Reliv International Reports Second-Quarter Financial Results for 2020
CHESTERFIELD, Mo., Aug. 14, 2020 /PRNewswire/ -- Reliv International, Inc. (NASDAQ: RELV), a developer and marketer of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2020.
Reliv reported net sales of $8.0 million for the second quarter of 2020 compared with net sales of $8.3 million in the second quarter of 2019, a decrease of 2.9%. Net sales in the United States increased to $6.1 million in the second quarter of 2020, which represented a 3.1% increase in net sales when compared to the prior-year quarter. Net sales in Reliv's foreign markets decreased 18.0% in the second quarter of 2020 compared with the prior-year quarter. All foreign markets experienced decreases in net sales, including decreases in net sales in Asia and Europe of 18.3% and 20.4%, respectively, in the second quarter of 2020. The decreases in foreign net sales were primarily the result of local business disruptions caused by COVID-19 pandemic.
Reliv reported a net loss for the second quarter of 2020 of $199,000 (loss per diluted share of $0.11) compared to a net loss of $388,000 (loss per diluted share of $0.22) in the second quarter of 2019. The loss from operations for the second quarter of 2020 was $277,000 compared to a loss from operations of $366,000 in the same period in 2019. Results from operations in the second quarter of 2020 improved from the prior-year quarter as selling, general and administrative expenses decreased by $188,000 to $3.5 million in the second quarter of 2020 compared to $3.7 million in the prior-year quarter; however, the decline in sales did not permit the Company to reach profitability in the quarter.
Net sales for the first six months of 2020 were $18.3 million, which represented a 3.1% increase compared to same period in 2019. Net sales in the United States increased by 7.0% and net sales in Reliv's foreign markets decreased by 7.6% in the first half of 2020 compared with the first half of last year. Net sales in Reliv's foreign markets decreased by 6.7% during the first half of 2020 when the impact of foreign currency fluctuation is removed.
Reliv reported net income of $463,000, or $0.27 per diluted share in the first six months of 2020, compared to net income of $236,000 or $0.13 per diluted share in the same period of 2019. The improvement in the first six months of 2020 is the result of the increase in sales and resulting gross margin, coupled with the income tax benefit in the first quarter of 2020 generated by the net operating loss carryback of $225,000 provided under the CARES Act.
Reliv had cash and cash equivalents of $2.7 million as of June 30, 2020, compared to $1.6 million as of December 31, 2019. Net cash generated by operating activities was $222,000 in the first six months of 2020.
As of June 30, 2020, Reliv had 25,490 active Distributors – an increase of 0.6% from June 30, 2019. The number of Master Affiliates increased by 5.7% compared to the year-ago total, driven by the growth in Master Affiliates in Asia of 48.9%. Master Affiliate is the level at which Distributors are eligible to earn generation royalties. As of June 30, 2020, Reliv had 13,020 retail customers and Preferred Customers in total – a decrease of 12.6% from June 30, 2019. The actual number of customers is much higher as many Distributors (approximately 74% in the U.S.) join Reliv to purchase our products at a discount and do not participate in the business opportunity and the count also does not include those customers that buy product directly from distributors rather than from the Company.
"In spite of the obstacles created by the COVID-19 pandemic, our business showed its resiliency during the second quarter of 2020," commented Ryan A. Montgomery, Chief Executive Officer. "We were able to generate a modest increase in sales in the United States as our company and distributors continue to adapt our business model and use of technology to the 'new normal' of life during these challenging times."
"We continue to enhance our online tools for distributors for their outreach to new potential customers and distributors, as well our communications with our distributors through the use of Zoom video calls, online training videos, and other features available through our Reliv mobile app," Montgomery added.
In place of its traditional U.S. distributor conference originally planned to be held in St. Louis in late July, Reliv will instead host a world-wide online conference on August 28-29. Registration is free to all distributors and registered customers. "We are well into the process of creating the content for this first-ever virtual Reliv conference, with portions of the conference targeted to our markets in Asia-Pacific and Europe. We are excited by the opportunity of reaching out to a much larger audience, not only in the United States, but all over the Reliv world."
