Core Viewpoint - Natural Health Trends Corp. (NHTC) reported a decline in revenue and net income for Q1 2025, but showed signs of healthy demand through increased order volume, while facing challenges from trade uncertainties and a strategic focus on regional manufacturing [2][3][8]. Revenue and Earnings Snapshot - NHTC reported revenues of $10.7 million for Q1 2025, a 1.9% decline from $10.9 million in the same period last year [2] - Net income decreased by 35.1% to $122,000 from $188,000 year-over-year, with earnings per diluted share falling to $0.01 from $0.02 [3] - Operating loss narrowed to $0.3 million from $0.4 million a year earlier, while selling, general, and administrative expenses declined by 3.9% to $3.8 million [3] - Gross margin increased to 73.6% from 73.4%, indicating stable cost management [3] Other Key Business Metrics - NHTC ended the quarter with 30,180 active members, down 4.6% year-over-year [4] - Commissions expense as a percentage of revenues increased to 41.8% from 41% due to higher commission payouts [4] - Cash provided by operating activities was $484,000, down from $549,000 in the prior-year quarter [4] Cash Position and Dividends - As of March 31, 2025, NHTC held $41.9 million in cash and marketable securities, down from $43.9 million at the end of 2024, primarily due to dividend payouts [5] - The company declared a quarterly cash dividend of $0.20 per share, payable on May 23 to shareholders of record as of May 13 [5] Management Commentary - President Chris Sharng described Q1 as an extension of positive momentum from the second half of 2024, highlighting engagement from a product roadshow in China and Hong Kong [6] - The launch of new products, Twin Slim Coffee and Tomato Soup, was well-received [6] - The opening of a new office in Bogotá, Colombia, is seen as strategically significant for the Latin American market [7] Factors Influencing the Results - Revenue decline was attributed to timing differences in incentive campaigns rather than weakening demand, with a sequential uptick in order intake noted [8] - The company is working to regionalize manufacturing closer to Asian markets to improve cost efficiency and reduce logistics volatility [8] Guidance and Strategic Outlook - Management did not provide explicit financial guidance but emphasized the importance of navigating evolving trade barriers [9] - NHTC aims to streamline its supply chain and adjust logistics to mitigate adverse impacts while focusing on product innovation and member support [10] Other Developments - NHTC expanded its geographical footprint with the launch of a new regional office in Bogotá, reinforcing its commitment to long-term international expansion [11]

Natural Health Trends (NHTC) Q1 2025 Earnings Call April 30, 2025 11:30 AM ET Company Participants Michelle Glidewell - Senior Manager of NHT Global CorpChris Sharng - President & DirectorScott Davidson - Senior VP and CFO Operator Greetings, and welcome to the Natural Health Trends Corp. First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. And as a reminder, this conference is being recorded. It is now my pleasure to introduce to you Michelle ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $10.7 million, a 2% decrease from $11 million in Q1 2024, attributed to the timing of incentive calendars [4][7] - Active member base decreased to 30,180 as of March 31, down from 30,870 at December 31, and down 5% from 31,620 in March 2024 [7] - Gross profit margin increased slightly to 73.6% from 73.4% in the same quarter last year [7] - Net income for Q1 2025 was $122,000 or $0.01 per diluted share, compared to $188,000 or $0.02 per diluted share in Q1 2024 [9] Business Line Data and Key Metrics Changes - Orders taken increased by 9% sequentially over Q4 2024, indicating sustained interest in products [4] - New products introduced in the Twin Slim weight management line received strong customer feedback [5] Market Data and Key Metrics Changes - The company completed a Night City Roadshow in China and Hong Kong, promoting wellness products [5] - A new office was opened in Bogota, Colombia, serving as a central hub for customer services and brand showcasing [6] Company Strategy and Development Direction - The company is actively working to streamline its supply chain and bring manufacturing closer to primary markets in Asia to improve long-term efficiency [6][10] - Immediate priorities include assessing the potential impact of tariffs on operations and optimizing logistics [10] Management's Comments on Operating Environment and Future Outlook - Management noted that the international trade environment changed significantly after Q1, making it difficult to gauge impacts [6] - The focus remains on executing strategic initiatives and providing exceptional support to members [10] Other Important Information - Commissions expense as a percentage of total revenue increased to 41.8% from 41% a year ago due to higher weekly commissions [8] - Total cash, cash equivalents, and marketable securities were $41.9 million at March 31, down from $43.9 million at December 31, 2024, due to quarterly dividend payments [10] - A quarterly cash dividend of $0.20 per share was declared, payable on May 23 to stockholders of record as of May 13 [10] Q&A Session Summary - No specific Q&A session content was provided in the transcript.

