Natural Health Trends Reports Fourth Quarter and Full Year 2024 Financial Results
MWN-AI** Summary
Natural Health Trends Corp. (NASDAQ: NHTC) reported its financial results for the fourth quarter and full year ending December 31, 2024, highlighting some notable achievements despite challenges in certain markets. The company experienced a slight dip in fourth-quarter revenue, totaling $10.8 million compared to $10.9 million in the same quarter of the previous year. However, revenues from its critical Hong Kong operations saw a robust increase of 9% sequentially and 7% year-over-year.
For the full year 2024, total revenues reached $43.0 million, marking a 2% decrease from the previous year while showing signs of improvement with a reduced operating loss, down to $1.3 million from $1.7 million in 2023. The net income stood at $572,000, consistent with the prior year.
The company declared a quarterly cash dividend of $0.20 per share, reflecting a commitment to return value to shareholders. Active Member numbers remained stable at approximately 30,870, although there was a year-over-year decrease.
Management attributed the mixed results to varying consumer sentiment across markets, particularly noting strategic price adjustments in Taiwan and North America, which may have limited promotional opportunities. Nonetheless, these adjustments are seen as beneficial for long-term margin protection.
On the balance sheet side, Natural Health Trends ended the year with $43.9 million in cash and marketable securities, a decrease from $46.3 million the previous quarter. The company’s operational cash flows improved significantly, providing $602,000 when adjusted for tax liabilities related to the 2017 Tax Act.
Overall, Natural Health Trends is positioning itself for future growth while managing current challenges, indicated by its performance in key markets and proactive financial strategies.
MWN-AI** Analysis
Natural Health Trends Corp. (NASDAQ: NHTC) recently reported its financial results for Q4 and Full Year 2024, showing a mixed performance characterized by stable revenues and declining net income. With fourth-quarter net sales at $10.8 million—essentially flat from the previous year—it’s noteworthy that the Hong Kong segment saw a healthy sequential increase of 9%. This resilience in Hong Kong, amidst a backdrop of tepid consumer sentiment, suggests robust demand dynamics that could be capitalized on moving forward.
However, the broader picture reveals challenges. Revenue for 2024 dropped 2% to $43 million, driven by weaker performances in North America and Taiwan where strategic price adjustments led to minimized promotional activity. Despite these issues, operating losses shrank to $1.3 million from $1.7 million in 2023, hinting at operational improvements are underway.
The company generated positive cash flows from operations, before accounting for the tax installment liabilities, indicating improved management of operational cash. Moreover, the declaration of a quarterly dividend of $0.20 per share showcases management’s confidence in cash generation and profitability stability.
From an investment perspective, NHTC appears to have a solid foundation with $43.9 million in cash and marketable securities, albeit down from the prior quarter. Given the persistent operating losses and decline in active member count, investors should closely monitor strategic initiatives aimed at reviving growth in underperforming markets. Future earnings releases and the upcoming 10-K filing will likely offer greater insight.
In conclusion, while cautiously optimistic signals are visible within the reported results, potential investors should weigh the risks associated with stagnant revenue performance and monitor corporate responses to market challenges. A targeted approach focusing on areas of strength, particularly in Greater China, might yield long-term benefits.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
– Net sales from our most important Hong Kong business up sequentially and year-over-year during the 4 th quarter
– Positive cash flows from operations before 2017 Tax Act installment for the 4 th quarter as well as the full year of 2024
– Declared a quarterly cash dividend of $0.20 per share
LOS ANGELES, Feb. 05, 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 brand, today announced its financial results for the fourth quarter and full year ended December 31, 2024.
Fourth Quarter 2024 Financial Highlights
- Revenue of $10.8 million was roughly unchanged compared to $10.9 million in the fourth quarter of 2023. Revenue from our Hong Kong business increased 9% sequentially and 7% compared to the fourth quarter of 2023.
- Operating loss was $421,000, compared to $292,000 in the fourth quarter of 2023. The increase primarily can be attributed to the timing of expenses incurred year-over-year.
- Net income 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.
- The number of Active Members1 were 30,870 at December 31, 2024, roughly unchanged compared to 30,880 at September 30, 2024, and decreased 5% compared to 32,410 at December 31, 2023.
| 1 | Natural Health Trends defines Active Members as those that have placed at least one product order with the Company during the preceding twelve-month period. |
Full Year 2024 Financial Highlights
- Revenue of $43.0 million decreased 2% compared to $43.9 million in 2023.
- Operating loss was $1.3 million, compared to $1.7 million in 2023.
- Net income was $572,000, or $0.05 per diluted share, compared to $568,000, or $0.05 per diluted share, in 2023.
Management Commentary
"Our fourth quarter performance was steady as our business in Greater China achieved a 7% increase in net sales compared to the fourth quarter of 2023 and a 9% increase compared to last quarter, despite ongoing tepid consumer sentiment. Overall, our results for the fourth quarter and the full year were tempered by the performance of other markets, particularly Taiwan and North America, where we implemented strategic price adjustments in 2023 and offered fewer product promotions throughout 2024. However, these changes position us for long-term benefits of safeguarding margins and reinforcing market discipline."
