Attached files
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| 8-K - FORM 8-K - RELIV INTERNATIONAL INC | relv20171109_8k.htm |
Exhibit 99
NEWS RELEASE
For more information, contact:
|
Steve Albright |
Chief Financial Officer
(636) 733-1305
FOR IMMEDIATE DISTRIBUTION
Reliv International Reports Third-Quarter Financial Results for 2017
CHESTERFIELD, MO, November 10, 2017 – Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2017.
Reliv reported net sales of $9.1 million for the third quarter of 2017 compared with net sales of $10.8 million in the third quarter of 2016. Net sales in the United States decreased to $7.1 million in the third quarter of 2017 compared to $8.6 million in the prior-year quarter. Net sales in Reliv’s foreign markets decreased 9.8 percent in the third quarter of 2017 compared with the prior-year third quarter. An increase of 32.8 percent in net sales in Asia in the third quarter of 2017 was offset by a decline of 23.6 percent in net sales in Europe, along with decreases in other regions.
Reliv reported a net loss for the third quarter of 2017 of $319,000 (loss per diluted share of $0.17) compared to net income of $134,000 (income per diluted share of $0.07) in the third quarter of 2016. The loss from operations for the third quarter of 2017 was $334,000 compared to income from operations of $34,000 in the same period in 2016. The impact to operations from the decrease in third quarter 2017 net sales was partially offset by a reduction in selling, general and administrative (“SGA”) expenses. SGA expenses decreased to $4.3 million in the third quarter of 2017 compared to $4.7 million in the third quarter of 2016.
Net sales for the first nine months of 2017 were $31.9 million, which represents an 8.7 percent decrease from the same period in 2016. Net sales in the United States decreased by 8.8 percent and net sales in Reliv’s foreign markets decreased by 8.1 percent in the first nine months of 2017 compared with the same period of last year. When the impact of foreign currency fluctuation is removed, net sales in Reliv’s foreign markets decreased by 2.6 percent during the first nine months of 2017 as the result of a stronger U.S. dollar on a year-to-date basis in 2017 in most of our markets.
Reliv reported a net loss of $315,000, or $0.17 per diluted share in the first nine months of 2017, compared to a net loss of $897,000 or $0.49 per diluted share in the same period of 2016. The loss from operations for the first nine months of 2017 was $325,000 compared to a loss from operations of $1.1 million in the same period in 2016. SGA expenses were reduced to $13.8 million for the first nine months of 2017 compared to $15.9 million in the same period in 2016. The reduction in 2017 SGA expenses is the result of the continuing impact of a cost reduction program that took place in mid-2016.
Reliv continues to build on the “Fit for Life” theme of our International Distributor Conference held in August. In order to fuel the momentum that has generated with its Fit3TM program, Reliv has launched a 90-day Fit for Life Challenge from October through December in which participants have a chance to win a trip for two to St. Louis for a Fit3 weekend retreat.
In addition to the product focus on Fit3, Reliv continues to improve its processes and tools related to building the customer and distributor ranks. “We are simplifying our every approach and process to speed up activity in the field. Reliv is focused on three things: Recruiting, Onboarding and Retention,” said Ryan Montgomery, President. “To grow, we must improve our customer and distributor enrollment totals. From now through December, recruiting new customers and business builders is the number one focus and we’ve added a trip incentive for those who reach preset recruiting and volume goals. Upon enrollment, it is critical the new recruit is onboarded in an effective manner to give them the knowledge, tools and training necessary to be successful as a new distributor. From there, we strive to be leaders in customer and distributor retention, which derives from individual results with our products and business opportunity.”
In order to support activity on the local level, corporate and distributor leaders are conducting numerous special events throughout the U.S. during the trip challenge. To help meet the trip qualifications, the company has introduced free ground shipping for distributors attaining the Quick Start and Master Affiliate levels of business for a limited time.
Reliv had cash and cash equivalents of $2.5 million as of September 30, 2017, compared to $3.6 million as of December 31, 2016. Net cash used in operating activities was $593,000 in the first nine months of 2017.
