CHESTERFIELD, MO--(Marketwired - March 28, 2017) - Reliv International, Inc. (
Fourth-Quarter Results
Reliv reported net sales of $10.6 million for the fourth quarter of 2016, compared with net sales of $12.3 million for the fourth quarter of 2015. U.S. net sales decreased by 12.1 percent for the quarter compared with the same quarter in 2015. Net sales outside of the United States declined 18.4 percent in the fourth quarter of 2016 compared to the prior-year quarter, with 10.7 percent of that decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar.
Reliv reported net income of $272,000, or earnings of $0.15 per diluted share, for the fourth quarter of 2016 compared with a net loss of $206,000, or a loss of $0.11 per diluted share, for the fourth quarter of 2015. All earnings/loss per share amounts are based on the number of shares outstanding subsequent to the one-for-seven reverse stock split that took effect on October 4, 2016. Income from operations for the fourth quarter of 2016 was $275,000 compared with a loss from operations of $209,000 in the same quarter of 2015.
Full-Year Results
Reliv reported net sales of $45.5 million for 2016 compared with net sales of $51.8 million in 2015. U.S. net sales decreased to $35.6 million from $40.4 million, a decline of 11.9 percent.
Net sales in Reliv's foreign markets for 2016 decreased 12.9 percent compared with net sales for 2015, with 8.1 percent of the decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar. The decline in net sales in Europe represented a significant portion of the decrease in foreign sales. Net sales in Europe declined by 11.3 percent in 2016 compared to the prior year, with virtually the entire decline due to the impact of foreign currency fluctuation.
The net loss for 2016 was $625,000 (loss per diluted share of $0.34) compared to a net loss of $1.2 million (loss per diluted share of $0.67) in 2015. The loss from operations for 2016 was $812,000 compared to a loss from operations of $1.27 million in 2015. Selling, general and administrative expenses were $20.2 million versus $23.6 million in 2015, as the effect of a cost reduction program implemented in May 2016 helped offset the impact of the sales decline. In 2016, Reliv recorded a valuation allowance of $292,000 against the tax benefits generated by its current year operating losses.
As previously reported, Reliv executed a one-for-seven (1:7) reverse stock split and Reliv's common stock began trading on a split-adjusted basis when the market opened on October 4, 2016. As a result of the reverse stock split, each seven pre-split shares of common stock automatically combined into one new share of common stock, and the number of outstanding common shares decreased from approximately 12.9 million shares to 1.85 million shares.
"The cost reduction program instituted earlier this year returned us to profitability in the third and fourth quarters of 2016 while the preparation was underway for the rollout of our Fit3™ program," said Ryan A. Montgomery, President. "With the rollout of Fit3 on February 1st, we look forward to an exciting 2017."
The Fit3 program consists of three principal components: nutrition coaching, exercise coaching and Fit3 workout videos, and three new Fit3 nutritional products: Active, Burn and Purify. Fit3 differs from diets and exercise fads in that it promotes realistic and sustainable lifestyle changes. Fit3 program trials have been underway for more than a year and have produced significant, measurable results among participants.
"Fit3 ushers in a new era for Reliv," commented Montgomery. "We have invested resources to make Fit3 much more than a set of extraordinary nutritional products; it is a multi-faceted lifestyle program and support system. And part of that lifestyle includes the Reliv business opportunity for those who wish to pursue it."
Reliv had cash and cash equivalents of $3.6 million as of December 31, 2016, compared to $3.3 million as of December 31, 2015. Net cash generated from operating activities was $1.5 million in 2016 compared to $800,000 of cash used in operations in the prior-year period.
