Reliv International Reports Fourth-Quarter and Full-Year Financial Results for 2019

PRNewswire 27-Mar-2020 7:00 AM

CHESTERFIELD, Mo., March 27, 2020 /PRNewswire/ -- Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the fourth quarter and full year of 2019.

Fourth-Quarter Results

Reliv reported net sales of $8.2 million for the fourth quarter of 2019, compared with net sales of $9.3 million for the fourth quarter of 2018, a decrease of 12.4%. U.S. net sales decreased by 17.9% for the quarter compared with the same quarter in 2018.   Network marketing net sales in the U.S. decreased by 12.5% in the fourth quarter of 2019 as they were adversely impacted in the quarter by a price increase on most products effective October 1, 2019.  Additionally, U.S. sales in the prior-year quarter included approximately $700,000 of contract packaging business that was divested in January 2019.  Net sales outside of the United States increased by 5.8% in the fourth quarter of 2019 compared to the prior-year quarter.  Net sales in Asia and Mexico were up 45.2% and 4.7%, respectively, in the fourth quarter; however, sales in Europe decreased by 17.2%. Net sales in Reliv's foreign markets increased by 3.7% during the fourth quarter of 2019 when the impact of foreign currency fluctuation is removed.

Reliv reported a net loss of $514,000, or a loss of $0.29 per diluted share, for the fourth quarter of 2019 compared with a net loss of $145,000, or a loss of $0.08 per diluted share, for the fourth quarter of 2018.   The loss from operations for the fourth quarter of 2019 was $308,000 compared to loss from operations of $169,000 in the same period in 2018.  Income tax expense in the fourth quarter was $271,000, primarily resulting from income tax on earnings coupled with a settlement for an old tax audit in our Philippine entity.

Full-Year Results

Reliv reported net sales of $35.1 million for 2019 compared with net sales of $36.1 million in 2018, a decline of 2.9%. U.S. net sales decreased to $25.7 million from $27.7 million, a decline of 7.0%.

Net sales in Reliv's foreign markets for 2019 increased 10.3% compared with net sales for 2018. Net sales increases in 2019 in Asia and Mexico of 68.7% and 21.7%, respectively, were offset by a decrease of 18.8% in Europe compared to the prior year.  Net sales in Reliv's foreign markets increased by 11.9% during 2019 when the impact of foreign currency fluctuation is removed.

The net loss for 2019 was $444,000 (loss per diluted share of $0.25) compared to a net loss of $1.9 million (loss per diluted share of $1.03) in 2018.  The loss from operations for 2019 was $559,000 compared to a loss from operations of $1.9 million in 2018.  Selling, general, and administrative expenses were $14.8 million versus $16.5 million in 2018.  Other income includes a first quarter of 2019 gain of $435,000 from the sale of all manufacturing equipment as part of an asset sale with Nutracom, LLC (Nutracom).  Income tax expense for 2019 was $468,000, once again resulting from income tax on earnings coupled with previously mentioned tax settlements in our Philippine entity.

Reliv had cash and cash equivalents of $1.6 million as of December 31, 2019, compared to $2.0 million as of December 31, 2018.  Net cash used in operating activities was $943,000 in 2019 compared to $1.2 million of cash used in operations in the prior-year period.

As of December 31, 2019, Reliv had 15,630 customers and Preferred Customers in total – an increase of 22.3% from December 31, 2018.  The number of preferred customers increased to 9,320 as of December 31, 2019 compared to 5,060 as of the prior year end.  This increase is primarily driven by the growth in the Philippines.  Many customers buy product directly from distributors rather than from us so the number of customers is likely greater than stated above.  As of December 31, 2019, Reliv had 25,730 active Distributors – an increase of 1.7% from December 31, 2018.  The number of Master Affiliates decreased by 2.1% compared to the year-ago total.  Master Affiliate is the level at which Distributors are eligible to earn generation royalties. 

