09/11/2018 12:00:00

Reliv International Reports Third-Quarter Financial Results for 2018

CHESTERFIELD, Mo., Nov. 09, 2018 (GLOBE NEWSWIRE) -- Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2018.

Reliv reported net sales of $8.3 million for the third quarter of 2018 compared with net sales of $9.1 million in the third quarter of 2017. Net sales in the United States decreased by $583,000 in the third quarter of 2018, which represented an 8.2 percent decline in net sales when compared to the prior-year quarter.  Net sales in Reliv’s foreign markets decreased by $149,000, or 7.5 percent, in the third quarter of 2018 compared with the prior-year quarter.  Net sales in Asia and Mexico increased by 4.8 percent and 21.9 percent, respectively, in the third quarter of 2018, offset by decreases in all other regions.  Net sales in Reliv’s foreign markets decreased by 3.3 percent during the third quarter of 2018 when the impact of foreign currency fluctuation is removed.

Reliv reported a net loss for the third quarter of 2018 of $542,000 (loss per diluted share of $0.29) compared to a net loss of $319,000 (loss per diluted share of $0.17) in the third quarter of 2017.  The loss from operations for the third quarter of 2018 was $532,000 compared to a loss from operations of $334,000 in the same period in 2017.  Results from operations were primarily impacted by the decline in net sales and gross margin, partially offset by a reduction in selling, general and administrative (“SGA”) expenses in the quarter.  SGA expenses decreased to $3.8 million in the third quarter of 2018 compared to $4.3 million in the prior-year quarter.

Net sales for the first nine months of 2018 were $26.8 million, which represents a 15.9 percent decrease from the same period in 2017.  Net sales in the United States decreased by 17.3 percent and net sales in Reliv’s foreign markets decreased by 10.9 percent in the first nine months of 2018 compared with the same period last year.   Net sales in Reliv’s foreign markets decreased by 12.2 percent during the first nine months of 2018 when the impact of foreign currency fluctuation is removed.

Reliv reported a net loss of $1.8 million, or $0.95 per diluted share in the first nine months of 2018, compared to a net loss of $315,000 or $0.17 per diluted share in the same period of 2017.

Reliv celebrated its 30th anniversary at its distributor conference last month in Orlando.  Among the presentations at the conference, the company introduced a new corporate website, which includes a new Distributor Resource Center that gives distributors easy and quick access to key training and sales tools.  “These online capabilities are important to our future growth,” stated Ryan A. Montgomery, Chief Executive Officer.  “The world has changed in 30 years, and so has the industry, especially the last 5-10 years.  As we continue to build on the core foundation of our Reliv business, the key to our future growth will be a blend of online and offline methods that continue to build personal relationships and using technology to reach new people.  Success will happen for those that embrace traditional and new methods.”

In its international operations, Reliv has engaged Gabriela Moreno as a sales consultant in Mexico, and Reliv has also added Jo Ann Sy as the sales manager in its Philippines market.  “These appointments confirm our commitment to our foreign operations,” said Mr. Montgomery.  “These individuals will be key in accelerating the growth in each of the markets, and we look forward to their contributions to Reliv.”

Additional initiatives include:

  • Reliv held a Girlfriends’ Getaway weekend event in Dayton, OH in August.  This event provided an introduction to the Reliv brand and the Fit3 platform to a large group of new customers and prospective customers in the region.  Similar events are already in the works for 2019.
  • As a follow up to our launch of Reliv Now® with Whey in the spring of 2018, Reliv is launching ProVantage with Whey in the EU market.  This provides a product with an alternative protein source to our second-largest market.

Reliv had cash and cash equivalents of $2.4 million as of September 30, 2018, compared to $3.3 million as of December 31, 2017.  Net cash used in operating activities was $850,000 in the first nine months of 2018. 

As of September 30, 2018, Reliv had 30,550 distributors and preferred customers – a decrease of 11.4 percent from September 30, 2017 – of which 3,250 are Master Affiliate level and above.  The number of Master Affiliates decreased by 14.7 percent compared to the prior year total.  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 core nutrition and targeted solutions. 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 14 countries. Learn more about Reliv at reliv.com, or on FacebookTwitter 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.

For more information, contact:

Steve Albright                                                      

Chief Financial Officer                                

(636) 733-1305          

--FINANCIAL HIGHLIGHTS FOLLOW –

Reliv International, Inc. and Subsidiaries

     
      

Condensed Consolidated Balance Sheets

     
 September 30 December 31    
  2018

  2017

    
 (Unaudited) (Audited)    

Assets

     
Current Assets:     
Cash and cash equivalents$2,372,837 $3,272,788    
Accounts receivable, less allowances of     
$25,000 in 2018 and $26,300 in 2017 326,572  29,760    
Accounts and note due from employees and distributors 140,562  138,497    
Inventories 4,477,787  4,555,485    
Other current assets 597,097  399,154    
      
