PR Newswire | Nov 13, 2020 07:00AM EST

11/13 06:00 CST

Reliv International Reports Third-Quarter Financial Results for 2020 CHESTERFIELD, Mo., Nov. 13, 2020

CHESTERFIELD, Mo., Nov. 13, 2020 /PRNewswire/ -- 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(r) 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 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

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 - 1,106,221 1,099,228related parties

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 2,331,844 2,418,921parties

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 $3,696,451 $3,489,157liabilities

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 & ($0.07) ($0.09) $0.19 $0.04Diluted

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 Amount % of Net Amount % Sales Sales

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 Amount % of Net Amount % Sales Sales

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 Aboveby Market

As of 9/30/2020

Preferred Active Total Customers Master Retail Customers Customers Distributors and Distributors 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

Preferred Active Total Customers Master Retail Customers Customers Distributors and Distributors 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 %

Preferred Active Total Customers Master Retail Customers Customers Distributors and Distributors 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 ofour Retail Customers/Preferred Customers/Active Distributors and MasterAffiliates and above. The total number of active distributors includes MasterAffiliates and above. We define an active retail or preferred customer as onethat has placed a product order in the prior twelve months, and we define anactive distributor as one that enrolls as a distributor or renews his or herdistributorship during the prior twelve months. Many individuals join Reliv asdistributors to obtain our products at a discount and may not participate inthe Reliv business opportunity. Master Affiliates and above are distributorsthat have attained the highest level of discount and are eligible for royaltiesgenerated by Master Affiliate groups in their downline organization.

For more information, contact:Steve Albright Chief Financial Officer (636) 733-1305

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SOURCE Reliv International, Inc.