As of December 31, 2016, Reliv had 38,480 distributors and preferred customers -- a decrease of 15.8 percent from December 31, 2015 -- of which 5,320 are Master Affiliate level and above. The number of Master Affiliates decreased by 14.2 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties. With the formal introduction of the Preferred Customer program in the United States and Canada in February 2016, Reliv now includes preferred customers as part of Active Distributor statistics.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address essential nutrition, fitness and weight loss 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 15 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 | ||||||
| 2016 | 2015 | ||||||
| (Unaudited | ) | (Audited | ) | ||||
| Assets | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $3,606,817 | $3,262,263 | |||||
| Accounts receivable, less allowances of $26,700 in 2016 and $30,200 in 2015 | 126,113 | 89,376 | |||||
| Accounts and note due from employees and distributors | 139,931 | 134,668 | |||||
| Inventories | 4,487,830 | 5,172,722 | |||||
| Other current assets | 571,377 | 1,140,680 | |||||
| Total current assets | 8,932,068 | 9,799,709 | |||||
| Other assets | 7,679,357 | 8,042,196 | |||||
| Net property, plant and equipment | 5,854,302 | 6,419,127 | |||||
| Total Assets | $22,465,727 | $24,261,032 | |||||
| Liabilities and Stockholders' Equity | |||||||
| Accounts payable and accrued expenses | $4,234,305 | $3,937,752 | |||||
| Current portion of long-term debt | 389,096 | 781,505 | |||||
| Long-term debt - noncurrent | 2,518,341 | 3,159,575 | |||||
| Other noncurrent liabilities | 409,813 | 499,705 | |||||
| Stockholders' equity | 14,914,172 | 15,882,495 | |||||
| Total Liabilities and Stockholders' Equity | $22,465,727 | $24,261,032 | |||||
| Consolidated Statements of Operations | ||||||||||||
| Three months ended December 31 | Year ended December 31 | |||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||
| Product sales | $9,823,376 | $11,358,169 | $42,004,961 | $47,759,553 | ||||||||
| Handling & freight income | 814,273 | 936,521 | 3,507,875 | 4,009,304 | ||||||||
| Net Sales | 10,637,649 | 12,294,690 | 45,512,836 | 51,768,857 | ||||||||
| Costs and expenses: | ||||||||||||
| Cost of products sold | 2,294,513 | 2,840,281 | 10,024,021 | 11,086,152 | ||||||||
| Distributor royalties and commissions | 3,749,861 | 4,361,219 | 16,095,032 | 18,410,190 | ||||||||
| Selling, general and administrative | 4,317,861 | 5,301,996 | 20,205,762 | 23,546,926 | ||||||||
| Total Costs and Expenses | 10,362,235 | 12,503,496 | 46,324,815 | 53,043,268 | ||||||||
| Income (loss) from operations | 275,414 | (208,806 | ) | (811,979 | ) | (1,274,411 | ) | |||||
| Other income (expense): | ||||||||||||
| Interest income | 26,317 | 28,036 | 107,006 | 117,027 | ||||||||
| Interest expense | (24,521 | ) | (26,379 | ) | (106,682 | ) | (113,881 | ) | ||||
| Other income (expense) | (30,919 | ) | 36,032 | 195,600 | (191,402 | ) | ||||||
| Income (loss) before income taxes | 246,291 | (171,117 | ) | (616,055 | ) | (1,462,667 | ) | |||||
| Provision (benefit) for income taxes | (26,000 | ) | 35,000 | 9,000 | (238,000 | ) | ||||||
| Net income (loss) | $272,291 | ($206,117 | ) | ($625,055 | ) | ($1,224,667 | ) | |||||
| Earnings (loss) per common share - Basic | $0.15 | ($0.11 | ) | ($0.34 | ) | ($0.67 | ) | |||||