Financial Performance - Net sales for Q1 2025 were $10,737,000, a decrease of 1.95% compared to $10,951,000 in Q1 2024[17] - Gross profit for Q1 2025 was $7,905,000, down from $8,039,000 in Q1 2024, reflecting a gross margin of approximately 73.6%[17] - Net income for Q1 2025 was $122,000, a decline of 35% from $188,000 in Q1 2024[19] - Total net sales for the three months ended March 31, 2025, were $10.7 million, a decrease of 2% from $10.9 million in the same period of 2024[41] - Product sales for the three months ended March 31, 2025, were $10.5 million, compared to $10.6 million in the same period of 2024[41] - The Company’s diluted net income per common share for the three months ended March 31, 2025, was $0.01, down from $0.02 in the same period of 2024[30] - Gross profit for the three months ended March 31, 2025, was $7,905,000, compared to $8,039,000 for the same period in 2024, reflecting a decrease of 1.7%[75] - Commissions expense increased to 41.8% of net sales in Q1 2025, up from 41.0% in Q1 2024, due to higher weekly commissions[107] Assets and Liabilities - Total current assets decreased to $48,806,000 as of March 31, 2025, compared to $50,983,000 at the end of 2024[15] - Total liabilities slightly decreased to $22,297,000 from $22,487,000 at the end of 2024[15] - The total stockholders' equity decreased to $30,882,000 as of March 31, 2025, from $32,872,000 at the end of 2024[15] - Total assets as of March 31, 2025, were $53,179,000, a decrease from $55,359,000 as of December 31, 2024[78] - The Company had contract liabilities of $5.4 million as of March 31, 2025, up from $4.9 million at the end of 2024, primarily due to $3.5 million received for unshipped product orders[39] - Deferred revenue as of March 31, 2025, was $6.9 million, consisting of $5.4 million in unshipped product orders and $1.5 million in auto ship advances[105] Cash Flow and Investments - Cash and cash equivalents increased to $21,688,000 from $13,533,000 at the end of 2024, marking a significant improvement[15] - The Company reported a net cash provided by operating activities of $484,000 for Q1 2025, down from $549,000 in Q1 2024[23] - Cash provided by operations for the first three months of 2025 was $484,000, down from $549,000 in the same period of 2024[112] - Cash flows from investing activities totaled $10.0 million in Q1 2025, compared to cash used of $28.5 million in Q1 2024, with $17.4 million spent on marketable securities[113] - As of March 31, 2025, cash, cash equivalents, and marketable securities totaled $41.9 million, a decrease of $2.0 million from December 31, 2024[111] - The Company recognized share-based compensation expense of $34,000 for the three months ended March 31, 2025, compared to $37,000 in the same period of 2024[64] Dividends and Stock Repurchase - The company declared dividends of $0.20 per share, totaling $2,303,000 for the quarter[20] - Cash dividends of $0.20 per common share were declared and paid, totaling $2.3 million for each quarter in 2025 and 2024[68] - The Company declared a quarterly cash dividend of $0.20 per share, payable on May 23, 2025, to stockholders of record on May 13, 2025[84] - The stock repurchase program has $21.9 million remaining from the authorized $70.0 million as of March 31, 2025[115] Market and Operational Insights - The Company operates in multiple markets, including the Americas, Greater China, Southeast Asia, and Europe, with no single market other than Hong Kong exceeding 10% of total net sales[42] - Approximately 94% of the Company's net sales were generated from subsidiaries located outside the Americas, with the Hong Kong subsidiary accounting for 85% of net sales in the latest fiscal quarter[87] - In Q1 2025, the company generated approximately 85% of its revenue from its e-commerce direct selling platform in Hong Kong, primarily from sales to members in China[88] - The Company operates in various markets, including the Americas, Greater China, Southeast Asia, and Europe, with a focus on expanding in promising markets[85] - The ongoing U.S.-China trade tensions have resulted in significant tariffs, including a 125% reciprocal tariff on Chinese imports, which may adversely affect the company's operations and costs[129] Corporate Changes and Future Outlook - The company relocated its corporate headquarters from Hong Kong to California in February 2025 due to changes in the political and economic landscape[90] - The political and economic environment in Hong Kong may adversely affect the company's future business and financial condition[90] - The company is exploring sourcing products from other jurisdictions to mitigate the impact of U.S. tariffs on Chinese imports[91] - The Company expects to recognize revenue from remaining performance obligations within the next twelve months[39] - The Company plans to focus investments in Greater China and other strategic markets, including Southeast Asia, India, South America, and Europe[118] Risk Management - The company maintains that its existing liquidity is adequate to fund normal operations and financial commitments for the foreseeable future[116] - There were no changes in internal control over financial reporting that materially affected the company during the fiscal quarter ended March 31, 2025[124] - The company has not identified any material changes to its risk factors since the last annual report[128]

