SOURCE: Reliv International, Inc.

Reliv International: The Nutritional Epigenetics Company

March 04, 2015 06:45 ET

Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2014

CHESTERFIELD, MO--(Marketwired - March 04, 2015) - Reliv International, Inc. (NASDAQ: RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the fourth quarter and full year of 2014.

Fourth-Quarter Results
Reliv reported net sales of $14.1 million for the fourth quarter of 2014, compared with sales of $17.4 million for the fourth quarter of 2013. U.S. sales decreased by 19.8 percent for the quarter compared with the same quarter in 2013. A significant portion of the decline in U.S. net sales was due to a promotion launched in fall 2013 that lowered the sales volume level needed to qualify as a Master Affiliate in the United States. This resulted in a shifting of and reduction in requalification orders that would normally be received in January 2014 to the fourth quarter of 2013. International sales for the quarter decreased 16.0 percent. A strengthening U.S. dollar compared to the year-ago quarter accounted for 4.0 percent of the decline.

Reliv reported net income of $998,000, or $0.08 per diluted share, for the fourth quarter of 2014 compared with net income of $503,000, or $0.04 per diluted share, for the fourth quarter of 2013. The fourth quarter of 2014 was favorably impacted by an income tax benefit of $575,000 primarily due to recognition of a deferred tax benefit of $758,000 related to net operating loss carryforwards in a European subsidiary. Income from operations for the fourth quarter of 2014 was $513,000 compared with $888,000 in the same quarter of 2013.

Full-Year Results
Reliv reported net sales of $57.3 million for 2014 compared with net sales of $68.2 million in 2013. U.S. net sales decreased from $53.7 million to $43.3 million. As previously noted, some of that decline can be attributed to the promotion launched in fall 2013.

Net sales in Reliv's foreign markets for 2014 decreased 3.7 percent compared with net sales for 2013. Europe once again topped all international markets with $8.3 million in net sales, an increase of 4.4 percent over 2013.

Net income for 2014 was $725,000 compared with $777,000 in 2013. Earnings per diluted share were $0.06 for both 2014 and 2013. Net income for 2014 was favorably impacted by the income tax benefit in the European subsidiary as previously noted. Income from operations for 2014 was $96,000 compared to $1.5 million in 2013. Selling, general and administrative expenses were $25.0 million versus $27.8 million in 2013, as cost reductions implemented in the latter half of 2014 helped offset the impact of the sales decline.

"In 2014 Reliv completed a series of critical transitions in our distributor compensation plan, our corporate leadership, and our product line, coupled with a cost containment initiative, to better position the company for future growth," said Robert L. Montgomery, Chairman and CEO of Reliv. "This process has come with anticipated adjustments. Yet after recording net losses in each of the first two quarters of 2014, we achieved profitability in both the third and fourth quarters. We believe the return to profitability is evidence that the transitions and cost containments initiated by Reliv are gaining traction."

"Reliv started 2014 by announcing that reduced profit level qualifications for distributors would remain in place in Reliv's compensation plan. First introduced as a promotion in the final months of 2013, the lower qualifications were embraced by distributors," Montgomery continued.

"We believe as the strategy to increase focus and promotion of the Reliv business opportunity gains traction, the ability for distributors to access the highest profit level at these qualification levels will result in an increase in new distributors. Marketing and promotional strategies have been developed that are consistent with this goal."

Montgomery added: "With the acquisition of the LunaRich technology, Reliv's marketing efforts in recent years focused on consumer education and establishing Reliv as the Nutritional Epigenetics Company. With our product and science messaging in place and our competitive advantage established, we are focused on the Reliv business opportunity. We believe we now have all elements in place -- field development, corporate leadership, product focus and business plan -- for this strategy to take hold and be embraced by our field."

"In the network marketing industry, product consumers form the foundation, but it is the expansion of distribution networks that drives growth. Reliv's product foundation is stronger than ever and, with distributor-focused business initiatives now taking hold, we are ready to build a thriving network of active entrepreneurs on top of it." 

As of December 31, 2014, Reliv had 47,970 distributors -- a decrease of 9.6 percent from December 31, 2013 -- of which 7,130 are Master Affiliate level and above. The number of Master Affiliates decreased by 5.4 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.

Reliv had cash and cash equivalents of $5.0 million as of December 31, 2014, a decrease of $1.7 million from the balance as of December 31, 2013. Net cash of $392,000 was used in operating activities in 2014 compared to net cash of $2.5 million provided by operations in 2013.

About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote essential nutrition, weight loss, athletic performancedigestive healthwomen's healthanti-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 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, www.reliv.com.

