false 0000912061 0000912061 2024-02-07 2024-02-07
 
UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
 
February 7, 2024
Date of Report (Date of earliest event reported)
 
NATURAL HEALTH TRENDS CORP.
(Exact name of registrant as specified in its charter)
 
Delaware
001-36849
59-2705336
(State or other jurisdiction of incorporation)        
(Commission File Number)  
(IRS Employer Identification No.)
 
Units 1205-07, 12F, Mira Place Tower A, 132 Nathan Road, Tsimshatsui, Kowloon, Hong Kong
(Address of principal executive offices, including zip code)
 
+852-3107-0800
(Registrant’s telephone number, including area code)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
☐   Emerging growth company
 
☐    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
Securities registered pursuant to Section 12(b) of the Exchange Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
NHTC
The NASDAQ Stock Market LLC
 
 
 
 
Item 2.02 Results of Operations and Financial Condition.
 
On February 7, 2024, Natural Health Trends Corp. issued an earnings release announcing its results for the quarter and year ended December 31, 2023. The press release is attached hereto as exhibit 99.1.
 
Item 9.01 Financial Statements and Exhibits.
 
 
(d)
Exhibits.
   
    104        Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: February 7, 2024
 
 
NATURAL HEALTH TRENDS CORP.
 
 
 
 
 
 
 
By:
/s/ Timothy S. Davidson                                                     
 
 
Timothy S. Davidson
 
 
Senior Vice President and Chief Financial Officer
 
 

Exhibit 99.1

 

Natural Health Trends Reports Fourth Quarter and Full Year 2023 Financial Results

 

– Fourth quarter revenue of $10.9 million increased 3% compared to the third quarter of 2023 

– Cash flows from operations improved $2.0 million year-over-year before tax installment payments

– Declared a quarterly cash dividend of $0.20 per share 

 

HONG KONG – February 7, 2024 – Natural Health Trends Corp. (NASDAQ: NHTC), a leading direct-selling and e-commerce company that markets premium quality personal care, wellness and “quality of life” products under the NHT Global brand, today announced its financial results for the fourth quarter and full year ended December 31, 2023.

 

Fourth Quarter 2023 Financial Highlights

 

 

•

Revenue of $10.9 million increased 3% compared to $10.6 million in the third quarter of 2023 and decreased 13% compared to $12.5 million in the fourth quarter of 2022. 
 

•

Operating loss was $242,000 compared to operating loss of $292,000 in the third quarter of 2023 and operating income of $43,000 in the fourth quarter of 2022.
 

•

Net income was $358,000, or $0.03 per diluted share, compared to $172,000, or $0.02 per diluted share, in the third quarter of 2023 and $188,000, or $0.02 per diluted share, in the fourth quarter of 2022.
 

•

The number of Active Members1 were down 6% to 32,410 at December 31, 2023, compared to 34,660 at September 30, 2023, and decreased 16% compared to 38,660 at December 31, 2022.

 

 

1 

Natural Health Trends defines Active Members as those that have placed at least one product order with the Company during the preceding twelve-month period.

 

Full Year 2023 Financial Highlights

 

 

•

Revenue of $43.9 million decreased 11% compared to $49.1 million in 2022.
 

•

Operating loss was $1.7 million, compared to $270,000 in 2022.
 

•

Net income was $568,000, or $0.05 per diluted share, compared to $313,000, or $0.03 per diluted share, in 2022.

 

Management Commentary

 

“We managed to achieve a sequential increase in orders despite tepid consumer sentiment in China and price increases in several markets in the quarter. We believe the increased frequency and size of in-person activities contributed to the uptick. We plan to sponsor more such events in the coming months to continue improving the effectiveness of our market campaigns.” commented Chris Sharng, President of Natural Health Trends Corp.

 

Mr. Sharng continued, “Though under pressure from lingering inflation and stronger dollar, we succeeded in protecting margin and controlling costs. With more emphasis on training in the coming year, we believe we are well positioned to benefit from further volume boost.”

