54.4 million at March 31, 2024, down from $56.2 million at December 31, 2023.
  • On April 29, 2024, 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 24, 2024 to stockholders of record as of May 14, 2024.

First Quarter 2024 Financial Results Conference Call

Management will host a conference call to discuss the first quarter 2024 financial results today, Wednesday, May 1, 2024 at 11:30 a.m. Eastern Time. The conference call details are as follows:

Date:Wednesday, May 1, 2024
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:13745331
Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1662841&tp_key=a0bd3854bf
  

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 1, 2024 through 11:59 p.m. Eastern Time on May 8, 2024 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13745331.

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 28, 2024 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.

 
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) 
 
  March 31, 2024  December 31, 2023 
  (Unaudited)     
ASSETS        
Current assets:        
Cash and cash equivalents $25,825  $56,178 
Marketable securities  28,608    
Inventories  4,899   4,293 
Other current assets  3,401   3,758 
Total current assets  62,733   64,229 
Property and equipment, net  241   266 
Operating lease right-of-use assets  3,272   3,319 
Restricted cash  37   39 
Deferred tax asset  397   369 
Other assets  959   869 
Total assets $67,639  $69,091 
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable $749  $990 
Income taxes payable  3,758   3,716 
Accrued commissions  2,262   2,067 
Other accrued expenses  1,357   1,170 
Deferred revenue  7,174   6,166 
Amounts held in eWallets  3,727   3,945 
Operating lease liabilities  1,199   1,146 
Other current liabilities  636   784 
Total current liabilities  20,862   19,984 
Income taxes payable  5,054   5,054 
Deferred tax liability  134   135 
Operating lease liabilities  2,219   2,318 
Total liabilities  28,269   27,491 
Stockholders’ equity:        
Preferred stock      
Common stock  13   13 
Additional paid-in capital  84,732   84,695 
Accumulated deficit  (19,818)  (17,703)
Accumulated other comprehensive loss  (1,221)  (1,069)
Treasury stock, at cost  (24,336)  (24,336)
Total stockholders’ equity  39,370   41,600 
Total liabilities and stockholders’ equity $67,639  $69,091 


 
NATURAL HEALTH TRENDS CORP. 
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
 
  Three Months Ended March 31, 
  2024  2023 
Net sales $10,951  $11,861 
Cost of sales  2,912   3,031 
Gross profit  8,039   8,830 
Operating expenses:        
Commissions expense  4,486   4,992 
Selling, general and administrative expenses  3,918   4,232 
Total operating expenses  8,404   9,224 
Loss from operations  (365)  (394)
Other income, net  563   681 
Income before income taxes  198   287 
Income tax provision  10   30 
Net income $188  $257 
Net income per common share:        
Basic $0.02  $0.02 
Diluted $0.02  $0.02 
Weighted average common shares outstanding:        
Basic  11,456   11,424 
Diluted  11,474   11,428 


 
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
 
  Three Months Ended March 31, 
  2024  2023 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income $188  $257 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:        
Depreciation and amortization  35   46 
Share-based compensation  37   46 
Noncash lease expense  272   280 
Deferred income taxes  (32)  (57)
Changes in assets and liabilities:        
Inventories  (640)  (490)
Other current assets  189   (78)
Other assets  (101)  (18)
Accounts payable  (239)  338 
Income taxes payable  42   40 
Accrued commissions  212   (465)
Other accrued expenses  191   (76)
Deferred revenue  1,029   43 
Amounts held in eWallets  (208)  (215)
Operating lease liabilities  (284)  (301)
Other current liabilities  (142)  (46)
Net cash provided by (used in) operating activities  549   (696)
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of property and equipment  (11)  (7)
Purchases of marketable securities  (28,514)   
Net cash used in investing activities  (28,525)  (7)
CASH FLOWS FROM FINANCING ACTIVITIES:        
Dividends paid  (2,303)  (2,304)
Net cash used in financing activities  (2,303)  (2,304)
Effect of exchange rates on cash, cash equivalents and restricted cash  (76)  (91)
Net decrease in cash, cash equivalents and restricted cash  (30,355)  (3,098)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period  56,217   69,746 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $25,862  $66,648 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:        
Right-of-use assets obtained in exchange for operating lease liabilities $251  $(78)
         

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
investor.relations@nhtglobal.com


FAQ

What was the percentage change in revenue for Natural Health Trends in the first quarter of 2024?

Revenue decreased by 8% compared to the first quarter of 2023 due to changes in deferred revenue.

How did the number of Active Members change for Natural Health Trends in the first quarter of 2024?

The number of Active Members decreased by 2% to 31,620 at March 31, 2024.

What was the net income reported by Natural Health Trends for the first quarter of 2024?

Net income was $188,000, or $0.02 per diluted share, compared to $257,000 in the first quarter of 2023.

What was the cash dividend declared by Natural Health Trends for the first quarter of 2024?

The company declared a quarterly cash dividend of $0.20 per share.

How did the company's operating loss change in the first quarter of 2024?

Operating loss was $365,000 compared to $394,000 in the first quarter of 2023.

Natural Health Trends Corp.

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