Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2019
CHESTERFIELD, Mo., March 27, 2020 /PRNewswire/ -- 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 2019.
Fourth-Quarter Results
Reliv reported net sales of $8.2 million for the fourth quarter of 2019, compared with net sales of $9.3 million for the fourth quarter of 2018, a decrease of 12.4%. U.S. net sales decreased by 17.9% for the quarter compared with the same quarter in 2018. Network marketing net sales in the U.S. decreased by 12.5% in the fourth quarter of 2019 as they were adversely impacted in the quarter by a price increase on most products effective October 1, 2019. Additionally, U.S. sales in the prior-year quarter included approximately $700,000 of contract packaging business that was divested in January 2019. Net sales outside of the United States increased by 5.8% in the fourth quarter of 2019 compared to the prior-year quarter. Net sales in Asia and Mexico were up 45.2% and 4.7%, respectively, in the fourth quarter; however, sales in Europe decreased by 17.2%. Net sales in Reliv's foreign markets increased by 3.7% during the fourth quarter of 2019 when the impact of foreign currency fluctuation is removed.
Reliv reported a net loss of $514,000, or a loss of $0.29 per diluted share, for the fourth quarter of 2019 compared with a net loss of $145,000, or a loss of $0.08 per diluted share, for the fourth quarter of 2018. The loss from operations for the fourth quarter of 2019 was $308,000 compared to loss from operations of $169,000 in the same period in 2018. Income tax expense in the fourth quarter was $271,000, primarily resulting from income tax on earnings coupled with a settlement for an old tax audit in our Philippine entity.
Full-Year Results
Reliv reported net sales of $35.1 million for 2019 compared with net sales of $36.1 million in 2018, a decline of 2.9%. U.S. net sales decreased to $25.7 million from $27.7 million, a decline of 7.0%.
Net sales in Reliv's foreign markets for 2019 increased 10.3% compared with net sales for 2018. Net sales increases in 2019 in Asia and Mexico of 68.7% and 21.7%, respectively, were offset by a decrease of 18.8% in Europe compared to the prior year. Net sales in Reliv's foreign markets increased by 11.9% during 2019 when the impact of foreign currency fluctuation is removed.
The net loss for 2019 was $444,000 (loss per diluted share of $0.25) compared to a net loss of $1.9 million (loss per diluted share of $1.03) in 2018. The loss from operations for 2019 was $559,000 compared to a loss from operations of $1.9 million in 2018. Selling, general, and administrative expenses were $14.8 million versus $16.5 million in 2018. Other income includes a first quarter of 2019 gain of $435,000 from the sale of all manufacturing equipment as part of an asset sale with Nutracom, LLC (Nutracom). Income tax expense for 2019 was $468,000, once again resulting from income tax on earnings coupled with previously mentioned tax settlements in our Philippine entity.
Reliv had cash and cash equivalents of $1.6 million as of December 31, 2019, compared to $2.0 million as of December 31, 2018. Net cash used in operating activities was $943,000 in 2019 compared to $1.2 million of cash used in operations in the prior-year period.
As of December 31, 2019, Reliv had 15,630 customers and Preferred Customers in total – an increase of 22.3% from December 31, 2018. The number of preferred customers increased to 9,320 as of December 31, 2019 compared to 5,060 as of the prior year end. This increase is primarily driven by the growth in the Philippines. Many customers buy product directly from distributors rather than from us so the number of customers is likely greater than stated above. As of December 31, 2019, Reliv had 25,730 active Distributors – an increase of 1.7% from December 31, 2018. The number of Master Affiliates decreased by 2.1% compared to the year-ago total. Master Affiliate is the level at which Distributors are eligible to earn generation royalties.
"2019 was a year of transition for Reliv," commented Ryan A. Montgomery, Chief Executive Officer. "We successfully completed our transaction with Nutracom which allows each party to focus on their respective core competencies. We launched our RLV line of hemp-extract products in the United States. We continue to focus on building our base of distributors and preferred customers through training and targeted initiatives, such as the payment of wholesale commissions on a weekly basis, to reward those distributors building their base of business in this manner. We were disappointed in our results in the fourth quarter in the U.S.; however, we believe we are laying the groundwork for a solid year in 2020."
"Our RLV line continues to be a solid contributor to U.S. sales representing 7.3% of net sales in the fourth quarter. We launched additional products in the RLV line in the fourth quarter and at our recent distributor conference in Dallas, TX and plan further developments in this line during 2020," said Montgomery.
