Natural Health Trends Corp (NASDAQ:NHTC) Q4 2020 Earnings Conference Call February 10, 2021 11:30 AM ET Company Participants Kimberly Orlando - ADDO Investor Relations Chris Sharng - President, CEO & Director Timothy Davidson - SVP, CFO, Chief Compliance Officer & Secretary Conference Call Participants Operator Greetings, and welcome to the Natural Health Trends Corp. Fourth Quarter and Full Year 2020 Earnings Call. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like ...

Natural Health Trends Corp. (NASDAQ:NHTC) Q3 2020 Earnings Conference Call November 4, 2020 11:20 AM ET Company Participants Kimberly Orlando - Managing Director, ADDO Investor Relations Chris Sharng - President Scott Davidson - Senior Vice President and Chief Financial Officer Disclaimer: *NEW* We are providing this transcript version in a raw, machine-assisted format and it is unaudited. Please reference the audio for any questions on the content. A standard transcript will be available later on the site ...

Securities registered pursuant to Section 12(b) of the Exchange Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.001 per share NHTC The NASDAQ Stock Market LLC Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SEC ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2020 was $16.4 million, a decrease of 30% compared to $23.4 million in Q2 2019, primarily due to the COVID-19 pandemic's impact on operations [15] - Operating income was $183,000 compared to an operating loss of $4,000 in Q2 2019, indicating a return to profitability [18] - Net income totaled $34,000 or breakeven per diluted share, down from net income of $397,000 or $0.04 per diluted share in Q2 2019 [18] - Gross profit margin decreased to 70.6% from 76.9% in the prior year due to increased logistics costs and product promotions [16] - Selling, general and administrative expenses decreased by 35% to $4.3 million from $6.6 million a year ago [17] Business Line Data and Key Metrics Changes - The active member base decreased by 4% to 54,400 at June 30 from 56,500 at March 31, and down 31% from 78,300 at June 30 of the previous year [15] - Commission expenses as a percentage of total revenue declined to 43.4% from 48.7% in the prior year quarter due to proactive cost reduction efforts [16] Market Data and Key Metrics Changes - Economic activity in key markets, particularly Greater China, has begun to resume, with some restrictions on travel and gatherings being lifted [15] - Operations in Peru continued to be adversely impacted by COVID-19, although shipping into larger cities resumed in late Q1 [12] Company Strategy and Development Direction - The company is focused on diversifying operations into new and emerging markets, although progress has been delayed due to COVID-19 [11] - New product launches occurred in China, Peru, and India, indicating ongoing efforts to expand product offerings despite challenges [12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the improvement of the macroeconomic situation in the second half of 2020 [13] - The company has successfully transitioned to a digital operation, allowing continued engagement with customers through online activities [9] - Management emphasized the importance of health and safety for members, employees, and customers as foundational to success [13] Other Important Information - The company maintained a strong liquidity position with total cash and cash equivalents at $93.2 million and zero debt [18] - A quarterly cash dividend of $0.20 per share was declared, reflecting confidence in the company's financial stability [19] Q&A Session Summary - No specific questions or answers were documented in the provided content, thus this section is not applicable.

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number: 001-36849 NATURAL HEALTH TRENDS CORP. (Exact name of registrant as specified in its charter) Delawa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Securities registered pursuant to Section 12(b) of the Exchange Act: FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number: 001-36849 NATURAL HEALTH TRENDS CORP. (Exact na ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36849 NATURAL HEALTH TRENDS CORP. (Exact name of registrant as specified in its charter) Delaware 59-2705336 (State or other jurisdi ...