In international operations, net sales in all foreign markets decreased as local COVID-19 guidelines were generally more restrictive than those in the United States. "After a difficult April in our foreign markets, we saw steady improvements each month as the restrictions eased," noted Montgomery. "We are hopeful for a full recovery of our foreign operations overall in the coming months as people see the value of our products and in the home-based business opportunity that Reliv provides."
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, develops and markets 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 | |||||
June 30 | December 31 | ||||
2020 | 2019 | ||||
(Unaudited) | (Audited) | ||||
Assets | |||||
Current Assets: | |||||
Cash and cash equivalents | $2,730,672 | $1,630,779 | |||
Accounts receivable, less allowances of | |||||
$5,000 in 2020 and 2019 | 279,920 | 107,369 | |||
Notes & accounts receivables & deposits - related parties | 889,022 | 1,099,228 | |||
Inventories | 3,028,031 | 2,701,688 | |||
Other current assets | 855,741 | 326,454 | |||
Total current assets | 7,783,386 | 5,865,518 | |||
Notes & accounts receivables - related parties | 2,361,910 | 2,418,921 | |||
Other assets | 2,431,384 | 2,581,717 | |||
Net property, plant and equipment | 4,281,323 | 4,440,840 | |||
Total Assets | $16,858,003 | $15,306,996 | |||
Liabilities and Stockholders' Equity | |||||
Accounts payable, accruals & other current liabilities | $3,741,717 | $3,489,157 | |||
Long-term debt - current | 833,649 | 500,000 | |||
Long-term debt, less current portion | 528,351 | - | |||
Other noncurrent liabilities | 242,771 | 216,196 | |||
Stockholders' equity | 11,511,515 | 11,101,643 | |||
Total Liabilities and Stockholders' Equity | $16,858,003 | $15,306,996 | |||
Consolidated Statements of Operations | |||||
Three months ended June 30 | Six months ended June 30 | ||||
2020 | 2019 | 2020 | 2019 | ||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||
Product sales | $7,371,162 | $7,603,041 | $16,919,979 | $16,414,038 | |
Freight income | 446,707 | 479,881 | 1,004,802 | 999,822 | |
Other revenue | 198,691 | 174,091 | 374,444 | 332,657 | |
Net Sales | 8,016,560 | 8,257,013 | 18,299,225 | 17,746,517 | |
Costs and expenses: | |||||
Cost of goods sold | 2,202,488 | 2,268,992 | 4,857,331 | 4,702,723 | |
Distributor royalties and commissions | 2,590,078 | 2,665,093 | 5,918,533 | 5,782,665 | |
Selling, general and administrative | 3,501,104 | 3,688,944 | 7,278,786 | 7,428,472 | |
Total Costs and Expenses | 8,293,670 | 8,623,029 | 18,054,650 | 17,913,860 | |
Income (loss) from operations | (277,110) | (366,016) | 244,575 | (167,343) | |
Other income (expense): | |||||
Interest income | 39,048 | 46,218 | 78,710 | 95,480 | |
Interest expense | (7,933) | (10,075) | (14,038) | (15,487) | |
Other income (expense): | 100,938 | 4,768 | 30,032 | (660) | |
Gain on sale of fixed assets | - | - | - | 434,549 | |
Income (loss) before income taxes | (145,057) | (325,105) | 339,279 | 346,539 | |
Provision (benefit) for income taxes | 54,000 | 63,000 | (124,000) | 111,000 | |
Net income (loss) | ($199,057) | ($388,105) | $463,279 | $235,539 | |
