Reliv International Q3 Results – Down 13.5% To $10.9 Million
Reliv International, Inc., a maker of nutritional supplements that promote optimal health, reported its financial results for the third quarter of 2014.
Net sales for the quarter were $14.3 million, a 13.5 percent decrease from the third quarter last year. U.S. net sales totaled $10.9 million, a decrease of $2.2 million, or 16.8 percent, compared to third-quarter 2013 net sales.
Net sales outside of the United States declined slightly at 0.2 percent in the third quarter of 2014 compared to the prior-year quarter, offset by the European market where net sales increased by 16.1 percent.
Net income for the third quarter of 2014 was $166,000 or $0.01 per diluted share, compared to $293,000 or $0.02 per diluted share in the 2013 third quarter. In the second quarter of 2014, Reliv reported a net loss of $289,000 or $0.02 per diluted share.
Reliv's sequential profitability improvement is attributable to effective cost reduction measures enacted in the third quarter and the tax benefit related to the liquidation of Reliv's former entity in Germany. Income from operations for the third quarter of 2014 was $228,000 compared to $402,000 in the same quarter of 2013.
Reliv has recently completed a series of critical transitions — in our distributor field, our corporate leadership, our distributor compensation plan and our product line — to better position the company for future growth, said Robert L. Montgomery, Chairman and CEO of Reliv.
This process has come with anticipated adjustments. Yet after recording losses in net income in each of the first two quarters of 2014, we achieved profitability in the third quarter. We believe the return to profitability is evidence that the transitions initiated by Reliv are gaining traction.
Montgomery cites key elements of Reliv's strategic plan for growth:
- Positioning Reliv as the Nutritional Epigenetics Company;
- New product strategy around Reliv Now®, LunaRich X™ and the LunaRich® Super Pack;
- Renewed focus on the business opportunity for the distributors;
- Technology upgrades, both within operations at Reliv HQ and online for distributors;
- Increased manufacturing capabilities with a new encapsulation line;
- Continued expansion of Reliv's European markets;
- Company-wide cost containment initiative; and
- Investment in clinical studies of Reliv products and additional research.
We see many examples of this plan already producing results, but turning around momentum in the field takes time, Montgomery noted. During that process, we are aggressively controlling expenses to improve our bottom line.
Growth in Europe continued with net sales of $2.0 million in the third quarter of 2014 compared to $1.7 million in the prior-year third quarter. Europe remains Reliv's strongest international market and we expect growth to continue, Montgomery said. In October, at the most well-attended Reliv event in Reliv Europe history, we launched LunaRich C™ (LunaRich X™ in the United States).
This product, a concentrated lunasin extract delivered in capsule form, is one of our top sellers in the United States and complements Reliv Europe's existing product line. We expect LunaRich C to enhance the momentum in Europe and sustain growth in the final quarter of 2014 and next year.
Reliv held an official launch event for the market of Indonesia on September 7. Reliv has operated in Indonesia for a number of years, but until this year could only offer one product: Innergize!®, our isotonic performance formula, Montgomery said. We have now expanded our product line in this market to four products, including Reliv Now®, our essential nutrition formula and top seller worldwide. With over $1 billion in direct sales annually, Indonesia is a market we believe offers Reliv an opportunity for growth in this region.
Worldwide net sales for the first nine months of 2014 were $43.3 million, representing a 14.9 percent decrease from the same period in 2013. In the United States, net sales declined 19.1 percent compared with the first nine months of the prior year. Net sales outside of the United States increased by 0.8 percent in the first nine months of 2014 compared with the first nine months last year.
Reliv reported a net loss of $274,000, or $0.02 per diluted share in the first nine months of 2014, compared to net income $274,000 or $0.02 per diluted share in the same period of 2013.
Reliv's total distributor count was 49,420 as of September 30, 2014 — a decrease of 4.8 percent from the same date in 2013 — of which 7,030 are Master Affiliate level and above. The number of Master Affiliates increased by 5.4 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.
Reliv had cash and cash equivalents of $5.18 million as of September 30, 2014. This amount compares to $6.66 million as of December 31, 2013 and $5.74 million at this date last year.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition along with premium skincare products. Reliv supplements address essential nutrition, weight loss, athletic performance, digestive health, women's health, anti-aging and healthy energy. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, the peptide behind many of soy's health benefits. The company sells its products through an international network marketing system of independent distributors in 15 countries.
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