CHESTERFIELD, MO--(Marketwired - November 13, 2015) - Reliv International, Inc. (
Net sales for the quarter were $12.2 million, a 14.8 percent decrease from the third quarter last year. U.S. net sales totaled $9.8 million, a decrease of 10.8 percent, compared to third-quarter 2014 net sales. Net sales outside of the United States declined 27.7 percent in the third quarter of 2015 compared to the prior-year quarter, with 9.3 percent of that decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar.
The net loss for the third quarter of 2015 was $289,000 or $0.02 per diluted share, compared to net income of $166,000 or $0.01 per diluted share in the third quarter of 2014. Loss from operations for the third quarter of 2015 was $377,000 compared to income of $228,000 for the same quarter of 2014.
On November 2, Reliv announced major updates to its distributor compensation plan that will go into effect February 1, 2016. The updated compensation plan will adjust profit level qualifications for distributors and introduce a new preferred customer program.
"Clearly, the results of the third quarter are not satisfactory. To achieve improved results, we initiated a strategic plan to further engage and support our distributor force," said Robert L. Montgomery, Chairman and Chief Executive Officer. "Our announcements on November 2 were a key initial step in our strategy for 2016 and beyond."
"We announced the updates three months before they go into effect in order to prepare and train our distributor field," Montgomery said. "This also allows distributors during this three-month period to take advantage of unique incentives resulting from the transition process."
"The new profit level qualifications simplify the compensation structure and provide a clearer, more achievable path to advancement," Montgomery said. "We know from past success that this approach works, and we anticipate a greater number of distributors achieving higher ranks within the plan and driving sales growth."
The preferred customer program will allow new customers to receive an automatic discount on all product orders without having to sign up as a distributor -- a first for Reliv. "The preferred customer program provides an entirely new entry point into Reliv," Montgomery said. "People interested in our nutritional solutions but reluctant to launch a Reliv distributorship now have added incentive to become customers. Similar programs within the direct sales industry have been met with great success, and we anticipate this program will lead to an increase in customer retail sales."
For the first nine months of 2015, worldwide net sales were $39.5 million, representing an 8.7 percent decrease from the same period in 2014. In the United States, net sales declined 5.0 percent compared with the first nine months of the prior year. Net sales outside of the United States decreased by 20.0 percent in the first nine months of 2015 compared with the first nine months last year.
Reliv reported a net loss of $1.0 million, or $0.08 per diluted share in the first nine months of 2015, compared to a net loss of $274,000 or $0.02 per diluted share in the same period of 2014.
On September 30, 2015, Reliv entered into a term loan with Enterprise Bank & Trust in the principal amount of $3.25 million and a revolving credit facility with available borrowing capacity of $3.5 million. Reliv used the proceeds of the term loan to pay off the outstanding balance of principal and accrued interest under its prior term loan and revolving credit facility with BMO Harris Bank N.A. "We are pleased to begin a banking relationship with Enterprise and look forward to a long partnership with them," said Montgomery. "This credit facility, coupled with our current cash reserves, gives us the capital needed for our strategic initiatives to grow Reliv in the coming years," he added.
Reliv had cash and cash equivalents of $3.2 million as of September 30, 2015. This amount compares to $5.0 million as of December 31, 2014 and $5.2 million at this date last year.
Reliv's total distributor count was 45,890 as of September 30, 2015 -- a decrease of 7.1 percent from the same date in 2014 -- of which 5,890 are Master Affiliate level and above. Master Affiliate is the level at which distributors are eligible to earn generation royalties.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. 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, 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 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.
| Reliv International, Inc. and Subsidiaries | |||||||||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||||||||
| September 30 | December 31 | ||||||||||||||||
| 2015 | 2014 | ||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Assets | |||||||||||||||||
| Current Assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 3,158,965 | $ | 4,989,392 | |||||||||||||
| Accounts receivable, less allowances of $30,200 in 2015 and $26,300 in 2014 | 84,536 | 265,530 | |||||||||||||||
| Accounts and note due from employees and distributors | 132,786 | 121,208 | |||||||||||||||
| Inventories | 5,619,487 | 5,177,465 | |||||||||||||||
| Other current assets | 1,315,814 | 979,615 | |||||||||||||||
| Total current assets | 10,311,588 | 11,533,210 | |||||||||||||||
| Other assets | 5,466,291 | 5,462,855 | |||||||||||||||
| Intangible assets, net | 2,723,179 | 2,925,775 | |||||||||||||||
| Net property, plant and equipment | 6,574,752 | 6,925,970 | |||||||||||||||