 

 

1
 

 

Balance Sheet and Cash Flow

 

 

•

Net cash used in operating activities was $69,000 in the fourth quarter of 2023, compared net cash provided by operating activities of $938,000 in the fourth quarter of 2022. Net cash used in operating activities was $4.3 million in 2023, compared to $4.9 million in 2022. Before tax installment payments, the liability of which arises from the 2017 U.S. Tax Cuts and Jobs Act (the “Act Act”), cash used in operating activities was $1.2 million in 2023, versus $3.2 million a year ago. Of the total Tax Act liability of $20.2 million, $11.2 million has been paid to date.
 

•

Total cash and cash equivalents were $56.2 million as of December 31, 2023, down from $69.7 million as of December 31, 2022. 
 

•

On February 5, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 on each share of common stock outstanding. The dividend will be payable on March 1, 2024 to stockholders of record as of February 20, 2024.

 

The Company expects to issue its 2023 audited financial results in late February with its Annual Report on Form 10-K to be filed with the United States Securities and Exchange Commission. These financial results are preliminary and the accompanying financial statements have not been audited or have not yet been reviewed by the Company’s independent accountants. Significant updates and revisions may be required before the release of the Company’s 2023 audited financial results.

 

Fourth Quarter and Full Year 2023 Financial Results Conference Call

 

Management will host a conference call to discuss the fourth quarter and full year 2023 financial results today, Wednesday, February 7, 2024 at 11:30 a.m. Eastern Time. The conference call details are as follows:

 

Date:

Wednesday, February 7, 2024

Time:

11:30 a.m. Eastern Time / 8:30 a.m. Pacific Time

Dial-in:

1-877-407-0789 (Domestic)

1-201-689-8562 (International)

Conference ID:

13743993

Webcast:

https://viavid.webcasts.com/starthere.jsp?ei=1653011&tp_key=5a8602f7ee

 

For those unable to participate during the live broadcast, a replay of the call will also be available from 2:30 p.m. Eastern Time on February 7, 2024 through 11:59 p.m. Eastern Time on February 14, 2024 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number:  13743993.

 

About Natural Health Trends Corp.

 

Natural Health Trends Corp. (NASDAQ: NHTC) is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, the Americas, and Europe. The Company markets premium quality personal care products under the NHT Global brand. Additional information can be found on the Company’s website at www.naturalhealthtrendscorp.com.

 

Forward-Looking Statements

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this press release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause the Company’s actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption “Risk Factors” in Natural Health Trends Corp.’s Annual Report on Form 10-K filed on March 3, 2023 with the Securities and Exchange Commission (SEC), as well as in subsequent reports filed this year with the SEC. The Company assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.

 

2
 

 

CONTACT:

 

Scott Davidson

Senior Vice President and Chief Financial Officer

Natural Health Trends Corp.

Tel (Hong Kong): +852-3107-0800

Tel (U.S.): 310-541-0888

investor.relations@nhtglobal.com

 

3
 

 

NATURAL HEALTH TRENDS CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data) 

 

   

December 31,

  
   

2023

    

2022

  
    (Unaudited)    

ASSETS

                

Current assets:

                

Cash and cash equivalents

   $ 56,178     $ 69,667  

Inventories

     4,293       4,525  

Other current assets

     3,758       3,359  

Total current assets

     64,229       77,551  

Property and equipment, net

     266       394  

Operating lease right-of-use assets

     3,319       3,992  

Restricted cash

     39       79  

Deferred tax asset

     369       195  

Other assets

     869       606  

Total assets

   $ 69,091     $ 82,817  

LIABILITIES AND STOCKHOLDERS’ EQUITY

                

Current liabilities:

                

Accounts payable

   $ 990     $ 810  

Income taxes payable

     3,716       2,972  

Accrued commissions

     2,067       2,943  

Other accrued expenses

     1,170       1,181  

Deferred revenue

     6,166       5,597  

Amounts held in eWallets

     3,945       4,895  

Operating lease liabilities

     1,146       1,135  

Other current liabilities

     784       905  

Total current liabilities

     19,984       20,438  

Income taxes payable

     5,054       9,098  

Deferred tax liability

     135       141  

Operating lease liabilities

     2,318       2,989  

Total liabilities

     27,491       32,666  

Stockholders’ equity:

                

Preferred stock

     —       —  

Common stock

     13       13  

Additional paid-in capital

     84,695       86,102  

Accumulated deficit

     (17,703 )     (9,056 )

Accumulated other comprehensive loss

     (1,069 )     (1,004 )

Treasury stock, at cost

     (24,336 )     (25,904 )

Total stockholders’ equity

     41,600       50,151  

Total liabilities and stockholders’ equity

   $ 69,091     $ 82,817  

 

4
 

 

NATURAL HEALTH TRENDS CORP. 