Financial Performance - Revenue for Q1 2025 was $10.7 million, a decrease of 2% compared to $11.0 million in Q1 2024[7] - Operating loss for Q1 2025 was $345,000, an improvement from a loss of $365,000 in Q1 2024[7] - Net income for Q1 2025 was $122,000, or $0.01 per diluted share, compared to $188,000, or $0.02 per diluted share in Q1 2024[7] - Cash flows from operations were $484,000 in Q1 2025, down from $549,000 in Q1 2024[11] - Total cash, cash equivalents, and marketable securities were $41.9 million at March 31, 2025, down from $43.9 million at December 31, 2024[11] - The total assets decreased to $53.2 million as of March 31, 2025, from $55.4 million at December 31, 2024[14] Membership and Orders - Active Members decreased by 2% to 30,180 as of March 31, 2025, down from 30,870 at December 31, 2024, and down 5% from 31,620 at March 31, 2024[7] - The company experienced a 9% sequential increase in orders taken compared to Q4 2024, indicating sustained interest in its products[5] Dividends and Manufacturing Strategy - The company declared a quarterly cash dividend of $0.20 per share, payable on May 23, 2025[11] - The company is working to align manufacturing closer to key markets to improve long-term efficiency amid trade uncertainties[6]

– Sales decreased 2% year-over-year during the first quarter of 2025, attributable to promotional calendar differences – Generated cash flows from operations of $484,000 during the first quarter of 2025 – Declared a quarterly cash dividend of $0.20 per share LOS ANGELES, April 30, 2025 (GLOBE NEWSWIRE) -- 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 bra ...

Membership Trends - Total active members decreased from 32,410 in 2023 to 30,870 in 2024, representing a decline of approximately 4.8%[30] - The Americas region saw a reduction in active members from 4,040 in 2023 to 3,360 in 2024, a decrease of about 16.8%[30] - Hong Kong's active members slightly decreased from 23,490 in 2023 to 23,150 in 2024, a decline of approximately 1.4%[30] - The company experienced a 5% decrease in active members at the end of 2024 compared to the end of 2023, and a 16% decrease in active members at the end of 2023 and 2022 compared to the previous year, significantly impacting year-over-year sales[100] Revenue and Financial Performance - Total net sales for 2024 were $42,963,000, a decrease of 2.2% from $43,924,000 in 2023[236] - Gross profit for 2024 was $31,785,000, down from $32,749,000 in 2023, reflecting a decline of 2.9%[236] - Operating expenses decreased to $33,084,000 in 2024 from $34,420,000 in 2023, a reduction of 3.9%[236] - The company reported a net income of $572,000 for 2024, slightly up from $568,000 in 2023[236] - Basic and diluted net income per common share remained at $0.05 for both 2024 and 2023[236] - Total assets decreased to $55,359,000 in 2024 from $69,091,000 in 2023, a decline of 20%[234] - Current liabilities increased to $20,799,000 in 2024 from $19,984,000 in 2023, an increase of 4.1%[234] - Stockholders' equity decreased to $32,872,000 in 2024 from $41,600,000 in 2023, a decline of 21.1%[234] - The company experienced a loss from operations of $1,299,000 in 2024, an improvement from a loss of $1,671,000 in 2023[236] - Comprehensive income for 2024 was $340,000, down from $503,000 in 2023, a decrease of 32.3%[239] - Total cash, cash equivalents, and restricted cash decreased to $13,567,000 at the end of 2024 from $56,217,000 at the end of 2023, representing a decline of 75.8%[244] - Operating activities resulted in a net cash outflow of $3,367,000 in 2024, an improvement compared to the outflow of $4,278,000 in 2023[244] - The company declared dividends of $0.80 per share, totaling $9,213,000 for 2024, consistent with the $9,215,000 declared in 2023[244] - The company reported a depreciation and amortization expense of $131,000 in 2024, down from $164,000 in 2023, indicating a reduction of 20.1%[244] - Inventories increased by $1,000,000 in 2024 compared to an increase of $228,000 in 2023, showing a significant rise in inventory levels[244] - The company purchased marketable securities worth $70,431,000 in 2024, compared to no purchases in 2023[244] - The net cash used in investing activities was $30,075,000 in 2024, a substantial increase from $46,000 in 2023[244] - The company experienced a net decrease in cash and cash equivalents of $42,650,000 in 2024, compared to a decrease of $13,529,000 in 2023[244] - The company holds $3.6 million in cash in bank accounts located in China, subject to foreign currency controls, with no