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| 8-K - FORM 8-K - RELIV INTERNATIONAL INC | v392580_8-k.htm |
Exhibit 99
NEWS RELEASE
For more information, contact:
Steve Albright
Chief Financial Officer
(636) 733-1305
FOR IMMEDIATE DISTRIBUTION
Reliv International Reports Third-Quarter Financial Results
CHESTERFIELD, MO, October 30, 2014 – Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2014.
Net sales for the quarter were $14.3 million, a 13.5 percent decrease from the third quarter last year. U.S. net sales totaled $10.9 million, a decrease of $2.2 million, or 16.8 percent, compared to third-quarter 2013 net sales. Net sales outside of the United States declined slightly at 0.2 percent in the third quarter of 2014 compared to the prior-year quarter, offset by the European market where net sales increased by 16.1 percent.
Net income for the third quarter of 2014 was $166,000 or $0.01 per diluted share, compared to $293,000 or $0.02 per diluted share in the 2013 third quarter. In the second quarter of 2014, Reliv reported a net loss of $289,000 or $0.02 per diluted share. Reliv’s sequential profitability improvement is attributable to effective cost reduction measures enacted in the third quarter and the tax benefit related to the liquidation of Reliv’s former entity in Germany. Income from operations for the third quarter of 2014 was $228,000 compared to $402,000 in the same quarter of 2013.
“Reliv has recently completed a series of critical transitions — in our distributor field, our corporate leadership, our distributor compensation plan and our product line — to better position the company for future growth,” said Robert L. Montgomery, Chairman and CEO of Reliv. “This process has come with anticipated adjustments. Yet after recording losses in net income in each of the first two quarters of 2014, we achieved profitability in the third quarter. We believe the return to profitability is evidence that the transitions initiated by Reliv are gaining traction.”
Montgomery cites key elements of Reliv’s strategic plan for growth:
| · | Positioning Reliv as the Nutritional Epigenetics Company; |
| · | New product strategy around Reliv Now®, LunaRich X™ and the LunaRich® Super Pack; |
| · | Renewed focus on the business opportunity for the distributors; |
| · | Technology upgrades, both within operations at Reliv HQ and online for distributors; |
| · | Increased manufacturing capabilities with a new encapsulation line; |
| · | Continued expansion of Reliv’s European markets; |
| · | Company-wide cost containment initiative; and |
| · | Investment in clinical studies of Reliv products and additional research. |
“We see many examples of this plan already producing results, but turning around momentum in the field takes time,” Montgomery noted. “During that process, we are aggressively controlling expenses to improve our bottom line.”
Growth in Europe continued with net sales of $2.0 million in the third quarter of 2014 compared to $1.7 million in the prior-year third quarter. “Europe remains Reliv’s strongest international market and we expect growth to continue,” Montgomery said. “In October, at the most well-attended Reliv event in Reliv Europe history, we launched LunaRich C™ (LunaRich X™ in the United States). This product, a concentrated lunasin extract delivered in capsule form, is one of our top sellers in the United States and complements Reliv Europe’s existing product line. We expect LunaRich C to enhance the momentum in Europe and sustain growth in the final quarter of 2014 and next year.”
Reliv held an official launch event for the market of Indonesia on September 7. “Reliv has operated in Indonesia for a number of years, but until this year could only offer one product: Innergize!®, our isotonic performance formula,” Montgomery said. “We have now expanded our product line in this market to four products, including Reliv Now®, our essential nutrition formula and top seller worldwide. With over $1 billion in direct sales annually, Indonesia is a market we believe offers Reliv an opportunity for growth in this region.”
Worldwide net sales for the first nine months of 2014 were $43.3 million, representing a 14.9 percent decrease from the same period in 2013. In the United States, net sales declined 19.1 percent compared with the first nine months of the prior year. Net sales outside of the United States increased by 0.8 percent in the first nine months of 2014 compared with the first nine months last year.
Reliv reported a net loss of $274,000, or $0.02 per diluted share in the first nine months of 2014, compared to net income $274,000 or $0.02 per diluted share in the same period of 2013.
