SOURCE: Reliv International, Inc.

Reliv International: The Nutritional Epigenetics Company

March 28, 2017 07:00 ET

Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2016

CHESTERFIELD, MO--(Marketwired - March 28, 2017) - 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 2016.

Fourth-Quarter Results
Reliv reported net sales of $10.6 million for the fourth quarter of 2016, compared with net sales of $12.3 million for the fourth quarter of 2015. U.S. net sales decreased by 12.1 percent for the quarter compared with the same quarter in 2015. Net sales outside of the United States declined 18.4 percent in the fourth quarter of 2016 compared to the prior-year quarter, with 10.7 percent of that decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar.

Reliv reported net income of $272,000, or earnings of $0.15 per diluted share, for the fourth quarter of 2016 compared with a net loss of $206,000, or a loss of $0.11 per diluted share, for the fourth quarter of 2015. All earnings/loss per share amounts are based on the number of shares outstanding subsequent to the one-for-seven reverse stock split that took effect on October 4, 2016. Income from operations for the fourth quarter of 2016 was $275,000 compared with a loss from operations of $209,000 in the same quarter of 2015.

Full-Year Results
Reliv reported net sales of $45.5 million for 2016 compared with net sales of $51.8 million in 2015. U.S. net sales decreased to $35.6 million from $40.4 million, a decline of 11.9 percent.

Net sales in Reliv's foreign markets for 2016 decreased 12.9 percent compared with net sales for 2015, with 8.1 percent of the decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar. The decline in net sales in Europe represented a significant portion of the decrease in foreign sales. Net sales in Europe declined by 11.3 percent in 2016 compared to the prior year, with virtually the entire decline due to the impact of foreign currency fluctuation.

The net loss for 2016 was $625,000 (loss per diluted share of $0.34) compared to a net loss of $1.2 million (loss per diluted share of $0.67) in 2015. The loss from operations for 2016 was $812,000 compared to a loss from operations of $1.27 million in 2015. Selling, general and administrative expenses were $20.2 million versus $23.6 million in 2015, as the effect of a cost reduction program implemented in May 2016 helped offset the impact of the sales decline. In 2016, Reliv recorded a valuation allowance of $292,000 against the tax benefits generated by its current year operating losses.

As previously reported, Reliv executed a one-for-seven (1:7) reverse stock split and Reliv's common stock began trading on a split-adjusted basis when the market opened on October 4, 2016. As a result of the reverse stock split, each seven pre-split shares of common stock automatically combined into one new share of common stock, and the number of outstanding common shares decreased from approximately 12.9 million shares to 1.85 million shares.

"The cost reduction program instituted earlier this year returned us to profitability in the third and fourth quarters of 2016 while the preparation was underway for the rollout of our Fit3™ program," said Ryan A. Montgomery, President. "With the rollout of Fit3 on February 1st, we look forward to an exciting 2017."

The Fit3 program consists of three principal components: nutrition coaching, exercise coaching and Fit3 workout videos, and three new Fit3 nutritional products: Active, Burn and Purify. Fit3 differs from diets and exercise fads in that it promotes realistic and sustainable lifestyle changes. Fit3 program trials have been underway for more than a year and have produced significant, measurable results among participants.

"Fit3 ushers in a new era for Reliv," commented Montgomery. "We have invested resources to make Fit3 much more than a set of extraordinary nutritional products; it is a multi-faceted lifestyle program and support system. And part of that lifestyle includes the Reliv business opportunity for those who wish to pursue it."

Reliv had cash and cash equivalents of $3.6 million as of December 31, 2016, compared to $3.3 million as of December 31, 2015. Net cash generated from operating activities was $1.5 million in 2016 compared to $800,000 of cash used in operations in the prior-year period.

As of December 31, 2016, Reliv had 38,480 distributors and preferred customers -- a decrease of 15.8 percent from December 31, 2015 -- of which 5,320 are Master Affiliate level and above. The number of Master Affiliates decreased by 14.2 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 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 -

       
Reliv International, Inc. and Subsidiaries
 
Condensed Consolidated Balance Sheets
   December 31  December 31
   2016  2015
   (Unaudited ) (Audited )
Assets         
Current Assets:         
 Cash and cash equivalents  $3,606,817   $3,262,263  
 Accounts receivable, less allowances of $26,700 in 2016 and $30,200 in 2015  126,113   89,376  
 Accounts and note due from employees and distributors  139,931   134,668  
 Inventories  4,487,830   5,172,722  
 Other current assets  571,377   1,140,680  
          
Total current assets  8,932,068   9,799,709  
          
Other assets  7,679,357   8,042,196  
Net property, plant and equipment  5,854,302   6,419,127  
          
