PR Newswire | Aug 14, 2020 07:00AM EDT

08/14 06:00 CDT

Reliv International Reports Second-Quarter Financial Results for 2020 CHESTERFIELD, Mo., Aug. 14, 2020

CHESTERFIELD, Mo., Aug. 14, 2020 /PRNewswire/ -- Reliv International, Inc. (NASDAQ: RELV), a developer and marketer of nutritional supplements that promote optimal health, today reported its financial results for the second quarter of 2020.

Reliv reported net sales of $8.0 million for the second quarter of 2020 compared with net sales of $8.3 million in the second quarter of 2019, a decrease of 2.9%. Net sales in the United States increased to $6.1 million in the second quarter of 2020, which represented a 3.1% increase in net sales when compared to the prior-year quarter. Net sales in Reliv's foreign markets decreased 18.0% in the second quarter of 2020 compared with the prior-year quarter. All foreign markets experienced decreases in net sales, including decreases in net sales in Asia and Europe of 18.3% and 20.4%, respectively, in the second quarter of 2020. The decreases in foreign net sales were primarily the result of local business disruptions caused by COVID-19 pandemic.

Reliv reported a net loss for the second quarter of 2020 of $199,000 (loss per diluted share of $0.11) compared to a net loss of $388,000 (loss per diluted share of $0.22) in the second quarter of 2019. The loss from operations for the second quarter of 2020 was $277,000 compared to a loss from operations of $366,000 in the same period in 2019. Results from operations in the second quarter of 2020 improved from the prior-year quarter as selling, general and administrative expenses decreased by $188,000 to $3.5 million in the second quarter of 2020 compared to $3.7 million in the prior-year quarter; however, the decline in sales did not permit the Company to reach profitability in the quarter.

Net sales for the first six months of 2020 were $18.3 million, which represented a 3.1% increase compared to same period in 2019. Net sales in the United States increased by 7.0% and net sales in Reliv's foreign markets decreased by 7.6% in the first half of 2020 compared with the first half of last year. Net sales in Reliv's foreign markets decreased by 6.7% during the first half of 2020 when the impact of foreign currency fluctuation is removed.

Reliv reported net income of $463,000, or $0.27 per diluted share in the first six months of 2020, compared to net income of $236,000 or $0.13 per diluted share in the same period of 2019. The improvement in the first six months of 2020 is the result of the increase in sales and resulting gross margin, coupled with the income tax benefit in the first quarter of 2020 generated by the net operating loss carryback of $225,000 provided under the CARES Act.

Reliv had cash and cash equivalents of $2.7 million as of June 30, 2020, compared to $1.6 million as of December 31, 2019. Net cash generated by operating activities was $222,000 in the first six months of 2020.

As of June 30, 2020, Reliv had 25,490 active Distributors - an increase of 0.6% from June 30, 2019. The number of Master Affiliates increased by 5.7% compared to the year-ago total, driven by the growth in Master Affiliates in Asia of 48.9%. Master Affiliate is the level at which Distributors are eligible to earn generation royalties. As of June 30, 2020, Reliv had 13,020 retail customers and Preferred Customers in total - a decrease of 12.6% from June 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.

"In spite of the obstacles created by the COVID-19 pandemic, our business showed its resiliency during the second quarter of 2020," commented Ryan A. Montgomery, Chief Executive Officer. "We were able to generate a modest increase in sales in the United States as our company and distributors continue to adapt our business model and use of technology to the 'new normal' of life during these challenging times."

"We continue to enhance our online tools for distributors for their outreach to new potential customers and distributors, as well our communications with our distributors through the use of Zoom video calls, online training videos, and other features available through our Reliv mobile app," Montgomery added.

In place of its traditional U.S. distributor conference originally planned to be held in St. Louis in late July, Reliv will instead host a world-wide online conference on August 28-29. Registration is free to all distributors and registered customers. "We are well into the process of creating the content for this first-ever virtual Reliv conference, with portions of the conference targeted to our markets in Asia-Pacific and Europe. We are excited by the opportunity of reaching out to a much larger audience, not only in the United States, but all over the Reliv world."

In international operations, net sales in all foreign markets decreased as local COVID-19 guidelines were generally more restrictive than those in the United States. "After a difficult April in our foreign markets, we saw steady improvements each month as the restrictions eased," noted Montgomery. "We are hopeful for a full recovery of our foreign operations overall in the coming months as people see the value of our products and in the home-based business opportunity that Reliv provides."

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 network marketing 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

June 30 December 31

2020 2019

(Unaudited) (Audited)

Assets

Current Assets:

Cash and cash equivalents $2,730,672 $1,630,779

Accounts receivable, less allowances of

$5,000 in 2020 and 2019 279,920 107,369

Notes & accounts receivables & deposits - related parties 889,022 1,099,228

Inventories 3,028,031 2,701,688

Other current assets 855,741 326,454

Total current assets 7,783,386 5,865,518

Notes & accounts receivables - related parties 2,361,910 2,418,921

Other assets 2,431,384 2,581,717

Net property, plant and equipment 4,281,323 4,440,840

Total Assets $16,858,003 $15,306,996

Liabilities and Stockholders' Equity

Accounts payable, accruals & other current liabilities $3,741,717 $3,489,157

Long-term debt - current 833,649 500,000

Long-term debt, less current portion 528,351 -

Other noncurrent liabilities 242,771 216,196

Stockholders' equity 11,511,515 11,101,643

Total Liabilities and Stockholders' Equity $16,858,003 $15,306,996

Consolidated Statements of Operations

Three months ended June 30 Six months ended June 30

2020 2019 2020 2019

(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Product sales $7,371,162 $7,603,041 $16,919,979 $16,414,038

