NEWS RELEASE
For more information, contact:
Steve Albright or: Fred Nielson
Chief Financial Officer Investor Relations
(636) 733-1305 (636) 733-1314
FOR IMMEDIATE DISTRIBUTION
Reliv International Reports Third-Quarter 2010 Results
CHESTERFIELD, Mo., Nov. 2, 2010 – Reliv International, Inc. (NASDAQ:RELV), a nutrition
and direct selling company, today reported consolidated net sales of $18.7 million for the third
quarter of 2010, compared to net sales of $20.9 million in the third quarter of last year.
Net income for the quarter was $172,000 compared to net income of $324,000 in the third quarter of
last year. Diluted earnings per share were $0.01 compared to $0.03 in the same quarter last year.
U.S. sales for the quarter totaled approximately $16.0 million compared to $18.3 million in
last year’s third quarter. Sales outside of the United States were $2.7 million compared to
$2.6 million in the third quarter of 2009, though the increase was a result of currency fluctuations.
Robert L. Montgomery, chairman, president and chief executive officer, said, “Third-quarter results
were not where we want them to be, particularly in the United States. International markets,
specifically Europe, Canada and the Australia/New Zealand region, reported sales increases, offset
by sales declines in Mexico and Asia.”
“In the United States, which remains by far our largest market, I believe we are still fighting economic
headwinds,” Montgomery said. “But we took steps during the quarter at our International Conference
that we expect to support greater sales and help us move toward turning around the business.”
As examples of the steps announced during the August Conference, Montgomery said, “We reduced the
cost of new distributor start-up kits. We made the new distributor application easier to complete
online, and we introduced a ‘Fast Start Guide’ to help new distributors quickly get off to a
positive start in building their business. Each of those moves is designed to boost sales growth.”
Reliv believes these actions in part led to an increase in September new-distributor recruiting. Reliv
had more new distributors sign up in September than in all but one other month this year.
Reliv yesterday announced a new promotion designed to increase sales in which top-selling distributors
will win a Disney cruise.
For the first nine months of 2010, net sales were $60.2 million compared to $64.7 million in
the first nine months of 2009. Net sales outside of the United States during that period rose 18.7
percent, while net U.S. sales in the period decreased 10.3 percent. Excluding the impact of foreign
currency fluctuations, foreign sales rose 8.8 percent.
Reliv generated cash from operations of $1.4 million in the first nine months of 2010 compared to
$4.8 million in the same period of 2009. As of Sept. 30, 2010, Reliv’s cash and cash equivalents
totaled $6.4 million, the same amount compared to a year ago.
Reliv’s distributor count was 62,000 compared to 68,000 at the end of the third quarter last year.
Looking toward next year, Montgomery said, “We are maintaining our focus on key strategic initiatives
to improve results: increasing distributor sponsoring and retention; improving development of our
sales force; refreshing our brand; and enhancing product promotion.”
He added, “Reliv makes nutrition simple. Our success is built on that principle, outstanding
science-based nutritional products and a terrific home-based business opportunity.”
Reliv will host a conference call to discuss third-quarter earnings with investors. The conference
call will be on November 2, 2010 at 1:00 p.m. Eastern. The dial-in number is 866-804-6929. The
participant passcode is 27782269. A replay will be available for one week at 888-286-8010 using
the passcode 80291111. A live webcast is available on the Investor Relations section of Reliv’s
Web site at: Conference%20Calls%20Presentations.html.
An online archive of the webcast will be on Reliv’s Web site in the Investor Relations section,
24 hours after call concludes.
About Reliv International, Inc.
Reliv International, Inc., based in Chesterfield, Mo., produces dietary supplements that promote optimal health. Reliv supplements address essential nutrition, weight loss, and targeted solutions for athletic performance, digestive health, women’s health and anti-aging. The company also markets the Relivables line of premium personal care products. Reliv sells its products through an international network marketing system of independent distributors in 15 countries. Learn more about Reliv at www.reliv.com, or on Facebook, Twitter or YouTube.
