CHESTERFIELD, Mo., Aug. 1, 2007 (PRIME NEWSWIRE) -- Reliv International, Inc. (Nasdaq:RELV), maker of a proprietary line of nutritional supplements, today reported net sales for the second quarter totaled $26.3 million, representing a 5.5 percent decline compared to the second quarter last year.
In the United States, second-quarter net sales were $23.3 million, down 7.0 percent compared to the second quarter 2006. International net sales rose to $3.0 million for the quarter, up 8.4 percent vs. the same quarter of 2006.
Net income for the quarter equaled $823,000, or $0.05 per diluted share, down 44 percent from the second quarter of 2006.
The number of new distributors increased 7 percent during the second quarter compared to the same quarter last year. This is the third straight quarter of increases in the number of new distributors, reflecting a strategy to focus on distributor growth.
"We are disappointed in our second-quarter performance," said Robert L. Montgomery, chairman, president and chief executive officer. "While we are pleased to see our distributor growth strategy take root as evidenced by an increase in our total distributor count, a smaller percentage of the new distributors are joining at the Master Affiliate level when compared to a year ago. This translates into a drop in the average size of initial orders," he said.
"We believe the resulting sales lag is temporary as we teach our newest distributors to build their business to the Master Affiliate level. Our new basic training addresses this issue, and we'll emphasize it at our International Conference next week. We remain confident that this long-term strategy will serve us well," Montgomery said.
"At the International Conference, we'll also introduce a new sales promotion with great potential to increase sales," he said.
Profit margins in the quarter were negatively affected by higher selling, general and administrative expenses.
"We are actively looking at additional ways to reduce costs," Montgomery said. "For instance, we are holding one fewer regional conference in the second half of 2007 than in the same period in 2006."
Reliv also should benefit in the last half of 2007 from the elimination of some costs faced in the second quarter that were not present in the year-ago quarter. Those included expenses for the Mega-Bonus program and the upcoming trip to Germany for top distributors.
For the first six months of 2007, Reliv reported an increase in net sales and sponsorship compared to the first half of 2006. Net sales rose 3.8 percent compared to the first half of last year, and sponsorship numbers for the first half increased 19.9 percent. In addition, sales outside of the United States increased 11.5 percent to $6.1 million.
Net income for the first half of 2007, however, decreased 15.4 percent to $3.4 million.
Reliv will host a conference call to discuss the second quarter 2007 earnings with investors at 1:00 p.m. Eastern Time on August 1, 2007. The dial-in number for investors is 800-599-9795. The participant passcode is 33968585. To register, please call in 15 minutes prior to start of the call. A replay of this call will be available for one week by telephone from 3:00 p.m. Eastern by calling 888-286-8010 and using the passcode 26109342. A live web cast of this call will be available through the Investor Relations section of Reliv's Web site, http://www.reliv.com/us/investor. An online archive of the broadcast will be available on Reliv's Web site in the Investor Relations section 24 hours after the call concludes.
Reliv International, Inc., based in suburban St. Louis, Mo., develops, manufactures and markets a proprietary line of nutritional supplements addressing basic nutrition, specific wellness needs, weight management and sports nutrition. Reliv sells its products through an international network marketing system of approximately 69,000 independent distributors. Additional information about Reliv International, Inc. can be obtained on the Web at http://www.reliv.com.
Statements made in this 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 Reliv's web site, http://www.reliv.com.
