RELV Reliv International Inc

Reliv International, Inc. (NASDAQ:RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the third quarter of 2018.

Reliv reported net sales of $8.3 million for the third quarter of 2018 compared with net sales of $9.1 million in the third quarter of 2017. Net sales in the United States decreased by $583,000 in the third quarter of 2018, which represented an 8.2 percent decline in net sales when compared to the prior-year quarter.  Net sales in Reliv’s foreign markets decreased by $149,000, or 7.5 percent, in the third quarter of 2018 compared with the prior-year quarter.  Net sales in Asia and Mexico increased by 4.8 percent and 21.9 percent, respectively, in the third quarter of 2018, offset by decreases in all other regions.  Net sales in Reliv’s foreign markets decreased by 3.3 percent during the third quarter of 2018 when the impact of foreign currency fluctuation is removed.

Reliv reported a net loss for the third quarter of 2018 of $542,000 (loss per diluted share of $0.29) compared to a net loss of $319,000 (loss per diluted share of $0.17) in the third quarter of 2017.  The loss from operations for the third quarter of 2018 was $532,000 compared to a loss from operations of $334,000 in the same period in 2017.  Results from operations were primarily impacted by the decline in net sales and gross margin, partially offset by a reduction in selling, general and administrative (“SGA”) expenses in the quarter.  SGA expenses decreased to $3.8 million in the third quarter of 2018 compared to $4.3 million in the prior-year quarter.

Net sales for the first nine months of 2018 were $26.8 million, which represents a 15.9 percent decrease from the same period in 2017.  Net sales in the United States decreased by 17.3 percent and net sales in Reliv’s foreign markets decreased by 10.9 percent in the first nine months of 2018 compared with the same period last year.   Net sales in Reliv’s foreign markets decreased by 12.2 percent during the first nine months of 2018 when the impact of foreign currency fluctuation is removed.

Reliv reported a net loss of $1.8 million, or $0.95 per diluted share in the first nine months of 2018, compared to a net loss of $315,000 or $0.17 per diluted share in the same period of 2017.

Reliv celebrated its 30th anniversary at its distributor conference last month in Orlando.  Among the presentations at the conference, the company introduced a new corporate website, which includes a new Distributor Resource Center that gives distributors easy and quick access to key training and sales tools.  “These online capabilities are important to our future growth,” stated Ryan A. Montgomery, Chief Executive Officer.  “The world has changed in 30 years, and so has the industry, especially the last 5-10 years.  As we continue to build on the core foundation of our Reliv business, the key to our future growth will be a blend of online and offline methods that continue to build personal relationships and using technology to reach new people.  Success will happen for those that embrace traditional and new methods.”

In its international operations, Reliv has engaged Gabriela Moreno as a sales consultant in Mexico, and Reliv has also added Jo Ann Sy as the sales manager in its Philippines market.  “These appointments confirm our commitment to our foreign operations,” said Mr. Montgomery.  “These individuals will be key in accelerating the growth in each of the markets, and we look forward to their contributions to Reliv.”

Additional initiatives include:

• Reliv held a Girlfriends’ Getaway weekend event in Dayton, OH in August.  This event provided an introduction to the Reliv brand and the Fit3 platform to a large group of new customers and prospective customers in the region.  Similar events are already in the works for 2019.
• As a follow up to our launch of Reliv Now® with Whey in the spring of 2018, Reliv is launching ProVantage with Whey in the EU market.  This provides a product with an alternative protein source to our second-largest market.

Reliv had cash and cash equivalents of $2.4 million as of September 30, 2018, compared to $3.3 million as of December 31, 2017.  Net cash used in operating activities was $850,000 in the first nine months of 2018. 

As of September 30, 2018, Reliv had 30,550 distributors and preferred customers – a decrease of 11.4 percent from September 30, 2017 – of which 3,250 are Master Affiliate level and above.  The number of Master Affiliates decreased by 14.7 percent compared to the prior year total.  Master Affiliate is the level at which distributors are eligible to earn generation royalties.

About Reliv International, Inc.

Reliv International, based in Chesterfield, MO, produces nutritional supplements that promote optimal nutrition. Reliv supplements address core nutrition and targeted solutions. 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 14 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.

For more information, contact:

Steve Albright                                                       Chief Financial Officer                                 (636) 733-1305          

