SOURCE: Reliv International, Inc.

Reliv International: The Nutritional Epigenetics Company

October 30, 2014 06:45 ET

Reliv International Reports Third-Quarter Financial Results

CHESTERFIELD, MO--(Marketwired - October 30, 2014) - Reliv International, Inc. (NASDAQ: RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2014.

Net sales for the quarter were $14.3 million, a 13.5 percent decrease from the third quarter last year. U.S. net sales totaled $10.9 million, a decrease of $2.2 million, or 16.8 percent, compared to third-quarter 2013 net sales. Net sales outside of the United States declined slightly at 0.2 percent in the third quarter of 2014 compared to the prior-year quarter, offset by the European market where net sales increased by 16.1 percent.

Net income for the third quarter of 2014 was $166,000 or $0.01 per diluted share, compared to $293,000 or $0.02 per diluted share in the 2013 third quarter. In the second quarter of 2014, Reliv reported a net loss of $289,000 or $0.02 per diluted share. Reliv's sequential profitability improvement is attributable to effective cost reduction measures enacted in the third quarter and the tax benefit related to the liquidation of Reliv's former entity in Germany. Income from operations for the third quarter of 2014 was $228,000 compared to $402,000 in the same quarter of 2013.

"Reliv has recently completed a series of critical transitions -- in our distributor field, our corporate leadership, our distributor compensation plan and our product line -- 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 losses in net income in each of the first two quarters of 2014, we achieved profitability in the third quarter. We believe the return to profitability is evidence that the transitions initiated by Reliv are gaining traction."

Montgomery cites key elements of Reliv's strategic plan for growth:

  • Positioning Reliv as the Nutritional Epigenetics Company;
  • New product strategy around Reliv Now®, LunaRich X™ and the LunaRich® Super Pack;
  • Renewed focus on the business opportunity for the distributors;
  • Technology upgrades, both within operations at Reliv HQ and online for distributors;
  • Increased manufacturing capabilities with a new encapsulation line;
  • Continued expansion of Reliv's European markets;
  • Company-wide cost containment initiative; and
  • Investment in clinical studies of Reliv products and additional research.

"We see many examples of this plan already producing results, but turning around momentum in the field takes time," Montgomery noted. "During that process, we are aggressively controlling expenses to improve our bottom line."

Growth in Europe continued with net sales of $2.0 million in the third quarter of 2014 compared to $1.7 million in the prior-year third quarter. "Europe remains Reliv's strongest international market and we expect growth to continue," Montgomery said. "In October, at the most well-attended Reliv event in Reliv Europe history, we launched LunaRich C™ (LunaRich X™ in the United States). This product, a concentrated lunasin extract delivered in capsule form, is one of our top sellers in the United States and complements Reliv Europe's existing product line. We expect LunaRich C to enhance the momentum in Europe and sustain growth in the final quarter of 2014 and next year."

Reliv held an official launch event for the market of Indonesia on September 7. "Reliv has operated in Indonesia for a number of years, but until this year could only offer one product: Innergize!®, our isotonic performance formula," Montgomery said. "We have now expanded our product line in this market to four products, including Reliv Now®, our essential nutrition formula and top seller worldwide. With over $1 billion in direct sales annually, Indonesia is a market we believe offers Reliv an opportunity for growth in this region."

Worldwide net sales for the first nine months of 2014 were $43.3 million, representing a 14.9 percent decrease from the same period in 2013. In the United States, net sales declined 19.1 percent compared with the first nine months of the prior year. Net sales outside of the United States increased by 0.8 percent in the first nine months of 2014 compared with the first nine months last year.

Reliv reported a net loss of $274,000, or $0.02 per diluted share in the first nine months of 2014, compared to net income $274,000 or $0.02 per diluted share in the same period of 2013.

Reliv's total distributor count was 49,420 as of September 30, 2014 -- a decrease of 4.8 percent from the same date in 2013 -- of which 7,030 are Master Affiliate level and above. The number of Master Affiliates increased 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 $5.18 million as of September 30, 2014. This amount compares to $6.66 million as of December 31, 2013 and $5.74 million at this date last year.

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 nutritionweight 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.

Reliv International, Inc. and Subsidiaries
 
Condensed Consolidated Balance Sheets
 
  September 30  December 31          
  2014  2013          
  (Unaudited)             
Assets               
Current Assets:               
 Cash and cash equivalents $5,178,599  $6,656,798            
 Accounts receivable, less allowances of $28,100 in 2014 and $31,800 in 2013  156,507   148,630            
 Accounts and note due from employees and distributors  217,973   129,852            
 Inventories  5,105,107   5,214,690            
 Other current assets  1,218,202   1,006,099            
                    
Total current assets  11,876,388   13,156,069            
                    
Other assets  5,005,271   4,511,360            
Intangible assets, net  2,993,307   3,195,903            
Net property, plant and equipment  6,703,894   6,735,419            
                    