Total current assets 7,914,855  8,395,684    
      
Other assets 3,718,778  3,916,551    
Cash surrender value of life insurance -  3,086,522    
Net property, plant and equipment 5,332,691  5,677,239    
      
Total Assets$16,966,324 $21,075,996    
      

Liabilities and Stockholders' Equity

     
      
Accounts payable and accrued expenses$4,239,689 $3,212,634    
Current portion of long-term debt -  3,045,421    
Other noncurrent liabilities 518,180  453,354    
Stockholders' equity 12,208,455  14,364,587    
      
Total Liabilities and Stockholders' Equity$16,966,324 $21,075,996    
      
      

Consolidated Statements of Operations

     
 Three months ended September 30  Nine months ended September 30 
  2018  2017   2018  2017 
 (Unaudited)(Unaudited) (Unaudited)(Unaudited)
Product sales$7,817,526 $8,385,999  $25,129,503 $29,479,924 
Handling & freight income 519,519  683,324   1,670,522  2,373,809 
      
Net Sales 8,337,045  9,069,323   26,800,025  31,853,733 
      
Costs and expenses:     
Cost of products sold 2,383,942  1,949,670   7,089,958  7,113,647 
Distributor royalties and commissions 2,639,863  3,199,596   8,858,965  11,252,922 
Selling, general and administrative 3,845,304  4,253,675   12,546,840  13,811,814 
      
Total Costs and Expenses 8,869,109  9,402,941   28,495,763  32,178,383 
      
Loss from operations (532,064) (333,618)  (1,695,738) (324,650)
      
Other income (expense):     
Interest income 22,633  25,277   70,132  76,630 
Interest expense (16,408) (27,183)  (93,195) (79,472)
Other income (expense) (8,462) (4,579)  8,241  40,517 
      
Loss before income taxes (534,301) (340,103)  (1,710,560) (286,975)
Provision (benefit) for income taxes 8,000  (21,000)  48,000  28,000 
      
Net loss$(542,301)$(319,103) $(1,758,560)$(314,975)
      
      
Loss per common share - Basic$(0.29)$(0.17) $(0.95)$(0.17)
Weighted average shares 1,845,000  1,845,000   1,845,000  1,845,000 
      
Loss per common share - Diluted$(0.29)$(0.17) $(0.95)$(0.17)
Weighted average shares 1,845,000  1,845,000   1,845,000  1,846,000 

 

Reliv International, Inc. and Subsidiaries

       
         

Net sales by Market

    
(in thousands)

Three months ended September 30,

 

Change from

  

2018

   

2017

  

prior year

 

Amount

% of Net Sales

 

Amount

% of Net Sales

 

Amount

%

         
United States$6,49978.0% $7,08278.1% $(583)-8.2%
Australia/New Zealand 1561.9%  2242.5%  (68)-30.4%
Canada 1531.8%  2002.2%  (47)-23.5%
Mexico 1281.5%  1051.2%  23 21.9%
Europe 8079.7%  8919.8%  (84)-9.4%
Asia 5947.1%  5676.2%  27 4.8%
         
Consolidated Total$8,337100.0% $9,069100.0% $(732)-8.1%
         
         

Net sales by Market

    
(in thousands)

Nine months ended September 30,

 

Change from

  

2018

   

2017

  

prior year

 

Amount

% of Net Sales

 

Amount

% of Net Sales

 

Amount

%

         
United States$20,50576.5% $24,79177.8% $(4,286)-17.3%
Australia/New Zealand 5652.1%  7112.2%  (146)-20.5%
Canada 5572.1%  6812.2%  (124)-18.2%
Mexico 3481.3%  3521.1%  (4)-1.1%
Europe 3,00211.2%  3,39910.7%  (397)-11.7%
Asia 1,8236.8%  1,9206.0%  (97)-5.1%
         
Consolidated Total$26,800100.0% $31,854100.0% $(5,054)-15.9%
         
         
The following table sets forth, as of September 30, 2018 and 2017, the number of our Active Distributors/Preferred Customers 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 Affiliate groups in their downline organization.  Preferred Customers represent approximately 4,840 and 5,010 of the Active Distributor count as of September 30, 2018 and 2017, respectively.
         
         

Active Distributors/Preferred Customers and Master Affiliates and Above by Market

      
         
 

As of 9/30/2018

 

As of 9/30/2017

 

Change in %

 Active

Distributors

and Preferred Customers

Master

Affiliates and

Above

 Active

Distributors

and Preferred Customers

Master

Affiliates and

Above

 Active

Distributors

and Preferred

Customers

Master

Affiliates

and Above

   
         
United States 20,3902,290   23,8602,750   -14.5%-16.7%
Australia/New Zealand 1,01080   1,180110   -14.4%-27.3%
Canada 57080   71080   -19.7%0.0%
Mexico 85080   73060   16.4%33.3%
Europe 3,210380   3,940440   -18.5%-13.6%
Asia 4,520340   4,070370   11.1%-8.1%
         
Consolidated Total 30,5503,250   34,4903,810   -11.4%-14.7%

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