CHESTERFIELD, MO–(Marketwired – May 12, 2017) – Reliv International, Inc. (NASDAQ: RELV), a maker of nutritional supplements that promote optimal health, today reported its financial results for the first quarter of 2017.
First-Quarter Results
Reliv reported net sales of $12.8 million for the first quarter of 2017 compared with net sales of $13.0 million in the first quarter of 2016. Net sales in the United States remained level at $10.3 million in the first quarter of 2017 when compared to the prior-year quarter. Net sales in Reliv’s foreign markets decreased 9.5 percent in the first quarter of 2017 compared with the prior-year first quarter with 8.0 percent of the decline due to the impact of foreign currency fluctuation as the result of a stronger U.S. dollar. An increase of 39.1 percent in net sales in Asia in the first quarter of 2017 was offset by a decline of 22.8 percent in net sales in Europe, along with decreases in other regions. The impact of foreign currency fluctuation was 12.0 percent of the net sales decline in Europe in the first quarter of 2017.
Reliv reported net income for the first quarter of 2017 of $524,000 (earnings per diluted share of $0.28) compared to a net loss of $44,000 (loss per diluted share of $0.02) in the first quarter of 2016. The loss per diluted share for the first quarter of 2016 has been adjusted for the one-for-seven reverse stock split that took effect on October 4, 2016. Income from operations for the first quarter of 2017 was $517,000 compared to a loss from operations of $181,000 in the same period in 2016. Income from operations improved primarily due to the result of a reduction in selling, general and administrative (“SGA”) expenses which decreased from $5.6 million in the first quarter of 2016 to $4.9 million in the first quarter of 2017. The reduction in 2017 SGA expenses is the result of the continuing impact of a cost reduction program that took place in mid-2016.
On February 1, 2017, Reliv formally announced the launch of Fit3™, a new fitness and weight loss program created to help people get real fitness and weight loss results. The Fit3 program consists of three principal components: nutrition coaching, exercise coaching, and three new Fit3 formulas: Active, Burn and Purify. Active combines a three-protein blend of whey, casein and non-GMO soy with additional ingredients to support weight loss, athletic performance and energy. Burn further promotes weight loss when combined with healthy eating and exercise through a targeted fat-burning formula. Purify completes the trio as a probiotic, liver cleanse and metabolic supporter. Fit3 program net sales represented 10.1 percent of U.S. net sales in the first quarter of 2017.
“Reliv is a wellness company and with weight management being a critical element of an individual’s wellness, we believe we offer a real and achievable solution through our Fit3 program,” said Dr. Carl Hastings, Chief Scientific Officer. “Fit3 is our comprehensive solution to promote a healthy weight, improve athletic performance and help people create and maintain a fit lifestyle.”
“Fit3 ushers in a new era for Reliv,” said Ryan Montgomery, President. “Fit3 is much more than a set of extraordinary nutritional products; it is a multi-faceted lifestyle program and support system. With more than two-thirds of the U.S. population overweight, the Fit3 opportunity is clear.”
Reliv had cash and cash equivalents of $3.8 million as of March 31, 2017, compared to $3.6 million as of December 31, 2016 and $3.9 million as of March 31, 2016. Net cash generated from operating activities was $530,000 in the first quarter of 2017.
As of March 31, 2017, Reliv had 37,280 distributors and preferred customers — a decrease of 17.2 percent from March 31, 2016 — of which 3,590 are Master Affiliate level and above. The number of Master Affiliates decreased by 32.3 percent compared to the year-ago total. Master Affiliate is the level at which distributors are eligible to earn generation royalties. The decrease in the number of Master Affiliates in the U.S. and Canada was due in part to the increase in the business volume requirement for distributors to reach the Master Affiliate level. This change was effective February 1, 2016 as part of our revised compensation plan strategy and affected Master Affiliate requalifications during the first quarter of 2017.
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