losses reported[252] - The Company recognized a foreign exchange loss of $230,000 in 2024 and $292,000 in 2023[261] Compensation and Member Engagement - The company employs a binary compensation plan with unilevel features, allowing members to earn commissions based on the bonus volume points from product purchases by their down-line network[45] - Members can earn income through commissions on accumulated bonus volume from product purchases and retail profits from reselling products[47] - Compensation paid to members represented approximately 41% of net sales in 2024 and 42% in 2023, indicating a substantial expense that could reduce profitability[105] - The company offers various support programs, including product training meetings and member events, to enhance member engagement and loyalty[49] - The company has a comprehensive training system for members, covering various roles from prospects to sales leaders[25] - Modifications to the compensation plan are made to motivate members, potentially impacting commissions[264] - Performance-based agreements for business or market development may result in additional compensation for specific members[264] Regulatory and Compliance Challenges - The regulatory environment in China imposes restrictions on multi-level compensation and member recruitment activities, impacting the company's operations[55] - The company is subject to extensive governmental regulations regarding product claims and marketing, particularly for dietary supplements[66] - The company has committed to maintaining compliance with FDA regulations, including good manufacturing practices for dietary supplements[63] - The company anticipates reapplying for a direct selling license in China when conditions are favorable[57] - The company is subject to scrutiny from regulatory authorities regarding compliance with local laws, which could impact operations[68] - The company faces significant regulatory and legal barriers in international markets, which could impede growth and profitability in those regions[94][95] - The company is subject to extensive laws and regulations regarding direct selling, which could lead to significant penalties if compliance is not met[124] - The evolving regulatory climate in China and Hong Kong regarding privacy and data protection could materially adversely affect the company's business[127] - The company faces risks from geopolitical tensions between the U.S. and China, which could disrupt operations and adversely affect financial results[120] - The company has incurred significant expenses to comply with privacy and data protection laws, and any failure to comply could damage its reputation and financial condition[130] - The company may face challenges from third parties regarding the legality of its business operations, which could result in fines or adverse publicity[131] - Non-compliance with regulations could lead to significant penalties, affecting business operations and revenue[146] - New regulations on dietary supplements could impose additional restrictions, potentially harming the company's ability to introduce new products[148] Operational and Market Risks - The company relies on a limited number of independent third-party manufacturers, which poses risks related to product quality and timely delivery, potentially leading to significant revenue loss[93] - The company has suspended member activities in China due to a government campaign targeting illegal practices in the direct selling industry, which may have a material adverse effect on business operations[115] - Economic challenges in China and Hong Kong could have a material adverse impact on the company's overall business and financial results[79] - The company must navigate risks related to product warranties and returns, which vary by country and can affect customer satisfaction and retention[69] - Adverse publicity regarding product claims and compliance could negatively impact the company's ability to attract and retain members, affecting revenue generation[82] - The direct selling industry is highly competitive, with significant competition for member recruitment from larger organizations and local competitors[90] - The company has faced challenges in maintaining member engagement and productivity, particularly if new products fail to gain market acceptance[92] - Cybersecurity risks and data breaches could disrupt operations and harm the company's reputation, leading to financial liabilities[162] International Operations and Currency Risks - The company operates in multiple international markets, including the Americas, Greater China, Southeast Asia, South Korea, Japan, India, and Europe, with a focus on direct-selling and e-commerce[15] - In 2024, 96% of the company's revenue was recorded by subsidiaries located outside of North America, exposing it to foreign currency exchange rate fluctuations[134] - The company's foreign currency exchange rate exposure to various currencies collectively