Freight income 446,707 479,881 1,004,802 999,822

Other revenue 198,691 174,091 374,444 332,657

Net Sales 8,016,560 8,257,013 18,299,225 17,746,517

Costs and expenses:

Cost of goods sold 2,202,488 2,268,992 4,857,331 4,702,723

Distributor royalties and commissions 2,590,078 2,665,093 5,918,533 5,782,665

Selling, general and administrative 3,501,104 3,688,944 7,278,786 7,428,472

Total Costs and Expenses 8,293,670 8,623,029 18,054,650 17,913,860

Income (loss) from operations (277,110) (366,016) 244,575 (167,343)

Other income (expense):

Interest income 39,048 46,218 78,710 95,480

Interest expense (7,933) (10,075) (14,038) (15,487)

Other income (expense): 100,938 4,768 30,032 (660)

Gain on sale of fixed assets - - - 434,549

Income (loss) before income taxes (145,057) (325,105) 339,279 346,539

Provision (benefit) for income taxes 54,000 63,000 (124,000) 111,000

Net income (loss) ($199,057) ($388,105) $463,279 $235,539

Earnings (loss) per common share - Basic & Diluted ($0.11) ($0.22) $0.27 $0.13

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 June 30, Change from

2020 2019 prior year

Amount % of Amount % of Amount % Net Sales Net Sales

United States $ 6,088 75.9% $ 5,905 71.5% $ 183 3.1%

Australia/New Zealand 119 1.5% 132 1.6% (13) -9.8%

Canada 126 1.6% 140 1.7% (14) -10.0%

Mexico 125 1.6% 153 1.8% (28) -18.3%

Europe 602 7.5% 756 9.2% (154) -20.4%

Asia 957 11.9% 1,171 14.2% (214) -18.3%

Consolidated Total $ 8,017 100.0% $ 8,257 100.0% $ (240) -2.9%

Net sales by Market

(in thousands) Six months ended June 30, Change from

2020 2019 prior year

Amount % of Amount % of Amount % Net Sales Net Sales

United States $ 13,930 76.1% $ 13,016 73.4% $ 914 7.0%

Australia/New Zealand 289 1.6% 309 1.7% (20) -6.5%

Canada 285 1.6% 340 1.9% (55) -16.2%

Mexico 253 1.4% 289 1.6% (36) -12.5%

Europe 1,564 8.5% 1,695 9.6% (131) -7.7%

Asia 1,978 10.8% 2,098 11.8% (120) -5.7%

Consolidated Total $ 18,299 100.0% $ 17,747 100.0% $ 552 3.1%

Reliv International, Inc. and Subsidiaries

Retail and Preferred Customers/Active Distributors/Master Affiliates and Aboveby Market

As of 6/30/2020

Retail Preferred Active Total Customers Master Affiliates Customers Customers Distributors and Distributors and Above

United States 3,650 1,740 17,370 22,760 1,950

Australia/New Zealand 50 240 660 950 80

Canada 90 20 450 560 70

Mexico 30 110 1,110 1,250 80

Europe 710 580 1,610 2,900 270

Asia 1,050 4,750 4,290 10,090 700

Consolidated Total 5,580 7,440 25,490 38,510 3,150

As of 6/30/2019

Retail Preferred Active Total Customers Master Affiliates Customers Customers Distributors and Distributors and Above

United States 3,730 1,540 17,750 23,020 1,980

Australia/New Zealand 40 230 680 950 70

Canada 90 30 500 620 60

Mexico 10 90 1,100 1,200 100

Europe 810 820 1,710 3,340 300

Asia 2,690 4,810 3,610 11,110 470

Consolidated Total 7,370 7,520 25,350 40,240 2,980

Change in %

Retail Preferred Active Total Customers Master Affiliates Customers Customers Distributors and Distributors and Above

United States -2.1% 13.0% -2.1% -1.1% -1.5%

Australia/New Zealand 25.0% 4.3% -2.9% 0.0% 14.3%

Canada 0.0% -33.3% -10.0% -9.7% 16.7%

Mexico 200.0% 22.2% 0.9% 4.2% -20.0%

Europe -12.3% -29.3% -5.8% -13.2% -10.0%

Asia -61.0% -1.2% 18.8% -9.2% 48.9%

Consolidated Total -24.3% -1.1% 0.6% -4.3% 5.7%

The table above sets forth, as of June 30, 2020 and 2019, the number of ourRetail Customers/Preferred

Customers/Active Distributors and Master Affiliates and above. The totalnumber of active distributors includes

Master Affiliates and above. We define an active retail or preferred customeras one that has placed a product

order in the prior twelve months, and we define an active distributor as onethat enrolls as a distributor or renews

his or her distributorship during the prior twelve months. Many individualsjoin Reliv as distributors to obtain our

products at a discount (approximately 74% of distributors in the United States)and may not participate in the Reliv

business opportunity. Master Affiliates and above are distributors that haveattained the highest level of discount

and are eligible for royalties generated by Master Affiliate groups in theirdownline organization.

For more information, contact:

Steve Albright Chief Financial Officer (636) 733-1305

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SOURCE Reliv International, Inc.