As of September 30, 2017, Reliv had 34,490 distributors and preferred customers – a decrease of 14.7 percent from September 30, 2016 – of which 3,810 are Master Affiliate level and above. The number of Master Affiliates decreased by 28.4 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties. The decrease in the number of Master Affiliates in the U.S. and Canada was due in part to the increase in the business volume requirement for distributors to reach the Master Affiliate level. This change was effective February 1, 2016 as part of our revised compensation plan strategy and affected Master Affiliate requalifications during the first quarter of 2017.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address essential nutrition, fitness and weight loss 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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September 30 |
December 31 |
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2017 |
2016 |
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(Unaudited) |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
$ | 2,465,411 | $ | 3,606,817 | ||||||||||||
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Accounts receivable, less allowances of $25,800 in 2017 and $26,700 in 2016 |
33,705 | 126,113 | ||||||||||||||
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Accounts and note due from employees and distributors |
138,684 | 139,931 | ||||||||||||||
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Inventories |
4,877,594 | 4,487,830 | ||||||||||||||
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Other current assets |
548,705 | 571,377 | ||||||||||||||
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Total current assets |
8,064,099 | 8,932,068 | ||||||||||||||
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Other assets |
7,592,582 | 7,679,357 | ||||||||||||||
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Net property, plant and equipment |
5,797,867 | 5,854,302 | ||||||||||||||
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Total Assets |
$ | 21,454,548 | $ | 22,465,727 | ||||||||||||
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Liabilities and Stockholders' Equity |
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Accounts payable and accrued expenses |
$ | 3,636,669 | $ | 4,234,305 | ||||||||||||
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Current portion of long-term debt |
2,626,661 | 389,096 | ||||||||||||||
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Long-term debt - noncurrent |
- | 2,518,341 | ||||||||||||||
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Other noncurrent liabilities |
432,389 | 409,813 | ||||||||||||||
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Stockholders' equity |
14,758,829 | 14,914,172 | ||||||||||||||
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Total Liabilities and Stockholders' Equity |
$ | 21,454,548 | $ | 22,465,727 | ||||||||||||
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Consolidated Statements of Operations |
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Three months ended September 30 |
Nine months ended September 30 |
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2017 |
2016 |
2017 |
2016 |
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(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
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Product sales |
$ | 8,385,999 | $ | 9,972,547 | $ | 29,479,924 | $ | 32,181,585 | ||||||||
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Handling & freight income |
683,324 | 812,868 | 2,373,809 | 2,693,602 | ||||||||||||
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Net Sales |
9,069,323 | 10,785,415 | 31,853,733 | 34,875,187 | ||||||||||||
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Costs and expenses: |
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Cost of products sold |
1,949,670 | 2,214,633 | 7,113,647 | 7,729,508 | ||||||||||||
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Distributor royalties and commissions |
3,199,596 | 3,799,791 | 11,252,922 | 12,345,171 | ||||||||||||
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Selling, general and administrative |
4,253,675 | 4,737,305 | 13,811,814 | 15,887,901 | ||||||||||||
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Total Costs and Expenses |
9,402,941 | 10,751,729 | 32,178,383 | 35,962,580 | ||||||||||||
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Income (loss) from operations |
(333,618 | ) | 33,686 | (324,650 | ) | (1,087,393 | ) | |||||||||
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Other income (expense): |
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Interest income |
25,277 | 26,199 | 76,630 | 80,689 | ||||||||||||
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Interest expense |
(27,183 | ) | (28,982 | ) | (79,472 | ) | (82,161 | ) | ||||||||
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Other income (expense) |
(4,579 | ) | 41,575 | 40,517 | 226,519 | |||||||||||
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Income (loss) before income taxes |
(340,103 | ) | 72,478 | (286,975 | ) | (862,346 | ) | |||||||||
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Provision (benefit) for income taxes |
(21,000 | ) | (62,000 | ) | 28,000 | 35,000 | ||||||||||
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Net income (loss) |
