EX-99.1 2 ex_164809.htm EXHIBIT 99.1 ex_164809.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 2019

 

CHESTERFIELD, MO, November 14, 2019 – Reliv International, Inc. (NASDAQ:RELV), a marketer of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2019.

 

Reliv reported net sales of $9.1 million for the third quarter of 2019 compared with net sales of $8.3 million in the third quarter of 2018. Net sales in the United States increased by $344,000 in the third quarter of 2019, which represented a 5.3% increase in net sales when compared to the prior-year quarter. Net sales in the United States were favorably impacted by the launch of the RLV line of hemp-extract products near the end of the second quarter of 2019.

 

Net sales in Reliv’s foreign markets increased by $468,000, or 25.5%, in the third quarter of 2019 compared with the prior-year quarter. Net sales in Asia and Mexico increased by 93.3% and 21.9%, respectively, in the third quarter of 2019, offset by decreases in all other regions. Net sales in Reliv’s foreign markets increased by 26.4% during the third quarter of 2019 when the impact of foreign currency fluctuation is removed.

 

Reliv reported a net loss for the third quarter of 2019 of $166,000 (loss per diluted share of $0.09) compared to a net loss of $542,000 (loss per diluted share of $0.29) in the third quarter of 2018. The loss from operations for the third quarter of 2019 was $85,000 compared to a loss from operations of $532,000 in the same period in 2018. Results from operations improved as the result of the increase in net sales and gross margin, coupled with a slight reduction in selling, general and administrative (“SGA”) expenses in the quarter. SGA expenses decreased by $49,000 in the third quarter of 2019 to $3.80 million compared to $3.85 million in the prior-year quarter.

 

Net sales for the first nine months of 2019 were $26.9 million, which represents a 0.4% increase from the same period in 2018. Net sales in the United States decreased by 3.2% and net sales in Reliv’s foreign markets increased by 11.8% in the first nine months of 2019 compared with the same period last year. Net sales in Reliv’s foreign markets increased by 14.6% during the first nine months of 2019 when the impact of foreign currency fluctuation is removed.

 

Reliv reported net income of $70,000, or $0.04 per diluted share in the first nine months of 2019, compared to a net loss of $1.8 million or $0.95 per diluted share in the same period of 2018.

 

Reliv had cash and cash equivalents of $2.5 million as of September 30, 2019, compared to $2.0 million as of December 31, 2018. Net cash provided by operating activities was $27,000 in the first nine months of 2019.

 

 

 

 

As of September 30, 2019, Reliv had 34,000 active distributors and preferred customers – an increase of 11.3% from September 30, 2018 – of which 3,140 are Master Affiliate level and above. The number of preferred customers included in the active distributor and preferred customer count increased to 8,090 as of September 30, 2019 from 4,840 as of the prior year. This increase is primarily driven by the growth in the Philippines. The number of Master Affiliates decreased by 3.4% compared to the prior year total. Master Affiliate is the level at which distributors are eligible to earn generation royalties.

 

As previously mentioned, Reliv formally introduced its RLV line of hemp-extract products late in the second quarter of 2019. Initially, the RLV line includes three liquid tinctures and one balm. All of the RLV products are derived from organically-grown, non-GMO hemp. Sales from the RLV product line represented 10.2% of net sales in the United States in the third quarter of 2019.

 

“We are excited about the addition of the RLV line into the Reliv product family,” commented Ryan A. Montgomery, Chief Executive Officer. “Not only is it providing a spark in U.S. sales, it has created excitement in the entire Reliv business leading to a growth in new distributors and customers for all of the Reliv products. Additional products in the RLV line are in development for introduction within the next year.”

 

In international operations, sales and distributor activity in the Philippines continues to grow at a tremendous rate. “We are very excited with our continued growth in the Philippines, fueled by another outstanding increase in the number of new distributors and preferred customers,” noted Montgomery. Net sales in the Philippines grew by 94.5% in local currency in the third quarter of 2019, compared to the prior-year quarter, as the active distributor and preferred customer and Master Affiliate counts across all of the Asia markets increased by 110% and 56%, respectively. “We are supporting the growth in the Philippines, both through marketing initiatives and improvements in operations, and we have taken steps to channel that excitement into other markets in our Asia-Pacific region,” said Montgomery. Effective October 1, 2019, Reliv modified its distributor compensation plan in its Australia/New Zealand and Malaysia markets to create a larger maximum purchasing discount for its distributors and a higher commission rate to those distributors who are directly responsible for generating new business.

 

About Reliv International, Inc. 

 

Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address core nutrition, targeted solutions and overall wellness through its 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 network marketing 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

 
   

2019

   

2018

 
   

(Unaudited)

   

(Audited)

 

Assets

               

Current Assets:

               

Cash and cash equivalents

  $ 2,540,779     $ 1,989,974  

Accounts receivable, less allowances of $5,000 in 2019 and 2018

    249,318       400,759  

Notes & accounts receivables & deposits - related parties

    1,121,104       151,222  

Inventories

    2,347,804       2,954,947  

Assets held for sale

    -       2,124,939  

Other current assets

    927,445       464,165  
                 

Total current assets

    7,186,450       8,086,006  
                 

Notes & accounts receivables - related parties

    2,481,563       1,282,072  

Other assets

    2,658,293       2,287,237  

Net property, plant and equipment

    4,513,915       4,698,550  
                 

Total Assets

  $ 16,840,221     $ 16,353,865  
                 

Liabilities and Stockholders' Equity

               
                 

