SOURCE: Reliv International, Inc.

Reliv International: The Nutritional Epigenetics Company

August 14, 2015 07:00 ET

Reliv International Reports Second-Quarter Financial Results

CHESTERFIELD, MO--(Marketwired - August 14, 2015) - Reliv International, Inc. (NASDAQ: RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2015.

Net sales for the quarter were $12.4 million, a 14.0 percent decrease from the second quarter last year. Net U.S. sales totaled $9.6 million, down from $10.8 million in the second quarter of 2014. Net sales outside of the United States decreased 22.1 percent in the second quarter of 2015 compared to the prior-year quarter. Foreign currency fluctuation accounted for 8.7 percent of the net sales decline outside of the United States. Net sales in Europe declined 30.7 percent in the second quarter of 2015 compared to the prior-year quarter, with foreign currency fluctuation accounting for 6.8 percent of the decline.

The net loss for the second quarter of 2015 was $846,000 or $0.07 per diluted share, compared to a net loss of $289,000 or $0.02 per diluted share in the 2014 second quarter. The loss from operations for the second quarter of 2015 was $1.12 million compared to a loss of $475,000 in the same quarter of 2014.

Net sales for the first six months of 2015 were $27.3 million, which represents a 5.7 percent decrease from the same period in 2014. In the United States, net sales declined 2.0 percent. Reliv's international net sales decreased 16.5 percent in the first half of 2015 compared with the first half of last year, with 8.3 percent of the decline due to foreign currency fluctuation.

Reliv reported a net loss of $730,000, or $0.06 per diluted share in the first six months of 2015, compared to net loss of $440,000 or $0.03 per diluted share in the same period of 2014.

The loss from operations in the second quarter of 2015 was primarily due to the previously mentioned decrease in net sales. However, there were two charges impacting the second quarter results that will not impact results going forward. In Mexico, operating costs in the second quarter of 2015 were negatively impacted by a newly implemented value added tax ("VAT"). The implementation of this new VAT has impacted many nutritional supplement companies in Mexico. As part of a decree issued by the Mexico treasury department, Reliv entered into an amnesty program during the second quarter of 2015 resulting in an overall VAT implementation pre-tax charge of approximately $130,000.

In Europe, we concluded a long-term performance-based incentive compensation agreement with our senior managers in the region during the second quarter of 2015. We recognized $165,000 in compensation expense during the second quarter of 2015 related to this agreement. This compares to compensation expense recognized under this agreement of $145,000 during the second quarter of 2014.

For the six-month period ended June 30, 2015, Reliv used $108,000 in cash in operating activities. This compares to cash used in operating activities of $1.21 million for the six-month period ended June 30, 2014. Reliv had cash and cash equivalents of $4.50 million as of June 30, 2015. This amount compares to $4.99 million as of December 31, 2014 and $4.93 million as of this date last year.

"While these results are less favorable than we hoped, we have launched new initiatives to implement the training and rewards necessary to turn our sales in a positive direction," said Robert L. Montgomery, Chairman and Chief Executive Officer. "We have conducted an evaluation process within the company and among our distributor field and have decided to focus messaging and training on simplified and specific steps for our distributors to build a successful business. Early adopters are experiencing business success," he added.

In May 2015, Reliv launched mobile-ready personal websites for Reliv distributors. "Not only do these sites allow distributors to tell the Reliv story through engaging content and videos, they offer a whole new way to speed up business," Montgomery said. "For the first time distributors have their own online shopping carts and new distributor sign-up. And since the sites are mobile-ready, distributors can give presentations and complete transactions on the spot -- anytime, anywhere. In June 2015, their first full month in operation, personal websites accounted for nearly 40% of all new customer sign-ups. We see this as a positive start to a promising growth opportunity."

About Reliv International, Inc.

Reliv International, based in Chesterfield, MO, 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. 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 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.

  
Reliv International, Inc. and Subsidiaries  
   
Condensed Consolidated Balance Sheets  
   June 30   December 31           
   2015   2014           
   (Unaudited )             
Assets                  
Current Assets:                  
 Cash and cash equivalents  $4,497,299   $4,989,392           
 Accounts receivable, less allowances of $25,500 in 2015 and $26,300 in 2014  56,485   265,530           
 Accounts and note due from employees and distributors  141,089   121,208           
 Inventories  5,469,510   5,177,465           
 Other current assets  1,347,537   979,615           
                   
Total current assets  11,511,920   11,533,210           
                   
Other assets  5,502,820   5,462,855           
Intangible assets, net  2,790,711   2,925,775           
Net property, plant and equipment  6,721,789   6,925,970           
                   
Total Assets  $26,527,240   $26,847,810           
                   
Liabilities and Stockholders' Equity                  
                   
Accounts payable and accrued expenses  $5,294,187   $5,187,057           
Current portion of long-term debt  3,794,019   697,423           
Long-term debt - noncurrent  647,444   3,547,267           
Other noncurrent liabilities  446,023   418,785           
Stockholders' equity  16,345,567   16,997,278           
                   
