NHT Global(US:NHTC)2024-05-01 13:20Financial Performance - Net sales for the three months ended March 31, 2024, were $10,951,000, a decrease of 7.7% compared to $11,861,000 for the same period in 2023[15]. - Gross profit for the first quarter of 2024 was $8,039,000, down from $8,830,000 in the same quarter of 2023, reflecting a decline of approximately 9.0%[15]. - Net income for the three months ended March 31, 2024, was $188,000, compared to $257,000 for the same period in 2023, indicating a decrease of approximately 26.9%[15]. - The company reported a comprehensive income of $36,000 for Q1 2024, significantly lower than $157,000 in Q1 2023, reflecting a decline of about 77.1%[18]. - The company reported total net sales of $10.951 million for the three months ended March 31, 2024, down from $11.861 million in the same period of 2023, representing a decrease of approximately 7.66%[81]. - The primary reporting segment generated net sales of $10.466 million for the three months ended March 31, 2024, compared to $11.331 million in the prior year[81]. - In Q1 2024, net sales were $11.0 million, a decrease of $910,000 or 8% compared to $11.9 million in Q1 2023[108]. - Hong Kong net sales decreased by $499,000 or 5% year-over-year, primarily due to changes in deferred revenue, which increased by $1.0 million in Q1 2024[108]. Assets and Liabilities - Total current assets decreased to $62,733,000 as of March 31, 2024, down from $64,229,000 on December 31, 2023, representing a decline of approximately 2.3%[13]. - Total liabilities increased to $28,269,000 as of March 31, 2024, compared to $27,491,000 on December 31, 2023, marking an increase of approximately 2.8%[13]. - Stockholders' equity decreased to $39,370,000 as of March 31, 2024, down from $41,600,000 at the end of 2023, representing a decline of about 5.4%[13]. - Cash and cash equivalents decreased to $25,825,000 as of March 31, 2024, down from $56,178,000 on December 31, 2023, a decline of approximately 54.0%[13]. - The company had $25.862 million in cash, cash equivalents, and restricted cash at the end of the period, a decrease from $66.648 million at the end of the previous year[25]. - Working capital as of March 31, 2024, was $41.9 million, a decrease of $2.4 million compared to December 31, 2023[115]. - The ratio of current assets to current liabilities was 3.0 to 1.0 as of March 31, 2024[115]. Expenses - Total operating expenses decreased to $8,404,000 in Q1 2024 from $9,224,000 in Q1 2023, a reduction of about 8.9%[15]. - Selling, general and administrative expenses decreased to $3.9 million for the three-month period ended March 31, 2024, compared to $4.2 million in the same period a year ago, primarily due to lower employee-related costs and professional fees[111]. - The company experienced a decrease in share-based compensation expenses, which were $37 million for the three months ended March 31, 2024, compared to $46 million in the prior year[25]. - Commissions expense represented 41.0% of net sales in Q1 2024, compared to 42.1% in Q1 2023, attributed to lower weekly commissions outside of Hong Kong[110]. Cash Flow - The company reported a net cash provided by operating activities of $549 million, a significant improvement compared to a net cash used of $696 million in the prior year[25]. - Cash provided by operations was $549,000 for the first three months of 2024, an improvement from cash used in operations of $696,000 for the same period in 2023, reflecting increased order volume and better management of operating costs[116]. - Total cash, cash equivalents, and marketable securities decreased by $1.7 million from December 31, 2023, to $54.4 million as of March 31, 2024, due to dividends paid during the first three months of 2024[115]. - Cash flows used in investing activities totaled $28.5 million for the first three months of 2024, primarily for purchasing marketable securities[116]. Dividends and Stock Repurchase - The company declared dividends of $0.20 per share, totaling $2,303,000 for the quarter[21]. - Cash dividends of $0.20 per common share were declared and paid, totaling $2.3 million for each quarter in 2024 and 2023[73]. - As of March 31, 2024, $21.9 million of the $70.0 million stock repurchase program remained available for future purchases[74]. - As of March 31, 2024, $21.9 million of the $70.0 million stock repurchase program remained available for future purchases[118]. Market and Operations - Active members decreased to 31,620 as of March 31, 2024, from 32,410 at December 31, 2023, and 38,330 at March 31, 2023[88]. - Approximately 95% of net sales are generated from subsidiaries located outside the Americas, with the Hong Kong subsidiary accounting for 84% of net sales in the latest fiscal quarter[89]. - The company operates an e-commerce direct selling platform in Hong Kong, with substantial revenues derived from sales to members in China[90]. - The business environment in China remains challenging due to ongoing government scrutiny and negative social media sentiment towards health product companies[93]. - The company has resumed in-person member events in China, Hong Kong, and Macau since Q1 2023, indicating a gradual normalization of operations[94]. - The company plans to continue adapting its marketing programs to overcome physical restrictions and is hopeful for sustained recovery in operations[94]. Tax and Deferred Revenue - The effective income tax rate for the three months ended March 31, 2024, includes estimates for foreign income inclusions, with a total income taxes payable of $9,000,000 related to the repatriation tax[62]. - Deferred revenue increased to $5.5 million as of March 31, 2024, from $4.4 million at the end of 2023, primarily due to $4.2 million of cash received for unshipped product orders[40]. - As of March 31, 2024, deferred revenue was $7.2 million, consisting of $5.5 million in unshipped product orders and $1.7 million in auto ship advances[108]. Investments and Future Plans - The company aims to invest in Greater China and other markets, focusing on establishing manufacturing capabilities and increasing brand awareness[121]. - The company plans to reapply for a direct selling license in China when circumstances are favorable, which could incrementally benefit existing business operations[90].