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8-K - FORM 8-K - RELIV INTERNATIONAL INCrelv20201112_8k.htm

Exhibit 99.1

 

 

NEWS RELEASE

 

For more information, contact:

 

Steve Albright

Chief Financial Officer                    

(636) 733-1305                         

 

FOR IMMEDIATE DISTRIBUTION

 

Reliv International Reports Third-Quarter Financial Results for 2020

 

CHESTERFIELD, MO, November 13, 2020 – Reliv International, Inc. (NASDAQ:RELV), a marketer of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2020.

 

Reliv reported net sales of $8.7 million for the third quarter of 2020 compared with net sales of $9.1 million in the third quarter of 2019, a decrease of 5.3%. Net sales in the United States, our largest market, decreased by $161,000 in the third quarter of 2020, which represented a 2.4% decrease in net sales when compared to the prior-year quarter. In the third quarter of 2019, net sales in the United States were favorably impacted by the then-recent launch of the RLV line of hemp-extract products and by the announcement of a price increase effective October 1, 2019.

 

Net sales in Reliv’s foreign markets decreased by $320,000, or 13.9%, in the third quarter of 2020 compared with the prior-year quarter. Net sales in Asia and Europe decreased by 20.3% and 13.5%, respectively, in the third quarter of 2020, as net sales in these regions continue to be heavily impacted by the COVID-19 pandemic. Net sales in Reliv’s foreign markets decreased by 17.0% during the third quarter of 2020 when the impact of foreign currency fluctuation is removed.

 

Reliv reported a net loss for the third quarter of 2020 of $125,000 (loss per diluted share of $0.07) compared to a net loss of $166,000 (loss per diluted share of $0.09) in the third quarter of 2019. The loss from operations for the third quarter of 2020 was $167,000 compared to a loss from operations of $85,000 in the same period in 2019. Results from operations declined primarily as the result of the decrease in net sales and gross margin.

 

Net sales for the first nine months of 2020 were $27.0 million, which represents a 0.3% increase from the same period in 2019. Net sales in the United States increased by 3.8% and net sales in Reliv’s foreign markets decreased by 9.7% in the first nine months of 2020 compared with the same period last year. Net sales in Reliv’s foreign markets decreased by 10.1% during the first nine months of 2020 when the impact of foreign currency fluctuation is removed.

 

Reliv reported net income of $339,000, or $0.19 per diluted share in the first nine months of 2020, compared to a net income of $70,000 or $0.04 per diluted share in the same period of 2019.

 

Reliv had cash and cash equivalents of $3.3 million as of September 30, 2020, compared to $1.6 million as of December 31, 2019. Net cash provided by operating activities was $772,000 in the first nine months of 2020.

 

 

 

As of September 30, 2020, Reliv had 24,850 active Distributors – a decrease of 4.1% from September 30, 2019 – of which 3,310 are Master Affiliate level and above. The number of Master Affiliates increased by 5.4% compared to the prior year total, driven by advancements in the Philippines. Master Affiliate is the level at which distributors are eligible to earn generation royalties. As of September 30, 2020, Reliv had 13,200 retail customers and Preferred Customers in total – a decrease of 12.0% from September 30, 2019. The actual number of customers is much higher as many Distributors (approximately 74% in the U.S.) join Reliv to purchase our products at a discount and do not participate in the business opportunity and the count also does not include those customers that buy product directly from distributors rather than from the Company. 

 

“We believe Reliv is positioned well in the nutrition and work from home industries. The challenges caused by the COVID-19 pandemic continue, but we’re pleased with how our field has adapted with more frequent use of online technology to communicate and operate,” commented Ryan A. Montgomery, Chief Executive Officer. “We believe the work done this summer and early fall with virtual conferences and other tools will lead to stronger sales for the remainder of the year.”   

 

Reliv has hosted online conferences targeted to its North American and European regions over the past three months and will host one for its Asia-Pacific region in November. “We are pleased with the content created and presented to much of the Reliv world, not only for its immediate impact, but the long-term value created by the mobile app and online content for customer acquisition and distributor training,” said Montgomery.

 

In international operations, net sales in Reliv’s key markets in Europe and Asia continue to be challenged as local COVID-19 guidelines still are generally more restrictive than those in the United States. “Foreign sales, particularly in the Philippines, continue to be dampened by the pandemic,” noted Montgomery. “However, we believe we still have a solid base of business in our foreign markets and feel sales will rebound as the world emerges from this global crisis. We firmly believe the efficacy of our products and value of our home-based business opportunity play a role in this recovery.”