Corporate Development
In February 2025, the Company relocated its corporate headquarters from Hong Kong back to Rolling Hills Estates, California.
Balance Sheet and Cash Flow
- Net cash provided operating activities was $88,000 in the fourth quarter of 2024, compared net cash used in operating activities of $69,000 in the fourth quarter of 2023. Net cash used in operating activities was $3.4 million in 2024, compared to $4.3 million in 2023. Before tax installment payments, the liability of which arises from the 2017 U.S. Tax Cuts and Jobs Act (the “Act Act”), cash provided by operating activities was $602,000 in 2024, versus cash used in operations of $1.2 million a year ago. Of the total Tax Act liability of $20.2 million, $15.1 million has been paid to date.
- Total cash, cash equivalents and marketable securities were $43.9 million as of December 31, 2024, down from $46.3 million as of September 30, 2024.
- On February 3, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 on each share of common stock outstanding. The dividend will be payable on February 28, 2025 to stockholders of record as of February 18, 2025.
The Company expects to issue its 2024 audited financial results in late February with its Annual Report on Form 10-K to be filed with the United States Securities and Exchange Commission. These financial results are preliminary and the accompanying financial statements have not been audited or have not yet been reviewed by the Company’s independent accountants. Significant updates and revisions may be required before the release of the Company’s 2024 audited financial results.
Fourth Quarter and Full Year 2024 Financial Results Conference Call
Management will host a conference call to discuss the fourth quarter and full year 2024 financial results today, Wednesday, February 5, 2025 at 11:30 a.m. Eastern Time. The conference call details are as follows:
| Date: | Wednesday, February 5, 2025 |
| Time: | 11:30 a.m. Eastern Time / 8:30 a.m. Pacific Time |
| Dial-in: | 1-877-407-0789 (Domestic) 1-201-689-8562 (International) |
| Conference ID: | 13750282 |
| Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1698806&tp_key=ccfcb08f42 |
For those unable to participate during the live broadcast, a replay of the call will also be available from 2:30 p.m. Eastern Time on February 5, 2025 through 11:59 p.m. Eastern Time on February 12, 2025 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13750282.
About Natural Health Trends Corp.
Natural Health Trends Corp. (NASDAQ: NHTC) is an international direct-selling and e-commerce company operating through its subsidiaries throughout Asia, the Americas, and Europe. The Company markets premium quality personal care products under the NHT Global brand. Additional information can be found on the Company’s website at www.naturalhealthtrendscorp.com.
Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Forward-looking statements in this press release do not constitute guarantees of future performance. Such forward-looking statements are subject to risks and uncertainties that could cause the Company’s actual results to differ materially from those anticipated. Such risks and uncertainties include the risks and uncertainties detailed under the caption “Risk Factors” in Natural Health Trends Corp.’s Annual Report on Form 10-K filed on February 28, 2024 with the Securities and Exchange Commission (SEC), as well as in subsequent reports filed this year with the SEC. The Company assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
| NATURAL HEALTH TRENDS CORP. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) | |||||||
| December 31, | |||||||
| 2024 | 2023 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 13,533 | $ | 56,178 | |||
| Marketable securities | 30,407 | — | |||||
| Inventories | 3,272 | 4,293 | |||||
| Other current assets | 3,771 | 3,758 | |||||
| Total current assets | 50,983 | 64,229 | |||||
| Property and equipment, net | 190 | 266 | |||||
| Operating lease right-of-use assets | 2,498 | 3,319 | |||||
| Restricted cash | 34 | 39 | |||||
| Deferred tax asset | 382 | 369 | |||||
| Other assets | 1,272 | 869 | |||||
| Total assets | $ | 55,359 | $ | 69,091 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 895 | $ | 990 | |||
| Income taxes payable | 4,908 | 3,716 | |||||
| Accrued commissions | 2,021 | 2,067 | |||||
| Other accrued expenses | 1,425 | 1,170 | |||||
| Deferred revenue | 6,428 | 6,166 | |||||
| Amounts held in eWallets | 3,286 | 3,945 | |||||
| Operating lease liabilities | 1,127 | 1,146 | |||||
| Other current liabilities | 709 | 784 | |||||
| Total current liabilities | 20,799 | 19,984 | |||||
| Income taxes payable | — | 5,054 | |||||
| Deferred tax liability | 174 | 135 | |||||
| Operating lease liabilities | 1,514 | 2,318 | |||||
| Total liabilities | 22,487 | 27,491 | |||||
| Stockholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | 13 | 13 | |||||
| Additional paid-in capital | 84,901 | 84,695 | |||||