Reliv’s total distributor count was 49,420 as of September 30, 2014 – a decrease of 4.8 percent from the same date in 2013 – of which 7,030 are Master Affiliate level and above. The number of Master Affiliates increased by 5.4 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 $5.18 million as of September 30, 2014. This amount compares to $6.66 million as of December 31, 2013 and $5.74 million at this date last year.
About Reliv International, Inc.
Reliv International, 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 15 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.
| Reliv International, Inc. and Subsidiaries | ||||||||
| ADD TWO | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| September 30 | December 31 | |||||||
| 2014 | 2013 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 5,178,599 | $ | 6,656,798 | ||||
| Accounts receivable, less allowances of $28,100 in 2014 and $31,800 in 2013 | 156,507 | 148,630 | ||||||
| Accounts and note due from employees and distributors | 217,973 | 129,852 | ||||||
| Inventories | 5,105,107 | 5,214,690 | ||||||
| Other current assets | 1,218,202 | 1,006,099 | ||||||
| Total current assets | 11,876,388 | 13,156,069 | ||||||
| Other assets | 5,005,271 | 4,511,360 | ||||||
| Intangible assets, net | 2,993,307 | 3,195,903 | ||||||
| Net property, plant and equipment | 6,703,894 | 6,735,419 | ||||||
| Total Assets | $ | 26,578,860 | $ | 27,598,751 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Total current liabilities | $ | 6,633,723 | $ | 6,649,345 | ||||
| Long-term debt, less current maturities | 3,668,159 | 3,781,607 | ||||||
| Other non-current liabilities | 401,277 | 1,037,327 | ||||||
| Stockholders' equity | 15,875,701 | 16,130,472 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 26,578,860 | $ | 27,598,751 | ||||
| Consolidated Statements of Operations | ||||||||||||||||
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Product sales | $ | 13,206,275 | $ | 15,241,597 | $ | 39,867,425 | $ | 46,296,517 | ||||||||
| Handling & freight income | 1,108,006 | 1,297,867 | 3,387,322 | 4,525,618 | ||||||||||||
| Net Sales | 14,314,281 | 16,539,464 | 43,254,747 | 50,822,135 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of products sold | 2,968,139 | 3,529,027 | 8,855,401 | 10,490,825 | ||||||||||||
| Distributor royalties and commissions | 4,985,450 | 5,974,652 | 15,425,704 | 18,595,100 | ||||||||||||
| Selling, general and administrative | 6,133,040 | 6,633,771 | 19,390,732 | 21,121,858 | ||||||||||||
| Total Costs and Expenses | 14,086,629 | 16,137,450 | 43,671,837 | 50,207,783 | ||||||||||||
| Income (loss) from operations | 227,652 | 402,014 | (417,090 | ) | 614,352 | |||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 31,736 | 37,240 | 100,008 | 113,072 | ||||||||||||
| Interest expense | (26,054 | ) | (22,187 | ) | (75,689 | ) | (58,182 | ) | ||||||||
| Other income (expense) | (60,372 | ) | 28,637 | (53,983 | ) | (62,482 | ) | |||||||||
| Income (loss) before income taxes | 172,962 | 445,704 | (446,754 | ) | 606,760 | |||||||||||
| Provision (benefit) for income taxes | 7,000 | 153,000 | (173,000 | ) | 333,000 | |||||||||||
| Net income (loss) | $ | 165,962 | $ | 292,704 | $ | (273,754 | ) | $ | 273,760 | |||||||
| Earnings (loss) per common share - Basic | $ | 0.01 | $ | 0.02 | $ | (0.02 | ) | $ | 0.02 | |||||||
| Weighted average shares | 12,666,000 | 12,616,000 | 12,666,000 | 12,617,000 | ||||||||||||