Total Liabilities and Stockholders' Equity  $26,527,240   $26,847,810           
                   
                   
Consolidated Statements of Operations                  
   Three months ended June 30    Six months ended June 30  
   2015   2014    2015   2014  
   (Unaudited ) (Unaudited )  (Unaudited ) (Unaudited )
                   
Product sales  $11,442,990   $13,355,370    $25,151,113   $26,661,151  
Handling & freight income  1,002,361   1,120,209    2,128,601   2,279,316  
                   
Net Sales  12,445,351   14,475,579    27,279,714   28,940,467  
                   
Costs and expenses:                  
 Cost of products sold  2,647,755   3,000,412    5,642,704   5,887,262  
 Distributor royalties and commissions  4,459,577   5,232,967    9,740,324   10,440,254  
 Selling, general and administrative  6,454,992   6,716,826    12,584,941   13,257,693  
                   
Total Costs and Expenses  13,562,324   14,950,205    27,967,969   29,585,209  
                   
Loss from operations  (1,116,973 ) (474,626 )  (688,255 ) (644,742 )
                   
Other income (expense):                  
Interest income  30,073   32,148    60,455   68,272  
Interest expense  (26,749 ) (25,367 )  (50,688 ) (49,635 )
Other income (expense)  15,653   31,079    (155,061 ) 6,389  
                   
Loss before income taxes  (1,097,996 ) (436,766 )  (833,549 ) (619,716 )
Benefit from income taxes  (252,000 ) (148,000 )  (104,000 ) (180,000 )
                   
Net loss  ($845,996 ) ($288,766 )  ($729,549 ) ($439,716 )
                   
                   
Loss per common share - Basic  ($0.07 ) ($0.02 )  ($0.06 ) ($0.03 )
Weighted average shares  12,819,000   12,666,000    12,819,000   12,666,000  
                   
Loss per common share - Diluted  ($0.07 ) ($0.02 )  ($0.06 ) ($0.03 )
Weighted average shares  12,819,000   12,666,000    12,819,000   12,666,000  
                   
Cash dividends declared per common share  -   -    -   -  
             
  
Reliv International, Inc. and Subsidiaries  
   
Net sales by Market  
(in thousands)  
   Three months ended June 30,    Change From  
   2015    2014    Prior Year  
   Amount  % of Net Sales    Amount  % of Net Sales    Amount   %  
                          
United States  $9,591  77.1 %  $10,815  74.7 %  $(1,224 ) -11.3 %
Australia/New Zealand   329  2.6 %   429  3.0 %   (100 ) -23.3 %
Canada   335  2.7 %   357  2.5 %   (22 ) -6.2 %
Mexico   234  1.9 %   190  1.3 %   44   23.2 %
Europe   1,554  12.5 %   2,244  15.5 %   (690 ) -30.7 %
Asia   402  3.2 %   441  3.0 %   (39 ) -8.8 %
                             
Consolidated total  $12,445  100.0 %  $14,476  100.0 %  $(2,031 ) -14.0 %
                             
                             
Net sales by Market  
(in thousands)  
    Six months ended June 30,     Change From Prior Year  
    2015     2014   
    Amount  % of Net Sales     Amount  % of Net Sales     Amount   %  
                             
United States  $21,071  77.2 %  $21,507  74.3 %  $(436 ) -2.0 %
Australia/New Zealand   701  2.6 %   861  3.0 %   (160 ) -18.6 %
Canada   768  2.8 %   647  2.2 %   121   18.7 %
Mexico   431  1.6 %   415  1.4 %   16   3.9 %
Europe   3,348  12.3 %   4,573  15.8 %   (1,225 ) -26.8 %
Asia   961  3.5 %   937  3.3 %   24   2.6 %
                             
Consolidated total  $27,280  100.0 %  $28,940  100.0 %  $(1,660 ) -5.7 %
                             
                             
The following table sets forth, as of June 30, 2015 and 2014, 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. 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 June 30, 2015 and 2014 includes France preferred customers of 3,218 and 2,630, respectively.
                             
Active Distributors and Master Affiliates and above by Market  
                             
    As of 6/30/2015     As of 6/30/2014     Change in %  
    Total
Active
Distr-
ibuto-
rs
 Master
Affil-
iates
and
Above
    Total
Active
Distr-
ibuto-
rs
 Master
Affil-
iates
and
Above
    Total
Active
Distr-
ibuto-
rs
  Master
Affil-
iates
and
Above
 
      
                             
United States   33,760  4,330     36,440  5,170     -7.4 % -16.2 %
Australia/New Zealand   1,230  130     1,300  150     -5.4 % -13.3 %
Canada   1,250  220     1,270  250     -1.6 % -12.0 %
Mexico   1,220  100     1,130  140     8.0 % -28.6 %
Europe   6,810  650     8,190  880     -16.8 % -26.1 %
Asia   2,300  270     2,370  330     -3.0 % -18.2 %
                             
Consolidated total   46,570  5,700     50,700  6,920     -8.1 % -17.6 %

Contact Information

  • For more information, contact:

    Steve Albright
    Chief Financial Officer
    (636) 733-1305