--FINANCIAL HIGHLIGHTS FOLLOW --

            
            
Reliv International, Inc. and Subsidiaries
 
            
Condensed Consolidated Balance Sheets           
  December 31  December 31      
  2014  2013      
  (Unaudited)  (Audited)      
Assets           
Current Assets:           
 Cash and cash equivalents $4,989,392  $6,656,798      
 Accounts receivable, less allowances of $26,300 in 2014 and $31,800 in 2013 265,530  148,630      
 Accounts and note due from employees and distributors 121,208  129,852      
 Inventories 5,177,465  5,214,690      
 Other current assets 979,615  1,006,099      
            
Total current assets 11,533,210  13,156,069      
            
Deferred income taxes 686,000  -      
Other assets 4,776,855  4,511,360      
Intangible assets, net 2,925,775  3,195,903      
Net property, plant and equipment 6,925,970  6,735,419      
            
Total Assets $26,847,810  $27,598,751      
            
Liabilities and Stockholders' Equity           
            
Total current liabilities $5,884,480  $6,649,345      
Long-term debt, less current maturities 3,547,267  3,781,607      
Other non-current liabilities 418,785  1,037,327      
Stockholders' equity 16,997,278  16,130,472      
            
Total Liabilities and Stockholders' Equity $26,847,810  $27,598,751      
            
            
Consolidated Statements of Operations           
  Three months ended December 31  Year ended December 31
  2014  2013  2014  2013
  (Unaudited)  (Unaudited)  (Unaudited)  (Audited)
Product sales $13,034,829  $16,082,933  $52,902,254  $62,379,450
Handling & freight income 1,055,382  1,301,670  4,442,705  5,827,288
            
Net Sales 14,090,211  17,384,603  57,344,959  68,206,738
            
Costs and expenses:           
 Cost of products sold 2,802,326  3,532,171  11,657,728  14,022,996
 Distributor royalties and commissions 5,117,201  6,330,914  20,542,905  24,926,014
 Selling, general and administrative 5,657,864  6,633,625  25,048,596  27,755,483
            
Total Costs and Expenses 13,577,391  16,496,710  57,249,229  66,704,493
            
Income from operations 512,820  887,893  95,730  1,502,245
            
Other income (expense):           
Interest income 31,495  36,330  131,503  149,402
Interest expense (24,453)  (24,279)  (100,142)  (82,461)
Other income (expense) (96,539)  (75,114)  (150,522)  (137,596)
            
Income (loss) before income taxes 423,323  824,830  (23,431)  1,431,590
Provision (benefit) for income taxes (575,000)  322,000  (748,000)  655,000
            
Net income $998,323  $502,830  $724,569  $776,590
            
            
Earnings per common share - Basic $0.08  $0.04  $0.06  $0.06
Weighted average shares 12,667,000  12,624,000  12,666,000  12,619,000
            
Earnings per common share - Diluted $0.08  $0.04  $0.06  $0.06
Weighted average shares 12,730,000  12,875,000  12,811,000  12,816,000
            
Cash dividends declared per common share -  $0.01  -  $0.03
        
       
Reliv International, Inc. and Subsidiaries
 
                  
Net sales by Market         
(in thousands)                 
   Three months ended December 31,   Change From
   2014   2013   Prior Year
   Amount % of Net Sales   Amount % of Net Sales   Amount %
                          
United States  $10,870 77.1 %  $13,550 77.9 %  $(2,680 )-19.8 %
Australia/New Zealand   381 2.7 %   457 2.6 %   (76 )-16.6 %
Canada   374 2.7 %   466 2.7 %   (92 )-19.7 %
Mexico   189 1.3 %   219 1.3 %   (30 )-13.7 %
Europe   1,772 12.6 %   2,289 13.2 %   (517 )-22.6 %
Asia   504 3.6 %   404 2.3 %   100  24.8 %
                          
Consolidated total  $14,090 100.0 %  $17,385 100.0 %  $(3,295 )-19.0 %
                          
                          
Net sales by Market                 
(in thousands)                 
   Year ended December 31,   Change From
   2014   2013  Prior Year
   Amount % of Net Sales   Amount % of Net Sales   Amount %
                          
United States  $43,323 75.5 %  $53,651 78.7 %  $(10,328 )-19.3 %
Australia/New Zealand   1,642 2.9 %   1,859 2.7 %   (217 )-11.7 %
Canada   1,367 2.4 %   1,777 2.6 %   (410 )-23.1 %
Mexico   796 1.4 %   977 1.4 %   (181 )-18.5 %
Europe   8,301 14.5 %   7,953 11.7 %   348  4.4 %
Asia   1,916 3.3 %   1,990 2.9 %   (74 )-3.7 %
                          
Consolidated total  $57,345 100.0 %  $68,207 100.0 %  $(10,862 )-15.9 %
                          
                          

The following table sets forth, as of December 31, 2014 and 2013, 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. For the December 31, 2014 and 2013 data, 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 12/31/14 and 12/31/13 includes France preferred customers of 2,945 and 1,500, respectively.

                    
       
Active Distributors and Master Affiliates and above by Market
                    
  As of 12/31/2014   As of 12/31/2013   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 34,650  5,360   39,270  5,590   -11.8%  -4.1%
Australia/New Zealand 1,300  150   1,470  200   -11.6%  -25.0%
Canada 1,200  250   1,340  250   -10.4%  0.0%
Mexico 1,130  140   1,100  160   2.7%  -12.5%
Europe 7,640  890   6,790  940   12.5%  -5.3%
Asia 2,050  340   3,100  400   -33.9%  -15.0%
                    
Consolidated total 47,970  7,130   53,070  7,540   -9.6%  -5.4%
                    

Contact Information

  • For more information, contact:

    Steve Albright 
    Chief Financial Officer 
    (636) 733-1305