- FINANCIAL HIGHLIGHTS FOLLOW -
Condensed Consolidated Balance Sheets
September 30 December 31
2010 2009
---- ----
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $6,404,688 $5,760,913
Accounts and notes receivable, less
allowances of $66,400 in 2010 and
$59,700 in 2009 234,889 326,022
Accounts due from employees and
distributors 68,407 78,500
Inventories 5,970,584 5,084,404
Other current assets 1,199,683 979,333
--------- -------
Total current assets 13,878,251 12,229,172
Other assets 1,886,906 1,569,079
Intangible assets, net 1,837,365 1,991,497
Net property, plant and equipment 7,985,765 8,364,685
--------- ---------
Total Assets $25,588,287 $24,154,433
=========== ===========
Liabilities and Stockholders'
Equity
Total current liabilities $10,733,977 $6,761,481
Long-term debt, less current
maturities 991,721 4,719,542
Other non-current liabilities 401,618 406,544
Stockholders' equity 13,460,971 12,266,866
---------- ----------
Total Liabilities and Stockholders'
Equity $25,588,287 $24,154,433
=========== ===========
Consolidated Statements of Income
Three months ended
September 30
2010 2009
---- ----
(Unaudited) (Unaudited)
Product sales $16,612,215 $18,578,895
Handling & freight income 2,060,849 2,306,633
--------- ---------
Net Sales 18,673,064 20,885,528
Costs and expenses:
Cost of products sold 3,820,490 4,451,156
Distributor royalties and
commissions 7,011,217 7,907,856
Selling, general and
administrative 7,402,210 8,056,928
--------- ---------
Total Costs and Expenses 18,233,917 20,415,940
---------- ----------
Income from operations 439,147 469,588
Other income (expense):
Interest income 12,961 10,119
Interest expense (52,885) (62,195)
Other income 437 76,657
--- ------
Income before income taxes 399,660 494,169
Provision for income taxes 228,000 170,000
------- -------
Net Income $171,660 $324,169
======== ========
Earnings per common share -
Basic $0.01 $0.03
===== =====
Weighted average shares 12,380,000 12,230,000
Earnings per common share -
Diluted $0.01 $0.03
===== =====
Weighted average shares 12,380,000 12,230,000
Cash dividends declared per
common share $- $-
=== ===
Nine months ended
September 30
2010 2009
---- ----
(Unaudited) (Unaudited)
Product sales $53,559,074 $57,517,213
Handling & freight income 6,661,873 7,212,434
Net Sales 60,220,947 64,729,647
Costs and expenses:
Cost of products sold 12,093,367 12,800,809
Distributor royalties and
commissions 22,560,625 24,480,422
Selling, general and
administrative 23,486,389 24,725,653
---------- ----------
Total Costs and Expenses 58,140,381 62,006,884
---------- ----------
Income from operations 2,080,566 2,722,763
Other income (expense):
Interest income 35,334 45,538
Interest expense (159,336) (113,129)
Other income 21,592 202,747
------ -------
Income before income taxes 1,978,156 2,857,919
Provision for income taxes 854,000 1,112,000
------- ---------
Net Income $1,124,156 $1,745,919
========== ==========
Earnings per common share -
Basic $0.09 $0.13
===== =====
Weighted average shares 12,380,000 13,109,000
Earnings per common share -
Diluted $0.09 $0.13
===== =====
Weighted average shares 12,380,000 13,109,000
Cash dividends declared per
common share $0.02 $0.05
===== =====
Net sales by Market
(in thousands)
Three months ended September 30,
2010
% of
Amount sales
------ -----
United States $15,975 85.5%
Australia/New
Zealand 656 3.5%
Canada 505 2.7%
Mexico 320 1.7%
Europe 439 2.4%
Asia 778 4.2%
---
Consolidated total $18,673 100.0%
======= =====
Three months ended September 30,
2009
% of
Amount sales
------ -----
United States $18,262 87.4%
Australia/New
Zealand 620 3.0%
Canada 428 2.0%
Mexico 392 1.9%
Europe 314 1.5%
Asia 870 4.2%
Consolidated total $20,886 100.0%
======= =====
Change From
Prior Year
Amount %
------ ---
United States $(2,287) -12.5%
Australia/New
Zealand 36 5.8%
Canada 77 18.0%
Mexico (72) -18.4%
Europe 125 39.8%
Asia (92) -10.6%
Consolidated total $(2,213) -10.6%
======= =====
Net sales by Market
(in thousands)
Nine months ended September 30,
2010
% of
Amount sales
------ -----
United States $51,378 85.3%
Australia/New
Zealand 1,924 3.2%
Canada 1,634 2.7%
Mexico 1,107 1.9%
Europe 1,440 2.4%
Asia 2,738 4.5%
Consolidated total $60,221 100.0%
======= =====
Nine months ended September 30,
2009
% of
Amount sales
------ -----
United States $57,281 88.5%
Australia/New
Zealand 1,672 2.6%
Canada 1,076 1.7%
Mexico 1,018 1.6%
Europe 927 1.4%
Asia 2,756 4.2%
Consolidated total $64,730 100.0%
======= =====
Change From
Prior Year
Amount %
------ ---
United States $(5,903) -10.3%
Australia/New
Zealand 252 15.1%
Canada 558 51.9%
Mexico 89 8.7%
Europe 513 55.3%
Asia (18) -0.7%
Consolidated total $(4,509) -7.0%
======= ====
The following table sets forth, as of September 30, 2010 and 2009,
the number of our active distributors and Master Affiliates and
above. The total number of active distributors includes Master
Affiliates and above. We define an active distributor as one that
enrolls as a distributor or renews its distributorship during the
prior twelve months. Master Affiliates and above are distributors
that have attained the highest level of discount and are eligible
for royalties generated by Master Affiliates and above in their
downline organization. Growth in the number of active distributors
and Master Affiliates and above is a key factor in continuing the
growth of our business.
Active Distributors and Master Affiliates and above by Market
As of 9/30/2010
Master
Affiliates
Total Active and
Distributors Above
------------- ----------
United States 48,520 6,730
Australia/New
Zealand 2,410 200
Canada 1,390 180
Mexico 2,100 300
Europe 1,860 260
Asia 5,950 620
----- ---
Consolidated
total 62,230 8,290
====== =====
As of 9/30/2009
Master
Total Affiliates
Active and
Distributors Above
------------- ----------
United States 54,460 8,390
Australia/New
Zealand 2,490 190
Canada 1,190 120
Mexico 1,960 240
Europe 1,110 160
Asia 7,100 780
----- ---
Consolidated
total 68,310 9,880
====== =====
Change in %
Total Master
Active Affiliates
Distributors and Above
------------ ----------
United States -10.9% -19.8%
Australia/New
Zealand -3.2% 5.3%
Canada 16.8% 50.0%
Mexico 7.1% 25.0%
Europe 67.6% 62.5%
Asia -16.2% -20.5%
Consolidated
total -8.9% -16.1%
==== =====