Reliv International, Inc. and Subsidiaries
ADD ONE
Condensed Consolidated Balance Sheets
June 30 December 31
2007 2006
------------------------
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 5,482,699 $ 9,332,810
Short-term investments 6,934,592 7,864,000
Accounts and notes receivable, less
allowances of $6,300 in 2007 and
$6,200 in 2006 797,971 669,379
Accounts due from employees and
distributors 329,264 223,246
Inventories 5,739,689 4,778,221
Other current assets 3,007,491 1,977,522
------------------------
Total current assets 22,291,706 24,845,178
Other assets 3,003,463 2,639,537
Accounts due from employees and
distributors 386,675 362,959
Net property, plant and equipment 9,550,203 9,434,546
------------------------
Total Assets $35,232,047 $37,282,220
========================
Liabilities and Stockholders' Equity
Total current liabilities $ 9,963,468 $ 8,615,256
Total non-current liabilities 1,164,077 933,113
Stockholders' equity 24,104,502 27,733,851
------------------------
Total Liabilities and Stockholders'
Equity $35,232,047 $37,282,220
========================
Consolidated Statements of Income
------------------------ ------------------------
Three months ended Six months ended
June 30 June 30
2007 2006 2007 2006
------------------------ ------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Product sales $23,550,919 $24,990,986 $54,948,885 $53,032,320
Handling & freight
income 2,773,618 2,858,082 6,339,296 6,012,100
------------------------ ------------------------
Net Sales 26,324,537 27,849,068 61,288,181 59,044,420
Costs and expenses:
Cost of
products sold 4,398,940 4,722,823 10,460,332 9,805,004
Distributor
royalties and
commissions 10,602,827 11,156,285 24,531,390 23,783,317
Selling,
general and
administrative 10,199,831 9,484,876 21,229,680 18,951,617
------------------------ ------------------------
Total Costs and
Expenses 25,201,598 25,363,984 56,221,402 52,539,938
------------------------ ------------------------
Income from
operations 1,122,939 2,485,084 5,066,779 6,504,482
Other income
(expense):
Interest income 163,514 197,446 376,116 282,122
Interest expense (447) (11,026) (573) (45,467)
Other income 98,305 37,883 195,238 98,519
------------------------ ------------------------
Income before
income taxes 1,384,311 2,709,387 5,637,560 6,839,656
Provision for
income taxes 561,000 1,089,000 2,194,000 2,769,000
------------------------ ------------------------
Net Income $ 823,311 $ 1,620,387 $ 3,443,560 $ 4,070,656
======================== ========================
Earnings per
common share -
Basic $ 0.05 $ 0.10 $ 0.21 $ 0.25
======================== ========================
Weighted average
shares 16,135,000 16,667,000 16,282,000 16,121,000
======================== ========================
Earnings per
common share -
Diluted $ 0.05 $ 0.09 $ 0.21 $ 0.25
======================== ========================
Weighted average
shares 16,308,000 17,106,000 16,453,000 16,554,000
======================== ========================
Cash dividends
declared per
common share $ 0.05 $ 0.05 $ 0.05 $ 0.05
======================== ========================
Reliv International, Inc. and Subsidiaries
ADD TWO
The following tables summarize net sales by geographic market ranked
by the date we began operations in each market.
Net sales by Market
(in thousands)
Three months ended June 30,
2007 2006 Change From
% of % of Prior Year
Amount sales Amount sales Amount %
--------------- --------------- --------------
United States 23,303 88.5% 25,061 90.0% (1,758) -7.0%
Australia/New
Zealand 722 2.7% 576 2.1% 146 25.3%
Canada 378 1.4% 412 1.5% (34) -8.3%
Mexico 393 1.5% 314 1.1% 79 25.2%
United Kingdom/
Ireland 252 1.0% 319 1.1% (67) -21.0%
Philippines 671 2.6% 514 1.9% 157 30.5%
Malaysia/Singapore 424 1.6% 457 1.6% (33) -7.2%
Germany 182 0.7% 196 0.7% (14) -7.1%
--------------- --------------- --------------
Consolidated Total 26,325 100.0% 27,849 100.0% (1,524) -5.5%
=============== =============== ==============
Net sales by Market
(in thousands)
Six months ended June 30,
2007 2006 Change From
% of % of Prior Year
Amount sales Amount sales Amount %
--------------- --------------- --------------
United States 55,206 90.1% 53,592 90.8% 1,614 3.0%
Australia/New
Zealand 1,375 2.3% 1,155 2.0% 220 19.0%
Canada 818 1.3% 820 1.4% (2) -0.2%
Mexico 804 1.3% 643 1.1% 161 25.0%
United Kingdom/
Ireland 539 0.9% 592 1.0% (53) -9.0%
Philippines 1,299 2.1% 1,007 1.7% 292 29.0%
Malaysia/Singapore 754 1.2% 915 1.5% (161) -17.6%
Germany 493 0.8% 320 0.5% 173 54.1%
--------------- --------------- --------------
Consolidated Total 61,288 100.0% 59,044 100.0% 2,244 3.8%
=============== =============== ==============
The following table sets forth, as of June 30, 2007 and 2006, 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 6/30/2007 As of 6/30/2006 Change in %
Master Master Master
Active Affil- Active Affil- Active Affil-
Distrib- iates Distrib- iates Distrib- iates
utors and utors and utors and
Above Above Above
--------------- --------------- --------------
United States 56,930 13,200 52,270 14,160 8.9% -6.8%
Australia/New
Zealand 2,510 280 2,380 210 5.5% 33.3%
Canada 1,130 150 1,150 160 -1.7% -6.3%
Mexico 1,300 190 1,180 200 10.2% -5.0%
United Kingdom/
Ireland 830 130 870 140 -4.6% -7.1%
Philippines 3,990 300 3,320 300 20.2% 0.0%
Malaysia/Singapore 2,260 290 3,020 400 -25.2% -27.5%
Germany 520 150 260 90 100.0% 66.7%
--------------- --------------- --------------
Consolidated total 69,470 14,690 64,450 15,660 7.8% -6.2%
=============== =============== ==============