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8-K - FORM 8-K - RELIV INTERNATIONAL INCv327028_8k.htm

 

EXHIBIT 99

NEWS RELEASE

 

For more information, contact:

 

 

Steve Albright or: Fred Nielson
Chief Financial Officer   Investor Relations
(636) 733-1305   (636) 733-1314

 

   

FOR IMMEDIATE DISTRIBUTION

 

Reliv International Reports Third-Quarter Financial Results

 

CHESTERFIELD, Missouri, October 31, 2012 – Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2012.

 

Net sales for the quarter were $15.3 million, an 11.7 percent decrease from the third quarter last year. Net U.S. sales totaled $12.1 million, down from third-quarter 2011 net sales of $14.1 million. Net sales outside of the United States rose 0.9 percent in the third quarter of 2012 compared to the prior-year quarter, buoyed by the European market where net sales increased by 39.2 percent.

 

Net income for the third quarter of 2012 was $287,000 or $0.02 per diluted share, compared to $49,000 or $0.00 per diluted share in the 2011 third quarter. The 2012 quarter’s increase was due to a one-time after-tax gain of approximately $247,000 resulting from a discounted balance due on a purchase agreement entered into in a previous year. Income/loss from operations for the third quarter of 2012 was a loss of $32,000 compared to income of $168,000 in the same quarter of 2011.

 

Europe remained Reliv’s leading growth market with net sales increasing to $1.39 million in the third quarter of 2012 compared to $1.00 million in the prior-year third quarter. “The number of active Reliv distributors in Europe has nearly doubled from the same time last year,” said Robert L. Montgomery, chairman and chief executive officer of Reliv. “The recent Reliv European Conference drew record attendance as emerging leaders expand their distribution networks across the continent. We anticipate that the European launch of products formulated with Reliv’s exclusive LunaRich soy powder and enhanced marketing resources will build on this momentum.”

 

“In the United States, we are turning to product innovation to generate excitement and spark sales growth,” Montgomery said. “Our relationship with the Missouri Plant Science Center has already produced LunaRich soy powder – now used in five Reliv product formulas – and we are actively working on additional exclusive ingredients. The scientific community is now embracing the science behind LunaRich, and through public relations efforts, we anticipate significantly increasing awareness of LunaRich and of Reliv.”

 

“We are empowering distributors with new business tools, giving them more choices in how they share Reliv with prospects,” he added. “We have also introduced online enhancements that make it easier for new customers and distributors to sign up. I believe these initiatives will help increase our sponsoring numbers moving forward.”

 

 
 

  

Reliv reported a reduction in selling, general and administrative expenses (“SG&A”) of $572,000 for the third quarter of 2012 compared to the prior-year period. Through nine months, SG&A expenses decreased by $1.75 million in 2012 compared to the first nine months of 2011. “We have adopted more efficient ways of doing business,” Montgomery said. “I believe the efficiencies we’ve created now should increase our profits when we return to consistent sales growth.”

 

Net sales for the first nine months of 2012 were $51.8 million, representing a 9.1 percent decrease from the same period in 2011. Reliv’s international net sales, driven by strong results in Europe, rose 15.3 percent in the first nine months of 2012 compared with the first nine months last year. In the United States, net sales declined 14.0 percent compared with the first nine months of the prior year.

 

Reliv reported net income of $922,000, or $0.07 per diluted share in the first nine months of 2012, compared to $728,000 or $0.06 per diluted share in the same period of 2011. The increase in net income is due to the gain recognized on the discounted balance due on the purchase agreement as discussed previously.

 

Reliv’s total distributor count was 58,570 as of September 30, 2012 – an increase of 1.6 percent from the same date in 2011 – of which 6,710 are Master Affiliate level and above. Master Affiliate is the level at which distributors are eligible to earn generation royalties. The growth in the distributor count is related to the sales growth in Europe, offset by a decline in the distributor count in the United States.

 

Net cash generated from operating activities in the first nine months of 2012 totaled $1.06 million, representing a decrease of $1.19 million over the first nine months of 2011. Reliv had cash and cash equivalents of $4.9 million as of September 30, 2012, a decrease of $2.2 million from the same date last year.

 

About Reliv International, Inc.
Reliv International, Inc., based in Chesterfield, Missouri, 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. 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.

 

--FINANCIAL HIGHLIGHTS FOLLOW –

 

 
 

 

Reliv International, Inc. and Subsidiaries      
ADD THREE      
       
Condensed Consolidated Balance Sheets      
   September 30  December 31
   2012  2011
   (Unaudited)   
Assets          
Current Assets:          
Cash and cash equivalents  $4,901,083   $7,174,213 
Accounts receivable, less allowances of          
$68,100 in 2012 and $70,300 in 2011   313,977    334,828 
Accounts and note due from employees & distributors   333,452    43,191 
Inventories   5,363,070    4,723,773 
Other current assets   1,392,335    1,136,376 
           
Total current assets   12,303,917    13,412,381 
           
Other assets   3,942,493    1,987,213 
Intangible assets, net   1,482,137    1,597,644 
Net property, plant and equipment   7,209,244    7,421,947 
           
