CHESTERFIELD, Mo., Aug. 1, 2013 (GLOBE NEWSWIRE) -- Reliv International, Inc. (Nasdaq:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2013.
Net sales for the quarter were $15.4 million, an 8.1 percent decrease from the second quarter last year. Net U.S. sales totaled $11.8 million, down from second-quarter 2012 net sales of $12.9 million. Net sales outside of the United States declined 6.3 percent in the second quarter of 2013 compared to the prior-year quarter as net sales declined by 46.5 percent in Asia, offset by sales increases of 12.6 percent in Europe and 9.2 percent in Australia/New Zealand.
The net loss for the second quarter of 2013 was ($214,000) or ($0.02) per diluted share, compared to net income of $103,000 or $0.01 per diluted share in the 2012 second quarter.
Net sales in Europe increased to $1.96 million in the second quarter of 2013 compared to $1.74 in the prior-year second quarter. "Europe continues to lead all overseas areas in growth as Reliv added France as our 16th market in May," said Robert L. Montgomery, chairman and chief executive officer of Reliv. "We anticipate continued growth and are investing in our leadership and resources in Europe."
Australia/New Zealand increased net sales to $524,000 in the second quarter of 2013 compared to $480,000 in the same quarter in 2012. "We introduced a new pricing structure and a preferred customer program in this region in an effort to spur growth," Montgomery said. "We implemented similar initiatives in Asia, including new leadership in senior management positions, and I believe these initiatives will lead to a positive turnaround in these markets as well."
Overall, the reduction in profitability is due to the decline in worldwide sales. Selling, general and administrative expenses increased in 2013 due to a long-term performance-based compensation agreement with Reliv's European managers that began accruing in the fourth quarter of 2012. Reliv recorded expense of $156,000 in the current quarter and $201,000 for the year-to-date related to the agreement. In addition, unfavorable foreign currency exchange rate fluctuations totaled $68,000 in the quarter due to a strengthening U.S. dollar.
In July 2013, Reliv entered into a license agreement with Soy Labs, LLC to secure exclusive rights to certain intellectual property related to lunasin, a dietary ingredient that promotes optimal health at the epigenetic level. The license covers an issued patent and several patent applications related to lunasin and soy-related peptides, proprietary information, and manufacturing processes of Soy Labs, LLC.
"Part of our long-term sales and marketing strategy worldwide is to position Reliv to benefit from the growing popularity of epigenetics," Montgomery said. "The science of epigenetics is now hitting mainstream media and we believe nutritional epigenetics will soon follow. Our license of the intellectual property related to the commercialization of lunasin positions Reliv as industry leader in this emerging field of study."
"Our LunaRich product line, which optimizes lunasin levels, has energized our distributor force and shown significant potential for sales growth," he added. "Reliv Now® with LunaRich has become our top seller, comprising 18.4 percent of net sales in the United States in the second quarter 2013, while LunaRich X™, launched in January 2013, accounted for 8.5 percent of second quarter 2013 net sales in the United States. For the first time Reliv now controls an ingredient in its entirety, from the proprietary extraction process to the patented mechanisms of action within the body. I believe this places Reliv in a unique position in the industry and provides an opportunity for growth."
Net sales for the first six months of 2013 were $34.3 million, which represents a 6.1 percent decrease from the same period in 2012. Reliv's international net sales declined 6.0 percent in the first half of 2013 compared with the first half of last year. In the United States, net sales declined 6.2 percent. Reliv reported a net loss of ($19,000), or ($0.00) per diluted share in the first six months of 2013, compared to net income of $635,000 or $0.05 per diluted share in the same period of 2012.
Reliv's total distributor count was 53,390 as of June 30, 2013 – a decrease of 9.9 percent from the same date in 2012 – of which 5,910 are Master Affiliate level and above. The number of Master Affiliates decreased by 7.9 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 $4.26 million as of June 30, 2013, a decrease of $1.25 million over the same date last year.
About Reliv International, Inc.
Reliv International, Inc., 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 16 countries. Learn more about Reliv at www.reliv.com, or on Facebook, Twitter or YouTube.
Statements made in this news release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" or similar expressions. Factors that could cause actual results to differ are identified in the public filings made by Reliv with the Securities and Exchange Commission. More information on factors that could affect Reliv's business and financial results are included in its public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available on the Company's web site, www.reliv.com.