"2019 was a year of transition for Reliv," commented Ryan A. Montgomery, Chief Executive Officer.  "We successfully completed our transaction with Nutracom which allows each party to focus on their respective core competencies.   We launched our RLV line of hemp-extract products in the United States. We continue to focus on building our base of distributors and preferred customers through training and targeted initiatives, such as the payment of wholesale commissions on a weekly basis, to reward those distributors building their base of business in this manner.  We were disappointed in our results in the fourth quarter in the U.S.; however, we believe we are laying the groundwork for a solid year in 2020."

"Our RLV line continues to be a solid contributor to U.S. sales representing 7.3% of net sales in the fourth quarter.  We launched additional products in the RLV line in the fourth quarter and at our recent distributor conference in Dallas, TX and plan further developments in this line during 2020," said Montgomery.

In international operations, sales and distributor activity in the Philippines continued its strong pace in the fourth quarter of 2019. "We've completed an outstanding year in the Philippines, and we intend to fuel that growth in 2020 and expand the excitement there to our other markets in the Asia-Pacific region," noted Montgomery.  Net sales in the Philippines grew by 39.7% in local currency in the fourth quarter of 2019, compared to the prior-year quarter, as the active distributor and preferred customer and Master Affiliate counts across all of the Asia markets increased by 116% and 63%, respectively.

About Reliv International, Inc.

Reliv International, based in Chesterfield, MO, produces 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 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.

--FINANCIAL HIGHLIGHTS FOLLOW –

Reliv International, Inc. and Subsidiaries







Condensed Consolidated Balance Sheets



December 31

December 31





2019

2018





(Unaudited)

(Audited)




Assets






Current Assets:






Cash and cash equivalents

$1,630,779

$1,989,974




Accounts receivable, less allowances of $5,000 in 2019 and 2018

107,369

400,759




Notes & accounts receivables & deposits - related parties

1,099,228

151,222




Inventories

2,701,688

2,954,947




Assets held for sale

-

2,124,939




Other current assets

326,454

464,165










Total current assets

5,865,518

8,086,006










Notes & accounts receivables - related parties

2,418,921

1,282,072




Other assets

2,581,717

2,287,237




Net property, plant and equipment

4,440,840

4,698,550










Total Assets

$15,306,996

$16,353,865










Liabilities and Stockholders' Equity












Accounts payable, accruals & other current liabilities

$3,489,157

$3,915,390




Revolving line of credit

500,000

-




Other noncurrent liabilities

216,196

445,611




Stockholders' equity

11,101,643

11,992,864










Total Liabilities and Stockholders' Equity

$15,306,996

$16,353,865
















Consolidated Statements of Operations



Three months ended December 31


Year ended December 31


2019

2018


2019

2018


(Unaudited)

(Unaudited)


(Unaudited)

(Audited)

Product sales

$7,488,554

$8,788,666


$32,298,533

$33,918,169

Freight income

452,306

527,050


1,973,320

2,197,572

Other revenue

219,073

-


783,462

-







Net Sales

8,159,933

9,315,716


35,055,315

36,115,741







Costs and expenses:






  Cost of goods sold

2,356,400

2,619,785


9,557,116

9,709,743

  Distributor royalties and commissions

2,537,219

2,890,639


11,259,071

11,749,604

  Selling, general and administrative

3,573,838

3,974,045


14,798,586

16,520,885







Total Costs and Expenses

8,467,457

9,484,469


35,614,773

37,980,232







Loss from operations

(307,524)

(168,753)


(559,458)

(1,864,491)







Other income (expense):






Interest income

40,782

22,922


177,810

93,054

Interest expense

(7,443)

(2,361)


(47,180)

(95,556)

Other income

31,146

50,140


17,922

62,347

Gain (loss) on sale of fixed assets

-

3,271


434,549

(695)







Income (loss) before income taxes

(243,039)

(94,781)


23,643

(1,805,341)

Provision for income taxes

271,000

50,000


468,000

98,000







Net loss

($514,039)