Earnings (loss) per common share - Basic & Diluted | ($0.11) | ($0.22) | $0.27 | $0.13 | |
Weighted average shares | 1,746,000 | 1,746,000 | 1,746,000 | 1,746,000 | |
Reliv International, Inc. and Subsidiaries | ||||||||
Net sales by Market | ||||||||
(in thousands) | Three months ended June 30, | Change from | ||||||
2020 | 2019 | prior year | ||||||
Amount | % of | Amount | % of | Amount | % | |||
United States | $ 6,088 | 75.9% | $ 5,905 | 71.5% | $ 183 | 3.1% | ||
Australia/New Zealand | 119 | 1.5% | 132 | 1.6% | (13) | -9.8% | ||
Canada | 126 | 1.6% | 140 | 1.7% | (14) | -10.0% | ||
Mexico | 125 | 1.6% | 153 | 1.8% | (28) | -18.3% | ||
Europe | 602 | 7.5% | 756 | 9.2% | (154) | -20.4% | ||
Asia | 957 | 11.9% | 1,171 | 14.2% | (214) | -18.3% | ||
Consolidated Total | $ 8,017 | 100.0% | $ 8,257 | 100.0% | $ (240) | -2.9% | ||
Net sales by Market | ||||||||
(in thousands) | Six months ended June 30, | Change from | ||||||
2020 | 2019 | prior year | ||||||
Amount | % of | Amount | % of | Amount | % | |||
United States | $ 13,930 | 76.1% | $ 13,016 | 73.4% | $ 914 | 7.0% | ||
Australia/New Zealand | 289 | 1.6% | 309 | 1.7% | (20) | -6.5% | ||
Canada | 285 | 1.6% | 340 | 1.9% | (55) | -16.2% | ||
Mexico | 253 | 1.4% | 289 | 1.6% | (36) | -12.5% | ||
Europe | 1,564 | 8.5% | 1,695 | 9.6% | (131) | -7.7% | ||
Asia | 1,978 | 10.8% | 2,098 | 11.8% | (120) | -5.7% | ||
Consolidated Total | $ 18,299 | 100.0% | $ 17,747 | 100.0% | $ 552 | 3.1% | ||
Reliv International, Inc. and Subsidiaries | |||||
Retail and Preferred Customers/Active Distributors/Master Affiliates and Above by Market | |||||
As of 6/30/2020 | |||||
Retail | Preferred | Active | Total Customers | Master Affiliates | |
United States | 3,650 | 1,740 | 17,370 | 22,760 | 1,950 |
Australia/New Zealand | 50 | 240 | 660 | 950 | 80 |
Canada | 90 | 20 | 450 | 560 | 70 |
Mexico | 30 | 110 | 1,110 | 1,250 | 80 |
Europe | 710 | 580 | 1,610 | 2,900 | 270 |
Asia | 1,050 | 4,750 | 4,290 | 10,090 | 700 |
Consolidated Total | 5,580 | 7,440 | 25,490 | 38,510 | 3,150 |
As of 6/30/2019 | |||||
Retail | Preferred | Active | Total Customers | Master Affiliates | |
United States | 3,730 | 1,540 | 17,750 | 23,020 | 1,980 |
Australia/New Zealand | 40 | 230 | 680 | 950 | 70 |
Canada | 90 | 30 | 500 | 620 | 60 |
Mexico | 10 | 90 | 1,100 | 1,200 | 100 |
Europe | 810 | 820 | 1,710 | 3,340 | 300 |
Asia | 2,690 | 4,810 | 3,610 | 11,110 | 470 |
Consolidated Total | 7,370 | 7,520 | 25,350 | 40,240 | 2,980 |
Change in % | |||||
Retail | Preferred | Active | Total Customers | Master Affiliates | |
United States | -2.1% | 13.0% | -2.1% | -1.1% | -1.5% |
Australia/New Zealand | 25.0% | 4.3% | -2.9% | 0.0% | 14.3% |
Canada | 0.0% | -33.3% | -10.0% | -9.7% | 16.7% |
Mexico | 200.0% | 22.2% | 0.9% | 4.2% | -20.0% |
Europe | -12.3% | -29.3% | -5.8% | -13.2% | -10.0% |
Asia | -61.0% | -1.2% | 18.8% | -9.2% | 48.9% |
Consolidated Total | -24.3% | -1.1% | 0.6% | -4.3% | 5.7% |
The table above sets forth, as of June 30, 2020 and 2019, 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 (approximately 74% of distributors in the United States) 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, Inc.
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