Reliv International Reports First-Quarter 2010 Results
Press Release Source: Reliv International, Inc. On Thursday April 29, 2010, 6:45 am EDT
CHESTERFIELD, Mo., April 29 /PRNewswire-FirstCall/ -- Reliv International, Inc. (Nasdaq:RELV), a nutrition and direct selling company, today reported that sales and earnings in the first-quarter of 2010 were below last year's first-quarter results, but sales outside of the United States rose during the period.
Net sales were $22.7 million, a decline of 4.5 percent from the first quarter of 2009. U.S. sales declined 9.0 percent. International sales rose 36.1 percent, with approximately half of the increase due to currency fluctuations.
Net income was $746,000 for the quarter, or $0.06 per diluted share, compared to $1.0 million in net income, or $0.07 per diluted share, in the same quarter last year.
Robert L. Montgomery, chairman, president and chief executive officer, said, "International sales were a bright spot this quarter, increasing approximately 19 percent excluding the effect of currency fluctuations. Our U.S. distributors and customers, however, are still feeling the effects of the recession, as their spending remains below last year's levels. The rate of the sales decline, however, has moderated compared to previous years' declines."
Montgomery described several tactics designed to increase sales. "We are currently conducting the Reliv 'Freedom Tour' in which senior executives will visit our 35 top U.S. markets. We hope to spur new-distributor enrollments and encourage existing distributors to expand their businesses more quickly," Montgomery said.
"In the first quarter, we launched the Team Reliv concept in which distributors will sponsor running events in their hometowns," he said. "The events give participants an opportunity to sample Innergize, our isotonic sports product, and give our distributors a means of generating leads. This is part of a strategy to attract younger distributors to Reliv and to increase our brand awareness by emphasizing the role of Reliv supplements in a healthy, active lifestyle," Montgomery said.
Reliv also introduced three new Relivables products during the first quarter, including Relivables Soy Nuts, Relivables snack bars and "r" body lotion.
One factor in the overall sales decline has been a reduction in the size of the average order. "Over the last two years, the number of orders has remained relatively steady, which indicates a solid customer base," Montgomery said. "We believe the recession, therefore, is the main culprit leading to lower average order sizes."
He added, "Our total distributor count declined from last year, mainly due to a slow January and February this year. In the first quarter of last year, enrollments were very strong due in part to a special promotion that wasn't in place in the first quarter of 2010. March 2010 enrollments, however, were back to our historical levels," he said.
Reliv generated net cash from operating activities of $1.6 million in the first quarter, less than the $2.8 million in net cash generated in the first quarter of 2009. As of March 31, 2010, Reliv had cash and cash equivalents of $7.2 million, up slightly from $7.0 million on hand as of the same date in 2009.
He added, "Reliv was founded on the premise that we make nutrition simple. We offer outstanding products that are based on the latest scientific research. In addition, we provide an affordable business opportunity for individuals who want to start a home-based business."
Reliv will host a conference call to discuss first-quarter earnings with investors. The conference call will be on April 29, 2010 at 1:00 p.m. Eastern. The dial-in number is 866-730-5767. The participant passcode is 70492527. A replay will be available for one week at 888-286-8010 using the passcode 61922212.
A live webcast is available on the Investor Relations section of Reliv's Web site at: http://www.reliv.com/US/EN/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 the 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 66,000 independent distributors. Additional information about Reliv International, Inc. can be obtained on the Web at http://www.reliv.com/.
Consolidated Balance Sheets
March 31 December 31
2010 2009
---------- ----------
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $7,150,487 $5,760,913
Accounts and notes receivable, less allowances of
$62,000 in 2010 and $59,700 in 2009 322,815 326,022
Accounts due from employees and distributors 74,519 78,500
Inventories 5,199,175 5,084,404
Other current assets 1,498,316 979,333
---------- ----------
Total current assets 14,245,312 12,229,172
Other assets 3,815,186 3,560,576
Net property, plant and equipment 8,212,847 8,364,685
---------- -----------
Total Assets $26,273,345 $24,154,433
=========== ===========
Liabilities and Stockholders' Equity
Total current liabilities $8,172,793 $6,761,481
Long-term debt, less current maturities 4,585,874 4,719,542
Other non-current liabilities 406,120 406,544
Stockholders' equity 13,108,558 12,266,866
---------- -----------
Total Liabilities and Stockholders' Equity $26,273,345 $24,154,433
=========== ===========
Consolidated Statements of Operations
Three months ended March 31
2010 2009
---------- ----------
(Unaudited) (Unaudited)
Product sales $20,257,680 $21,166,181
Handling & freight income 2,469,571 2,624,809
---------- ----------
Net Sales 22,727,251 23,790,990
Costs and expenses:
Cost of products sold 4,556,382 4,575,751
Distributor royalties and commissions 8,480,076 8,937,667
Selling, general and administrative 8,543,450 8,617,873
---------- ----------
Total Costs and Expenses 21,579,908 22,131,291
---------- ----------
Income from operations 1,147,343 1,659,699
Other income (expense):
Interest income 9,526 20,715
Interest expense (51,676) (9,550)
Other income 57,283 12,055
---------- ----------
Income before income taxes 1,162,476 1,682,919
Provision for income taxes 416,000 671,000
---------- ----------
Net Income $746,476 $1,011,919
========== ==========
Earnings per common share - Basic $0.06 $0.07
========== ==========
Weighted average shares 12,380,000 14,299,000
========== ==========
Earnings per common share - Diluted $0.06 $0.07
Weighted average shares 12,380,000 14,299,000
Cash dividends declared per common share $ - $ -
========== ==========
Net sales by
Market
(in
thousands) Three months ended March 31, Change from
2010 2009 prior year
% of Net % of Net
Amount Sales Amount Sales Amount %
---------------- ---------------- ----------------
United States 19,448 85.6% 21,381 89.9% (1,933) -9.0%
Australia/New
Zealand 727 3.2% 516 2.1% 211 40.9%
Canada 587 2.6% 336 1.4% 251 74.7%
Mexico 394 1.7% 281 1.2% 113 40.2%
Europe 420 1.8% 308 1.3% 112 36.4%
Asia 1,151 5.1% 969 4.1% 182 18.8%
---------------- ---------------- ----------------
Consolidated
Total 22,727 100.0% 23,791 100.0% (1,064) -4.5%
================ ================ ================
The following table sets forth, as of March 31, 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 3/31/2010 As of 3/31/2009 Change in %
Master Master Master
Active Affiliates Active Affiliates Active Affiliates
Distributors and Above Distributors and Above Distributors and Above
------------------------ ------------------------ ------------------------
United States 52,010 6,070 54,440 7,490 -4.5% -19.0%
Australia/New
Zealand 2,530 190 2,440 180 3.7% 5.6%
Canada 1,310 140 1,250 110 4.8% 27.3%
Mexico 2,290 220 1,700 200 34.7% 10.0%
Europe 1,350 180 1,080 140 25.0% 28.6%
Asia 6,540 590 7,770 880 -15.8% -33.0%
------------------------ ------------------------ ------------------------
Consolidated
Total 66,030 7,390 68,680 9,000 -3.9% -17.9%
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