– FINANCIAL HIGHLIGHTS FOLLOW –
| Reliv International, Inc. and Subsidiaries | ||||
| ADD TWO | ||||
| Condensed Consolidated Balance Sheets | ||||
| June 30 | December 31 | |||
| 2013 | 2012 | |||
| (Unaudited) | ||||
| Assets | ||||
| Current Assets: | ||||
| Cash and cash equivalents | $4,255,963 | $5,801,042 | ||
| Accounts receivable, less allowances of $32,000 in 2013 and $35,700 in 2012 | 172,899 | 247,087 | ||
| Accounts and notes due from employees and distributors | 141,372 | 109,346 | ||
| Inventories | 5,582,010 | 5,262,916 | ||
| Other current assets | 1,770,872 | 1,070,301 | ||
| Total current assets | 11,923,116 | 12,490,692 | ||
| Other assets | 4,450,630 | 4,212,442 | ||
| Intangible assets, net | 1,366,630 | 1,443,635 | ||
| Net property, plant and equipment | 6,875,143 | 7,111,772 | ||
| Total Assets | $24,615,519 | $25,258,541 | ||
| Liabilities and Stockholders' Equity | ||||
| Total current liabilities | $6,363,528 | $6,614,631 | ||
| Long-term debt, less current maturities | 2,194,129 | 2,401,312 | ||
| Other non-current liabilities | 796,162 | 660,728 | ||
| Stockholders' equity | 15,261,700 | 15,581,870 | ||
| Total Liabilities and Stockholders' Equity | $24,615,519 | $25,258,541 | ||
| Consolidated Statements of Operations | ||||
| Three months ended June 30 | Six months ended June 30 | |||
| 2013 | 2012 | 2013 | 2012 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Product sales | $14,165,463 | $14,894,640 | $31,054,921 | $32,509,480 |
| Handling & freight income | 1,259,945 | 1,886,064 | 3,227,751 | 4,014,868 |
| Net Sales | 15,425,408 | 16,780,704 | 34,282,672 | 36,524,348 |
| Costs and expenses: | ||||
| Cost of products sold | 3,057,940 | 3,220,860 | 6,961,798 | 7,121,441 |
| Distributor royalties and commissions | 5,617,245 | 6,319,613 | 12,620,448 | 13,774,773 |
| Selling, general and administrative | 6,972,599 | 7,021,658 | 14,488,088 | 14,495,904 |
| Total Costs and Expenses | 15,647,784 | 16,562,131 | 34,070,334 | 35,392,118 |
| Income (loss) from operations | (222,376) | 218,573 | 212,338 | 1,132,230 |
| Other income (expense): | ||||
| Interest income | 38,668 | 40,863 | 75,832 | 50,177 |
| Interest expense | (18,493) | (31,295) | (35,995) | (62,214) |
| Other income (expense) | (64,544) | (38,564) | (91,119) | (61,232) |
| Income (loss) before income taxes | (266,745) | 189,577 | 161,056 | 1,058,961 |
| Provision (benefit) for income taxes | (53,000) | 87,000 | 180,000 | 424,000 |
| Net Income (loss) | ($213,745) | $102,577 | ($18,944) | $634,961 |
| Earnings (loss) per common share - Basic | ($0.02) | $0.01 | ($0.00) | $0.05 |
| Weighted average shares | 12,616,000 | 12,507,000 | 12,617,000 | 12,499,000 |
| Earnings (loss) per common share - Diluted | ($0.02) | $0.01 | ($0.00) | $0.05 |
| Weighted average shares | 12,708,000 | 12,678,000 | 12,707,000 | 12,658,000 |
| Cash dividends declared per common share | $0.02 | $0.02 | $0.02 | $0.02 |
| Reliv International, Inc. and Subsidiaries | ||||||
| ADD THREE | ||||||
| Net sales by Market | ||||||
| (in thousands) | ||||||
| Three months ended June 30, | Change From | |||||
| 2013 | 2012 | Prior Year | ||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | |
| United States | $ 11,828 | 76.7% | $ 12,943 | 77.1% | $ (1,115) | -8.6% |
| Australia/New Zealand | 524 | 3.4% | 480 | 2.9% | 44 | 9.2% |
| Canada | 372 | 2.4% | 439 | 2.6% | (67) | -15.3% |
| Mexico | 256 | 1.7% | 271 | 1.6% | (15) | -5.5% |
| Europe | 1,960 | 12.7% | 1,741 | 10.4% | 219 | 12.6% |
| Asia | 485 | 3.1% | 907 | 5.4% | (422) | -46.5% |
| Consolidated total | $ 15,425 | 100.0% | $ 16,781 | 100.0% | $ (1,356) | -8.1% |
| Net sales by Market | ||||||
| (in thousands) | ||||||
| Six months ended June 30, | Change From | |||||
| 2013 | 2012 | Prior Year | ||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | |
| United States | $ 26,938 | 78.6% | $ 28,713 | 78.6% | $ (1,775) | -6.2% |
| Australia/New Zealand | 973 | 2.8% | 1,020 | 2.8% | (47) | -4.6% |
| Canada | 926 | 2.7% | 989 | 2.7% | (63) | -6.4% |
| Mexico | 534 | 1.6% | 558 | 1.6% | (24) | -4.3% |
| Europe | 3,979 | 11.6% | 3,335 | 9.1% | 644 | 19.3% |
| Asia | 933 | 2.7% | 1,909 | 5.2% | (976) | -51.1% |
| Consolidated total | $ 34,283 | 100.0% | $ 36,524 | 100.0% | $ (2,241) | -6.1% |
| The following table sets forth, as of June 30, 2013 and 2012, 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. | ||||||
| Active Distributors and Master Affiliates and above by Market | ||||||
| As of 6/30/2013 | As of 6/30/2012 | Change in % | ||||
| Total Active Distributors | Master Affiliates and Above | Total Active Distributors | Master Affiliates and Above | Total Active Distributors | Master Affiliates and Above | |
| United States | 38,860 | 4,180 | 42,080 | 4,790 | -7.7% | -12.7% |
| Australia/New Zealand | 1,570 | 200 | 1,940 | 130 | -19.1% | 53.8% |
| Canada | 1,260 | 180 | 1,320 | 200 | -4.5% | -10.0% |
| Mexico | 1,150 | 130 | 1,800 | 150 | -36.1% | -13.3% |
| Europe | 6,490 | 780 | 6,020 | 600 | 7.8% | 30.0% |
| Asia | 4,060 | 440 | 6,070 | 550 | -33.1% | -20.0% |
| Consolidated total | 53,390 | 5,910 | 59,230 | 6,420 | -9.9% | -7.9% |