SOURCE: Reliv International, Inc.

Reliv International: The Nutritional Epigenetics Company

May 13, 2016 07:00 ET

Reliv International Reports First-Quarter Financial Results for 2016

CHESTERFIELD, MO --(Marketwired - May 13, 2016) - Reliv International, Inc. (NASDAQ: RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the first quarter of 2016.

First-Quarter Results

Reliv reported net sales of $13.0 million for the first quarter of 2016 compared with net sales of $14.8 million in the first quarter of 2015. U.S. net sales decreased to $10.3 million from $11.5 million, a decline of 10.7 percent. Net sales in Reliv's foreign markets for the first quarter of 2015 decreased 17.1 percent compared with net sales in the prior-year first quarter with 6.5 percent of the decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar.

Reliv reported a net loss for the first quarter of 2016 of $44,000 (loss per diluted share of $0.00) compared to net income of $116,000 (earnings per diluted share of $0.01) in the first quarter of 2015. The loss from operations for the first quarter of 2016 was $181,000 compared to income from operations of $429,000 in the same period in 2015. The impact of the reduction in net sales was partially offset by a reduction in selling, general and administrative expenses. Selling, general and administrative expenses were $5.6 million in the first quarter of 2016 compared to $6.1 million in the first quarter of 2015.

Effective February 1, 2016, Reliv updated its distributor compensation plan to introduce a Preferred Customer program in the United States and Canada and to modify the requirements for a Retail Distributor (entry-level) to advance to the Affiliate distributor level. Advancement to Affiliate distributor entitles a distributor to a higher discount on their purchases and the opportunity to earn retail and wholesale profits. The updates to the distributor compensation plan also included adjustments to a distributor's group business volume required to achieve the Master Affiliate level.

"Restructuring our compensation plan has been successfully completed. The revised structure places a whole new emphasis on the business opportunity aspect of our company; however, the changes made had a near-term negative impact on sales in the United States and Canada as the distributor force adapts to the changes," said Robert L. Montgomery, Chairman and Chief Executive Officer. "We remain committed and prepared to further support our independent distributors with updated training, promotions, and recognition; key elements that drive people in our industry."

"Our ability to continue our long-standing tradition to manufacture and distribute cutting edge nutritional supplements through our network of independent distributors remains a key ingredient of our business model," Montgomery said. "Our plan is to reignite excitement in our existing and new business builders and commit to helping people learn and apply home-based business skills. That excitement is what will begin to drive growth."

Reliv had cash and cash equivalents of $3.9 million as of March 31, 2016, compared to $3.3 million as of December 31, 2015 and $5.8 million as of March 31, 2015. Net cash generated from operating activities was $724,000 in the first quarter of 2016 compared to net cash generated of $1.1 million in the prior-year quarter.

As of March 31, 2016, Reliv had 45,040 distributors and preferred customers -- a decrease of 8.8 percent from March 31, 2015 -- of which 5,300 are Master Affiliate level and above. The number of Master Affiliates decreased by 1.3 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties. With the formal introduction of the Preferred Customer program in the United States and Canada in February 2016, Reliv now includes preferred customers as part of Active Distributor statistics.

About Reliv International, Inc.

Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address essential nutritionweight loss, athletic performancedigestive healthwomen's healthanti-aging and healthy energy. 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 FacebookTwitter 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, reliv.com.

-- FINANCIAL HIGHLIGHTS FOLLOW --

             
Reliv International, Inc. and Subsidiaries            
             
Condensed Consolidated Balance Sheets            
    March 31     December 31  
    2016     2015  
    (Unaudited)        
Assets                
Current Assets:                
  Cash and cash equivalents   $ 3,893,496     $ 3,262,263  
  Accounts receivable, less allowances of                
    $30,600 in 2016 and $30,200 in 2015     20,455       89,376  
Accounts and note due from employees and distributors     137,324       134,668  
  Inventories     4,864,139       5,172,722  
  Other current assets     1,752,902       1,140,680  
                 
