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 2018
CHESTERFIELD, MO, November 9, 2018 – Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2018.
Reliv reported net sales of $8.3 million for the third quarter of 2018 compared with net sales of $9.1 million in the third quarter of 2017. Net sales in the United States decreased by $583,000 in the third quarter of 2018, which represented an 8.2 percent decline in net sales when compared to the prior-year quarter. Net sales in Reliv’s foreign markets decreased by $149,000, or 7.5 percent, in the third quarter of 2018 compared with the prior-year quarter. Net sales in Asia and Mexico increased by 4.8 percent and 21.9 percent, respectively, in the third quarter of 2018, offset by decreases in all other regions. Net sales in Reliv’s foreign markets decreased by 3.3 percent during the third quarter of 2018 when the impact of foreign currency fluctuation is removed.
Reliv reported a net loss for the third quarter of 2018 of $542,000 (loss per diluted share of $0.29) compared to a net loss of $319,000 (loss per diluted share of $0.17) in the third quarter of 2017. The loss from operations for the third quarter of 2018 was $532,000 compared to a loss from operations of $334,000 in the same period in 2017. Results from operations were primarily impacted by the decline in net sales and gross margin, partially offset by a reduction in selling, general and administrative (“SGA”) expenses in the quarter. SGA expenses decreased to $3.8 million in the third quarter of 2018 compared to $4.3 million in the prior-year quarter.
Net sales for the first nine months of 2018 were $26.8 million, which represents a 15.9 percent decrease from the same period in 2017. Net sales in the United States decreased by 17.3 percent and net sales in Reliv’s foreign markets decreased by 10.9 percent in the first nine months of 2018 compared with the same period last year. Net sales in Reliv’s foreign markets decreased by 12.2 percent during the first nine months of 2018 when the impact of foreign currency fluctuation is removed.
Reliv reported a net loss of $1.8 million, or $0.95 per diluted share in the first nine months of 2018, compared to a net loss of $315,000 or $0.17 per diluted share in the same period of 2017.
Reliv celebrated its 30th anniversary at its distributor conference last month in Orlando. Among the presentations at the conference, the company introduced a new corporate website, which includes a new Distributor Resource Center that gives distributors easy and quick access to key training and sales tools. “These online capabilities are important to our future growth,” stated Ryan A. Montgomery, Chief Executive Officer. “The world has changed in 30 years, and so has the industry, especially the last 5-10 years. As we continue to build on the core foundation of our Reliv business, the key to our future growth will be a blend of online and offline methods that continue to build personal relationships and using technology to reach new people. Success will happen for those that embrace traditional and new methods.”
In its international operations, Reliv has engaged Gabriela Moreno as a sales consultant in Mexico, and Reliv has also added Jo Ann Sy as the sales manager in its Philippines market. “These appointments confirm our commitment to our foreign operations,” said Mr. Montgomery. “These individuals will be key in accelerating the growth in each of the markets, and we look forward to their contributions to Reliv.”
Additional initiatives include:
● | Reliv held a Girlfriends’ Getaway weekend event in Dayton, OH in August. This event provided an introduction to the Reliv brand and the Fit3 platform to a large group of new customers and prospective customers in the region. Similar events are already in the works for 2019. |
● | As a follow up to our launch of Reliv Now® with Whey in the spring of 2018, Reliv is launching ProVantage with Whey in the EU market. This provides a product with an alternative protein source to our second-largest market. |
Reliv had cash and cash equivalents of $2.4 million as of September 30, 2018, compared to $3.3 million as of December 31, 2017. Net cash used in operating activities was $850,000 in the first nine months of 2018.
As of September 30, 2018, Reliv had 30,550 distributors and preferred customers – a decrease of 11.4 percent from September 30, 2017 – of which 3,250 are Master Affiliate level and above. The number of Master Affiliates decreased by 14.7 percent compared to the prior year total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.
About Reliv International, Inc.
Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address core nutrition and targeted solutions. 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 network marketing system of independent distributors in 14 countries. Learn more about Reliv at reliv.com, or on Facebook, Twitter 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 | |||||||
2018 | 2017 | |||||||
(Unaudited) | (Audited) | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 2,372,837 | $ | 3,272,788 | ||||
Accounts receivable, less allowances of $25,000 in 2018 and $26,300 in 2017 | 326,572 | 29,760 | ||||||
Accounts and note due from employees and distributors | 140,562 | 138,497 | ||||||
Inventories | 4,477,787 | 4,555,485 | ||||||
Other current assets | 597,097 | 399,154 | ||||||
Total current assets | 7,914,855 | 8,395,684 | ||||||
Other assets | 3,718,778 | 3,916,551 | ||||||
Cash surrender value of life insurance | - | 3,086,522 | ||||||
Net property, plant and equipment | 5,332,691 | 5,677,239 | ||||||
Total Assets | $ | 16,966,324 | $ | 21,075,996 | ||||
Liabilities and Stockholders' Equity | ||||||||
Accounts payable and accrued expenses | $ | 4,239,689 | $ | 3,212,634 | ||||
Current portion of long-term debt | - | 3,045,421 | ||||||
Other noncurrent liabilities | 518,180 | 453,354 | ||||||
Stockholders' equity | 12,208,455 | 14,364,587 | ||||||
Total Liabilities and Stockholders' Equity | $ | 16,966,324 | $ | 21,075,996 | ||||
Consolidated Statements of Operations |
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Product sales | $ | 7,817,526 | $ | 8,385,999 | $ | 25,129,503 | $ | 29,479,924 | ||||||||
Handling & freight income | 519,519 | 683,324 | 1,670,522 | 2,373,809 | ||||||||||||
Net Sales | 8,337,045 | 9,069,323 | 26,800,025 | 31,853,733 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of products sold | 2,383,942 | 1,949,670 | 7,089,958 | 7,113,647 | ||||||||||||
Distributor royalties and commissions | 2,639,863 | 3,199,596 | 8,858,965 | 11,252,922 | ||||||||||||
Selling, general and administrative | 3,845,304 | 4,253,675 | 12,546,840 | 13,811,814 | ||||||||||||
Total Costs and Expenses | 8,869,109 | 9,402,941 | 28,495,763 | 32,178,383 | ||||||||||||
Loss from operations | (532,064 | ) | (333,618 | ) | (1,695,738 | ) | (324,650 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income | 22,633 | 25,277 | 70,132 | 76,630 | ||||||||||||
Interest expense | (16,408 | ) | (27,183 | ) | (93,195 | ) | (79,472 | ) | ||||||||
Other income (expense) | (8,462 | ) | (4,579 | ) | 8,241 | 40,517 | ||||||||||
Loss before income taxes | (534,301 | ) | (340,103 | ) | (1,710,560 | ) | (286,975 | ) | ||||||||
Provision (benefit) for income taxes | 8,000 | (21,000 | ) | 48,000 | 28,000 | |||||||||||
Net loss | $ | (542,301 | ) | $ | (319,103 | ) | $ | (1,758,560 | ) | $ | (314,975 | ) | ||||
Loss per common share - Basic | $ | (0.29 | ) | $ | (0.17 | ) | $ | (0.95 | ) | $ | (0.17 | ) | ||||
Weighted average shares | 1,845,000 | 1,845,000 | 1,845,000 | 1,845,000 | ||||||||||||
Loss per common share - Diluted | $ | (0.29 | ) | $ | (0.17 | ) | $ | (0.95 | ) | $ | (0.17 | ) | ||||
Weighted average shares | 1,845,000 | 1,845,000 | 1,845,000 | 1,846,000 | ||||||||||||