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

   

Three Months Ended December 31,

    

Year Ended December 31,

  
   

2023

    

2022

    

2023

    

2022

  
   

(Unaudited)

    

(Unaudited)

          

Net sales

   $ 10,937     $ 12,512     $ 43,924     $ 49,134  

Cost of sales

     2,789       3,263       11,175       12,661  

Gross profit

     8,148       9,249       32,749       36,473  

Operating expenses:

                                

Commissions expense

     4,553       5,377       18,414       20,747  

Selling, general and administrative expenses

     3,837       3,829       16,006       15,996  

Total operating expenses

     8,390       9,206       34,420       36,743  

Income (loss) from operations

     (242 )     43       (1,671 )     (270 )

Other income, net

     708       400       2,416       872  

Income before income taxes

     466       443       745       602  

Income tax provision

     108       255       177       289  

Net income

   $ 358     $ 188     $ 568     $ 313  

Net income per common share:

                                

Basic

   $ 0.03     $ 0.02     $ 0.05     $ 0.03  

Diluted

   $ 0.03     $ 0.02     $ 0.05     $ 0.03  

Weighted-average number of common shares outstanding:

                                

Basic

     11,448       11,423       11,436       11,362  

Diluted

     11,461       11,423       11,456       11,423  

 

5
 

 

NATURAL HEALTH TRENDS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

   

Year Ended December 31,

  
   

2023

    

2022

  

CASH FLOWS FROM OPERATING ACTIVITIES:

     (Unaudited)          

Net income

   $ 568     $ 313  

Adjustments to reconcile net income to net cash used in operating activities:

                

Depreciation and amortization

     164       204  

Share-based compensation

     161       —  

Noncash lease expense

     1,109       1,172  

Deferred income taxes

     (178 )     90  

Changes in assets and liabilities:

                

Inventories

     228       680  

Other current assets

     (452 )     992  

Other assets

     (270 )     (67 )

Accounts payable

     181       52  

Income taxes payable

     (3,299 )     (1,404 )

Accrued commissions

     (866 )     (654 )

Other accrued expenses

     (4 )     (732 )

Deferred revenue

     565       (2,901 )

Amounts held in eWallets

     (947 )     (1,432 )

Operating lease liabilities

     (1,119 )     (1,220 )

Other current liabilities

     (119 )     55  

Net cash used in operating activities

     (4,278 )     (4,852 )

CASH FLOWS FROM INVESTING ACTIVITIES:

                

Purchases of property and equipment

     (46 )     (143 )

Net cash used in investing activities

     (46 )     (143 )

CASH FLOWS FROM FINANCING ACTIVITIES:

                

Dividends paid

     (9,215 )     (9,138 )

Net cash used in financing activities

     (9,215 )     (9,138 )

Effect of exchange rates on cash, cash equivalents and restricted cash

     10       (486 )

Net decrease in cash, cash equivalents and restricted cash

     (13,529 )     (14,619 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

     69,746       84,365  

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

   $ 56,217     $ 69,746  

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

                

Right-of-use assets obtained in exchange for operating lease liabilities

   $ 147     $ 2,234  

 

6
v3.24.0.1
Document And Entity Information
Feb. 07, 2024
Document Information [Line Items]  
Entity, Registrant Name NATURAL HEALTH TRENDS CORP.
Document, Type 8-K
Document, Period End Date Feb. 07, 2024
Entity, Incorporation, State or Country Code DE
Entity, File Number 001-36849
Entity, Tax Identification Number 59-2705336
Entity, Address, Address Line One Units 1205-07, 12F, Mira Place Tower A
Entity, Address, Address Line Two 132 Nathan Road
Entity, Address, Address Line Three Tsimshatsui
Entity, Address, City or Town Kowloon
Entity, Address, Country HK
City Area Code 852
Local Phone Number 3107-0800
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity, Emerging Growth Company false
Title of 12(b) Security Common Stock
Trading Symbol NHTC
Security Exchange Name NASDAQ
Amendment Flag false
Entity, Central Index Key 0000912061
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