In international operations, sales and distributor activity in the Philippines continued its strong pace in the fourth quarter of 2019. "We've completed an outstanding year in the Philippines, and we intend to fuel that growth in 2020 and expand the excitement there to our other markets in the Asia-Pacific region," noted Montgomery. Net sales in the Philippines grew by 39.7% in local currency in the fourth quarter of 2019, compared to the prior-year quarter, as the active distributor and preferred customer and Master Affiliate counts across all of the Asia markets increased by 116% and 63%, respectively.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address core nutrition, targeted solutions and overall wellness and now include a line of RLV hemp extracts. 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 13 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 | ||||
2019 | 2018 | ||||
(Unaudited) | (Audited) | ||||
Assets | |||||
Current Assets: | |||||
Cash and cash equivalents | $1,630,779 | $1,989,974 | |||
Accounts receivable, less allowances of $5,000 in 2019 and 2018 | 107,369 | 400,759 | |||
Notes & accounts receivables & deposits - related parties | 1,099,228 | 151,222 | |||
Inventories | 2,701,688 | 2,954,947 | |||
Assets held for sale | - | 2,124,939 | |||
Other current assets | 326,454 | 464,165 | |||
Total current assets | 5,865,518 | 8,086,006 | |||
Notes & accounts receivables - related parties | 2,418,921 | 1,282,072 | |||
Other assets | 2,581,717 | 2,287,237 | |||
Net property, plant and equipment | 4,440,840 | 4,698,550 | |||
Total Assets | $15,306,996 | $16,353,865 | |||
Liabilities and Stockholders' Equity | |||||
Accounts payable, accruals & other current liabilities | $3,489,157 | $3,915,390 | |||
Revolving line of credit | 500,000 | - | |||
Other noncurrent liabilities | 216,196 | 445,611 | |||
Stockholders' equity | 11,101,643 | 11,992,864 | |||
Total Liabilities and Stockholders' Equity | $15,306,996 | $16,353,865 | |||
Consolidated Statements of Operations | |||||
Three months ended December 31 | Year ended December 31 | ||||
2019 | 2018 | 2019 | 2018 | ||
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||
Product sales | $7,488,554 | $8,788,666 | $32,298,533 | $33,918,169 | |
Freight income | 452,306 | 527,050 | 1,973,320 | 2,197,572 | |
Other revenue | 219,073 | - | 783,462 | - | |
Net Sales | 8,159,933 | 9,315,716 | 35,055,315 | 36,115,741 | |
Costs and expenses: | |||||
Cost of goods sold | 2,356,400 | 2,619,785 | 9,557,116 | 9,709,743 | |
Distributor royalties and commissions | 2,537,219 | 2,890,639 | 11,259,071 | 11,749,604 | |
Selling, general and administrative | 3,573,838 | 3,974,045 | 14,798,586 | 16,520,885 | |
Total Costs and Expenses | 8,467,457 | 9,484,469 | 35,614,773 | 37,980,232 | |
Loss from operations | (307,524) | (168,753) | (559,458) | (1,864,491) | |
Other income (expense): | |||||
Interest income | 40,782 | 22,922 | 177,810 | 93,054 | |
Interest expense | (7,443) | (2,361) | (47,180) | (95,556) | |
Other income | 31,146 | 50,140 | 17,922 | 62,347 | |
Gain (loss) on sale of fixed assets | - | 3,271 | 434,549 | (695) | |
Income (loss) before income taxes | (243,039) | (94,781) | 23,643 | (1,805,341) | |
Provision for income taxes | 271,000 | 50,000 | 468,000 | 98,000 | |
Net loss | ($514,039) | ($144,781) | ($444,357) | ($1,903,341) | |
Loss per common share - Basic | ($0.29) | ($0.08) | ($0.25) | ($1.03) | |
Weighted average shares | 1,746,000 | 1,845,000 | 1,746,000 | 1,845,000 | |
Loss per common share - Diluted | ($0.29) | ($0.08) | ($0.25) | ($1.03) | |
Weighted average shares | 1,746,000 | 1,845,000 | 1,746,000 | 1,845,000 | |