Reliv International, Inc. and Subsidiaries |
Net sales by Market | ||||||||||||||||||||||||
(in thousands) | Three months ended September 30, | Change from | ||||||||||||||||||||||
2018 | 2017 | prior year | ||||||||||||||||||||||
Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | |||||||||||||||||||
United States | $ | 6,499 | 78.0 | % | $ | 7,082 | 78.1 | % | $ | (583 | ) | -8.2 | % | |||||||||||
Australia/New Zealand | 156 | 1.9 | % | 224 | 2.5 | % | (68 | ) | -30.4 | % | ||||||||||||||
Canada | 153 | 1.8 | % | 200 | 2.2 | % | (47 | ) | -23.5 | % | ||||||||||||||
Mexico | 128 | 1.5 | % | 105 | 1.2 | % | 23 | 21.9 | % | |||||||||||||||
Europe | 807 | 9.7 | % | 891 | 9.8 | % | (84 | ) | -9.4 | % | ||||||||||||||
Asia | 594 | 7.1 | % | 567 | 6.2 | % | 27 | 4.8 | % | |||||||||||||||
Consolidated Total | $ | 8,337 | 100.0 | % | $ | 9,069 | 100.0 | % | $ | (732 | ) | -8.1 | % | |||||||||||
Net sales by Market | ||||||||||||||||||||||||
(in thousands) | Nine months ended September 30, | Change from | ||||||||||||||||||||||
2018 | 2017 | prior year | ||||||||||||||||||||||
Amount | % of Net Sales | Amount | % of Net Sales | Amount | % | |||||||||||||||||||
United States | $ | 20,505 | 76.5 | % | $ | 24,791 | 77.8 | % | $ | (4,286 | ) | -17.3 | % | |||||||||||
Australia/New Zealand | 565 | 2.1 | % | 711 | 2.2 | % | (146 | ) | -20.5 | % | ||||||||||||||
Canada | 557 | 2.1 | % | 681 | 2.2 | % | (124 | ) | -18.2 | % | ||||||||||||||
Mexico | 348 | 1.3 | % | 352 | 1.1 | % | (4 | ) | -1.1 | % | ||||||||||||||
Europe | 3,002 | 11.2 | % | 3,399 | 10.7 | % | (397 | ) | -11.7 | % | ||||||||||||||
Asia | 1,823 | 6.8 | % | 1,920 | 6.0 | % | (97 | ) | -5.1 | % | ||||||||||||||
Consolidated Total | $ | 26,800 | 100.0 | % | $ | 31,854 | 100.0 | % | $ | (5,054 | ) | -15.9 | % | |||||||||||
The following table sets forth, as of September 30, 2018 and 2017, the number of our Active Distributors/Preferred Customers 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 Affiliate groups in their downline organization. Preferred Customers represent approximately 4,840 and 5,010 of the Active Distributor count as of September 30, 2018 and 2017, respectively. |
Active Distributors/Preferred Customers and Master Affiliates and Above by Market |
As of 9/30/2018 | As of 9/30/2017 | Change in % | ||||||||||||||||||||||
Active Distributors and Preferred Customers | Master Affiliates and Above | Active Distributors and Preferred Customers | Master Affiliates and Above | Active Distributors and Preferred Customers | Master Affiliates and Above | |||||||||||||||||||
United States | 20,390 | 2,290 | 23,860 | 2,750 | -14.5 | % | -16.7 | % | ||||||||||||||||
Australia/New Zealand | 1,010 | 80 | 1,180 | 110 | -14.4 | % | -27.3 | % | ||||||||||||||||
Canada | 570 | 80 | 710 | 80 | -19.7 | % | 0.0 | % | ||||||||||||||||
Mexico | 850 | 80 | 730 | 60 | 16.4 | % | 33.3 | % | ||||||||||||||||
Europe | 3,210 | 380 | 3,940 | 440 | -18.5 | % | -13.6 | % | ||||||||||||||||
Asia | 4,520 | 340 | 4,070 | 370 | 11.1 | % | -8.1 | % | ||||||||||||||||
Consolidated Total | 30,550 | 3,250 | 34,490 | 3,810 | -11.4 | % | -14.7 | % | ||||||||||||||||