NHT Global(US:NHTC)2022-11-01 16:00Financial Performance - Net sales for the three months ended September 30, 2022, were $11,716,000, a decrease of 18% compared to $14,276,000 for the same period in 2021[15]. - Gross profit for the nine months ended September 30, 2022, was $27,224,000, down 17% from $33,040,000 in the prior year[15]. - Net income for the three months ended September 30, 2022, was $47,000, compared to $471,000 for the same period in 2021, indicating a significant decline[18]. - Net income for the nine months ended September 30, 2022, was $125,000, a decrease of 85.3% compared to $853,000 for the same period in 2021[25]. - The company reported a comprehensive loss of $(354,000) for the three months ended September 30, 2022, compared to a comprehensive income of $408,000 for the same period in 2021[18]. - Total net sales for the three months ended September 30, 2022, were $11.716 million, a decrease of 17.9% compared to $14.276 million for the same period in 2021[82]. - Total net sales for the nine months ended September 30, 2022, were $36,622,000, down 16.7% from $43,897,000 for the same period in 2021[42]. - The company experienced a loss from operations and negative cash flows during the first nine months of 2022 due to lower net sales compared to the same period in 2021[97]. Assets and Liabilities - Total current assets decreased to $79,012,000 as of September 30, 2022, down from $93,469,000 at December 31, 2021, representing a decline of approximately 15%[12]. - Total liabilities decreased to $32,686,000 as of September 30, 2022, from $38,867,000 at December 31, 2021, reflecting a reduction of approximately 16%[12]. - Cash and cash equivalents decreased to $70,663,000 as of September 30, 2022, down from $83,843,000 at December 31, 2021, a decline of approximately 16%[12]. - Working capital decreased by $10.0 million to $58.8 million as of September 30, 2022, compared to December 31, 2021[117]. - The accumulated deficit increased to $(6,961,000) as of September 30, 2022, compared to $(231,000) at December 31, 2021[13]. Cash Flow - The company reported a net cash used in operating activities of $(5,790,000) for the nine months ended September 30, 2022, compared to $(557,000) for the same period in 2021[25]. - The company experienced a net decrease in cash of $(13,633,000) for the nine months ended September 30, 2022, compared to $(7,728,000) for the same period in 2021[25]. - Cash and cash equivalents totaled $70.7 million as of September 30, 2022, a decrease of $13.2 million from December 31, 2021[117]. Revenue and Sales - The company recognized product sales when products are shipped, with sales returns averaging 1% of sales for both the nine months ended September 30, 2022, and 2021[37]. - The total net sales from external customers in Hong Kong for the three months ended September 30, 2022, were $9.424 million, a decrease from $11.201 million in the same period of 2021[83]. - Hong Kong net sales decreased by $1.8 million, or 16%, primarily due to recurring COVID-19 outbreaks and government control measures impacting member interactions[109]. Expenses - Operating expenses for the three months ended September 30, 2022, totaled $8,763,000, a reduction of 13% from $10,129,000 in the same period last year[15]. - Total operating expenses increased to 74.8% of net sales for the three months ended September 30, 2022, compared to 70.9% for the same period in 2021[106]. - Selling, general and administrative expenses decreased to $3.9 million for the three months ended September 30, 2022, from $4.1 million in the same period last year[113]. Market Presence and Strategy - The company has an active physical presence in multiple markets, including the Americas, Greater China, Southeast Asia, and Europe[28]. - The company plans to focus resources on investing in Greater China and other key markets, including Southeast Asia, India, South America, and Europe[123]. - The company anticipates continued adverse financial performance in the near term due to ongoing challenges in the Chinese market and the impact of COVID-19[94]. Shareholder Returns - The company declared dividends of $0.20 per share, totaling $6,855,000 for the nine months ended September 30, 2022, consistent with the previous year[25]. - The Company declared and paid cash dividends of $0.20 per common share during each of the first three quarters of 2022, totaling $6.9 million for the nine-month period[74]. - As of September 30, 2022, $21.9 million of the $70.0 million stock repurchase program remained available for future purchases[75]. Tax and Regulatory Matters - The effective income tax rate for the three and nine months ended September 30, 2022, includes an estimate for the Global Intangible Low-Taxed Income (GILTI) inclusion[60]. - The company does not have a valuation allowance against U.S. deferred tax assets as of September 30, 2022, but maintains a valuation allowance in certain foreign jurisdictions[130]. - The company booked a tax benefit of $84,000 during 2021 due to net operating losses generated in the tax year ended December 31, 2020[132]. Internal Controls - Management concluded that disclosure controls and procedures were effective as of September 30, 2022[136]. - There were no changes in internal control over financial reporting during the fiscal quarter ended September 30, 2022, that materially affected internal control[137].