GlobeNewswire Inc | Nov 3, 2021 09:00AM EDT

November 03, 2021

? Sixth consecutive quarter of positive operating income and net income? Strong balance sheet with ample liquidity? Achieved strong sales momentum in Peru, Japan andIndia? Declared a quarterly cash dividend of $0.20 per share

HONG KONG, Nov. 03, 2021 (GLOBE NEWSWIRE) -- Natural Health Trends Corp. (NASDAQ: NHTC), a leading direct-selling and e-commerce company that markets premium quality personal care, wellness andquality of lifeproducts under the NHT Global brand, today announced its financial results for the quarter ended September 30, 2021.

Third Quarter2021 Financial Highlights

-- Revenue of $14.3 million decreased 12% compared to $16.2million in the secondquarter of 2021 and increased 1% compared to $14.1 million in the third quarter of 2020.

-- Operating income of$479,000 increased 24% compared to $385,000 in the secondquarter of 2021 and decreased 28% compared to $668,000 in the third quarter of 2020.

-- Net income was $471,000, or $0.04per diluted share, compared to $229,000, or $0.02per diluted share, in the secondquarter of 2021 and $635,000, or $0.06 per diluted share, in the third quarter of 2020.

-- The number of Active Members1decreased2% to 45,950at September 30, 2021compared to 46,860at June 30, 2021, and decreased 14% compared to 53,300at September 30, 2020.

Natural Health Trends defines Active Members as those that have placed at 1 least one product order with the Company during the preceding twelve-month period.

Year-to-Date2021 Financial Highlights

-- Revenue of $43.9million decreased 3% compared to $45.5million in the first ninemonths of 2020.

-- Operating incomewas $1.1 millioncompared to an operating loss of $597,000 in the first ninemonths of 2020.

-- Net income was $853,000, or $0.07per diluted share, compared to net incomeof $96,000, or $0.01per diluted share, in the first ninemonths of 2020.

Management Commentary

During the third quarter our leaders continued to face challenges in conducting their business following renewed government-mandated restrictions and shutdowns amid scattered outbreaks in COVID-19 cases. The quarter marked the first quarter since the beginning of the pandemic we were unable to sponsor any in-person member events in China, Macau or Hong Kong and we had to abruptly cancel a previously scheduled event in September. Despite these difficult circumstances,we still managed to deliver revenue and order volume growth year-over-year, and our sixth consecutive quarter of positive operating income and net income, commented Chris Sharng, President of Natural Health Trends Corp. Revenue of $14.3 million increased 1% compared to the third quarter of 2020 driven by strength in Peru, Japanand India, which all experienced strong top-line growth year-over-year.

Mr. Sharng continued, Further, we are pleased to announce the SEC has closed its investigation and the IRS has completed its tax audit. We fully cooperated with the SEC and IRS throughout their respective review processes and we are pleased to put these matters behind us. Mr. Sharng concluded, As we continue to navigate the evolving operating environment resulting from the COVID-19 pandemic, we remain highly focused on the fundamentals of our business including supporting our members, maintaining our strong financial discipline, and operating our business efficiently.

Balance Sheet and Cash Flow

-- Net cash used inoperating activities was $557,000in the first ninemonths of 2021, compared to net cash used of $1.5millionin the first ninemonths of 2020. -- Total cash and cash equivalents were $84.6million at September 30, 2021, down slightly from $88.1million at June 30, 2021. -- On November 1, 2021, the Companys Board of Directors declared a quarterly cash dividend of $0.20 on each share of common stock outstanding. The dividend will be payable on November 26, 2021to stockholders of record as of November 16, 2021.

Third Quarter2021 Financial Results Conference Call

Management will host a conference call to discuss thethird quarter2021 financial results today, Wednesday, November 3, 2021at 11:30 a.m.Eastern Time. The conference call details are as follows:

Date: Wednesday, November 3, 2021Time: 11:30 a.m. Eastern Time / 8:30 a.m. Pacific TimeDial-in: 1-877-407-0789 (Domestic) 1-201-689-8562 (International)Conference ID: 13723871Webcast: http://public.viavid.com/index.php?id=146859

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 November 3, 2021through 11:59 p.m. Eastern Time on November 17, 2021by dialing 1-844-512-2921 (domestic) and 1-412-317-6671(international) and referencing the replay pin number: 13723871.

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 Companys 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 Companys 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 February 26, 2021 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.

