NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In Thousands, Except Share Data)
June 30, September
2008 30, 2008
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ASSETS
Current assets:
Cash and cash equivalents $ 5,209 $ 3,969
Restricted cash 201 227
Accounts receivable 314 222
Inventories, net 2,875 1,974
Other current assets 1,103 894
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Total current assets 9,702 7,286
Property and equipment, net 1,343 1,321
Goodwill 1,764 1,764
Intangible assets, net 2,200 2,000
Restricted cash 3,766 3,678
Deferred tax assets 187 164
Other assets 2,002 1,657
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Total assets $ 20,964 $ 17,870
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,472 $ 1,387
Income taxes payable 391 376
Accrued distributor commissions 1,512 1,063
Other accrued expenses 2,980 2,806
Deferred revenue 2,598 2,116
Current portion of convertible debentures,
net of discount of $541 and $609 at June 30,
2008 and September 30, 2008, respectively 876 1,339
Other current liabilities 3,362 3,192
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Total current liabilities 13,191 12,279
Convertible debentures, net of discount of $2,833
and $2,302 at June 30, 2008 and September 30,
2008, respectively - -
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Total liabilities 13,191 12,279
Commitments and contingencies
Minority interest 37 34
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000
shares authorized; 1,761,900 shares
designated Series A convertible preferred
stock, 138,400 shares issued and outstanding
at June 30, 2008 and September 30, 2008,
aggregate liquidation value of $259 124 124
Common stock, $0.001 par value; 50,000,000
shares authorized; 10,359,626 and 10,343,582
shares issued and outstanding at June 30,
2008 and September 30, 2008, respectively 10 10
Additional paid-in capital 79,451 79,579
Accumulated deficit (72,766) (75,082)
Accumulated other comprehensive income:
Foreign currency translation adjustments 917 926
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Total stockholders' equity 7,736 5,557
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Total liabilities and stockholders' equity $ 20,964 $ 17,870
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NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, Except Per Share Data)
Three Months Ended
------------------------
June 30, September
2008 30, 2008
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Net sales $ 12,323 $ 11,016
Cost of sales 3,445 3,050
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Gross profit 8,878 7,966
Operating expenses:
Distributor commissions 4,600 4,573
Selling, general and administrative expenses
(including stock-based compensation expense of
$129 and $128 during the three months ended
June 30, 2008 and September 30, 2008,
respectively) 4,272 4,358
Depreciation and amortization 366 338
Impairment of long-lived assets 4 2
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Total operating expenses 9,242 9,271
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Loss from operations (364) (1,305)
Other expense:
Loss on foreign exchange (118) (345)
Interest income 33 18
Interest expense (including amortization of debt
issuance costs and accretion of debt discount
of $449 and $559 during the three months ended
June 30, 2008 and September 30, 2008,
respectively) (556) (666)
Other (22) 19
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Total other expense, net (663) (974)
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Loss before income taxes and minority interest (1,027) (2,279)
Income tax provision (42) (37)
----------- -----------
Net loss (1,069) (2,316)
Preferred stock dividends (4) (4)
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Net loss attributable to common stockholders $ (1,073) $ (2,320)
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Loss per share - basic and diluted $ (0.11) $ (0.24)
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Weighted-average number of shares outstanding 9,619 9,719
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NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
Three Months Ended
------------------------
June 30, September
2008 30, 2008
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,069) $ (2,316)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization of property and
equipment 166 138
Amortization of intangibles 200 200
Amortization of debt issuance costs 76 96
Accretion of debt discount 373 463
Stock-based compensation 129 128
Impairment of long-lived assets 4 2
Changes in assets and liabilities:
Accounts receivable 36 73
Inventories, net (69) 828
Other current assets 638 193
Other assets 83 143
Accounts payable (410) (70)
Income taxes payable (16) 7
Accrued distributor commissions (121) (406)
Other accrued expenses (294) (143)
Deferred revenue 46 (471)
Other current liabilities 84 (157)
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Net cash used in operating activities (144) (1,292)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (140) (130)
Decrease in restricted cash 614 (42)
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Net cash provided by (used in) investing
activities 474 (172)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt 145 -
Payments on debt (145)
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Net cash provided by (used in) financing
activities 145 (145)
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Effect of exchange rates on cash and cash
equivalents 77 369
----------- -----------
Net increase (decrease) in cash and cash
equivalents 552 (1,240)
CASH AND CASH EQUIVALENTS, beginning of period 4,657 5,209
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CASH AND CASH EQUIVALENTS, end of period $ 5,209 $ 3,969
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Contact Information: Contact: Jean Bono Natural Health Trends Corp.