Reliv International, Inc. and Subsidiaries | ||||||||
Net sales by Market | ||||||||
(in thousands) | Three months ended December 31, | Change from | ||||||
2019 | 2018 | prior year | ||||||
Amount | % of Net | Amount | % of Net | Amount | % | |||
United States | $ 5,888 | 72.2% | $ 7,168 | 76.9% | $ (1,280) | -17.9% | ||
Australia/New Zealand | 151 | 1.9% | 167 | 1.8% | (16) | -9.6% | ||
Canada | 137 | 1.7% | 162 | 1.7% | (25) | -15.4% | ||
Mexico | 133 | 1.6% | 127 | 1.4% | 6 | 4.7% | ||
Europe | 803 | 9.8% | 970 | 10.4% | (167) | -17.2% | ||
Asia | 1,048 | 12.8% | 722 | 7.8% | 326 | 45.2% | ||
Consolidated Total | $ 8,160 | 100.0% | $ 9,316 | 100.0% | $ (1,156) | -12.4% | ||
Net sales by Market | ||||||||
(in thousands) | Year ended December 31, | Change from | ||||||
2019 | 2018 | prior year | ||||||
Amount | % of Net | Amount | % of Net | Amount | % | |||
United States | $ 25,747 | 73.4% | $ 27,673 | 76.6% | $ (1,926) | -7.0% | ||
Australia/New Zealand | 595 | 1.7% | 732 | 2.0% | (137) | -18.7% | ||
Canada | 617 | 1.8% | 719 | 2.0% | (102) | -14.2% | ||
Mexico | 577 | 1.6% | 474 | 1.3% | 103 | 21.7% | ||
Europe | 3,225 | 9.2% | 3,973 | 11.0% | (748) | -18.8% | ||
Asia | 4,294 | 12.3% | 2,545 | 7.1% | 1,749 | 68.7% | ||
Consolidated Total | $ 35,055 | 100.0% | $ 36,116 | 100.0% | $ (1,061) | -2.9% | ||
Reliv International, Inc. and Subsidiaries | ||||||
Retail and Preferred Customers/Active Distributors/Master Affiliates and Above by Market | ||||||
As of 12/31/2019 | ||||||
Retail | Preferred | Active | Total | Master | ||
United States | 3,500 | 1,500 | 17,580 | 22,580 | 2,110 | |
Australia/New Zealand | 50 | 210 | 660 | 920 | 80 | |
Canada | 90 | 30 | 470 | 590 | 60 | |
Mexico | 20 | 100 | 1,160 | 1,280 | 100 | |
Europe | 740 | 690 | 1,650 | 3,080 | 330 | |
Asia | 1,910 | 6,790 | 4,210 | 12,910 | 620 | |
Consolidated Total | 6,310 | 9,320 | 25,730 | 41,360 | 3,300 | |
As of 12/31/2018 | ||||||
Retail | Preferred | Active | Total | Master | ||
United States | 4,190 | 1,470 | 18,340 | 24,000 | 2,340 | |
Australia/New Zealand | 50 | 240 | 720 | 1,010 | 90 | |
Canada | 100 | 30 | 530 | 660 | 80 | |
Mexico | 10 | 110 | 860 | 980 | 90 | |
Europe | 550 | 1,120 | 1,860 | 3,530 | 390 | |
Asia | 2,820 | 2,090 | 3,000 | 7,910 | 380 | |
Consolidated Total | 7,720 | 5,060 | 25,310 | 38,090 | 3,370 | |
Change in % | ||||||
Retail | Preferred | Active | Total | Master | ||
United States | -16.5% | 2.0% | -4.1% | -5.9% | -9.8% | |
Australia/New Zealand | 0.0% | -12.5% | -8.3% | -8.9% | -11.1% | |
Canada | -10.0% | 0.0% | -11.3% | -10.6% | -25.0% | |
Mexico | 100.0% | -9.1% | 34.9% | 30.6% | 11.1% | |
Europe | 34.5% | -38.4% | -11.3% | -12.7% | -15.4% | |
Asia | -32.3% | 224.9% | 40.3% | 63.2% | 63.2% | |
Consolidated Total | -18.3% | 84.2% | 1.7% | 8.6% | -2.1% | |
The table above sets forth, as of December 31, 2019 and 2018, the number of our Retail Customers/Preferred Customers/Active Distributors and Master Affiliates and above. The total number of active distributors includes Master Affiliates and above. We define an active retail or preferred customer as one that has placed a product order in the prior twelve months, and we define an active distributor as one that enrolls as a distributor or renews his or her distributorship during the prior twelve months. Many individuals join Reliv as distributors to obtain our products at a discount and may not participate in the Reliv business opportunity. 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. |
For more information, contact:
Steve Albright
Chief Financial Officer
(636) 733-1305
SOURCE Reliv International
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