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Reliv International Reports Third-Quarter Results
CHESTERFIELD, Mo., Oct. 29, 2009 – Reliv International, Inc. (NASDAQ:RELV), a nutrition and direct selling company, today reported third-quarter net sales of $20.9 million vs. $23.9 million in the same quarter of 2008.
Net income was $324,000 vs. $536,000 in the 2008 third quarter, and earnings per diluted share were $0.03 compared to $0.04 in the same quarter last year.
In the United States, net sales totaled $18.3 million compared to $20.8 million in the third quarter of 2008. Net sales outside of the U.S. declined by approximately 14 percent. Excluding the impact of foreign currency fluctuations, however, the decline in foreign sales was about 5 percent.
Reliv also announced that it is reducing its dividend from $0.05 per share to $0.02 per share. For 2009, Reliv’s annual dividend will be $0.07 rather than $0.10 per share.
“Despite the decline in our performance compared to last year’s third quarter, we saw glimmers of light that we hope will shine brighter as we move into 2010,” said Robert L. Montgomery, chairman, president and chief executive officer. “We achieved a five percent increase in the number of new distributors along with an increase in the number of orders this quarter over the third quarter of 2008,” he said.
“This year we also reported a sequential increase in net sales from the second quarter to the third quarter for the first time since 2006,” Montgomery said. “In addition, the number of orders and the size of the average order are up sequentially.”
“The highlight of the third quarter was our international conference in St. Louis, where we introduced a new line of products under the Relivables name as well as a number of new business tools for distributors. All have been well received,” Montgomery said.
For the first nine months of 2009, net sales totaled $64.7 million, down about 15 percent compared to the same period last year. U.S. sales decreased approximately 13 percent, while sales outside of the U.S. were down about 27 percent. Excluding foreign currency fluctuations, foreign sales were down 13.5 percent.
Net income for the first three quarters of this year equaled $1.7 million compared to $2.6 million for the first three quarters of 2008. Diluted earnings per share for the period equaled $0.13, down from diluted earnings per share of $0.17 for the first nine months of last year.
Reliv generated cash from operating activities of $4.8 million during the first nine months of 2009, an increase of approximately 34 percent over cash generated from operations during the same period last year. Reducing inventory levels was a key factor in the increase.
“In the fourth quarter, we are continuing a series of special events called the Financial Freedom Tour, launched earlier this year, in which we highlight the Reliv business opportunity. We expect to share the opportunity with a couple of thousand existing and potential distributors between October and November through these events,” Montgomery said.
Dividend reduction
Commenting on the reduction in Reliv’s dividend, Steven D. Albright, senior vice president and chief financial officer, said, “This is a difficult decision but we’re confident it’s the right one for Reliv. With profits down, we can invest the cost savings from the dividend to strengthen our business overall,”
The dividend will be paid to all shareholders of record as of Nov. 9, 2009, to be paid on or about Nov. 19, 2009.
Reliv will host a conference call to discuss third-quarter earnings with investors. The conference call will be on October 29, 2009 at 1:00 p.m. Eastern. The dial-in number is 866-272-9941. The participant passcode is 10757749. A replay will be available for one week at 888-286-8010 using the passcode 37679647. A live webcast is available on the Investor Relations section of Reliv’s Web site at:
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
Reliv International, Inc., based in Chesterfield, Mo., is a developer, manufacturer and marketer of a proprietary line of nutritional supplements. Reliv supplements address essential daily nutrition, weight loss and targeted solutions such as energy and performance enhancement, digestive health, women’s health and anti-aging. Reliv sells its products through an international network marketing system of approximately 68,000 independent distributors. Additional information about Reliv International, Inc. can be obtained on the Web at www.reliv.com.