| Earnings (loss) per common share - Diluted | $ | 0.01 | $ | 0.02 | $ | (0.02 | ) | $ | 0.02 | |||||||
| Weighted average shares | 12,750,000 | 12,842,000 | 12,666,000 | 12,785,000 | ||||||||||||
| Cash dividends declared per common share | $ | 0.00 | $ | 0.02 | $ | 0.00 | $ | 0.02 | ||||||||
| Reliv International, Inc. and Subsidiaries | |||||||||||||||||||||||
| ADD THREE | |||||||||||||||||||||||
| Net sales by Market | |||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Three months ended September 30, | Change From | ||||||||||||||||||||||
| 2014 | 2013 | Prior Year | |||||||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | ||||||||||||||||||
| United States | $ | 10,946 | 76.5 | % | $ | 13,163 | 79.6 | % | $ | (2,217 | ) | -16.8 | % | ||||||||||
| Australia/New Zealand | 399 | 2.8 | % | 429 | 2.6 | % | (30 | ) | -7.0 | % | |||||||||||||
| Canada | 346 | 2.4 | % | 384 | 2.3 | % | (38 | ) | -9.9 | % | |||||||||||||
| Mexico | 192 | 1.3 | % | 225 | 1.4 | % | (33 | ) | -14.7 | % | |||||||||||||
| Europe | 1,956 | 13.7 | % | 1,685 | 10.2 | % | 271 | 16.1 | % | ||||||||||||||
| Asia | 475 | 3.3 | % | 653 | 3.9 | % | (178 | ) | -27.3 | % | |||||||||||||
| Consolidated total | $ | 14,314 | 100.0 | % | $ | 16,539 | 100.0 | % | $ | (2,225 | ) | -13.5 | % | ||||||||||
| Net sales by Market | |||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Nine months ended September 30, | Change From | ||||||||||||||||||||||
| 2014 | 2013 | Prior Year | |||||||||||||||||||||
| Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | ||||||||||||||||||
| United States | $ | 32,453 | 75.0 | % | $ | 40,101 | 78.9 | % | $ | (7,648 | ) | -19.1 | % | ||||||||||
| Australia/New Zealand | 1,261 | 2.9 | % | 1,402 | 2.8 | % | (141 | ) | -10.1 | % | |||||||||||||
| Canada | 993 | 2.3 | % | 1,310 | 2.6 | % | (317 | ) | -24.2 | % | |||||||||||||
| Mexico | 607 | 1.4 | % | 759 | 1.5 | % | (152 | ) | -20.0 | % | |||||||||||||
| Europe | 6,529 | 15.1 | % | 5,664 | 11.1 | % | 865 | 15.3 | % | ||||||||||||||
| Asia | 1,412 | 3.3 | % | 1,586 | 3.1 | % | (174 | ) | -11.0 | % | |||||||||||||
| Consolidated total | $ | 43,255 | 100.0 | % | $ | 50,822 | 100.0 | % | $ | (7,567 | ) | -14.9 | % | ||||||||||
The following table sets forth, as of September 30, 2014 and 2013, 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 his or her 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. For the September 30, 2014 data, the active distributor count for Europe includes our preferred customers in France. This program began in mid-2013 and the Europe active distributor count as of 9/30/14 and 9/30/13 includes French preferred customers of 2,822 and 1,040, respectively.
Active Distributors and Master Affiliates and above by Market
| As of 9/30/2014 | As of 9/30/2013 | 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 | 35,680 | 5,240 | 38,670 | 4,830 | -7.7 | % | 8.5 | % | |||||||||||||||
| Australia/New Zealand | 1,290 | 150 | 1,470 | 200 | -12.2 | % | -25.0 | % | |||||||||||||||
| Canada | 1,250 | 260 | 1,270 | 220 | -1.6 | % | 18.2 | % | |||||||||||||||
| Mexico | 1,140 | 140 | 1,080 | 150 | 5.6 | % | -6.7 | % | |||||||||||||||
| Europe | 8,060 | 920 | 5,800 | 820 | 39.0 | % | 12.2 | % | |||||||||||||||
| Asia | 2,000 | 320 | 3,630 | 450 | -44.9 | % | -28.9 | % | |||||||||||||||
| Consolidated total | 49,420 | 7,030 | 51,920 | 6,670 | -4.8 | % | 5.4 | % | |||||||||||||||