 

Last month, Reliv announced its intention to effect a reverse stock split, followed by a forward split of its common stock as part of a plan to delist its stock from NASDAQ and suspend its filing obligations to the U.S. Securities and Exchange Commission. Reliv believes the costs of being a public reporting company far outweigh its benefits. Reliv expects the plan to be complete on or after November 29, 2020.

 

About Reliv International, Inc. 

 

Reliv International, based in Chesterfield, MO, develops and markets nutritional supplements that promote optimal nutrition. Reliv supplements address core nutrition, targeted solutions and overall wellness and now include a line of RLV hemp extracts. Reliv is the exclusive provider of LunaRich® products, which optimize levels of lunasin, a soy peptide that works at the epigenetic level to promote optimal health. The company sells its products through an international direct selling system of independent distributors in 13 countries. Learn more about Reliv at reliv.com, or on FacebookTwitter or Instagram.

 

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, reliv.com.

 

--FINANCIAL HIGHLIGHTS FOLLOW –

 

 

 

Reliv International, Inc. and Subsidiaries

 

Condensed Consolidated Balance Sheets

   

September 30

   

December 31

 
   

2020

   

2019

 
   

(Unaudited)

   

(Audited)

 

Assets

               

Current Assets:

               

Cash and cash equivalents

  $ 3,339,675     $ 1,630,779  

Accounts receivable, less allowances of $5,000 in 2020 and 2019

    58,157       107,369  

Notes & accounts receivables & deposits - related parties

    1,106,221       1,099,228  

Inventories

    2,828,738       2,701,688  

Other current assets

    490,620       326,454  
                 

Total current assets

    7,823,411       5,865,518  
                 

Notes & accounts receivables - related parties

    2,331,844       2,418,921  

Other assets

    2,343,238       2,581,717  

Net property, plant and equipment

    4,208,008       4,440,840  
                 

Total Assets

  $ 16,706,501     $ 15,306,996  
                 

Liabilities and Stockholders' Equity

               
                 

Accounts payable, accruals & other current liabilities

  $ 3,696,451     $ 3,489,157  

Long-term debt - current

    977,229       500,000  

Long-term debt, less current portion

    384,771       -  

Other noncurrent liabilities

    214,209       216,196  

Stockholders' equity

    11,433,841       11,101,643  
                 

Total Liabilities and Stockholders' Equity

  $ 16,706,501     $ 15,306,996  

 

 

Consolidated Statements of Operations

                               
   

Three months ended September 30

   

Nine months ended September 30

 
   

2020

   

2019

   

2020

   

2019

 
   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

 

Product sales

  $ 7,935,387     $ 8,395,941     $ 24,855,366     $ 24,809,979  

Freight income

    489,479       521,192       1,494,281       1,521,014  

Other revenue

    243,478       231,732       617,922       564,389  
                                 

Net Sales

    8,668,344       9,148,865       26,967,569       26,895,382  
                                 

Costs and expenses:

                               

Cost of goods sold

    2,290,223       2,497,993       7,147,554       7,200,716  

Distributor royalties and commissions

    2,801,005       2,939,187       8,719,538       8,721,852  

Selling, general and administrative

    3,744,220       3,796,276       11,023,006       11,224,748  
                                 

Total Costs and Expenses

    8,835,448       9,233,456       26,890,098       27,147,316  
                                 

Income (loss) from operations

    (167,104 )     (84,591 )     77,471       (251,934 )
                                 

Other income (expense):

                               

Interest income

    45,904       41,548       124,614       137,028  

Interest expense

    (6,717 )     (24,250 )     (20,755 )     (39,737 )

Other income (expense):

    56,202       (12,564 )     86,234       (13,224 )

Gain on sale of fixed assets

    -       -       -       434,549  
                                 

Income (loss) before income taxes

    (71,715 )     (79,857 )     267,564       266,682  

Provision (benefit) for income taxes

    53,000       86,000       (71,000 )     197,000  
                                 

Net income (loss)

  $ (124,715 )   $ (165,857 )   $ 338,564     $ 69,682  
                                 
                                 

Earnings (loss) per common share - Basic & Diluted

  $ (0.07 )   $ (0.09 )   $ 0.19     $ 0.04  

Weighted average shares

    1,746,000       1,746,000       1,746,000       1,746,000  

 

 

 

Reliv International, Inc. and Subsidiaries

 

Net sales by Market

                                               

(in thousands)

 

Three months ended September 30,

   

Change from

 
   

2020

   

2019

   

prior year

 
   

Amount

   

% of Net Sales

   

Amount

   

% of Net Sales

   

