Natural Health Trends Corp. Announces Third Quarter and Nine Months 2007 Results

DALLAS, TX--(Marketwire - November 14, 2007) - Natural Health Trends Corp. (NASDAQ: BHIP) today announced its financial results for the quarter ended September 30, 2007.

Sales in the third quarter of 2007 were $16.8 million, compared to $29.9 million and $25.2 million for the third quarter a year ago and the second quarter of 2007, respectively. Changes in the Hong Kong-based sales accounted for most of the decrease year-on-year and quarter-over-quarter.

As of September 30, 2007, the Company had 67,000 active distributors, compared to 103,000 and 75,000 active distributors at the end of the third quarter of 2006 and at the end of the second quarter of 2007, respectively. The Company considers a distributor "active" if they have placed at least one product order during the preceding year.

For the third quarter of 2007, the Company incurred a net loss of $3.5 million, compared to a net loss of $2.5 million a year ago in the comparable quarter, and a net loss of $1.5 million in the prior quarter. Loss applicable to common stockholders for the third quarter of 2007 was $0.43 per share, compared to a loss of $0.30 per share a year ago in the comparable quarter, and a loss of $0.37 per share in the prior quarter.

As of September 30, 2007, the Company's cash and cash equivalents totaled $6.2 million, including $1.1 million in China that may not be freely transferable to other countries because the Company's Chinese subsidiary is subject to a business license capitalization requirement.

Chris Sharng, the Company's President, said, "The sales decrease was attributable to several factors. First of all, our Chinese members, in coordination with the Company, self-imposed a quiet period during July and August, which then continued into September, as Chinese regulatory authorities were said to have begun a period of more aggressive enforcement against illegitimate sales operations. Our members did not want to be inadvertently confused for or associated with companies operating illegitimately. Therefore, we had minimal marketing activities during the third quarter. In addition, we had to manage certain changes that we initiated just prior to and during the third quarter. These changes included a commission enhancement program that allows new distributors to receive commissions more quickly, while providing overall margin improvement to the Company. We also began an aggressive restructuring that continued through November to reduce operating costs."

Mr. Sharng continued, "As a result of all these factors occurring simultaneously, sales initially decreased and currently are leveling out as we enter in the fourth quarter. We are working with our leaders in Greater China to develop an active marketing calendar in the fourth quarter, with a grand opening of the Chinese e-commerce business in the works. Our Greater Chinese leaders are fully committed to the business, and we are optimistic about the future of this key market. In addition, the October 27th European grand opening event was a great success and generated good momentum in that market. Also, we are continuing the significant restructuring of our world-wide organization, targeting to reduce our total headcount by about 30% from 233 employees to approximately 160 employees by year end, expecting an estimated annualized personnel cost savings of roughly $4.0 million. Furthermore, the full anticipated benefits from our commission plan enhancement are expected to be attained in the first quarter of 2008."

The Company plans to host a conference call in the next few days and will issue a separate notice for the call.

About Natural Health Trends Corp.

Natural Health Trends Corp. is an international direct-selling and e-commerce company operating through its subsidiaries in Asia, North America, Europe and Latin America. The Company markets premium quality personal care products under the NHT Global brand. Additional information can be found on the Company's website, and management encourages interested parties to register for updated corporate information via email on the Company's home page, www.naturalhealthtrendscorp.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption "Risk Factors" in our Amendment No. 2 to Registration Statement on Form S-3 filed on August 24, 2007 with the Securities and Exchange Commission and our Quarterly Report on Form 10-Q filed on November 14, 2007, with the Securities and Exchange Commission. We assume no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

                 NATURAL HEALTH TRENDS CORP.