| Accumulated deficit | (26,344 | ) | (17,703 | ) | |||
| Accumulated other comprehensive loss | (1,301 | ) | (1,069 | ) | |||
| Treasury stock, at cost | (24,397 | ) | (24,336 | ) | |||
| Total stockholders’ equity | 32,872 | 41,600 | |||||
| Total liabilities and stockholders’ equity | $ | 55,359 | $ | 69,091 | |||
| NATURAL HEALTH TRENDS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| Net sales | $ | 10,846 | $ | 10,937 | $ | 42,963 | $ | 43,924 | |||||||
| Cost of sales | 2,802 | 2,789 | 11,178 | 11,175 | |||||||||||
| Gross profit | 8,044 | 8,148 | 31,785 | 32,749 | |||||||||||
| Operating expenses: | |||||||||||||||
| Commissions expense | 4,549 | 4,553 | 17,571 | 18,414 | |||||||||||
| Selling, general and administrative expenses | 3,916 | 3,837 | 15,513 | 16,006 | |||||||||||
| Total operating expenses | 8,465 | 8,390 | 33,084 | 34,420 | |||||||||||
| Loss from operations | (421 | ) | (242 | ) | (1,299 | ) | (1,671 | ) | |||||||
| Other income, net | 396 | 708 | 1,919 | 2,416 | |||||||||||
| Income (loss) before income taxes | (25 | ) | 466 | 620 | 745 | ||||||||||
| Income tax provision (benefit) | (201 | ) | 108 | 48 | 177 | ||||||||||
| Net income | $ | 176 | $ | 358 | $ | 572 | $ | 568 | |||||||
| Net income per common share: | |||||||||||||||
| Basic | $ | 0.02 | $ | 0.03 | $ | 0.05 | $ | 0.05 | |||||||
| Diluted | $ | 0.02 | $ | 0.03 | $ | 0.05 | $ | 0.05 | |||||||
| Weighted-average number of common shares outstanding: | |||||||||||||||
| Basic | 11,478 | 11,448 | 11,467 | 11,436 | |||||||||||
| Diluted | 11,486 | 11,461 | 11,490 | 11,456 | |||||||||||
| NATURAL HEALTH TRENDS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||
| Year Ended December 31, | |||||||
| 2024 | 2023 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | (Unaudited) | ||||||
| Net income | $ | 572 | $ | 568 | |||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||
| Depreciation and amortization | 131 | 164 | |||||
| Net accretion of marketable securities | (441 | ) | — | ||||
| Share-based compensation | 145 | 161 | |||||
| Noncash lease expense | 1,087 | 1,109 | |||||
| Deferred income taxes | 17 | (178 | ) | ||||
| Changes in assets and liabilities: | |||||||
| Inventories | 1,000 | 228 | |||||
| Other current assets | (113 | ) | (452 | ) | |||
| Other assets | (421 | ) | (270 | ) | |||
| Accounts payable | (94 | ) | 181 | ||||
| Income taxes payable | (3,862 | ) | (3,299 | ) | |||
| Accrued commissions | (19 | ) | (866 | ) | |||
| Other accrued expenses | 271 | (4 | ) | ||||
| Deferred revenue | 245 | 565 | |||||
| Amounts held in eWallets | (672 | ) | (947 | ) | |||
| Operating lease liabilities | (1,151 | ) | (1,119 | ) | |||
| Other current liabilities | (62 | ) | (119 | ) | |||
| Net cash used in operating activities | (3,367 | ) | (4,278 | ) | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchases of property and equipment | (57 | ) | (46 | ) | |||
| Purchases of marketable securities | (70,431 | ) | — | ||||
| Proceeds from maturities of marketable securities | 40,413 | — | |||||
| Net cash used in investing activities | (30,075 | ) | (46 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Dividends paid | (9,213 | ) | (9,215 | ) | |||
| Net cash used in financing activities | (9,213 | ) | (9,215 | ) | |||
| Effect of exchange rates on cash, cash equivalents and restricted cash | 5 | 10 | |||||
| Net decrease in cash, cash equivalents and restricted cash | (42,650 | ) | (13,529 | ) | |||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 56,217 | 69,746 | |||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ | 13,567 | $ | 56,217 | |||
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | |||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | 124 | $ | 147 | |||
CONTACT:
Scott Davidson
Senior Vice President and Chief Financial Officer
Natural Health Trends Corp.
Tel (U.S.): 310-541-0888
investor.relations@nhtglobal.com
FAQ**
How did the sequential and year-over-year increase in net sales from Natural Health Trends Corp. NHTC's Hong Kong business impact the overall fourth quarter revenue of $10.8 million, which remained roughly unchanged from the previous year's quarter?
Can you elaborate on the factors contributing to the positive cash flow from operations, excluding the 2017 Tax Act installment, and how this performance affects overall financial health for Natural Health Trends Corp. NHTC in 2024?
With a quarterly cash dividend of $0.20 per share declared by Natural Health Trends Corp. NHTC, what is the company’s outlook on maintaining this dividend in the future, especially considering its recent operating losses and equity position?
How does the management plan to address the challenges posed by other markets as mentioned in the report, and what specific strategies will Natural Health Trends Corp. NHTC implement to improve overall performance in 2025?
**MWN-AI FAQ is based on asking OpenAI questions about Natural Health Trends Corp. (NASDAQ: NHTC).
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