Amount

   

%

 
                                                 

United States

  $ 6,682       77.1 %   $ 6,843       74.8 %   $ (161 )     -2.4 %

Australia/New Zealand

    148       1.7 %     135       1.5 %     13       9.6 %

Canada

    128       1.5 %     140       1.5 %     (12 )     -8.6 %

Mexico

    166       1.9 %     156       1.7 %     10       6.4 %

Europe

    629       7.3 %     727       7.9 %     (98 )     -13.5 %

Asia

    915       10.5 %     1,148       12.6 %     (233 )     -20.3 %
                                                 

Consolidated Total

  $ 8,668       100.0 %   $ 9,149       100.0 %   $ (481 )     -5.3 %

 

 

Net sales by Market

                                               

(in thousands)

 

Nine months ended September 30,

   

Change from

 
   

2020

   

2019

   

prior year

 
   

Amount

   

% of Net Sales

   

Amount

   

% of Net Sales

   

Amount

   

%

 
                                                 

United States

  $ 20,613       76.5 %   $ 19,859       73.8 %   $ 754       3.8 %

Australia/New Zealand

    437       1.6 %     445       1.6 %     (8 )     -1.8 %

Canada

    412       1.5 %     479       1.8 %     (67 )     -14.0 %

Mexico

    420       1.6 %     444       1.7 %     (24 )     -5.4 %

Europe

    2,193       8.1 %     2,422       9.0 %     (229 )     -9.5 %

Asia

    2,893       10.7 %     3,246       12.1 %     (353 )     -10.9 %
                                                 

Consolidated Total

  $ 26,968       100.0 %   $ 26,895       100.0 %   $ 73       0.3 %

 

 

 

Reliv International, Inc. and Subsidiaries

 

Retail and Preferred Customers/Active Distributors/Master Affiliates and Above by Market

 

   

As of 9/30/2020

 
   

Retail

Customers

   

Preferred

Customers

   

Active

Distributors

   

Total

Customers and

Distributors

   

Master

Affiliates and

Above

 
                                         

United States

    3,680       2,050       17,000       22,730       2,060  

Australia/New Zealand

    50       280       660       990       80  

Canada

    90       30       460       580       70  

Mexico

    30       140       1,190       1,360       90  

Europe

    730       560       1,540       2,830       260  

Asia

    850       4,710       4,000       9,560       750  
                                         

Consolidated Total

    5,430       7,770       24,850       38,050       3,310  

 

 

   

As of 9/30/2019

 
   

Retail

Customers

   

Preferred

Customers

   

Active

Distributors

   

Total

Customers and

Distributors

   

Master

Affiliates and

Above

 
                                         

United States

    3,610       1,540       17,810       22,960       2,070  

Australia/New Zealand

    50       220       670       940       70  

Canada

    90       30       500       620       70  

Mexico

    20       110       1,170       1,300       90  

Europe

    740       750       1,690       3,180       310  

Asia

    2,390       5,450       4,060       11,900       530  
                                         

Consolidated Total

    6,900       8,100       25,900       40,900       3,140  

 

 

   

Change in %

 
   

Retail

Customers

   

Preferred

Customers

   

Active

Distributors

   

Total

Customers and

Distributors

   

Master

Affiliates and

Above

 
                                         

United States

    1.9 %     33.1 %     -4.5 %     -1.0 %     -0.5 %

Australia/New Zealand

    0.0 %     27.3 %     -1.5 %     5.3 %     14.3 %

Canada

    0.0 %     0.0 %     -8.0 %     -6.5 %     0.0 %

Mexico

    50.0 %     27.3 %     1.7 %     4.6 %     0.0 %

Europe

    -1.4 %     -25.3 %     -8.9 %     -11.0 %     -16.1 %

Asia

    -64.4 %     -13.6 %     -1.5 %     -19.7 %     41.5 %
                                         

Consolidated Total

    -21.3 %     -4.1 %     -4.1 %     -7.0 %     5.4 %

 

 

The table above sets forth, as of September 30, 2020 and 2019, the number of our Retail Customers/Preferred Customers/Active Distributors and Master Affiliates and above. The total number of active distributors includes Master Affiliates and above. We define an active retail or preferred customer as one that has placed a product order in the prior twelve months, and we define an active distributor as one that enrolls as a distributor or renews his or her distributorship during the prior twelve months. Many individuals join Reliv as distributors to obtain our products at a discount and may not participate in the Reliv business opportunity. Master Affiliates and above are distributors that have attained the highest level of discount and are eligible for royalties generated by Master Affiliate groups in their downline organization.