Total Assets $26,578,860  $27,598,751            
                    
Liabilities and Stockholders' Equity                   
                    
Total current liabilities $6,633,723  $6,649,345            
Long-term debt, less current maturities  3,668,159   3,781,607            
Other non-current liabilities  401,277   1,037,327            
Stockholders' equity  15,875,701   16,130,472            
                    
Total Liabilities and Stockholders' Equity $26,578,860  $27,598,751            
                    
                    
Consolidated Statements of Operations
   Three months ended September 30    Nine months ended September 30  
   2014   2013    2014    2013  
   (Unaudited ) (Unaudited )  (Unaudited )  (Unaudited )
Product sales $13,206,275  $15,241,597   $39,867,425   $46,296,517  
Handling & freight income  1,108,006   1,297,867    3,387,322    4,525,618  
                    
Net Sales  14,314,281   16,539,464    43,254,747    50,822,135  
                    
Costs and expenses:                   
 Cost of products sold  2,968,139   3,529,027    8,855,401    10,490,825  
 Distributor royalties and commissions  4,985,450   5,974,652    15,425,704    18,595,100  
 Selling, general and administrative  6,133,040   6,633,771    19,390,732    21,121,858  
                    
Total Costs and Expenses  14,086,629   16,137,450    43,671,837    50,207,783  
                    
Income (loss) from operations  227,652   402,014    (417,090 )  614,352  
                    
Other income (expense):                   
Interest income  31,736   37,240    100,008    113,072  
Interest expense  (26,054 ) (22,187 )  (75,689 )  (58,182 )
Other income (expense)  (60,372 ) 28,637    (53,983 )  (62,482 )
                    
Income (loss) before income taxes  172,962   445,704    (446,754 )  606,760  
Provision (benefit) for income taxes  7,000   153,000    (173,000 )  333,000  
                    
Net income (loss) $165,962  $292,704    ($273,754 ) $273,760  
                    
                    
Earnings (loss) per common share - Basic $0.01  $0.02    ($0.02 ) $0.02  
Weighted average shares  12,666,000   12,616,000    12,666,000    12,617,000  
                    
Earnings (loss) per common share - Diluted $0.01  $0.02    ($0.02 ) $0.02  
Weighted average shares  12,750,000   12,842,000    12,666,000    12,785,000  
                    
Cash dividends declared per common share $0.00  $0.02   $0.00   $0.02  
  
  
Reliv International, Inc. and Subsidiaries  
   
Net sales by Market  
(in thousands)  
  Three months ended September 30,   Change From  
  2014   2013   Prior Year  
  Amount % of Net Sales   Amount % of Net Sales   Amount  %  
                    
United States $10,946 76.5 % $13,163 79.6 % $(2,217 )-16.8 %
Australia/New Zealand  399 2.8 %  429 2.6 %  (30 )-7.0 %
Canada  346 2.4 %  384 2.3 %  (38 )-9.9 %
Mexico  192 1.3 %  225 1.4 %  (33 )-14.7 %
Europe  1,956 13.7 %  1,685 10.2 %  271  16.1 %
Asia  475 3.3 %  653 3.9 %  (178 )-27.3 %
                       
Consolidated total $14,314 100.0 % $16,539 100.0 % $(2,225 )-13.5 %
                       
                       
Net sales by Market                      
(in thousands)                      
   Nine months ended September 30,    Change From Prior Year  
   2014    2013   
   Amount % of Net Sales    Amount % of Net Sales    Amount    %
                       
United States $32,453 75.0 % $40,101 78.9 % $(7,648 )-19.1 %
Australia/New Zealand  1,261 2.9 %  1,402 2.8 %  (141 )-10.1 %
Canada  993 2.3 %  1,310 2.6 %  (317 )-24.2 %
Mexico  607 1.4 %  759 1.5 %  (152 )-20.0 %
Europe  6,529 15.1 %  5,664 11.1 %  865  15.3 %
Asia  1,412 3.3 %  1,586 3.1 %  (174 )-11.0 %
                       
Consolidated total $43,255 100.0 % $50,822 100.0 % $(7,567 )-14.9 %
                
                

The following table sets forth, as of September 30, 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 September 30, 2014 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 9/30/14 and 9/30/13 includes French preferred customers of 2,822 and 1,040, respectively. 

 

Active Distributors and Master Affiliates and above by Market  
   
  As of 9/30/2014  As of 9/30/2013  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 35,680  5,240  38,670  4,830  -7.7 % 8.5 %
Australia/New Zealand 1,290  150  1,470  200  -12.2 % -25.0 %
Canada 1,250  260  1,270  220  -1.6 % 18.2 %
Mexico 1,140  140  1,080  150  5.6 % -6.7 %
Europe 8,060  920  5,800  820  39.0 % 12.2 %
Asia 2,000  320  3,630  450  -44.9 % -28.9 %
                     
Consolidated total 49,420  7,030  51,920  6,670  -4.8 % 5.4 %

Contact Information

  • For more information, contact:

    Steve Albright
    Chief Financial Officer
    (636) 733-1305