Total current assets     10,668,316       9,799,709  
                 
Other assets     7,929,840       8,042,196  
Net property, plant and equipment     6,246,441       6,419,127  
                 
Total Assets   $ 24,844,597     $ 24,261,032  
                 
Liabilities and Stockholders' Equity                
                 
Total current liabilities   $ 4,828,737     $ 3,937,752  
Current portion of long-term debt     749,850       781,505  
Long-term debt, noncurrent     3,041,230       3,159,575  
Other noncurrent liabilities     442,354       499,705  
Stockholders' equity     15,782,426       15,882,495  
                 
Total Liabilities and Stockholders' Equity   $ 24,844,597     $ 24,261,032  
                 
                 
Consolidated Statements of Operations                
      Three months ended March 31  
      2016       2015  
      (Unaudited )     (Unaudited )
Product sales   $ 12,042,561     $ 13,708,123  
Handling & freight income     993,889       1,126,240  
                 
Net Sales     13,036,450       14,834,363  
                 
Costs and expenses:                
  Cost of products sold     2,984,104       2,994,949  
  Distributor royalties and commissions     4,624,375       5,280,747  
  Selling, general and administrative     5,609,268       6,129,949  
                 
Total Costs and Expenses     13,217,747       14,405,645  
                 
Income (loss) from operations     (181,297 )     428,718  
Other income (expense):                
  Interest income     27,357       30,382  
  Interest expense     (26,401 )     (23,939 )
  Other income (expense)     113,681       (170,714 )
                 
Income (loss) before income taxes     (66,660 )     264,447  
Provision (benefit) for income taxes     (23,000 )     148,000  
                 
Net Income (loss)     ($43,660 )   $ 116,447  
                 
Earnings (loss) per common share - Basic     ($0.00 )   $ 0.01  
  Weighted average shares     12,919,000       12,819,000  
                 
Earnings (loss) per common share - Diluted     ($0.00 )   $ 0.01  
  Weighted average shares     12,919,000       12,822,000  
                         
Reliv International, Inc. and Subsidiaries                        
                                 
Net sales by Market                  
(in thousands)   Three months ended March 31,     Change from  
    2016     2015     prior year  
    Amount   % of Net Sales     Amount   % of Net Sales     Amount     %  
                                 
United States   10,255   78.7 %   11,480   77.4 %   (1,225 )   -10.7 %
Australia/New Zealand   298   2.3 %   372   2.5 %   (74 )   -19.9 %
Canada   306   2.3 %   433   2.9 %   (127 )   -29.3 %
Mexico   163   1.3 %   197   1.3 %   (34 )   -17.3 %
Europe   1,556   11.9 %   1,793   12.1 %   (237 )   -13.2 %
Asia   458   3.5 %   559   3.8 %   (101 )   -18.1 %
                                 
Consolidated Total   13,036   100.0 %   14,834   100.0 %   (1,798 )   -12.1 %
                                 
                                 

The following table sets forth, as of March 31, 2016 and 2015, 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 4,400 and 4,600 of the Active Distributor count as of March 31, 2016 and 2015, respectively. The significant majority of these Preferred Customers are in Europe.

                           
Active Distributors/Preferred Customers and Master Affiliates and above by Market          
                           
    As of 3/31/2016   As of 3/31/2015   Change in %
    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
   
                           
United States   31,910   4,130   34,640   4,080   -7.9%     1.2%
Australia/New Zealand   1,690   120   1,870   120   -9.6%     0.0%
Canada   1,120   170   1,250   210   -10.4%     -19.0%
Mexico   1,220   90   1,150   90   6.1%     0.0%
Europe   6,000   480   7,490   640   -19.9%     -25.0%
Asia   3,100   310   3,010   230   3.0%     34.8%
                           
Consolidated Total   45,040   5,300   49,410   5,370   -8.8%     -1.3%

Contact Information

  • For more information, contact:
    Steve Albright
    Chief Financial Officer
    (636) 733-1305