                 CONSOLIDATED BALANCE SHEETS
              (In Thousands, Except Share Data)


                                                    December    September
                                                    31, 2006     30, 2007
                                                  -----------  -----------
                                                               (Unaudited)
ASSETS
Current assets:
  Cash and cash equivalents                       $    11,936  $     6,199
  Restricted cash                                         455          395
  Certificates of deposit                               1,277            -
  Accounts receivable                                     462          522
  Inventories, net                                      5,857        5,048
  Other current assets                                  2,639        1,606
                                                  -----------  -----------
Total current assets                                   22,626       13,770
Property and equipment, net                             2,944        1,973
Goodwill                                               14,145       14,145
Intangible assets, net                                  3,400        2,800
Restricted cash                                         4,142        4,911
Deferred tax assets                                       208          213
Other assets                                            1,120          952
                                                  -----------  -----------
Total assets                                      $    48,585  $    38,764
                                                  ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                $     3,424  $     3,389
  Income taxes payable                                    281          458
  Accrued distributor commissions                       3,852        2,121
  Other accrued expenses                                5,255        4,806
  Deferred revenue                                      5,641        4,272
  Other current liabilities                             3,135        3,115
                                                  -----------  -----------
Total current liabilities                              21,588       18,161
Commitments and contingencies
Minority interest                                          22           31
Stockholders' equity:
    Preferred stock, $0.001 par value, 5,000,000
     shares authorized; 1,761,900 shares
     designated Series A convertible preferred
     stock, 1,431,075 shares issued and
     outstanding at September 30, 2007, aggregate
     liquidation value of $2,503 at September 30,
     2007                                                   -        1,280
    Common stock, $0.001 par value, 50,000,000
     shares authorized, 8,199,933 and 8,802,674
     shares issued and outstanding at December
     31, 2006 and September 30, 2007                        8            9
    Additional paid-in capital                         70,042       73,656
    Accumulated deficit                               (44,128)     (55,696)
    Accumulated other comprehensive income:
      Foreign currency translation adjustment           1,053        1,323
                                                  -----------  -----------
Total stockholders' equity                             26,975       20,572
                                                  -----------  -----------
Total liabilities and stockholders' equity        $    48,585  $    38,764
                                                  ===========  ===========


               NATURAL HEALTH TRENDS CORP.

     CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
          (In Thousands, Except Per Share Data)


                              Three Months Ended      Nine Months Ended
                                September 30,           September 30,
                            ----------------------  ----------------------
                               2006        2007        2006        2007
                            ----------  ----------  ----------  ----------

Net sales                   $   29,945  $   16,828  $  105,740  $   63,524
Cost of sales                    6,646       4,892      23,419      16,559
                            ----------  ----------  ----------  ----------
Gross profit                    23,299      11,936      82,321      46,965
% of net sales                    77.8%       70.9%       77.8%       73.9%

Operating expenses:
  Distributor commissions       15,456       7,267      54,902      30,187
  % of net sales                  51.6%       43.2%       51.9%       47.5%

  Selling, general and
   administrative expenses      10,630       8,343      34,368      27,172
  Recovery of KGC
   receivable                     (338)       (146)       (652)       (565)
                            ----------  ----------  ----------  ----------
Total operating expenses        25,748      15,464      88,618      56,794
                            ----------  ----------  ----------  ----------
Loss from operations            (2,449)     (3,528)     (6,297)     (9,829)
Other income, net                  309         135         696         302
                            ----------  ----------  ----------  ----------
Loss before income taxes
 and minority interest          (2,140)     (3,393)     (5,601)     (9,527)
Income tax provision              (344)        (97)       (788)       (460)
Minority interest                    9          (6)        (35)         (7)
                            ----------  ----------  ----------  ----------
Net loss                        (2,475)     (3,496)     (6,424)     (9,994)

Beneficial conversion
 feature on preferred stock          -           -           -      (1,574)
Preferred stock dividends            -         (37)          -         (70)
                            ----------  ----------  ----------  ----------
Net loss attributable to
 common stockholders        $   (2,475) $   (3,533) $   (6,424) $  (11,638)
                            ==========  ==========  ==========  ==========

Loss per share - basic and
 diluted                    $    (0.30) $    (0.43) $    (0.80) $    (1.41)
                            ==========  ==========  ==========  ==========

Weighted-average number of
 shares outstanding              8,200       8,278       8,039       8,254
                            ==========  ==========  ==========  ==========

Contact Information: Contact: Chris Sharng President Natural Health Trends Corp. (972) 241-4080