Total Assets  $22,465,727   $24,261,032  
          
Liabilities and Stockholders' Equity         
          
Accounts payable and accrued expenses  $4,234,305   $3,937,752  
Current portion of long-term debt  389,096   781,505  
Long-term debt - noncurrent  2,518,341   3,159,575  
Other noncurrent liabilities  409,813   499,705  
Stockholders' equity  14,914,172   15,882,495  
          
Total Liabilities and Stockholders' Equity  $22,465,727   $24,261,032  
       
            
Consolidated Statements of Operations
  Three months ended December 31  Year ended December 31
  2016  2015  2016  2015
  (Unaudited)  (Unaudited)  (Unaudited)  (Audited)
Product sales $9,823,376   $11,358,169   $42,004,961   $47,759,553  
Handling & freight income 814,273   936,521   3,507,875   4,009,304  
                 
Net Sales 10,637,649   12,294,690   45,512,836   51,768,857  
                 
Costs and expenses:                
 Cost of products sold 2,294,513   2,840,281   10,024,021   11,086,152  
 Distributor royalties and commissions 3,749,861   4,361,219   16,095,032   18,410,190  
 Selling, general and administrative 4,317,861   5,301,996   20,205,762   23,546,926  
                 
Total Costs and Expenses 10,362,235   12,503,496   46,324,815   53,043,268  
                 
Income (loss) from operations 275,414   (208,806 ) (811,979 ) (1,274,411 )
                 
Other income (expense):                
Interest income 26,317   28,036   107,006   117,027  
Interest expense (24,521 ) (26,379 ) (106,682 ) (113,881 )
Other income (expense) (30,919 ) 36,032   195,600   (191,402 )
                 
Income (loss) before income taxes 246,291   (171,117 ) (616,055 ) (1,462,667 )
Provision (benefit) for income taxes (26,000 ) 35,000   9,000   (238,000 )
                 
Net income (loss) $272,291   ($206,117 ) ($625,055 ) ($1,224,667 )
                 
                 
Earnings (loss) per common share - Basic $0.15   ($0.11 ) ($0.34 ) ($0.67 )
Weighted average shares 1,845,000   1,846,000   1,845,000   1,839,000  
                 
Earnings (loss) per common share - Diluted $0.15   ($0.11 ) ($0.34 ) ($0.67 )
Weighted average shares 1,845,000   1,846,000   1,845,000   1,839,000  
            
 
Reliv International, Inc. and Subsidiaries
 
Net sales by Market
(in thousands)  Three months ended December 31,  Change from
   2016  2015  prior year
   Amount  % of Net Sales  Amount  % of Net Sales  Amount  %
                           
United States  $8,400  79.0 % $9,554  77.7 % $(1,154 ) -12.1 %
Australia/New Zealand   254  2.4 %  296  2.4 %  (42 ) -14.2 %
Canada   266  2.5 %  269  2.2 %  (3 ) -1.1 %
Mexico   111  1.0 %  152  1.3 %  (41 ) -27.0 %
Europe   1,147  10.8 %  1,541  12.5 %  (394 ) -25.6 %
Asia   460  4.3 %  483  3.9 %  (23 ) -4.8 %
                           
Consolidated Total  $10,638  100.0 % $12,295  100.0 % $(1,657 ) -13.5 %
                           
                           
Net sales by Market
(in thousands)  Year ended December 31,  Change from
   2016  2015  prior year
   Amount  % of Net Sales  Amount  % of Net Sales  Amount  %
                           
United States  $35,592  78.2 % $40,385  78.0 % $(4,793 ) -11.9 %
Australia/New Zealand   1,079  2.4 %  1,280  2.5 %  (201 ) -15.7 %
Canada   1,065  2.3 %  1,297  2.5 %  (232 ) -17.9 %
Mexico   530  1.2 %  719  1.4 %  (189 ) -26.3 %
Europe   5,491  12.0 %  6,192  12.0 %  (701 ) -11.3 %
Asia   1,756  3.9 %  1,896  3.6 %  (140 ) -7.4 %
                           
Consolidated Total  $45,513  100.0 % $51,769  100.0 % $(6,256 ) -12.1 %
                           

The following table sets forth, as of December 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 5,050 and 4,180 of the Active Distributor count as of December 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 12/31/2016  As of 12/31/2015  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  27,220  4,080  32,310  4,740  -15.8%  -13.9%
Australia/New Zealand  1,530  130  1,700  140  -10.0%  -7.1%
Canada  840  150  1,200  230  -30.0%  -34.8%
Mexico  940  90  1,220  110  -23.0%  -18.2%
Europe  4,860  530  6,300  650  -22.9%  -18.5%
Asia  3,090  340  2,990  330  3.3%  3.0%
                   
Consolidated Total  38,480  5,320  45,720  6,200  -15.8%  -14.2%
             

Contact Information

  • For more information, contact:

    Steve Albright
    Chief Financial Officer
    (636) 733-1305