Reliv International Reports Third-Quarter 2010 Results
CHESTERFIELD, Mo., Nov. 2, 2010 /PRNewswire-FirstCall/ -- Reliv International, Inc. (Nasdaq: RELV), a nutrition and direct selling company, today reported consolidated net sales of $18.7 million for the third quarter of 2010, compared to net sales of $20.9 million in the third quarter of last year.
Net income for the quarter was $172,000 compared to net income of $324,000 in the third quarter of last year. Diluted earnings per share were $0.01 compared to $0.03 in the same quarter last year.
U.S. sales for the quarter totaled approximately $16.0 million compared to $18.3 million in last year's third quarter. Sales outside of the United States were $2.7 million compared to $2.6 million in the third quarter of 2009, though the increase was a result of currency fluctuations.
Robert L. Montgomery, chairman, president and chief executive officer, said, "Third-quarter results were not where we want them to be, particularly in the United States. International markets, specifically Europe, Canada and the Australia/New Zealand region, reported sales increases, offset by sales declines in Mexico and Asia."
"In the United States, which remains by far our largest market, I believe we are still fighting economic headwinds," Montgomery said. "But we took steps during the quarter at our International Conference that we expect to support greater sales and help us move toward turning around the business."
As examples of the steps announced during the August Conference, Montgomery said, "We reduced the cost of new distributor start-up kits. We made the new distributor application easier to complete online, and we introduced a 'Fast Start Guide' to help new distributors quickly get off to a positive start in building their business. Each of those moves is designed to boost sales growth."
Reliv believes these actions in part led to an increase in September new-distributor recruiting. Reliv had more new distributors sign up in September than in all but one other month this year.
Reliv yesterday announced a new promotion designed to increase sales in which top-selling distributors will win a Disney cruise.
For the first nine months of 2010, net sales were $60.2 million compared to $64.7 million in the first nine months of 2009. Net sales outside of the United States during that period rose 18.7 percent, while net U.S. sales in the period decreased 10.3 percent. Excluding the impact of foreign currency fluctuations, foreign sales rose 8.8 percent.
Reliv generated cash from operations of $1.4 million in the first nine months of 2010 compared to $4.8 million in the same period of 2009. As of Sept. 30, 2010, Reliv's cash and cash equivalents totaled $6.4 million, the same amount compared to a year ago.
Reliv's distributor count was 62,000 compared to 68,000 at the end of the third quarter last year.
Looking toward next year, Montgomery said, "We are maintaining our focus on key strategic initiatives to improve results: increasing distributor sponsoring and retention; improving development of our sales force; refreshing our brand; and enhancing product promotion."
He added, "Reliv makes nutrition simple. Our success is built on that principle, outstanding science-based nutritional products and a terrific home-based business opportunity."
Reliv will host a conference call to discuss third-quarter earnings with investors. The conference call will be on November 2, 2010 at 1:00 p.m. Eastern. The dial-in number is 866-804-6929. The participant passcode is 27782269. A replay will be available for one week at 888-286-8010 using the passcode 80291111. A live webcast is available on the Investor Relations section of Reliv's Web site at: http://www.reliv.com/US/EN/Conference%20Calls%20Presentations.html.
An online archive of the webcast will be on Reliv's Web site in the Investor Relations section, 24 hours after call concludes.
About Reliv
Reliv International, Inc., based in Chesterfield, Mo., is a developer, manufacturer and marketer of a proprietary line of nutritional supplements. Reliv supplements address essential daily nutrition, weight loss and targeted solutions such as energy and performance enhancement, digestive health, women's health and anti-aging. Reliv sells its products through an international network marketing system of approximately 62,000 independent distributors. Additional information about Reliv International, Inc. can be obtained on the Web at www.reliv.com.