[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the nine months ended September 30, 2019, show a significant downturn with a net loss of **$2.8 million**, sharp revenue decrease, and declines in cash and equity, reflecting major operational challenges Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $101,113 | $132,653 | | Total current assets | $116,109 | $150,187 | | Total assets | $127,107 | $157,921 | | **Liabilities & Equity** | | | | Total current liabilities | $27,086 | $43,084 | | Total liabilities | $44,540 | $68,060 | | Total stockholders' equity | $82,567 | $89,861 | Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net sales | $59,779 | $150,320 | | Gross profit | $44,777 | $119,774 | | Income (loss) from operations | $(3,777) | $27,999 | | Net income (loss) | $(2,769) | $25,476 | | Diluted EPS | $(0.25) | $2.25 | Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(18,748) | $25,262 | | Net cash used in investing activities | $(181) | $(176) | | Net cash used in financing activities | $(12,300) | $(27,644) | | Net decrease in cash, cash equivalents and restricted cash | $(31,657) | $(3,269) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **60%** net sales decline to external pressures in Greater China, including government campaigns and Hong Kong unrest, resulting in a net loss and negative operating cash flow - The number of active members decreased to **68,150** as of September 30, 2019, down from **97,160** a year ago, reflecting challenges in member engagement and recruitment[87](index=87&type=chunk) - The Chinese government's "100-day campaign" and negative media significantly impacted business, leading to a voluntary suspension of member activities in China since January 2019[89](index=89&type=chunk)[90](index=90&type=chunk) - Political and social developments in Hong Kong adversely affected operations by forcing the company to curtail member meetings and events, which are key to marketing efforts[91](index=91&type=chunk) Net Sales by Market (in thousands) | Market | Q3 2019 | Q3 2018 | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | $13,575 | $41,447 | $48,465 | $133,681 | | Americas | $1,445 | $1,970 | $4,353 | $5,361 | | China | $525 | $1,698 | $2,138 | $5,510 | | Other | $1,478 | $1,928 | $4,723 | $5,768 | | **Total** | **$17,023** | **$47,043** | **$59,779** | **$150,320** | [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is omitted as the company qualifies as a smaller reporting company - Disclosure under this item is not applicable as the company qualifies as a smaller reporting company[139](index=139&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to a material weakness in internal control over financial reporting, with remediation expected by Q4 2019 - Due to a material weakness in internal control over financial reporting identified as of December 31, 2018, the company's disclosure controls and procedures were deemed **not effective** as of September 30, 2019[140](index=140&type=chunk) - Remediation efforts are underway to address the material weakness related to the review of shipment documentation from third-party logistics (3PL) facilities, including enhanced sampling and review of shipment data[142](index=142&type=chunk) - The company expects the remediation of the material weakness to be fully complete during the fourth quarter of 2019[143](index=143&type=chunk) [PART II - OTHER INFORMATION](index=33&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company and its executive officers are defending a securities class action lawsuit alleging false and misleading statements regarding China business operations, which the company believes are without merit - A securities class action lawsuit was filed against the company and its executive officers, alleging false and misleading statements about its China business operations between April 27, 2016, and January 5, 2019[145](index=145&type=chunk) - The company filed a motion to dismiss the amended complaint on September 6, 2019, and believes the claims are without merit[78](index=78&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor highlights the adverse effects of recent political and social developments in Hong Kong, which have curtailed company operations and negatively impacted financial performance - A new risk factor was added highlighting that recent political unrest and social strife in Hong Kong are adversely affecting the company's operations[146](index=146&type=chunk)[147](index=147&type=chunk) - The company has curtailed the number and scope of meetings and events in Hong Kong, an important component of its marketing and distribution, which has negatively affected financial performance[147](index=147&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2019, the company repurchased **383,127** shares for **$2.9 million**, with **$22.4 million** remaining available under the **$70.0 million** stock repurchase program Issuer Purchases of Equity Securities (Q3 2019) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 1-31, 2019 | — | $ — | | August 1-31, 2019 | 232,489 | $7.40 | | September 1-30, 2019 | 150,638 | $7.68 | - On August 6, 2019, the Board of Directors authorized the company to proceed with further purchases under its existing stock repurchase program[152](index=152&type=chunk) - As of September 30, 2019, **$22.4 million** (after-tax) of the **$70.0 million** stock repurchase program remained available for future purchases[58](index=58&type=chunk)[152](index=152&type=chunk) [Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[153](index=153&type=chunk) [Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[153](index=153&type=chunk) [Other Information](index=34&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - None[153](index=153&type=chunk) [Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications by executive officers and XBRL data files - Exhibits filed include certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[155](index=155&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number: 001-36849 NATURAL HEALTH TRENDS CORP. (Exact name of registrant as specified in its charter) Delaware 59-2705336 (Sta ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number: 001-36849 | --- | --- | --- | |---------------------------------|--------------------------------------------------- ...