Natural Health Trends Reports Q3 2015 Revenues Up 154%

 

Natural Health Trends Corp., a leading direct-selling company that markets premium quality personal care, wellness and quality of life products under the NHT Global brand, today announced its financial results for the quarter ended September 30, 2015.

Third Quarter 2015 Financial Highlights

• Total revenue increased 154% to $80.8 million, compared to $31.8 million in the third quarter of 2014.
• Revenue from the Company's Hong Kong operations, which represents 94% of total revenue, increased 168% to $75.9 million, compared to $28.3 million in the third quarter of 2014.
• Revenue outside of Hong Kong increased 38% to $4.9 million, compared to $3.5 million in the third quarter of 2014.
• Operating income increased 171% to $14.8 million, compared to $5.5 million in the third quarter of 2014.
• Net income available to common stockholders was $14.5 million, or $1.18 per diluted share, compared to $5.4 million, or $0.42 per diluted share, in the third quarter of 2014.
• The number of Active Members¹ increased 24% to 94,700 at September 30, 2015, compared to 76,400 at June 30, 2015.

¹Natural Health Trends defines Active Members as those that have placed at least one product order with the Company during the preceding twelve month period.

Year-to-Date 2015 Financial Highlights

• Total revenue increased 114% to $191.2 million, compared to $89.2 million in the first nine months of 2014.
• Operating income increased 130% to $34.0 million, compared to $14.8 million in the first nine months of 2014.
• Net income available to common stockholders was $33.5 million, or $2.70 per diluted share, compared to $14.6 million, or $1.16 per diluted share, in the first nine months of 2014.

Management Commentary

The third quarter was a record quarter, driven by our successful execution efforts for launching and marketing our products, as well as through supporting our leaders in developing effective sales techniques, commented Chris Sharng, President of Natural Health Trends Corp.

Our record third quarter revenue and net income both posted significant sequential increases and more than doubled versus the third quarter last year. Strengthened consumer demand for our products in China, coupled with strong growth in our active member base helped contribute to this impressive growth.

Mr. Sharng continued, We were very pleased to report that we have initiated the process for submitting a direct-selling license application in the Chinese province of Guangdong. We are hopeful that a license will enable us to drive incremental growth by leveraging our growing brand recognition in China as well as our Hong Kong distribution infrastructure.

As we are still very early in this process, timing for obtaining our direct-selling license remains uncertain. In the interim, we will remain highly focused on managing all aspects of our core business that are within our control.

Balance Sheet and Cash Flow

• At September 30, 2015, cash and cash equivalents totaled $94.6 million, compared to $74.4 million at June 30, 2015.
• Net cash provided by operating activities in the third quarter of 2015 was $25.7 million, compared to $8.1 million in the third quarter of 2014. For the first nine months of 2015, net cash provided by operating activities was $65.2 million, compared to $20.9 million in the first nine months of 2014.
• On October 21, 2015, the Company's Board of Directors declared a quarterly cash dividend of $0.05 per share on outstanding common stock, a 25% increase over the prior quarter dividend, which will be payable on November 20, 2015 to stockholders of record as of November 10, 2015.

During the three months ended September 30, 2015, the Company repurchased a total of $5.0 million of its common stock under its existing $15.0 million stock repurchase program, which remains available for repurchase through December 2016.

The Company expects to continue executing against the $15.0 million stock repurchase program and anticipates it will repurchase an additional $5.0 million under this program soon. Since November 2014, the Company has repurchased 800,618 shares of common stock at a cost of $15.6 million.

Our healthy liquidity position and strong cash flow generation affords us the flexibility and resources to continue investing in the growth of our business while at the same time providing returns to our shareholders through cash dividends and repurchasing shares of our common stock, added Scott Davidson, Senior Vice President and Chief Financial Officer of Natural Health Trends Corp.