– FINANCIAL HIGHLIGHTS FOLLOW – |
|||
Condensed Consolidated Balance Sheets |
|||
September 30 |
December 31 |
||
2010 |
2009 |
||
(Unaudited) |
|||
Assets |
|||
Current Assets: |
|||
Cash and cash equivalents |
$6,404,688 |
$5,760,913 |
|
Accounts and notes receivable, less allowances of $66,400 in 2010 and $59,700 in 2009 |
234,889 |
326,022 |
|
Accounts due from employees and distributors |
68,407 |
78,500 |
|
Inventories |
5,970,584 |
5,084,404 |
|
Other current assets |
1,199,683 |
979,333 |
|
Total current assets |
13,878,251 |
12,229,172 |
|
Other assets |
1,886,906 |
1,569,079 |
|
Intangible assets, net |
1,837,365 |
1,991,497 |
|
Net property, plant and equipment |
7,985,765 |
8,364,685 |
|
Total Assets |
$25,588,287 |
$24,154,433 |
|
Liabilities and Stockholders' Equity |
|||
Total current liabilities |
$10,733,977 |
$6,761,481 |
|
Long-term debt, less current maturities |
991,721 |
4,719,542 |
|
Other non-current liabilities |
401,618 |
406,544 |
|
Stockholders' equity |
13,460,971 |
12,266,866 |
|
Total Liabilities and Stockholders' Equity |
$25,588,287 |
$24,154,433 |
|
Consolidated Statements of Income |
||||||
Three months ended September 30 |
Nine months ended September 30 |
|||||
2010 |
2009 |
2010 |
2009 |
|||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||
Product sales |
$16,612,215 |
$18,578,895 |
$53,559,074 |
$57,517,213 |
||
Handling & freight income |
2,060,849 |
2,306,633 |
6,661,873 |
7,212,434 |
||
Net Sales |
18,673,064 |
20,885,528 |
60,220,947 |
64,729,647 |
||
Costs and expenses: |
||||||
Cost of products sold |
3,820,490 |
4,451,156 |
12,093,367 |
12,800,809 |
||
Distributor royalties and commissions |
7,011,217 |
7,907,856 |
22,560,625 |
24,480,422 |
||
Selling, general and administrative |
7,402,210 |
8,056,928 |
23,486,389 |
24,725,653 |
||
Total Costs and Expenses |
18,233,917 |
20,415,940 |
58,140,381 |
62,006,884 |
||
Income from operations |
439,147 |
469,588 |
2,080,566 |
2,722,763 |
||
Other income (expense): |
||||||
Interest income |
12,961 |
10,119 |
35,334 |
45,538 |
||
Interest expense |
(52,885) |
(62,195) |
(159,336) |
(113,129) |
||
Other income |
437 |
76,657 |
21,592 |
202,747 |
||
Income before income taxes |
399,660 |
494,169 |
1,978,156 |
2,857,919 |
||
Provision for income taxes |
228,000 |
170,000 |
854,000 |
1,112,000 |
||
Net Income |
$171,660 |
$324,169 |
$1,124,156 |
$1,745,919 |
||
Earnings per common share - Basic |
$0.01 |
$0.03 |
$0.09 |
$0.13 |
||
Weighted average shares |
12,380,000 |
12,230,000 |
12,380,000 |
13,109,000 |
||
Earnings per common share - Diluted |
$0.01 |
$0.03 |
$0.09 |
$0.13 |
||
Weighted average shares |
12,380,000 |
12,230,000 |
12,380,000 |
13,109,000 |
||
Cash dividends declared per common share |
$ - |
$ - |
$0.02 |
$0.05 |
||
Net sales by Market |
|||||||||
(in thousands) |
|||||||||
Three months ended September 30, |
Change From |
||||||||
2010 |
2009 |
Prior Year |
|||||||
Amount |
% of sales |
Amount |
% of sales |
Amount |
% |
||||
United States |
$ 15,975 |
85.5% |
$ 18,262 |
87.4% |
$ (2,287) |
-12.5% |
|||
Australia/New Zealand |
656 |
3.5% |
620 |
3.0% |
36 |
5.8% |
|||
Canada |
505 |
2.7% |
428 |
2.0% |
77 |
18.0% |
|||
Mexico |
320 |
1.7% |
392 |
1.9% |
(72) |
-18.4% |
|||
Europe |
439 |
2.4% |
314 |
1.5% |
125 |
39.8% |
|||
Asia |
778 |
4.2% |
870 |
4.2% |
(92) |
-10.6% |
|||
Consolidated total |
$ 18,673 |
100.0% |
$ 20,886 |
100.0% |
$ (2,213) |
-10.6% |
|||
Net sales by Market |
|||||||||
(in thousands) |
|||||||||
Nine months ended September 30, |
Change From |
||||||||
2010 |
2009 |
Prior Year |
|||||||
Amount |
% of sales |
Amount |
% of sales |
Amount |
% |
||||
United States |
$ 51,378 |
85.3% |
$ 57,281 |
88.5% |
$ (5,903) |
-10.3% |
|||
Australia/New Zealand |
1,924 |
3.2% |
1,672 |
2.6% |
252 |
15.1% |
|||
Canada |
1,634 |
2.7% |
1,076 |
1.7% |
558 |
51.9% |
|||
Mexico |
1,107 |
1.9% |
1,018 |
1.6% |
89 |
8.7% |
|||
Europe |
1,440 |
2.4% |
927 |
1.4% |
513 |
55.3% |
|||
Asia |
2,738 |
4.5% |
2,756 |
4.2% |
(18) |
-0.7% |
|||
Consolidated total |
$ 60,221 |
100.0% |
$ 64,730 |
100.0% |
$ (4,509) |
-7.0% |
|||
The following table sets forth, as of September 30, 2010 and 2009, 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 its 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. Growth in the number of active distributors and Master Affiliates and above is a key factor in continuing the growth of our business. |
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Active Distributors and Master Affiliates and above by Market |
|||||||||
As of 9/30/2010 |
As of 9/30/2009 |
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 |
48,520 |
6,730 |
54,460 |
8,390 |
-10.9% |
-19.8% |
|||
Australia/New Zealand |
2,410 |
200 |
2,490 |
190 |
-3.2% |
5.3% |
|||
Canada |
1,390 |
180 |
1,190 |
120 |
16.8% |
50.0% |
|||
Mexico |
2,100 |
300 |
1,960 |
240 |
7.1% |
25.0% |
|||
Europe |
1,860 |
260 |
1,110 |
160 |
67.6% |
62.5% |
|||
Asia |
5,950 |
620 |
7,100 |
780 |
-16.2% |
-20.5% |
|||
Consolidated total |
62,230 |
8,290 |
68,310 |
9,880 |
-8.9% |
-16.1% |
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SOURCE Reliv International, Inc.
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