| Weighted average shares | 1,845,000 | 1,846,000 | 1,845,000 | 1,839,000 | ||||||||
| Earnings (loss) per common share - Diluted | $0.15 | ($0.11 | ) | ($0.34 | ) | ($0.67 | ) | |||||
| Weighted average shares | 1,845,000 | 1,846,000 | 1,845,000 | 1,839,000 | ||||||||
| Reliv International, Inc. and Subsidiaries | |||||||||||||||||||
| Net sales by Market | |||||||||||||||||||
| (in thousands) | Three months ended December 31, | Change from | |||||||||||||||||
| 2016 | 2015 | prior year | |||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | ||||||||||||||
| United States | $ | 8,400 | 79.0 | % | $ | 9,554 | 77.7 | % | $ | (1,154 | ) | -12.1 | % | ||||||
| Australia/New Zealand | 254 | 2.4 | % | 296 | 2.4 | % | (42 | ) | -14.2 | % | |||||||||
| Canada | 266 | 2.5 | % | 269 | 2.2 | % | (3 | ) | -1.1 | % | |||||||||
| Mexico | 111 | 1.0 | % | 152 | 1.3 | % | (41 | ) | -27.0 | % | |||||||||
| Europe | 1,147 | 10.8 | % | 1,541 | 12.5 | % | (394 | ) | -25.6 | % | |||||||||
| Asia | 460 | 4.3 | % | 483 | 3.9 | % | (23 | ) | -4.8 | % | |||||||||
| Consolidated Total | $ | 10,638 | 100.0 | % | $ | 12,295 | 100.0 | % | $ | (1,657 | ) | -13.5 | % | ||||||
| Net sales by Market | |||||||||||||||||||
| (in thousands) | Year ended December 31, | Change from | |||||||||||||||||
| 2016 | 2015 | prior year | |||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | ||||||||||||||
| United States | $ | 35,592 | 78.2 | % | $ | 40,385 | 78.0 | % | $ | (4,793 | ) | -11.9 | % | ||||||
| Australia/New Zealand | 1,079 | 2.4 | % | 1,280 | 2.5 | % | (201 | ) | -15.7 | % | |||||||||
| Canada | 1,065 | 2.3 | % | 1,297 | 2.5 | % | (232 | ) | -17.9 | % | |||||||||
| Mexico | 530 | 1.2 | % | 719 | 1.4 | % | (189 | ) | -26.3 | % | |||||||||
| Europe | 5,491 | 12.0 | % | 6,192 | 12.0 | % | (701 | ) | -11.3 | % | |||||||||
| Asia | 1,756 | 3.9 | % | 1,896 | 3.6 | % | (140 | ) | -7.4 | % | |||||||||
| Consolidated Total | $ | 45,513 | 100.0 | % | $ | 51,769 | 100.0 | % | $ | (6,256 | ) | -12.1 | % | ||||||
The following table sets forth, as of December 31, 2016 and 2015, 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. In February 2016, we introduced a formal Preferred Customer program in the United States and Canada. As a result, we are including Preferred Customers as part of our Active Distributor count. Preferred Customer programs were previously in place in Europe and other foreign markets. Preferred Customers represent approximately 5,050 and 4,180 of the Active Distributor count as of December 31, 2016 and 2015, respectively. The significant majority of these Preferred Customers are in Europe.
| Active Distributors/Preferred Customers and Master Affiliates and Above by Market | ||||||||||||
| As of 12/31/2016 | As of 12/31/2015 | 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 | 27,220 | 4,080 | 32,310 | 4,740 | -15.8% | -13.9% | ||||||
| Australia/New Zealand | 1,530 | 130 | 1,700 | 140 | -10.0% | -7.1% | ||||||
| Canada | 840 | 150 | 1,200 | 230 | -30.0% | -34.8% | ||||||
| Mexico | 940 | 90 | 1,220 | 110 | -23.0% | -18.2% | ||||||
| Europe | 4,860 | 530 | 6,300 | 650 | -22.9% | -18.5% | ||||||
| Asia | 3,090 | 340 | 2,990 | 330 | 3.3% | 3.0% | ||||||
| Consolidated Total | 38,480 | 5,320 | 45,720 | 6,200 | -15.8% | -14.2% | ||||||
Contact Information:
For more information, contact:
Steve Albright
Chief Financial Officer
(636) 733-1305