$ | (319,103 | ) | $ | 134,478 | $ | (314,975 | ) | $ | (897,346 | ) | |||||
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Earnings (loss) per common share - Basic |
$ | (0.17 | ) | $ | 0.07 | $ | (0.17 | ) | $ | (0.49 | ) | |||||
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Weighted average shares |
1,845,000 | 1,846,000 | 1,845,000 | 1,846,000 | ||||||||||||
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Earnings (loss) per common share - Diluted |
$ | (0.17 | ) | $ | 0.07 | $ | (0.17 | ) | $ | (0.49 | ) | |||||
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Weighted average shares |
1,845,000 | 1,846,000 | 1,845,000 | 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 September 30, |
Change from |
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2017 |
2016 |
prior year |
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Amount |
% of Net Sales |
Amount |
% of Net Sales |
Amount |
% |
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United States |
$ | 7,082 | 78.1 | % | $ | 8,581 | 79.6 | % | $ | (1,499 | ) | -17.5 | % | |||||||||||
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Australia/New Zealand |
224 | 2.5 | % | 242 | 2.2 | % | (18 | ) | -7.4 | % | ||||||||||||||
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Canada |
200 | 2.2 | % | 250 | 2.3 | % | (50 | ) | -20.0 | % | ||||||||||||||
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Mexico |
105 | 1.2 | % | 119 | 1.1 | % | (14 | ) | -11.8 | % | ||||||||||||||
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Europe |
891 | 9.8 | % | 1,166 | 10.8 | % | (275 | ) | -23.6 | % | ||||||||||||||
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Asia |
567 | 6.2 | % | 427 | 4.0 | % | 140 | 32.8 | % | |||||||||||||||
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Consolidated Total |
$ | 9,069 | 100.0 | % | $ | 10,785 | 100.0 | % | $ | (1,716 | ) | -15.9 | % | |||||||||||
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Net sales by Market |
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(in thousands) |
Nine months ended September 30, |
Change from |
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2017 |
2016 |
prior year |
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Amount |
% of Net Sales |
Amount |
% of Net Sales |
Amount |
% |
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United States |
$ | 24,791 | 77.8 | % | $ | 27,191 | 78.0 | % | $ | (2,400 | ) | -8.8 | % | |||||||||||
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Australia/New Zealand |
711 | 2.2 | % | 825 | 2.4 | % | (114 | ) | -13.8 | % | ||||||||||||||
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Canada |
681 | 2.2 | % | 799 | 2.3 | % | (118 | ) | -14.8 | % | ||||||||||||||
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Mexico |
352 | 1.1 | % | 419 | 1.2 | % | (67 | ) | -16.0 | % | ||||||||||||||
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Europe |
3,399 | 10.7 | % | 4,344 | 12.4 | % | (945 | ) | -21.8 | % | ||||||||||||||
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Asia |
1,920 | 6.0 | % | 1,297 | 3.7 | % | 623 | 48.0 | % | |||||||||||||||
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Consolidated Total |
$ | 31,854 | 100.0 | % | $ | 34,875 | 100.0 | % | $ | (3,021 | ) | -8.7 | % | |||||||||||
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The following table sets forth, as of September 30, 2017 and 2016, 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. In February 2016, we introduced a formal Preferred Customer program in the United States and Canada. As a result, we are including Preferred Customers as part of our Active Distributor count. Preferred Customer programs were previously in place in Europe and other foreign markets. Preferred Customers represent approximately 5,010 and 4,720 of the Active Distributor count as of September 30, 2017 and 2016, respectively. |
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Active Distributors/Preferred Customers and Master Affiliates and Above by Market |
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As of 9/30/2017 |
As of 9/30/2016 |
Change in % |
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Active Distributors and Preferred Customers |
Master Affiliates and Above |
Active Distributors and Preferred Customers |
Master Affiliates and Above |
Active Distributors and Preferred Customers |
Master Affiliates and Above |
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United States |
23,860 | 2,750 | 28,700 | 4,110 | -16.9 | % | -33.1 | % | ||||||||||||||||
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Australia/New Zealand |
1,180 | 110 | 1,580 | 130 | -25.3 | % | -15.4 | % | ||||||||||||||||
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Canada |
710 | 80 | 890 | 140 | -20.2 | % | -42.9 | % | ||||||||||||||||
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Mexico |
730 | 60 | 1,010 | 90 | -27.7 | % | -33.3 | % | ||||||||||||||||
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Europe |
3,940 | 440 | 5,230 | 520 | -24.7 | % | -15.4 | % | ||||||||||||||||
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Asia |
4,070 | 370 | 3,040 | 330 | 33.9 | % | 12.1 | % | ||||||||||||||||
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Consolidated Total |
34,490 | 3,810 | 40,450 | 5,320 | -14.7 | % | -28.4 | % | ||||||||||||||||