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NHTC Reports 137% Increase in 2014 Revenues to $124.6 Million; EPS Increased 347% to $1.61

Operating Leverage Drives Margin Expansion on Increased Revenues;
Further Dividend Increase

DALLAS, March 3, 2015 (GLOBE NEWSWIRE) -- Natural Health Trends Corp. (Nasdaq:NHTC), a leading direct selling company that markets premium quality personal care, wellness and "quality of life" products under the NHT Global brand, today announced financial results for the quarter and twelve month periods ended December 31, 2014.

Fourth Quarter Financial Highlights

  • Total revenues increased 85% to $35.4 million, compared to $19.1 million in the fourth quarter last year.
  • Operating income was $6.1 million, up 266% compared to $1.7 million in the fourth quarter last year.
  • Net income was $5.8 million, or $0.45 per diluted share, compared to $1.6 million, or $0.14 per diluted share, in the fourth quarter last year.

Full Year Financial Highlights

  • Total revenues were $124.6 million, up 137% compared to $52.5 million last year.
  • Operating income was $20.8 million, up 393% compared to $4.2 million last year.
  • Net income was $20.4 million, or $1.61 per diluted share, compared to net income of $4.1 million, or $0.36 per diluted share last year.

Subsequent to December 31, 2014, the Company completed the requirements necessary to list its shares of common stock on the Nasdaq Capital Market. Trading on the Nasdaq Capital Market began on Tuesday, February 17, 2015.

"We capped off 2014 with another strong quarter, and delivered triple-digit sales growth, solid margin expansion and a more than four-fold increase in earnings per share for the year," commented Chris Sharng, President of Natural Health Trends Corp. "Clearly, our marketing strategy has been effective in driving strong top- and bottom-line growth. We have been keen to develop and extend our product line while providing the necessary infrastructure, including leadership development, training and competitive incentives, to attract and retain talented distributors and leverage existing operations to increase our margins."

"We recently concluded a successful event in Macau where 3,000 attended our Success Forum designed to recognize superior performance and serve as a platform for new product introductions. Our leaders are motivated and optimistic," continued Mr. Sharng. "Our momentum is strong going into the new year."

Dividend

On February 27, 2015, the Board of Directors declared a cash dividend of $0.02 per share on outstanding common stock, payable in cash on March 27, 2015 to stockholders of record on March 17, 2015.

Shareholder Conference Call

Management will conduct a conference call to discuss its fourth quarter and full year financial results. Details of the call are as follows:

A replay will be available from 1 p.m. ET on March 4, through 11:59 p.m. ET on March 11 by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and referencing replay pin number 3877280.

About Natural Health Trends Corp.

Natural Health Trends Corp. is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, North America, and Europe. The company markets premium quality personal care, wellness and "quality of life" products under the NHT Global brand. Additional information can be found on the company's website, www.naturalhealthtrendscorp.com.

Forward Looking Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption "Risk Factors" in our Annual Report on Form 10-K filed on March 7, 2014, with the Securities and Exchange Commission. We assume no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

-- Tables follow --

NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
December 31,
2013 2014
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $14,550 $44,816
Accounts receivable 134 107
Inventories, net 1,828 3,760
Other current assets 658 930
Total current assets 17,170 49,613
Property and equipment, net 265 476
Goodwill 1,764 1,764
Restricted cash 328 315
Other assets 300 372
Total assets $19,827 $52,540
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,058 $2,232
Income taxes payable 25 268
Accrued distributor commissions 3,962 8,853
Other accrued expenses 3,146 6,743
Deferred revenue 2,569 2,687
Deferred tax liability 108 65
Amounts held in distributor eWallets 2,064
Other current liabilities 882 1,513
Total current liabilities 13,750 24,425
Long-term incentive 1,665
Total liabilities 13,750 26,090
Commitments and contingencies
Stockholders' equity:
Preferred stock 111
Common stock 11 13
Additional paid-in capital 80,690 85,750
Accumulated deficit (74,619) (54,799)
Accumulated other comprehensive income (loss):
Foreign currency translation adjustments (81) 62
Treasury stock, at cost (35) (4,576)
Total stockholders' equity 6,077 26,450
Total liabilities and stockholders' equity $19,827 $52,540
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
Three Months Ended
December 31,
Year Ended
December 31,
2013 2014 2013 2014
(Unaudited) (Unaudited)
Net sales $19,101 $35,406 $52,527 $124,590
Cost of sales 4,391 7,464 12,551 26,981
Gross profit 14,710 27,942 39,976 97,609
Operating expenses:
Distributor commissions 9,677 16,607 24,053 56,997
Selling, general and administrative expenses 3,364 5,233 11,634 19,687
Depreciation and amortization 13 33 66 105
Total operating expenses 13,054 21,873 35,753 76,789
Income from operations 1,656 6,069 4,223 20,820
Other expense, net (26) (145) (32) (184)
Income before income taxes 1,630 5,924 4,191 20,636
Income tax provision 53 122 102 266
Net income 1,577 5,802 4,089 20,370
Preferred stock dividends (3) (1) (15) (10)
Net income available to common stockholders $1,574 $5,801 $4,074 $20,360
Income per common share:
Basic $0.14 $0.46 $0.36 $1.67
Diluted $0.14 $0.45 $0.36 $1.61
Weighted-average number of common shares outstanding:
Basic 11,233 12,692 11,154 12,131
Diluted 11,356 12,780 11,331 12,600
Cash dividends declared per share:
Common $– $0.010 $– $0.030
Series A preferred stock $– $0.032 $– $0.894
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Year Ended December 31,
2013 2014
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $4,089 $20,370
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 66 105
Stock-based compensation 110 49
Deferred income taxes 16 (43)
Changes in assets and liabilities:
Accounts receivable (17)
Inventories, net (974) (2,029)
Other current assets (35) (501)
Other assets (38) (85)
Accounts payable 1,673 (822)
Income taxes payable 16 243
Accrued distributor commissions 2,679 5,077
Other accrued expenses 1,467 3,706
Deferred revenue 1,738 147
Amounts held in distributor eWallets 2,065
Other current liabilities (104) 666
Long-term incentive 1,665
Net cash provided by operating activities 10,686 30,613
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (210) (339)
Increase in restricted cash (82)
Net cash used in investing activities (292) (339)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants 4,948
Repurchase of common stock (52) (4,661)
Dividends paid (476)
Net cash used in financing activities (52) (189)
Effect of exchange rates on cash and cash equivalents 1 181
Net increase in cash and cash equivalents 10,343 30,266
CASH AND CASH EQUIVALENTS, beginning of period 4,207 14,550
CASH AND CASH EQUIVALENTS, end of period $14,550 $44,816

CONTACT: Company Contact Scott Davidson Chief Financial Officer Natural Health Trends Corp. Tel: 972-241-4080 scott.davidson@nhtglobal.com Investor Contact Brett Maas Managing Partner Hayden IR Tel: 646-536-7331 brett@haydenir.comSource:Natural Health Trends Corp.