| Total Assets | $ | 25,075,810 | $ | 26,847,810 | |||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||
| Accounts payable and accrued expenses | $ | 4,486,860 | $ | 5,187,057 | |||||||||||||
| Current portion of long-term debt | 813,560 | 697,423 | |||||||||||||||
| Long-term debt - noncurrent | 3,279,589 | 3,547,267 | |||||||||||||||
| Other noncurrent liabilities | 377,825 | 418,785 | |||||||||||||||
| Stockholders' equity | 16,117,976 | 16,997,278 | |||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 25,075,810 | $ | 26,847,810 | |||||||||||||
| Consolidated Statements of Operations | |||||||||||||||||
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| Product sales | $ | 11,250,271 | $ | 13,206,275 | $ | 36,401,384 | $ | 39,867,425 | |||||||||
| Handling & freight income | 944,182 | 1,108,006 | 3,072,783 | 3,387,322 | |||||||||||||
| Net Sales | 12,194,453 | 14,314,281 | 39,474,167 | 43,254,747 | |||||||||||||
| Costs and expenses: | |||||||||||||||||
| Cost of products sold | 2,603,167 | 2,968,139 | 8,245,871 | 8,855,401 | |||||||||||||
| Distributor royalties and commissions | 4,308,647 | 4,985,450 | 14,048,971 | 15,425,704 | |||||||||||||
| Selling, general and administrative | 5,659,989 | 6,133,040 | 18,244,930 | 19,390,732 | |||||||||||||
| Total Costs and Expenses | 12,571,803 | 14,086,629 | 40,539,772 | 43,671,837 | |||||||||||||
| Income (loss) from operations | (377,350 | ) | 227,652 | (1,065,605 | ) | (417,090 | ) | ||||||||||
| Other income (expense): | |||||||||||||||||
| Interest income | 28,536 | 31,736 | 88,991 | 100,008 | |||||||||||||
| Interest expense | (36,814 | ) | (26,054 | ) | (87,502 | ) | (75,689 | ) | |||||||||
| Other income (expense) | (72,373 | ) | (60,372 | ) | (227,434 | ) | (53,983 | ) | |||||||||
| Income (loss) before income taxes | (458,001 | ) | 172,962 | (1,291,550 | ) | (446,754 | ) | ||||||||||
| Provision (benefit) from income taxes | (169,000 | ) | 7,000 | (273,000 | ) | (173,000 | ) | ||||||||||
| Net income (loss) | ($289,001 | ) | $ | 165,962 | ($1,018,550 | ) | ($273,754 | ) | |||||||||
| Earnings (loss) per common share - Basic | ($0.02 | ) | $ | 0.01 | ($0.08 | ) | ($0.02 | ) | |||||||||
| Weighted average shares | 12,919,000 | 12,666,000 | 12,853,000 | 12,666,000 | |||||||||||||
| Earnings (loss) per common share - Diluted | ($0.02 | ) | $ | 0.01 | ($0.08 | ) | ($0.02 | ) | |||||||||
| Weighted average shares | 12,919,000 | 12,750,000 | 12,853,000 | 12,666,000 | |||||||||||||
| Reliv International, Inc. and Subsidiaries | |||||||||||||||||||||||||
| Net sales by Market | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Three months ended September 30, | Change From | ||||||||||||||||||||||||
| 2015 | 2014 | Prior Year | |||||||||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | ||||||||||||||||||||
| United States | $ | 9,759 | 80.0 | % | $ | 10,946 | 76.5 | % | $ | (1,187 | ) | -10.8 | % | ||||||||||||
| Australia/New Zealand | 283 | 2.3 | % | 399 | 2.8 | % | (116 | ) | -29.1 | % | |||||||||||||||
| Canada | 260 | 2.2 | % | 346 | 2.4 | % | (86 | ) | -24.9 | % | |||||||||||||||
| Mexico | 136 | 1.1 | % | 192 | 1.3 | % | (56 | ) | -29.2 | % | |||||||||||||||
| Europe | 1,304 | 10.7 | % | 1,956 | 13.7 | % | (652 | ) | -33.3 | % | |||||||||||||||
| Asia | 452 | 3.7 | % | 475 | 3.3 | % | (23 | ) | -4.8 | % | |||||||||||||||
| Consolidated total | $ | 12,194 | 100.0 | % | $ | 14,314 | 100.0 | % | $ | (2,120 | ) | -14.8 | % | ||||||||||||
| Net sales by Market | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Nine months ended September 30, | Change From | ||||||||||||||||||||||||
| 2015 | 2014 | Prior Year | |||||||||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | ||||||||||||||||||||
| United States | $ | 30,831 | 78.1 | % | $ | 32,453 | 75.0 | % | $ | (1,622 | ) | -5.0 | % | ||||||||||||
| Australia/New Zealand | 984 | 2.5 | % | 1,261 | 2.9 | % | (277 | ) | -22.0 | % | |||||||||||||||
| Canada | 1,028 | 2.6 | % | 993 | 2.3 | % | 35 | 3.5 | % | ||||||||||||||||
| Mexico | 567 | 1.4 | % | 607 | 1.4 | % | (40 | ) | -6.6 | % | |||||||||||||||
| Europe | 4,651 | 11.8 | % | 6,529 | 15.1 | % | (1,878 | ) | -28.8 | % | |||||||||||||||
| Asia | 1,413 | 3.6 | % | 1,412 | 3.3 | % | 1 | 0.1 | % | ||||||||||||||||
| Consolidated total | $ | 39,474 | 100.0 | % | $ | 43,255 | 100.0 | % | $ | (3,781 | ) | -8.7 | % | ||||||||||||
| The following table sets forth, as of September 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 September 30, 2015 and 2014 includes France preferred customers of 3,106 and 2,822, respectively. | |||||||||||||||||||||||||
| Active Distributors and Master Affiliates and above by Market | |||||||||||||||||||||||||
| As of 9/30/2015 | As of 9/30/2014 | 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 | 33,360 | 4,500 | 35,680 | 5,240 | -6.5 | % | -14.1 | % | |||||||||||||||||
| Australia/New Zealand | 1,210 | 130 | 1,290 | 150 | -6.2 | % | -13.3 | % | |||||||||||||||||
| Canada | 1,250 | 230 | 1,250 | 260 | 0.0 | % | -11.5 | % | |||||||||||||||||
| Mexico | 1,240 | 100 | 1,140 | 140 | 8.8 | % | -28.6 | % | |||||||||||||||||
| Europe | 6,390 | 630 | 8,060 | 920 | -20.7 | % | -31.5 | % | |||||||||||||||||
| Asia | 2,440 | 300 | 2,000 | 320 | 22.0 | % | -6.3 | % | |||||||||||||||||
| Consolidated total | 45,890 | 5,890 | 49,420 | 7,030 | -7.1 | % | -16.2 | % | |||||||||||||||||
Contact Information:
For more information, contact:
Steve Albright
Chief Financial Officer
(636) 733-1305