($144,781)


($444,357)

($1,903,341)













Loss per common share - Basic

($0.29)

($0.08)


($0.25)

($1.03)

Weighted average shares 

1,746,000

1,845,000


1,746,000

1,845,000







Loss per common share - Diluted

($0.29)

($0.08)


($0.25)

($1.03)

Weighted average shares 

1,746,000

1,845,000


1,746,000

1,845,000

 

Reliv International, Inc. and Subsidiaries


Net sales by Market

(in thousands)

Three months ended December 31,


Change from


2019


2018


prior year


Amount

% of Net
Sales


Amount

% of Net
Sales


Amount

%










United States

$          5,888

72.2%


$          7,168

76.9%


$        (1,280)

-17.9%

Australia/New Zealand

151

1.9%


167

1.8%


(16)

-9.6%

Canada

137

1.7%


162

1.7%


(25)

-15.4%

Mexico

133

1.6%


127

1.4%


6

4.7%

Europe

803

9.8%


970

10.4%


(167)

-17.2%

Asia

1,048

12.8%


722

7.8%


326

45.2%










Consolidated Total

$          8,160

100.0%


$          9,316

100.0%


$        (1,156)

-12.4%



















Net sales by Market

(in thousands)

Year ended December 31,


Change from


2019


2018


prior year


Amount

% of Net
Sales


Amount

% of Net
Sales


Amount

%










United States

$        25,747

73.4%


$        27,673

76.6%


$        (1,926)

-7.0%

Australia/New Zealand

595

1.7%


732

2.0%


(137)

-18.7%

Canada

617

1.8%


719

2.0%


(102)

-14.2%

Mexico

577

1.6%


474

1.3%


103

21.7%

Europe

3,225

9.2%


3,973

11.0%


(748)

-18.8%

Asia

4,294

12.3%


2,545

7.1%


1,749

68.7%










Consolidated Total

$        35,055

100.0%


$        36,116

100.0%


$        (1,061)

-2.9%

 

Reliv International, Inc. and Subsidiaries


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









As of 12/31/2019



Retail
Customers

Preferred
Customers

Active
Distributors

Total
Customers and
Distributors

Master
Affiliates and
Above











United States

3,500

1,500

17,580

22,580

2,110


Australia/New Zealand

50

210

660

920

80


Canada

90

30

470

590

60


Mexico

20

100

1,160

1,280

100


Europe

740

690

1,650

3,080

330


Asia

1,910

6,790

4,210

12,910

620









Consolidated Total

6,310

9,320

25,730

41,360

3,300










As of 12/31/2018



Retail
Customers

Preferred
Customers

Active
Distributors

Total
Customers and
Distributors

Master
Affiliates and
Above











United States

4,190

1,470

18,340

24,000

2,340


Australia/New Zealand

50

240

720

1,010

90


Canada

100

30

530

660

80


Mexico

10

110

860

980

90


Europe

550

1,120

1,860

3,530

390


Asia

2,820

2,090

3,000

7,910

380









Consolidated Total

7,720

5,060

25,310

38,090

3,370

















Change in %



Retail
Customers

Preferred
Customers

Active
Distributors

Total
Customers and
Distributors

Master
Affiliates and
Above











United States

-16.5%

2.0%

-4.1%

-5.9%

-9.8%


Australia/New Zealand

0.0%

-12.5%

-8.3%

-8.9%

-11.1%


Canada

-10.0%

0.0%

-11.3%

-10.6%

-25.0%


Mexico

100.0%

-9.1%

34.9%

30.6%

11.1%


Europe

34.5%

-38.4%

-11.3%

-12.7%

-15.4%


Asia

-32.3%

224.9%

40.3%

63.2%

63.2%









Consolidated Total

-18.3%

84.2%

1.7%

8.6%

-2.1%
















The table above sets forth, as of December 31, 2019 and 2018, 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 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

 

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SOURCE Reliv International