CONTACTS:

Company Contact: Scott DavidsonSenior Vice President and Chief Financial OfficerNatural Health Trends Corp.Tel (Hong Kong): +852-3107-0800Tel (U.S.): 310-541-0888scott.davidson@nhtglobal.com

Investor Contact:ADDO Investor RelationsTel: 310-829-5400investor.relations@nhtglobal.com

NATURAL HEALTH TRENDS CORP.CONSOLIDATED BALANCE SHEETS(In thousands, except share data)

September 30, December 31, 2021 2020 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 84,640 $ 92,367 Inventories 4,390 3,779 Other current assets 4,386 3,595 Total current assets 93,416 99,741 Property and equipment, net 463 539 Operating lease right-of-use assets 3,339 3,745 Restricted cash 524 525 Deferred tax asset 660 731 Other assets 574 661 Total assets $ 98,976 $ 105,942 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Accounts payable $ 879 $ 580 Income taxes payable 1,844 1,481 Accrued commissions 3,441 3,496 Other accrued expenses 1,758 1,922 Deferred revenue 6,038 3,091 Amounts held in eWallets 6,756 8,503 Operating lease liabilities 1,304 1,163 Other current liabilities 847 1,270 Total current liabilities 22,867 21,506 Income taxes payable 12,130 13,748 Deferred tax liability 215 216 Operating lease liabilities 2,209 2,775 Total liabilities 37,421 38,245 Stockholders? equity: Preferred stock ? ? Common stock 13 13 Additional paid-in capital 86,102 86,102 Retained earnings 1,820 7,822 Accumulated other comprehensive loss (476 ) (336 )Treasury stock, at cost (25,904 ) (25,904 )Total stockholders? equity 61,555 67,697 Total liabilities and stockholders? equity $ 98,976 $ 105,942

NATURAL HEALTH TRENDS CORP.CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(In thousands, except per share data)

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net sales $ 14,276 $ 14,124 $ 43,897 $ 45,476 Cost of sales 3,668 3,635 10,857 12,966 Gross profit 10,608 10,489 33,040 32,510 Operating expenses:Commissions 6,027 5,620 18,468 19,336 expenseSelling,general and 4,102 4,201 13,488 13,771 administrativeexpensesTotal operating 10,129 9,821 31,956 33,107 expensesIncome (loss) 479 668 1,084 (597 )from operationsOther income (53 ) 385 (92 ) 603 (expense), netIncome before 426 1,053 992 6 income taxesIncome taxprovision (45 ) 418 139 (90 )(benefit)Net income $ 471 $ 635 $ 853 $ 96 Net income per common share:Basic $ 0.04 $ 0.06 $ 0.08 $ 0.01 Diluted $ 0.04 $ 0.06 $ 0.07 $ 0.01 Weightedaverage common sharesoutstanding:Basic 11,063 10,678 10,969 10,581 Diluted 11,424 11,424 11,424 11,424

NATURAL HEALTH TRENDS CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(In thousands)

Nine Months Ended September 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 853 $ 96 Adjustments to reconcile net income to net cash used in operating activities:Depreciation and amortization 237 301 Noncash lease expense 895 1,199 Deferred income taxes 66 979 Changes in assets and liabilities: Inventories (675 ) 2,193 Other current assets (823 ) 923 Other assets 65 120 Accounts payable 300 206 Income taxes payable (1,253 ) (1,790 )Accrued commissions 29 136 Other accrued expenses (157 ) (598 )Deferred revenue 2,973 (1,045 )Amounts held in eWallets (1,716 ) (3,163 )Operating lease liabilities (935 ) (1,120 )Other current liabilities (416 ) 33 Net cash used in operating activities (557 ) (1,530 )CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (165 ) (147 )Net cash used in investing activities (165 ) (147 )CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid (6,855 ) (6,855 )Net cash used in financing activities (6,855 ) (6,855 )Effect of exchange rates on cash, cash (151 ) 413 equivalents and restricted cashNet decrease in cash, cash equivalents and (7,728 ) (8,119 )restricted cashCASH, CASH EQUIVALENTS AND RESTRICTED CASH, 92,892 99,425 beginning of periodCASH, CASH EQUIVALENTS AND RESTRICTED CASH, end $ 85,164 $ 91,306 of periodSUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:Right-of-use assets obtained in exchange for $ 516 $ 2,724 operating lease liabilities