Total Assets  $24,937,791   $24,419,185 
           
Liabilities and Stockholders' Equity          
           
Total current liabilities  $6,772,945   $6,110,449 
Long-term debt, less current maturities   2,504,150    3,566,175 
Other non-current liabilities   609,519    256,710 
Stockholders' equity   15,051,177    14,485,851 
           
Total Liabilities and Stockholders' Equity  $24,937,791   $24,419,185 

 

  

Consolidated Statements of Income            
   Three months ended September 30  Nine months ended September 30
   2012  2011  2012  2011
   (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
Product sales  $13,571,674   $15,382,332   $46,081,154   $50,693,657 
Handling & freight income   1,704,862    1,927,261    5,719,730    6,300,712 
                     
Net Sales   15,276,536    17,309,593    51,800,884    56,994,369 
                     
Costs and expenses:                    
Cost of products sold   3,052,687    3,601,116    10,174,128    11,636,647 
Distributor royalties and commissions   5,737,908    6,450,155    19,512,681    21,317,105 
Selling, general and administrative   6,517,747    7,089,832    21,013,651    22,766,198 
                     
Total Costs and Expenses   15,308,342    17,141,103    50,700,460    55,719,950 
                     
Income (loss) from operations   (31,806)   168,490    1,100,424    1,274,419 
                     
Other income (expense):                    
Interest income   36,681    7,045    86,858    32,846 
Interest expense   (20,124)   (32,925)   (82,338)   (105,349)
Other income (expense)   437,745    (452)   376,513    13,883 
                     
Income before income taxes   422,496    142,158    1,481,457    1,215,799 
Provision for income taxes   135,000    93,000    559,000    488,000 
                     
Net Income  $287,496   $49,158   $922,457   $727,799 
                     
Other comprehensive income (loss):                    
Foreign currency translation adjustment   44,266    (85,488)   102,810    (125,615)
                     
Comprehensive income (loss)  $331,762   ($36,330)  $1,025,267   $602,184 
                     
                     
Earnings per common share - Basic  $0.02   $0.00   $0.07   $0.06 
Weighted average shares   12,480,000    12,416,000    12,499,000    12,436,000 
                     
Earnings per common share - Diluted  $0.02   $0.00   $0.07   $0.06 
Weighted average shares   12,636,000    12,416,000    12,657,000    12,436,000 
                     
Cash dividends declared per common share  $-     $-     $0.02   $0.03 

  

 
 

 

  

Reliv International, Inc. and Subsidiaries            
ADD FOUR                  
                   
Net sales by Market         
(in thousands)                  
   Three months ended September 30,  Change From
Prior Year
   2012  2011      
   Amount  % of Net
Sales
  Amount  % of Net
Sales
  Amount  %
                   
United States  $12,073    79.0%  $14,134    81.6%  $(2,061)   -14.6%
Australia/New Zealand   462    3.0%   563    3.2%   (101)   -17.9%
Canada   381    2.5%   495    2.9%   (114)   -23.0%
Mexico   274    1.8%   280    1.6%   (6)   -2.1%
Europe   1,389    9.1%   998    5.8%   391    39.2%
Asia   698    4.6%   840    4.9%   (142)   -16.9%
                               
Consolidated total  $15,277    100.0%  $17,310    100.0%  $(2,033)   -11.7%

 

   

Net sales by Market                  
(in thousands)                  
   Nine months ended September 30,  Change From
Prior Year
   2012  2011      
   Amount  % of Net
Sales
  Amount  % of Net
Sales
  Amount  %
                   
United States  $40,786    78.7%  $47,440    83.3%  $(6,654)   -14.0%
Australia/New Zealand   1,482    2.9%   1,778    3.1%   (296)   -16.6%
Canada   1,370    2.7%   1,669    2.9%   (299)   -17.9%
Mexico   832    1.6%   982    1.7%   (150)   -15.3%
Europe   4,724    9.1%   2,577    4.5%   2,147    83.3%
Asia   2,607    5.0%   2,548    4.5%   59    2.3%
                               
Consolidated total  $51,801    100.0%  $56,994    100.0%  $(5,193)   -9.1%

 

 

The following table sets forth, as of September 30, 2012 and 2011, 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 its 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. Growth in the number of active distributors and Master Affiliates and above is a key factor in continuing the growth of our business.

 

   

Active Distributors and Master Affiliates and above by Market         
                   
   As of 9/30/2012  As of 9/30/2011  Change in %
   Total 
Active Distributors
  Master Affiliates and Above  Total 
Active Distributors
  Master Affiliates and Above  Total  
Active Distributors
  Master Affiliates and Above
             
United States   41,300    4,990    44,900    5,920    -8.0%   -15.7%
Australia/New Zealand   1,910    150    1,950    160    -2.1%   -6.3%
Canada   1,270    210    1,350    200    -5.9%   5.0%
Mexico   1,810    150    1,310    230    38.2%   -34.8%
Europe   6,440    650    3,280    360    96.3%   80.6%
Asia   5,840    560    4,870    500    19.9%   12.0%
                               
Consolidated total   58,570    6,710    57,660    7,370    1.6%   -9.0%