--FINANCIAL HIGHLIGHTS FOLLOW –

Reliv International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
	September 30			December 31
		2018			2017
	(Unaudited)			(Audited)
Assets
Current Assets:
Cash and cash equivalents	$	2,372,837		$	3,272,788
Accounts receivable, less allowances of
$25,000 in 2018 and $26,300 in 2017		326,572			29,760
Accounts and note due from employees and distributors		140,562			138,497
Inventories		4,477,787			4,555,485
Other current assets		597,097			399,154
Total current assets		7,914,855			8,395,684
Other assets		3,718,778			3,916,551
Cash surrender value of life insurance		-			3,086,522
Net property, plant and equipment		5,332,691			5,677,239
Total Assets	$	16,966,324		$	21,075,996
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses	$	4,239,689		$	3,212,634
Current portion of long-term debt		-			3,045,421
Other noncurrent liabilities		518,180			453,354
Stockholders' equity		12,208,455			14,364,587
Total Liabilities and Stockholders' Equity	$	16,966,324		$	21,075,996
Consolidated Statements of Operations
	Three months ended September 30							Nine months ended September 30
		2018			2017				2018			2017
	(Unaudited)			(Unaudited)				(Unaudited)			(Unaudited)
Product sales	$	7,817,526		$	8,385,999			$	25,129,503		$	29,479,924
Handling & freight income		519,519			683,324				1,670,522			2,373,809
Net Sales		8,337,045			9,069,323				26,800,025			31,853,733
Costs and expenses:
Cost of products sold		2,383,942			1,949,670				7,089,958			7,113,647
Distributor royalties and commissions		2,639,863			3,199,596				8,858,965			11,252,922
Selling, general and administrative		3,845,304			4,253,675				12,546,840			13,811,814
Total Costs and Expenses		8,869,109			9,402,941				28,495,763			32,178,383
Loss from operations		(532,064	)		(333,618	)			(1,695,738	)		(324,650	)
Other income (expense):
Interest income		22,633			25,277				70,132			76,630
Interest expense		(16,408	)		(27,183	)			(93,195	)		(79,472	)
Other income (expense)		(8,462	)		(4,579	)			8,241			40,517
Loss before income taxes		(534,301	)		(340,103	)			(1,710,560	)		(286,975	)
Provision (benefit) for income taxes		8,000			(21,000	)			48,000			28,000
Net loss	$	(542,301	)	$	(319,103	)		$	(1,758,560	)	$	(314,975	)
Loss per common share - Basic	$	(0.29	)	$	(0.17	)		$	(0.95	)	$	(0.17	)
Weighted average shares		1,845,000			1,845,000				1,845,000			1,845,000
Loss per common share - Diluted	$	(0.29	)	$	(0.17	)		$	(0.95	)	$	(0.17	)
Weighted average shares		1,845,000			1,845,000				1,845,000			1,846,000

 

Reliv International, Inc. and Subsidiaries
Net sales by Market
(in thousands)	Three months ended September 30,										Change from
		2018					2017				prior year
	Amount		% of Net Sales			Amount		% of Net Sales			Amount			%
United States	$	6,499	78.0	%		$	7,082	78.1	%		$	(583	)	-8.2	%
Australia/New Zealand		156	1.9	%			224	2.5	%			(68	)	-30.4	%
Canada		153	1.8	%			200	2.2	%			(47	)	-23.5	%
Mexico		128	1.5	%			105	1.2	%			23		21.9	%
Europe		807	9.7	%			891	9.8	%			(84	)	-9.4	%
Asia		594	7.1	%			567	6.2	%			27		4.8	%
Consolidated Total	$	8,337	100.0	%		$	9,069	100.0	%		$	(732	)	-8.1	%
Net sales by Market
(in thousands)	Nine months ended September 30,										Change from
		2018					2017				prior year
	Amount		% of Net Sales			Amount		% of Net Sales			Amount			%
United States	$	20,505	76.5	%		$	24,791	77.8	%		$	(4,286	)	-17.3	%
Australia/New Zealand		565	2.1	%			711	2.2	%			(146	)	-20.5	%
Canada		557	2.1	%			681	2.2	%			(124	)	-18.2	%
Mexico		348	1.3	%			352	1.1	%			(4	)	-1.1	%
Europe		3,002	11.2	%			3,399	10.7	%			(397	)	-11.7	%
Asia		1,823	6.8	%			1,920	6.0	%			(97	)	-5.1	%
Consolidated Total	$	26,800	100.0	%		$	31,854	100.0	%		$	(5,054	)	-15.9	%
The following table sets forth, as of September 30, 2018 and 2017, 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 4,840 and 5,010 of the Active Distributor count as of September 30, 2018 and 2017, respectively.
Active Distributors/Preferred Customers and Master Affiliates and Above by Market
	As of 9/30/2018					As of 9/30/2017					Change in %
	ActiveDistributorsand Preferred Customers		MasterAffiliates andAbove			ActiveDistributorsand Preferred Customers		MasterAffiliates andAbove			ActiveDistributorsand PreferredCustomers			MasterAffiliatesand Above
United States		20,390	2,290				23,860	2,750				-14.5	%	-16.7	%
Australia/New Zealand		1,010	80				1,180	110				-14.4	%	-27.3	%
Canada		570	80				710	80				-19.7	%	0.0	%
Mexico		850	80				730	60				16.4	%	33.3	%
Europe		3,210	380				3,940	440				-18.5	%	-13.6	%
Asia		4,520	340				4,070	370				11.1	%	-8.1	%
Consolidated Total		30,550	3,250				34,490	3,810				-11.4	%	-14.7	%