Accounts payable, accruals & other current liabilities

  $ 4,554,269     $ 3,915,390  

Revolving line of credit

    500,000       -  

Other noncurrent liabilities

    235,905       445,611  

Stockholders' equity

    11,550,047       11,992,864  
                 

Total Liabilities and Stockholders' Equity

  $ 16,840,221     $ 16,353,865  

 

Consolidated Statements of Operations

   

Three months ended September 30

   

Nine months ended September 30

 
   

2019

   

2018

   

2019

   

2018

 
   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

 

Product sales

  $ 8,395,941     $ 7,817,526     $ 24,809,979     $ 25,129,503  

Freight income

    521,192       519,519       1,521,014       1,670,522  

Other revenue

    231,732       -       564,389       -  
                                 

Net Sales

    9,148,865       8,337,045       26,895,382       26,800,025  
                                 

Costs and expenses:

                               

Cost of goods sold

    2,497,993       2,383,942       7,200,716       7,089,958  

Distributor royalties and commissions

    2,939,187       2,639,863       8,721,852       8,858,965  

Selling, general and administrative

    3,796,276       3,845,304       11,224,748       12,546,840  
                                 

Total Costs and Expenses

    9,233,456       8,869,109       27,147,316       28,495,763  
                                 

Loss from operations

    (84,591 )     (532,064 )     (251,934 )     (1,695,738 )
                                 

Other income (expense):

                               

Interest income

    41,548       22,633       137,028       70,132  

Interest expense

    (24,250 )     (16,408 )     (39,737 )     (93,195 )

Other income (expense)

    (12,564 )     (1,658 )     (13,224 )     12,207  

Gain (loss) on sale of fixed assets

    -       (6,804 )     434,549       (3,966 )
                                 

Income (loss) before income taxes

    (79,857 )     (534,301 )     266,682       (1,710,560 )

Provision for income taxes

    86,000       8,000       197,000       48,000  
                                 

Net income (loss)

  $ (165,857 )   $ (542,301 )   $ 69,682     $ (1,758,560 )
                                 
                                 

Earnings (loss) per common share - Basic

  $ (0.09 )   $ (0.29 )   $ 0.04     $ (0.95 )

Weighted average shares

    1,746,000       1,845,000       1,746,000       1,845,000  
                                 

Earnings (loss) per common share - Diluted

  $ (0.09 )   $ (0.29 )   $ 0.04     $ (0.95 )

Weighted average shares

    1,746,000       1,845,000       1,746,000       1,845,000  

 

 

 

 

Reliv International, Inc. and Subsidiaries

 

Net sales by Market

(in thousands)

 

Three months ended September 30,

   

Change from

 
   

2019

   

2018

   

prior year

 
   

Amount

   

% of Net

Sales

   

Amount

   

% of Net

Sales

   

Amount

   

%

 
                                                 

United States

  $ 6,843       74.8 %   $ 6,499       78.0 %   $ 344       5.3 %

Australia/New Zealand

    135       1.5 %     156       1.9 %     (21 )     -13.5 %

Canada

    140       1.5 %     153       1.8 %     (13 )     -8.5 %

Mexico

    156       1.7 %     128       1.5 %     28       21.9 %

Europe

    727       7.9 %     807       9.7 %     (80 )     -9.9 %

Asia

    1,148       12.6 %     594       7.1 %     554       93.3 %
                                                 

Consolidated Total

  $ 9,149       100.0 %   $ 8,337       100.0 %   $ 812       9.7 %

 

Net sales by Market

(in thousands)

 

Nine months ended September 30,

   

Change from

 
   

2019

   

2018

   

prior year

 
   

Amount

   

% of Net

Sales

   

Amount

   

% of Net

Sales

   

Amount

   

%

 
                                                 

United States

  $ 19,859       73.8 %   $ 20,505       76.5 %   $ (646 )     -3.2 %

Australia/New Zealand

    445       1.6 %     565       2.1 %     (120 )     -21.2 %

Canada

    479       1.8 %     557       2.1 %     (78 )     -14.0 %

Mexico

    444       1.7 %     348       1.3 %     96       27.6 %

Europe

    2,422       9.0 %     3,002       11.2 %     (580 )     -19.3 %

Asia

    3,246       12.1 %     1,823       6.8 %     1,423       78.1 %
                                                 

Consolidated Total

  $ 26,895       100.0 %   $ 26,800       100.0 %   $ 95       0.4 %

 

The following table sets forth, as of September 30, 2019 and 2018, 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 8,090 and 4,840 of the Active Distributor count as of September 30, 2019 and 2018, respectively. 

 
 

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

 

   

As of 9/30/2019

   

As of 9/30/2018

   

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

    19,350       2,070       20,390       2,290       -5.1 %     -9.6 %

Australia/New Zealand

    890       70       1,010       80       -11.9 %     -12.5 %

Canada

    530       70       570       80       -7.0 %     -12.5 %

Mexico

    1,280       90       850       80       50.6 %     12.5 %

Europe

    2,440       310       3,210       380       -24.0 %     -18.4 %

Asia

    9,510       530       4,520       340       110.4 %     55.9 %
                                                 

Consolidated Total

    34,000       3,140       30,550       3,250       11.3 %     -3.4 %