Reliv International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
September 30 December 31
2009 2008
------------ -----------
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $6,422,451 $4,460,637
Accounts and notes receivable, less
allowances of $16,000 in 2009 and
$10,200 in 2008 339,230 494,689
Accounts due from employees and
distributors 107,327 241,532
Inventories 5,049,939 6,221,954
Other current assets 1,275,831 2,176,802
--------- ---------
Total current assets 13,194,778 13,595,614
Other assets 3,583,601 1,220,546
Accounts due from employees and
distributors - 164,462
Net property, plant and equipment 8,572,327 8,912,157
--------- ---------
Total Assets $25,350,706 $23,892,779
=========== ===========
Liabilities and Stockholders' Equity
Total current liabilities $8,810,776 $7,350,199
Total non-current liabilities 5,262,896 434,990
Stockholders' equity 11,277,034 16,107,590
---------- ----------
Total Liabilities and Stockholders'
Equity $25,350,706 $23,892,779
=========== ===========
Consolidated Statements of Income
------------------ -----------------
Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Product sales $18,578,895 $21,226,975 $57,517,213 $67,719,727
Handling & freight
income 2,306,633 2,633,832 7,212,434 8,372,176
--------- --------- --------- ---------
Net Sales 20,885,528 23,860,807 64,729,647 76,091,903
Costs and expenses:
Cost of products sold 4,451,156 4,464,874 12,800,809 13,410,310
Distributor royalties
and commissions 7,907,856 9,320,880 24,480,422 29,865,734
Selling, general and
administrative 8,056,928 8,950,900 24,725,653 28,472,176
--------- --------- ---------- ----------
Total Costs and
Expenses 20,415,940 22,736,654 62,006,884 71,748,220
---------- ---------- ---------- ----------
Income from operations 469,588 1,124,153 2,722,763 4,343,683
Other income
(expense):
Interest income 10,119 64,329 45,538 299,893
Interest expense (62,195) (21,011) (113,129) (31,405)
Other income (expense) 76,657 (211,550) 202,747 (229,139)
------ -------- ------- --------
Income before income
taxes 494,169 955,921 2,857,919 4,383,032
Provision for income
taxes 170,000 420,000 1,112,000 1,752,000
------- ------- --------- ---------
Net Income $324,169 $535,921 $1,745,919 $2,631,032
======== ======== ========== ==========
Earnings per common
share - Basic $0.03 $0.04 $0.13 $0.17
===== ===== ===== =====
Weighted average
shares 12,230,000 14,806,000 13,109,000 15,498,000
========== ========== ========== ==========
Earnings per common
share - Diluted $0.03 $0.04 $0.13 $0.17
===== ===== ===== =====
Weighted average
shares 12,230,000 14,810,000 13,109,000 15,502,000
========== ========== ========== ==========
Cash dividends
declared per common
share $- $- $0.05 $0.05
=== === ===== =====
Net sales by Market
(in thousands)
Three months ended Change From
September 30, Prior Year
2009 2008
Amount % of sales Amount % of sales Amount %
------ ---------- ------ ---------- ------ ---
United States 18,262 87.4% 20,814 87.2% (2,552) -12.3%
Australia/New
Zealand 620 3.0% 667 2.8% (47) -7.0%
Canada 428 2.0% 404 1.7% 24 5.9%
Mexico 392 1.9% 389 1.6% 3 0.8%
Europe 314 1.5% 322 1.4% (8) -2.5%
Asia 870 4.2% 1,265 5.3% (395) -31.2%
--- --- ----- --- ---- -----
Consolidated
total 20,886 100.0% 23,861 100.0% (2,975) -12.5%
====== ===== ====== ===== ====== =====
Net sales by Market
(in thousands)
Nine months ended Change From
September 30, Prior Year
2009 2008
Amount % of sales Amount % of sales Amount %
------ ---------- ------ ---------- ------ ---
United States 57,281 88.5% 65,934 86.6% (8,653) -13.1%
Australia/New
Zealand 1,672 2.6% 2,096 2.8% (424) -20.2%
Canada 1,076 1.7% 1,301 1.7% (225) -17.3%
Mexico 1,018 1.6% 1,269 1.7% (251) -19.8%
Europe 927 1.4% 1,226 1.6% (299) -24.4%
Asia 2,756 4.2% 4,266 5.6% (1,510) -35.4%
----- --- ----- --- ------ -----
Consolidated
total 64,730 100.0% 76,092 100.0% (11,362) -14.9%
====== ===== ====== ===== ======= =====