represented approximately 16% and 18% of revenue in 2024 and 2023, respectively[135] - Changes in U.S. tax law and proposals to reform foreign tax laws could significantly affect the company's tax position and cash flows[138] - Operations are subject to customs duties regulations, and failure to comply could materially impact financial condition[142] - Transfer pricing regulations require compliance, and non-compliance may lead to significant adverse effects on financial results[143] - Extensive government regulations on product formulation and marketing could delay or limit product sales, impacting revenue[144] - Compliance with international regulations may create delays and added expenses in introducing new products to certain markets[145]

Core Insights - Natural Health Trends Corp. (NHTC) reported a decline in stock price of 1.1% post-earnings announcement, contrasting with a 0.4% gain in the S&P 500 Index during the same period [1] - The company experienced a revenue of $10.8 million for Q4 2024, nearly flat compared to $10.9 million in Q4 2023, with a notable 7% year-over-year increase in Greater China sales [2] - For the full year, revenue decreased by 2.2% to $42.9 million from $43.9 million in 2023, while net income remained consistent at $572,000 [3] Financial Performance - The operating loss for Q4 2024 was $421,000, widening from a loss of $292,000 in the previous year [2] - Gross profit for the year was $31.8 million, with a gross margin of 73.9%, down from 74.6% in 2023 due to increased freight costs [3] - Commissions expense as a percentage of sales increased to 41.9% in Q4 2024 from 41.6% in the prior-year quarter [4] Market Dynamics - The gross margin for Q4 2024 was 74.2%, slightly lower than 74.5% in the prior-year quarter, primarily due to higher freight costs [5] - Sales growth in Greater China was attributed to effective promotions and incentives, while North America and Taiwan faced challenges due to strategic pricing adjustments [6] Cash Flow and Liquidity - Net cash provided by operating activities was $88,000 in Q4 2024, compared to a net cash usage of $69,000 in the prior-year period [7] - Cash, cash equivalents, and marketable securities totaled $43.9 million as of Dec. 31, 2024, down from $46.3 million as of Sept. 30, 2024 [7] Product Development and Expansion - The company launched two new products in Hong Kong during Q4 2024, with plans for further market expansion [8] - NHTC opened operations in Colombia in 2024 and plans to relocate its headquarters to Rolling Hills Estates, CA, in February 2025 [9]

Financial Data and Key Metrics Changes - Total fourth quarter revenue was $10.8 million, roughly unchanged from $10.9 million in the fourth quarter a year ago [14] - Gross profit margin for the fourth quarter was 74.2%, slightly down from 74.5% in the prior year due to higher freight costs [15] - Net income for the fourth quarter was $176,000 or $0.02 per diluted share, compared to $358,000 or $0.03 per diluted share in the fourth quarter of 2023 [16] Business Line Data and Key Metrics Changes - Revenue in the primary market of Greater China increased by 7% compared to the fourth quarter of 2023, while performance in Taiwan and North America negatively impacted overall results [6][14] - The active member base was 30,870 at December 31, consistent with September 30, but a 5% decline since the end of December 2023 [15] Market Data and Key Metrics Changes - The Greater China market showed a 9% increase in net sales compared to the preceding third quarter of 2024, indicating a positive trend despite sluggish consumer sentiment [6] Company Strategy and Development Direction - The company introduced two new products in Hong Kong and rolled them out in Taiwan and North America, aiming to enhance market presence and consumer engagement [7][8] - The opening of the Colombia market for in-country order taking reflects the company's strategy to expand its global footprint [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by consumer sentiment and macroeconomic conditions in Greater China but expressed confidence in the company's direction and the commitment of its leaders and members [19][20] - The company remains focused on innovating and enhancing support for its members to ensure continued success [20] Other Important Information - The company paid out $9.2 million in dividends for the full year of 2024 and declared a quarterly cash dividend of $0.20 per share [18][19] Q&A Session Summary - No specific questions or answers were provided in the content regarding the Q&A session.

Natural Health Trends (NHTC) Q4 2024 Earnings Call February 05, 2025 11:30 AM ET Company Participants Michelle Glidewell - Senior Manager of NHT Global CorpChris Sharng - President & DirectorScott Davidson - Senior VP and CFO Operator Greetings and welcome to the Natural Health Trans Corp. Fourth Quarter twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. It is now my pleasure to introduce y ...